KUALA LUMPUR – The Sarawak government will form a board of guardians comprising eight finance and investment experts and professionals to provide professional management for its sovereign wealth fund.
Premier Tan Sri Abang Johari Openg said the state government is looking for guardians who can act both professionally and transparently to make sure that the fund is well protected.
“We have to check the personality, integrity, and background of our professionals to be on the board,” he said, adding that not just Sarawakians or Malaysians were being sought for the roles.
“It (the board) is multinational and (comprises) people who have experience in investment in the capital market and various seed capital as well,” he told reporters at the Fifth Malaysian Banking and Finance Summit 2023 here today.
Additionally, the premier said the wealth fund would need to comply with the Santiago Principles – which are global guidelines of best practices for such funds – in order to help maintain a stable global financial system and the free flow of capital and investment.
He said in terms of managing the fund, the state government would ensure that the returns will be well calibrated by maximising the fund.
Meanwhile, in his keynote address, Abang Johari said the fund would adopt a capital maximisation model, whereby it would be benchmarked against the Norwegian Government Pension Fund Global, which has a fund size of US$1.25 trillion (RM5.71 trillion).
He said the same model was also adopted by the Alaska Permanent Fund in the United States, noting that both the Norwegian and Alaskan funds rely on oil and gas revenue, similar to Sarawak.
“I (have) learnt that sovereign wealth funds are a strategy for many countries to invest excess capital into markets or other investments.
“Therefore, we must build up wealth for Sarawak when our oil and gas reserves run out in the future,” he added.
Sarawak is setting up a sovereign wealth fund with an initial amount of RM8 billion to strengthen the state’s financial sustainability.
On November 22 last year, the Sarawak assembly unanimously passed the Sovereign Wealth Future Fund Board Bill, 2022. – Bernama, May 23, 2023
