by SARAH HAFIZAH CHANDRA & JACINTHA JOLENE
KUCHING: The Sarawak Sovereign Wealth Future Fund Board Bill 2022 was unanimously passed on the second day of the 19th State Legislative Assembly (DUN) sitting today (Nov 22).
The Bill was tabled by Finance and New Economy Minister Datuk Patinggi Tan Sri Abang Johari Tun Openg and it was debated by 10 DUN members.
He stated that the Bill seeks to establish a State Fund to be known as the ‘Sarawak Sovereign Wealth Future Fund’ in order to maximise returns from the state’s surplus capital reserves through investment.
He said sovereign wealth funds will be placed under the management and custodianship of a body corporate under the Bill to be called the Sarawak Sovereign Wealth Future Fund Board.
With the initial appropriation of RM8 billion, he also said the tabling of the Bill is the state government’s fulfilment of its election promise which is part of its manifesto by the Gabungan Parti Sarawak (GPS) government for the 12th state election and to prove that the GPS government takes its promises and manifesto seriously.
“Over the years, we have enjoyed commodity-based revenue particularly from oil and gas. This revenue source however is depleted and if the revenue is not managed and invested wisely, future generations will be deprived of the same economic benefits.
“Hence, it is critical to convert these non-renewable assets into financial assets to preserve and grow the state’s current wealth. Ultimately, this will create an endowment fund to generate sustainable sources of income for future generations,” he said this when tabling the Bill today.
Abang Johari pointed out that the sovereign wealth fund will also sustain the financial fiscal position of the state via revenue diversification and creation of reserves replacing oil and gas revenue in years to come.
He said this will further strengthen the state’s financial sustainability and enable it to meet any future eventualities.
“With this in mind, the setting up of a sovereign wealth fund by adopting a capital maximisation model through benchmarking against Norway’s sovereign wealth fund namely the Norway Oil Fund known as Norway Government Pension Fund Global with a fund size of USD1.2 trillion – it is a strategy of going forward.
“The same model was also adopted by United States (US) Alaska Permanent Fund Corporation with a fund size of USD70.6 billion. Incidentally, these jurisdictions also have their prime sources of revenue from oil and gas just like Sarawak,” he said.
As such, Abang Johari stated that the establishment of a sovereign wealth fund will meet the purposes of converting non-renewable assets to financial assets, investing for the future through forced savings and securing the continued growth of financial reserves through diversified investments.
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