22/11/2022 06:11 PM

KUCHING, Nov 22 (Bernama) -- The Sarawak Legislative Assembly today unanimously passed a Sovereign Wealth Future Fund Board Bill, 2022 with the State Government making an initial allocation of RM8 billion.

Sarawak Premier Tan Sri Abang Johari Tun Openg said under the bill, the state government would be required to make the initial and annual appropriations of fund, which would depend on the state’s financial standing.

“Money for the fund will come from the state consolidated fund through appropriations approved via resolutions passed by this August House,” he said when tabling the bill.

He said subsequent annual appropriations for the fund would be RM300 million annually from the second to fifth year, RM550 million annually between the sixth and 10th year and RM650 million annually from year 11th to 20th.

“With this appropriation, the fund is expected to grow sustainably with no withdrawals except in the case of critical events which might arise within this 20-year period or when the fund performs better than targeted,” he said.

Abang Johari, who is also Sarawak Finance and New Economy Minister, said the fund would be managed in a professional and transparent manner by a board of guardians, comprising experts and professionals in the field of finance and investment.

Additionally, he said it is imperative that the fund and the people managing it to be independent of any political interference.

“Therefore, a person will not be eligible to be appointed as a guardian if he is, at the time of his appointment, a member of a political party or a Member of Parliament or the Legislature or local authority of any state in Malaysia,” he said.

He said in the case of the fund performing better than targeted, the board of guardians might transfer such excess income to an endowment fund account that could be utilised, among others, for Sarawakians education, their socio-economic needs and talent development.

Abang Johari said the sovereign wealth fund would sustain the financial fiscal position of the state via revenue diversification and the creation of reserves replacing oil and gas revenue in years to come.

It would also come as a long-term strategy to maximise returns from the state’s surplus capital reserves through diversified investments, investing for the future through forced saving and converting non-renewable assets to financial assets.

“It is critical to convert these non-renewable assets into financial assets so as to preserve and grow the state’s current wealth.

“Ultimately, this will create an endowment to generate sustainable sources of income for future generations,” he added.