KUALA LUMPUR (May 23): Sarawak has proposed to appoint up to eight candidates to form the board of guardians for its RM8 billion sovereign wealth fund (SWF) said Sarawak Premier Tan Sri Abang Johari Tun Openg.

Abang Johari said that the plan comes after the state legislative assembly unanimously approved the Sarawak Sovereign Wealth Fund Board Bill in November last year.

“We have passed the legislation from the last Budget session and now we are forming the board of guardians,” he told reporters after attending the 5th Malaysian Banking and Finance Summit on Tuesday (May 23).

The premier said the board of guardians — the custodians of the monies in the sovereign wealth fund - will involve various local and international finance, investment experts as well as professionals.

“We have to check the personality (of the board of guardians candidates), the integrity as well as the background of the professional to be involved.

“(The board) are not only among the Sarawakian or Malaysian, but also from multinational, and people who have the experience in investment, capital market as well as how to multiply and seek capital,” he said.

He shared that the current plan for now is to appoint eight members of the board of guardians into the fund.

“Under the law there are up to 11 (board of guardians), and we will appoint eight. As they will be the people from various experiences — it is not easy so it will take time,” he said.

In November last year, Sarawak announced to set up the SWF with an initial amount of RM8 billion to strengthen the state's financial sustainability.

The fund adopted a capital maximisation model, where the fund benchmark against Norway’s SWF known as Norway Government Pension Fund Global, with a fund size of US$1.25 trillion (RM5.71 trillion).

The same model is also adopted by the US Alaska Permanent Fund Corp, with a fund size of US$70.6 billion (RM322.18 billion), according to the premier.

“These countries’ sources of revenue are also from oil and gas, similar to Sarawak,” Abang Johari said in his keynote address.

He said that the fund would enable Sarawak to convert non-renewable assets to financial assets, invest for the future through forced savings and secure the continued growth of financial reserves through diversified investments.

He noted that the fund will also create an endowment to generate sustainable sources of income for future generations, he added.

“This fund is set up according to best international practices to ensure appropriate governance and an internationally accepted level of integrity and transparency when dealing with public funds,” he added.

Sarawak welcomes financing for businesses

Abang Johari also welcomes partnerships, investment and financing across the supply and value chains of all sectors of the Sarawak economy.

“We have lay out ample opportunities in PCDS [Post-Covid Development Strategy] 2030 where investors, bankers and financial institutions can participate together to grow Sarawak’s economy. The massive development in Sarawak will require huge investment and financing,” he added.

The premier said the state has in place robust policies and procedures to ensure integrity, transparency and good governance that are aligned to ESG (environmental, social and governance) principles.

“There are more than just financing requirements for businesses. In building the Sarawak economy and supporting growth of new economy, financing is equally important to develop our talent. Banks and financial institutions can work towards creating bursary for education and human capital development in Sarawak,” he added.

He added that the state is committed to developing the funding capacity for SMEs as one of the key building blocks to achieve Sarawak’s 2030 aspirations.

“This is because our SME sector is a key contributor to Sarawak economy, and employs almost 50% of our workforce,” he noted.

Abang Johari said the state used to have five commercial banks ie Kwong Lee Bank, Bian Chiang Bank, Hock Hua Bank, Wah Tat Bank and Bank Utama before the consolidation under Malaysian banking industry rationalisation in the late 90s.

He said in the early 19th century, these family-owned commercial banks played an important role in facilitating trade and commerce.

“Looking at these historical events, I am even more committed to developing the funding capacity for our SMEs as one of the key building blocks to achieve Sarawak’s PCDS 2030 aspirations,” he added.