AFTER mounting pressure, the Sarawak government has finally relented to the long mooted suggestion that it uses the excess of its petroleum revenue to set up a sovereign wealth fund. 

“I welcome the suggestions made by some of the honourable members, including in the last assembly sitting for the state government to establish a sovereign wealth fund by investing on surplus revenue as a buffer in time of financial crisis, as well as for the benefits of our current and future generations,” Chief Minister Abang Johari told the state assembly today. 

He said a thorough feasibility study for its establishment would have to be done first.

“This is to ensure we have proper governance framework and implementation mechanism to mitigate any major risks associated with the operation of such a fund. 

“The study will also ensure all key aspects of the fund setup, such as financial, legal and operational perspectives, are taken into consideration.”

Abang Johari told the assembly he was inclined to study the Norway model of the fund. 

Batu Lintang rep See Chee How, when he was still with PKR, had as far back in 2014 suggested the government set up the fund based on the Norway model.

Civil groups and even member parties of the Abang Johari-led Gabungan Parti Sarawak had echoed See’s call in recent times.

The chief minister said such a fund could also help the state to address the issue of high volatility of resource prices, unpredictability of extraction, and exhaustibility of natural resources. – November 13, 2020.