Malaysia’s Sarawak in talks with Norway to form sovereign fund, ‘for the benefit of future generations’
- Home to some of the biggest aluminium smelters and hydroelectric dams in Southeast Asia, Sarawak aims to achieve the same standard and success as Norway
- Malaysia’s biggest state is interested in the lessons to be learned from the Scandinavian country, which has developed the world’s largest sovereign wealth fund
The Malaysian state of Sarawak is meeting with Norway to discuss setting up a sovereign wealth fund, Premier Abang Johari Tun Openg said in a statement on Saturday.
Sarawak, home to some of the biggest aluminium smelters and hydroelectric dams in Southeast Asia, would try to achieve the same standard and success of Norway’s sovereign wealth fund, the premier said after a meeting with Norges Bank Investment Management officials at the bank’s headquarters in Oslo. Norges Bank manages The Government Pension Fund Global.
“Given the many parallels between Sarawak and Norway, Sarawak was particularly interested in the lessons to be learned from Norway, given that it had around 25 years experience in developing the fund,” Abang Johari said.
Sarawak is Malaysia’s largest state, with an area about one-third of the size of Norway. Situated on the island of Borneo, it is also one of Southeast Asia’s largest producers of palm oil and fossil fuel.
The state aims to move away from its dependency on fossil fuels toward clean energy as it expects the recent “significant increase” in oil revenue, amid the rise of energy prices, to last only around another 25 years, Abang Johari said.
The premier said the state should put aside revenue from the increased earnings “for the benefit of future generations in the form of a sovereign fund.”
Norway’s US$1.3 trillion sovereign wealth fund, the world’s largest, earned a return on investment of US$177 billion last year, the second highest on record, with the biggest boost coming from tech stocks. The fund’s return on investment stood at 14.5 per cent for the year.