Sovereign Wealth Fund on target – Minster Jordan

DPI, GUYANA, Tuesday, April 17, 2018

The much-anticipated Sovereign Wealth Fund (SWF) is much closer to realisation as the preliminary report or ‘green paper’ is currently being prepared to be sent to Cabinet.

The proposal will also be opened for public consultation, Minister of Finance, Winston Jordan said.

According to the minister, the proposal will go to Cabinet next month. After its examination there, it will be opened to the public for consultation before it is laid in Parliament.

“We are on target for it getting into Parliament before the end of the year, which is what we said in the budget statement,” Minister Jordan told a news conference last Friday.

According to Minister Jordan, the SWF will receive all monies potentially coming from oil. Based on the rule being put into place, out of that fund, the country will get enough to drive its developmental agenda.

A Sovereign Wealth Fund (SWF) is defined as pools of money derived from a country’s reserves, which are set aside for investment purposes that will benefit the country’s economy and citizens. The funds come from Central Bank reserves that accumulate as a result of budget and trade surpluses, and even from revenue generated from the exports of natural resources.

The types of acceptable investments included in each SWF vary from country to country; countries with liquidity concerns limit investments to only very liquid public debt instruments. Some countries have created SWFs in diversifying their revenue streams.

For example, the United Arab Emirates relies on oil exports for its wealth. Therefore, it devotes a portion of its reserves to a Sovereign Wealth Fund that invests in other types of assets that can act as a shield against oil-related risk.

 

By: Alexis Rodney