Manage SWF well, economist says


ECONOMIST Paul Barker says a Sovereign Wealth Fund (SWF) is only valuable if and when it operates to the highest standard of performance and accountability to the people.
Barker, the executive director of the Institute of National Affairs, said this was to avoid poor management and governance as had been the case of major State associated funds.
He gave as examples the Mineral Resources Stabilisation Fund in the 1990s, the Superannuation Funds and Investment Corporation, plus various trust and resource funds over the years.
“The SWF needs to be managed to the highest level of transparency and sound performance, in terms of returns and risk management, notably at the higher end of the scale for the so-called Santiago Principles.”
Treasury last week put up public notices seeking application from qualified people to be appointed to the board and management of the Papua New Guinea Sovereign Wealth Fund.
Barker said lower standards in terms of political interference, performance and accountability, would make the initiative pointless in terms of its policy and economic objectives, and the misapplication of public funds.
“For this reason, the appointment of suitable board members and fund managers, and development and application of sound and prudent operational, investment and reporting rules, will be critical to the utility of the SWF,” Barker said.
“As well as the Treasury representative and alternate, the other board members must be persons with the highest credibility and experience in planning and oversight of fund management, communications and public disclosure and accountability.”
He said the Government had a poor record over the years of making unsuitable appointments to various boards of State-owned enterprises and authorities.

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