STOCKHOLM: Minister for Rural and Economic Development, Joseph Lelang, has led a small delegation from Papua New Guinea to Stockholm, Sweden, to meet with the Swedish Government to discuss and understand how they have successfully and consistently managed their Sovereign Wealth Fund since 1974.
Mr. Lelang said that this trip was an important one. He said, one of the tasks under his Ministry, was to advise the Government on what is the best design and structure to operationalize Papua New Guinea’s Sovereign Wealth Fund (SWF) and in particular, of its two sub-funds: the Fiscal Stabilization Fund and the Future Savings Fund.
He said, when the Organic Law on Sovereign Wealth Fund (OLSWF) was certified by Speaker of the PNG Parliament in 2016, not much progress had been made to operationalize the SWF.
Minister Lelang thanked Prime Minister James Marape for putting the SWF under his Ministerial oversight. He said “the SWF is an important Fund and I am totally committed to make certain the SWF is delivered by next year, on the 50th year of PNG’s independence”.
“I also want to thank the Swedish Government for accepting me and my delegation that comprised Hon. Joseph Yopyyopy, Member for Wosera-Gawi, and officials from the Department of Foreign Affairs and Treasury”, he said.
Speaking in Stockholm, Mr. Lelang said Sweden had six Funds and four sub-funds. During his visit, he was met by Mr. Niklas Ekvall, Chief Executive Officer of AP4 and Mr. Tobias Fransson, Head of Sustainability, Finance and Communication. The CEO, Mr. Ekvall outlined the AP4’s structure, its role in terms of assets, buffer capital and returns to investments including how the Fund served as a self-contained buffer against short- term market volatility”, said Mr. Lelang.
I chose Sweden because it is sensible to talk to and learn from a country that has years of experiences in successfully managing their Funds to becoming the best performing Fund in the world”, he said. Mr. Lelang said that a good SWF for PNG must have a good structure, policies and strategies and an enabling legislation that will embed into the design of our SWF structure, a culture of excellence and commitment by those that will manage it in the future.
Mr. Lelang concluded stating that the AP4 Fund, has consistently outperformed its investment return targets and is strong in comparison to international peers in Europe and around the world in the last 50 years. Its structure imposes discipline and total commitment to doing everything that is right under the law and in terms of its investments strategies and asset management.
“I am satisfied with the way the AP4 is designed and structured, which is what I am looking for, to imbed in the design of PNG’s SWF, the governance culture of accountability, sustainability and investment and how such investments and Funds are protected, for the future of this country but at the same time, serve its purpose as a buffer to imbalances in our budget and short-term foreign exchange market volatility”.
