FINANCE - Malaysia To Take Lead In Establishing Supra-Sovereign Wealth Fund

KUALA LUMPUR, Oct 23 (Bernama) -- Malaysia will take the lead in facilitating the establishment of the Supra-Sovereign Wealth Fund (SSWF) in its bid to attract large amounts of sovereign wealth funds from prosperous Islamic countries.

Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said Malaysia will act as a co-sponsor and initiate meetings with three identified Organisation of Islamic Conference (OIC)countries, to also become co-sponsors of the SSWF in a move to hasten its the establishment.

He said Malaysia has been chosen by the Islamic Development Bank (IDB) to lead the way, as the country is the one, which proposed the idea during the Annual Meeting of the IDB in Azerbaijan recently.

"Most Western countries are no longer the preferred investment destination.

"We have thus proposed the establishment of this fund under the IDB to tap the sovereign wealth fund, mostly from wealthy Islamic countries, to invest instead in Islamic developing nations," he told Bernama on Saturday.

The decision was conveyed to Husni by the IDB president Tan Sri Dr Ahmad Mohamed Ali during a 30-minute meeting on the sidelines of the Umno General Assembly here today.

"We expect that being co-sponsors, it will help us expedite the setting up of the SSWF fund. Through this fund, we can invest in development projects in developing Islamic countries," he highlighted.

Ahmad Husni said potential investments are in sectors such as manufacturing, services as well as in oil, gas and energy.

Under the proposed fund, wealthy members of OIC would contribute towards the fund that is to be invested in development projects with relatively high returns in the combined Muslim economies of Asia, Middle East, Central Asia and Africa (MAMICA), in high growth sectors.

Meanwhile, Ahmad Husni disclosed that Malaysia has agreed in principle to host the first OIC Economic Summit, which is being finalised.

Apart from that, the government is also in the final stage of allowing the IDB to open a regional office in Cyberjaya, he said.

Source :  http://www.bernama.com/bernama/v5/newsindex.php?id=537820 - Oct 23, 2010