Macau Monetary Authority (AMCM) President Benjamin Chan Sau San said on Tuesday that the government will launch a public consultation in the middle of next year on the possible establishment of a company tasked with managing the local version of a “sovereign wealth fund” – officially named Macau Investment and Development Fund Management Limited.
Chan made the remarks when replying to an oral interpellation by directly-elected lawmaker-cum-civic leader Alan Ho Ion Sang during a plenary session of the legislature.
In September, the government formally withdrew its controversial bill which proposed the transfer of 60 billion patacas from the government’s financial reserves for the setting-up of the Macau Special Administrative Region (MSAR) Investment and Development Fund. The bill was to amend the government’s 2019 budget so that it could allocate the 60 billion patacas from its financial reserves and use the amount as the fund’s start-up capital.
The Executive Council – the government’s top advisory body – announced in late July that the government planned to set up the MSAR Investment and Development Fund with a proposed capital of 60 billion patacas and that it would submit the bill to the legislature amending its 2019 budget so that it could go ahead with the 60 billion-pataca injection. The amendment bill proposed that the 60 billion patacas be taken from the “extraordinary” reserves of the government’s financial reserves for the establishment of Macau Investment and Development Fund Management Limited.
The Legislative Assembly unanimously voted in favour of the government’s request for the legislature to remove the debate of the bill’s outline from the agenda for a plenary session on August 7, after Chief Executive Fernando Chui Sai On announced during a press conference on August 5 that the government had requested the legislature to remove it from the agenda.
In the press conference on August 5, Chui said that as members of the public had “raised various views” about the bill which proposed the establishment of Macau Investment and Development Fund Management Limited with a capital of 60 billion patacas, the government believed that it would need to provide residents with “more explanations” about the proposed setting-up of the fund and launch a public consultation on the matter, before a discussion on the bill in the legislature could take place, with the aim of “allaying public concerns”.
The government formally requested the legislature to withdraw the bill on September 19.
Chan said on Tuesday that the Macau Monetary Authority – Macau’s quasi-central bank – has set up a working team on the matter which is carrying out preparatory tasks for the public consultation process next year, which will include a session for lawmakers, apart from a number of sessions for members of the public.
According to the Macau Post Daily, Chan also said that the government is open-minded as to whether Macau Investment and Development Fund Management Limited should be established, adding that the government would decide whether the company will be established or not depending on the opinions collected during next year’s public consultation.
According to a previous government statement, the public consultation will discuss the proposed introduction of the Santiago Principles – which is advocated by the International Monetary Fund (IMF) as the guidance principles for the operation of sovereign wealth funds – to the operation of the possible fund management company.
According to Wikipedia, the Santiago Principles, formally known as Sovereign Wealth Funds: Generally Accepted Principles and Practices (GAPP) have been designed as a common global set of 24 voluntary guidelines that assign best practices for the operations of sovereign wealth funds (SWFs).
According to the previous government statement, the public consultation will also discuss topics such as the managerial structure of the fund company, the international recruitment of the company’s management team, and the company’s investment risk management.
Chief Executive Fernando Chui Sai On revealed in his 2019 government work report to the Legislative Assembly on November 12 that the MSAR financial reserves amounted to 573 billion patacas (0.573 trillion patacas) at the end of September.
