Malaysians want more transparency on Petronas

Malaysians want more transparency on Petronas

By Chua Jui Meng

MALAYSIA’S non-commodity Khazanah Nasional, founded in 1993, is ranked 23 with US$34 billion in assets and a Linaburg-Maduell Transparency Index (LM-TI) of 5.

The world’s largest SWF is Norway’s oil-based Government Pension Fund-Global. It was set up in 1990 and is currently registered with assets worth US$664.3 billion with a perfect 10 LM-TI.

UAE-Abu Dhabi’s oil-based Abu Dhabi Investment Authority, established in 1976, is ranked second with US$627 billion with a 5 LM-TI.

At third ranking China’s non-commodity SAFE Investment Company which was founded in 1997 and now manages assets worth US$567.9 billion with a 4 LM-TI.

That’s the top three SWFs in the world. Now, let’s focus on our neighbours.

Singapore’s non-commodity Government of Singapore Investment Corporation that was set up in 1981 is ranked 8^th with assets at US$247.5 billion and a 6 LM-TI.

Following at 9^th rank is another Singapore non-commodity SWF, Temasek Holdings which was established in 1974. It has US$157.5 billion in assets and a perfect 10 LM-TI.

Even countries like Kuwait, which was severely damaged by Iraq’s bombing and brief occupation, Libya, Kazakhstan, Algeria and South Korea which was far poorer than Malaysia in the 60s, 70s and 80s.

Malaysia Boleh! (Malaysia Can!) is thus really Malaysia Tak Boleh! (Malaysia Cannot!) under BN-Umno’s 55-year rule.

http://www.swfinstitute.org/fund-rankings/

Sovereign Wealth Fund Rankings

Largest Sovereign Wealth Funds by Assets Under Management

Country Sovereign Wealth Fund Name Assets $Billion Inception Origin Linaburg-Maduell Transparency Index Norway Government Pension Fund – Global $664.3 1990 Oil 10 UAE – Abu Dhabi Abu Dhabi Investment Authority $627 1976 Oil 5 China SAFE Investment Company $567.9** 1997 Non-Commodity 4 Saudi Arabia SAMA Foreign Holdings $532.8 n/a Oil 4 China China Investment Corporation $482 2007 Non-Commodity 7 China – Hong Kong Hong Kong Monetary Authority Investment Portfolio $298.7 1993 Non-Commodity 8 Kuwait Kuwait Investment Authority $296 1953 Oil 6 Singapore Government of Singapore Investment Corporation $247.5 1981 Non-Commodity 6 Singapore Temasek Holdings $157.5 1974 Non-Commodity 10 Russia National Welfare Fund $149.7* 2008 Oil 5 China National Social Security Fund $134.5 2000 Non-Commodity 5 Qatar Qatar Investment Authority $115 2005 Oil 5 Australia Australian Future Fund $83 2006 Non-Commodity 10 UAE – Dubai Investment Corporation of Dubai $70 2006 Oil 4 UAE – Abu Dhabi International Petroleum Investment Company $65.3 1984 Oil 9 Libya Libyan Investment Authority $65 2006 Oil 1 Kazakhstan Kazakhstan National Fund $61.8 2000 Oil 8 Algeria Revenue Regulation Fund $56.7 2000 Oil 1 UAE – Abu Dhabi Mubadala Development Company $53.1 2002 Oil 10 South Korea Korea Investment Corporation $43 2005 Non-Commodity 9 US – Alaska Alaska Permanent Fund $42.8 1976 Oil 10 Iran National Development Fund of Iran $40 2011 Oil & Gas n/a Malaysia Khazanah Nasional $34 1993 Non-Commodity 5 Azerbaijan State Oil Fund $32.7 1999 Oil 10 Brunei Brunei Investment Agency $30 1983 Oil 1 France Strategic Investment Fund $25.5 2008 Non-Commodity 9 US – Texas Texas Permanent School Fund $25.5 1854 Oil & Other 9 Ireland National Pensions Reserve Fund $18 2001 Non-Commodity 10 New Zealand New Zealand Superannuation Fund $16.6 2003 Non-Commodity 10 Canada Alberta’s Heritage Fund $16.4 1976 Oil 9 Chile Social and Economic Stabilization Fund $15 2007 Copper 10 US – New Mexico New Mexico State Investment Council $14.9 1958 Non-Commodity 9 Brazil Sovereign Fund of Brazil $11.3 2008 Non-Commodity 9 East Timor Timor-Leste Petroleum Fund $11.1 2005 Oil & Gas 8 Bahrain Mumtalakat Holding Company $9.1 2006 Non-Commodity 9 Oman State General Reserve Fund $8.2 1980 Oil & Gas 1 Peru Fiscal Stabilization Fund $7.1 1999 Non-Commodity n/a Botswana Pula Fund $6.9 1994 Diamonds & Minerals 6 Mexico Oil Revenues Stabilization Fund of Mexico $6.0 2000 Oil n/a Chile Pension Reserve Fund $5.9 2006 Copper 10 US – Wyoming Permanent Wyoming Mineral Trust Fund $5.6 1974 Minerals 9 Saudi Arabia Public Investment Fund $5.3 2008 Oil 4 China China-Africa Development Fund $5.0 2007 Non-Commodity 4 Angola Fundo Soberano de Angola $5.0 2012 Oil n/a Trinidad & Tobago Heritage and Stabilization Fund $2.9 2000 Oil 8 US – Alabama Alabama Trust Fund $2.5 1985 Oil & Gas n/a Italy Italian Strategic Fund $1.4 2011 Non-Commodity n/a UAE – Ras Al Khaimah RAK Investment Authority $1.2 2005 Oil 3 Nigeria Nigerian Sovereign Investment Authority $1.0 2011 Oil n/a Palestine Palestine Investment Fund $0.8 2003 Non-Commodity n/a Venezuela FEM $0.8 1998 Oil 1 US – North Dakota North Dakota Legacy Fund $0.5 2011 Oil & Gas n/a Vietnam State Capital Investment Corporation $0.5 2006 Non-Commodity 4 Kiribati Revenue Equalization Reserve Fund $0.4 1956 Phosphates 1 Gabon Gabon Sovereign Wealth Fund $0.4 1998 Oil n/a Indonesia Government Investment Unit $0.3 2006 Non-Commodity n/a Mauritania National Fund for Hydrocarbon Reserves $0.3 2006 Oil & Gas 1 Equatorial Guinea Fund for Future Generations $0.08 2002 Oil n/a UAE – Federal Emirates Investment Authority n/a 2007 Oil 2 Oman Oman Investment Fund n/a 2006 Oil n/a UAE – Abu Dhabi Abu Dhabi Investment Council n/a 2007 Oil n/a Papua New Guinea Papua New Guinea Sovereign Wealth Fund n/a 2011 Gas n/a Mongolia Fiscal Stability Fund n/a 2011 Minerals n/a Total Oil & Gas Related $2,989.4 Total Other $2,192.4 TOTAL $5,181.8

*This includes the oil stabilization fund of Russia.
**This number is a best guess estimation.
***All figures quoted are from official sources, or, where the institutions concerned do not issue statistics of their assets, from other publicly available sources. Some of these figures are best estimates as market values change day to day.
Updated December 2012

My biggest beef with the BN federal government is this: Why is there no oil-based SWF for Malaysia?

Malaysia is the 27^th largest oil producer in the world, rolling out 693,700 bbl/day. Only 114 countries are listed as at 2009 and 2010.

Compare Malaysia with the above mentioned countries that are doing better in SWF asset management: Kuwait (10^th at 2,494,000 bbl/day), Libya (17^th at 1,790,000 bbl/day), Kazakhstan (18^th at 1,540,000 bbl/day), Algeria (15^th at 2,125,000 bbl/day), South Korea (64^th at 48,180 bbl/day) and Singapore (82^nd at 10,910 bbl/day).

Petronas , founded in 1974, is today a global player in oil and gas exploration.

Why is the government just satisfied with an annual RM100 million CONTRIBUTION to Kwan since 1988? Are you treating Malaysians as monkeys and giving out peanuts?

Where has Petronas’ trillions of ringgit in revenue over the past 38 years gone to? Did Petronas’ oil and gas exploration presence in 32 countries outside Malaysia contribute or help facilitate the bulk of RM1.08 trillion in capital flight in the last decade?

Why avoid establishing an oil-based sovereign fund for the people and country? Is it because financial transparency and accountability would be a pain?

Petronas’ Q3 2012 profits are down 22%. That is a significant drop in financial performance.

But all these beg the question: With such wealth over 38 years, why is Malaysia’s national debt, as reflected by Budget 2013, at RM502 billion or 1.3% short of the 55% legislated debt ceiling?

But Deputy International Trade and Industry Mukhriz Mahathir had let the cat out in an interview with The Edge last year, claiming that Malaysia’s debts were well managed as the bulk of the RM800 billion borrowings were domestic!

A debt is a debt! You have to repay all, whether domestic or foreign.

Also, which is the true figure for our federal debt? RM502 billion or RM800 billion?