A Seminar on “Establishing and Managing Trust Funds”was held at the 18th Forum Economic Ministers Meeting in Honiara, chaired and moderated by Secretary General of the Pacific Islands Forum, Tuiloma Neroni Slade with presentations from the World Bank Group, Governments of Tonga, Federated States of Micronesia (FSM) and Cook Islands, highlighted important issues relating to experiences and challenges of establishing and managing Trust Funds in the region.
“Trust Funds are not new to the region as a number of Forum Island Countries have had experiences and continue to operate Trust Funds. Northern Pacific countries such as the Federated States of Micronesia (FSM) and the Republic of Marshall Islands (RMI) operate Trust Funds which are funded by United States of America. Melanesian countries, including Papua New Guinea and Timor Leste have Trust Funds which are funded by new natural resources, while Kiribati and Nauru have property rights and exhausted natural resources Trust Funds,” Mr Slade said.
The seminar presented a highly experienced panel consisting of: Ms Ekaterina Gratcheva from the World Bank Group, who presented on Lessons in Managing Sovereign Assets in the Pacific; Hon. Dr. Aisake Eke, Tonga’s Minister for Finance and National Planning, shared Tonga’s experience with Climate Change Trust Fund, one of the special purpose Trust Funds in the Pacific. The Director – Office of Statistics Budget & Economic Management & Compact Management from Federated States of Micronesia, Hon. Evelyn Adolph, presented on the Challenges in Management of Trust Funds, from FSM’s Country Perspective with respect to Compact funds management. Mr. Richard Neves, Financial Secretary of Cook Islands shared his experience with Trust Funds in Timor Leste and Cook Islands Fund.
“Trust Funds create both opportunities and challenges for a country to transform the resources which are held in trust, whether they be from abundance of natural resources or donor funds, into well-managed financial assets and ultimately to tangible development,” said Mr Slade.
The seminar generated great interest from Forum member countries on best practices and investment decisions especially with the case study of Kiribati, labeled as the largest of the trust fund in the Pacific region, and other country experiences presented by the panel.
Based on the seminar discussions and deliberations, the Secretary General stressed the importance of having well-functioning, well-managed Trust Funds with strong governance framework to translate the resources held in trust to fund sustainable socio-economic development both for current and future generations.
“For any Trust Fund to operate efficiently and to contribute optimally to a country’s development both in the short and long term, it is highly crucial for the Trust Fund to be established under strong and effective governance mechanisms, based on internationally agreed principles and best practices. Without strong governance and accountability mechanisms, as well as prudential financial management practices, macroeconomic and governance risks are high,” Mr Slade further added. -ENDS-
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