Managing trust funds in the Pacific

The Fiji Times:

Monday, 14 July 2014

FOR any trust fund to operate efficiently and to contribute optimally to a country's development in the short and long-term, it is crucial for the trust fund to be established under strong and effective governance mechanisms, based on internationally agreed principles and best practices.

And without strong governance and accountability mechanisms, as well as prudential financial management practices, macroeconomic and governance risks are high.

This was presented by the Pacific Islands Forum secretary general, Tuiloma Neroni Slade, at a recent seminar on "Establishing and Managing Trust Funds" at the 18th Forum Economic Ministers Meeting in Honiara, Solomon Islands.

"Trust funds are not new to the region as a number of forum island countries have had experiences and continue to operate trust funds," he said in a statement.

Mr Slade said Northern Pacific countries such as the Federated States of Micronesia (FSM) and the Republic of Marshall Islands (RMI) operated trust funds which were funded by the US.

And Melanesian countries such as Papua New Guinea and Timor Leste, he said, had trust funds funded by new natural resources, while Kiribati and Nauru had property rights and exhausted natural resources trust funds.

"Trust funds create 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," he said.

The seminar generated great interest from Forum member countries on best practices and investment decisions especially with the case study of Kiribati, labelled 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, Mr Slade said it was important to have well-functioning, well-managed trust funds with strong governance framework to translate the resources in trust to fund sustainable socio economic development for present and future generations.

Read story: The Fiji Times

zoom out zoom in print this page