Cook Islands is establishing a Sovereign Wealth Fund (SWF) to secure the nation’s financial future potentially funded by revenue from future seabed mining.

This initiative is designed to secure the nation’s financial future, provide funding for critical infrastructure, and ensure long-term economic resilience.

A SWF is a state-owned investment fund created from a country’s reserves. These funds are invested in various assets with the goal of generating returns that can support the country’s economic and social objectives.

Garth Henderson, the Secretary of the Ministry of Finance and Economic Management (MFEM), highlighted the importance of this initiative during Wednesday’s public consultation led by the Ministry’s Economic Planning Division at Sinai Hall.

Reflecting on the recent public meetings, Henderson noted that the consultations have been instrumental in raising awareness about the Fund and gathering community feedback.

The public consultations began on Wednesday night with Vaka Takitumu at the Matavera CICC Sunday School Hall followed by Vaka Te Au O Tonga at Sinai Hall on Thursday. It will conclude on Tuesday, July 23, at the Aroa Nui Hall in Arorangi (Vaka Puaikura), from 6pm to 7.30pm.

“Last night (Wednesday) we were talking to about 20-30 people, raising awareness around the Sovereign Wealth Fund, and taking feedback from the community,” Henderson told Cook Islands News.

The Secretary acknowledged that the concept of a SWF might seem overwhelming to the general public, but emphasised that the key concerns were more about understanding the purpose of the fund and ensuring robust governance.

“The general public doesn’t want to know the mechanics of a Sovereign Wealth Fund. All they want to know is, what’s the purpose of the sovereign wealth funds? Are they comfortable that the governance framework in place is a good framework?”

He also stressed the importance of the fund’s independence from government control, ensuring transparency in investments and returns, and the need for protective legislation.

“People also want to know about independence of the board to make decisions, away from the government?”

Discussions also focused on the fund’s objectives, including resilience, stabilisation, and intergenerational investment returns, with a particular emphasis on health, education, and social programmes.

To ensure widespread understanding and participation, the Ministry has made extensive efforts to inform the public, using animations, social media posts, and distributing brochures.

Looking ahead, the Ministry plans to consolidate feedback through live-stream panels, which have previously garnered significant engagement.

The goal is to finalise a policy paper by the end of the year, which will then be presented to the Cabinet. Once approved, the policy will move towards legislation, with hopes of passing it through Parliament next year.

Henderson said: “If we’re comfortable with it and the Cabinet’s comfortable with it, they will move instructions to draft legislation ... get the legislation drafted up and pass through Parliament sometime next year.”

While acknowledging that there will always be some dissent, Henderson remains optimistic about gaining majority support.

“This doesn’t have to be a contentious issue, if the majority support and I anticipate majority support,” he said.

Henderson also mentioned potential revenue sources for the SWF, such as seabed harvesting and budget surpluses.

“If we did get some revenues from seabed harvesting, then that’ll be the primary contributor towards this trust fund,” he stated.

He emphasised the importance of financial discipline, particularly in building the intergenerational account to support future health and medical programmes.

One of the members of the public, Mariana Powell welcomed the initiative saying it’s a great investment for the future of her children and generations to come.

“It’s really interesting that they’re looking at the future of what would happen because I don’t think much about this planning had gone on before so it was really interesting,” Powell said.

“It makes you want to learn a little bit more about what’s happening. I think it’s a great investment for the future of our children and I do now that they’re talking about the laws and legislation that has to go through and I think that’s very important.”