Singapore, Kazakhstan promote bilateral investment

Singapore and Kazakhstan have exchanged a bilateral investment treaty to support greater investment flows between both countries.

The treaty protects the interests of investors from Singapore and Kazakhstan and gives them more confidence to leverage investment opportunities in either country. Under the terms of the treaty, Singapore companies operating in Kazakhstan will enjoy protection on their investments on top of that already accorded under Kazakhstan’s domestic laws, and vice versa. The Kazakhstan-Singapore treaty will also grant investors from both countries:

 Non-discriminatory treatment compared to other foreign investments (most favoured nation treatment);

 Fair and equitable treatment and full protection and security based on customary international law;

 Protection from illegal expropriation*;

 Non-discriminatory compensation for losses arising from war, armed conflict and civil strife;

 Freedom to transfer capital and returns in and out of country; and

 Access to international arbitration for investment disputes.

Singapore's Senior Minister of State for Trade and Industry Dr Koh Poh Koon commented that there is still headroom for bilateral trade growth. “Emerging markets such as Kazakhstan have strong potential for growth. Kazakhstan’s rapidly improving economic reforms, highly literate workforce and growing urban middle class present opportunities for Singapore companies. I strongly encourage our companies to venture into Kazakhstan and the rest of Central Asia,” he said.

2018 marks 25 years of bilateral relations for the two countries, Dr Koh revealed in a speech at the Kazakhstan-Singapore Business Forum. "Kazakhstan’s forward thinking leadership embraced globalisation early on, participating in the ebbs and flows of shifting global supply chains, and linking markets from Europe to Asia. Kazakhstan stands at the crossroads between the East and West, and the North and South. As the world’s economy moves East, Kazakhstan can be a key node connecting China, Central Asia, Europe and possibly even Southeast Asia," he said.

"The opening of the Astana International Financial Centre (AIFC) in July this year is a notable step that could help build up Kazakhstan as a Eurasian commercial and financial node that would eventually serve as the pathway for investments and other economic opportunities in the region." 

Kazakhstan is Singapore’s most significant economic partner among the five Central Asian states of Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan and Tajikistan. Minister Koh said bilateral trade in goods amounted to S$133.6 million last year, while bilateral trade in services grew 16% over the last five years to reach S$40 million in 2016. Bilateral investment grew approximately 30% over the same five-year period.

Kazakhstan is also part of the Eurasian Economic Union (EAEU), a customs union formed by Russia, Armenia, Belarus, Kyrgyzstan and Kazakhstan. Singapore is in the process of negotiating a free trade agreement with the EAEU and will build on the current agreement as a foundation to the negotiations.

*This refers to a public sector authority taking property from a private sector owner for public use or benefit.

Winners of Kazakhstan Transformers Roadshow announced

The winners of the first-ever Transformers Roadshow at the Astana Islamic Economy Forum in Kazakhstan have been announced. The Transformers platform acknowledges the crucial need to give people the tools to build a sustainable future and is supported by Transform, a US$500 million fund for innovation and technology.

The Transformers Roadshow serves as a platform to accelerate science, technology and innovation-led initiatives across the IsDB’s member countries and Muslim communities. Organised by the Islamic Development Bank (IsDB) and hosted by the Astana International Finance Center (AIFC), the science, technology and innovation competition invites innovators to pitch concepts supporting one or more of the UN’s Sustainable Development Goals. Winners receive US$3,000 to further develop their ideas.

Speaking at the launch of the Roadshow, President of the IsDB, Dr Bandar Hajjar said: “With Kazkahstan emerging as a growing Islamic finance market, we are delighted to be launching the first leg of our roadshow here with the AIFC’s support. An extension of the IsDB’s Transform Fund, it helps us to identify innovators who are seeking funding, business partners and advice for their unique ideas.”

Over 150 entrepreneurs across the Central Asia region entered the competition, and finalists were invited to participate in a series of masterclasses, seminars and workshops ahead of pitching. The sessions focused on: the benefits of creating a global ecosystem; generating interest in ideas and enterprises among impact investors; and how science, technology and innovation can solve social and health challenges across the developing world.

The winners of the Transformers Roadshow are:

- Z. Kerimkulov and N. Shodorova's  Egistic project, which focuses on the creation of a geo information and analytical system to support farmers and decision-makers in the development of the agricultural sector in Kazakhstan.

- R. Rakymbay, A. Taukenov and S. Satayev's project on smart farming, which aims to create a sustainable and technologically-driven solution to address farming challenges and ensure that a wide variety of plants are grown using accurate, live and digitally-driven data.

- K. Tuleishin pitched a venture on smart halal finance, which will aim to make its impact on reaching the UN sustainable development goals particularly in the area of quality education.

The initiative follows the IsDB’s recently launched Engage platform - an online ecosystem for innovators seeking market opportunities.

Kazakhstan consumers buying yoghurt, sour milk products for health

Yoghurt and sour milk products, which is a growing dairy category in Kazakhstan, has seen interest from health-conscious consumers who believe the products are healthy and aid the immune system and digestion. The demand has spurred manufacturers to constantly update product lines with new tastes and health-orientated additives, says Euromonitor in a report on the dairy market in Kazakhstan.

Euromonitor identified Wimm-Bill-Dann Produkty Pitania as the leading company in 2016 with a 21% share of retail value sales for yoghurt and sour milk products. "This international manufacturer offered a wide range of yoghurt and sour milk products in Kazakhstan. Its leadership in retail value sales terms was due to comparatively high unit prices and strong marketing campaign," Euromonitor stated in an introduction to the report.

According to Euromonitor, Wimm-Bill-Dann Produkty Pitania also topped the 'other' dairy category, with a 17% share of retail value sales. The company offers brands such as Chudo, Domik v Derevne and Vesely Molochnik in chilled and shelf stable desserts, chilled snacks, cream, fromage frais and quark.

The increasing popularity of non-traditional products, such as chilled and shelf stable desserts, chilled snacks and coffee whiteners, will stimulate volume and value growth. Euromonitor says there will also strong demand for cream, condensed milk, fromage frais and quark*, as they include traditional products that remain popular among Kazakhstanis. Cream is consumed with tea for instance, while smetana (sour cream) is mainly taken with traditional hot meals like meat as well as berry dumplings and pancakes.

Interested?

Buy the Euromonitor report on Dairy in Kazakhstan (December 2016)

*Quark is a dairy product made by warming soured milk and then straining it. The curds are spoonable and are said to have a mild flavour that goes well with both sweet and savoury dishes.

Milk demand to grow despite saturated market in Kazakhstan

Milk is an integral part of the nutrition intake of Kazakhstanis, especially in tea. As the population increases, the demand for milk is set to grow from 2016 to 2021, says Euromonitor. 

In 2016, manufacturers competed by offering high-quality products at affordable prices, relying on the use of high-quality raw materials and modernised equipment as well as on improving their production processes to do so. 

Agroprodukt Asia remained the leading player in 2016 with an 18% share of retail value sales. The company offers a wide range of drinking milk products, such as Odari, Zorkin Lug, Mumunya, Lyubimoe, Beloye, Moloko, Svezhee Moloko and Nashe.

Interested?

Buy the Euromonitor Dairy in Kazakhstan report

Cheese still a luxury item in Kazakhstan

In 2016, the key issues in the cheese industry in Kazakhstan were product quality and the presence of counterfeit products, says Euromonitor.

Relatively few have tasted cheese in Kazakhstan, the research firm said. The highest consumption of cheese was observed in large urban areas like Astana and Almaty, where consumers tend to have the highest purchasing power. Unscrupulous manufacturers have offered products that resemble cheese but were made of vegetable oil, which passed muster with uninformed local consumers. 

Gadyachsyr led the pack in 2016 with a 14% share of retail value sales. Ukrainian-manufactured cheeses are preferred however because of their perceived better taste and quality.

Over the forecast period, Kazakhstan is expected to see a more stable economic situation and increased purchasing power, so expenditure on cheese is expected to grow. 

Interested?

Buy the Euromonitor Dairy in Kazakhstan report

VCM adds works from National Museum of Kazahstan to e-collection

The Virtual Collection of Asian Masterpieces (VCM) welcomes the National Museum of the Republic of Kazakhstan as a new participating museum.

Created under the Cultural Heritage State Program on behalf of the President of the Republic of Kazakhstan Nursultan Nazarbayev, the museum aims to be the hub for analysis, comparison, reflection, discussion, and evaluation of statements on the historical and cultural heritage of Kazakhstan. 

 

The VCM is a project of the Asia-Europe Museum Network (ASEMUS) to foster mutual understanding among people from diverse cultural backgrounds. By presenting a collection of Asian masterpieces through the web, the VCM provides an opportunity for everyone to appreciate the arts, regardless of financial or geographical circumstances, and promotes communication among participating museums all around the world by introducing their collections online. 

 

Interested?

 

Explore the masterpieces of the National Museum of the Republic of Kazakhstan

KSA's Ministry of Haj meets with Kazahkstani delegation

Source: Ministry of Haj, KSA. Officials
from the Ministry of Haj with the Kazakhstani
and Russian pilgrim delegations.

HE the KSA Undersecretary for Haj affairs, Dr Hussein Al-Sharif has met with the Office of Kazakhstani Pilgrims delegation, headed by the deputy Supreme Mufti (Naib Mufti) of the Spiritual Association of Muslims of Kazakhstan, Serikbai Oraz.

During the meetings, services provided for pilgrims in 2016 (1437) were discussed, including arrangements and preparations to receive the pilgrims on Hajj, to provide them with the best services, and to allow them to perform the rituals easily and conveniently.

Dr Al-Sharif stressed the effectiveness of the electronic portal for pilgrim's services and the importance of compliance with the programmes prepared by the Ministry of Haj. He requested that pilgrims should be aware before their arrival to the KSA of compliance with transportation programmes and scheduled timings for the Jamaraat 'stoning of the devil' ritual, as well as of registering the contracts of pilgrims' housing in the residences licensed by competent authorities.

The Kazakhstani delegation head praised the integrated services provided by the Saudi government to pilgrims in Makkah, Madinah, and the holy sites; the enormous expansions at the Two Holy Mosques, including the expansion of the Mataf (the area surrounding Ka'abah); and the continuous achievements executed to serve pilgrims, most notably the holy sites train, and the Two-Holy Mosques train project that is in progress.

The Kazakhstani quota this year is nearly nearly 5,000.

Interested?

Read the Suroor Asia blog post about the Ministry of Haj's overview of Hajj 2016
Read the Suroor Asia blog post on the meetings with the Kuwaiti Pilgrim Affairs Offices.

IDB approves financing for projects in four member countries

The Board of Executive Directors of the Islamic Development Bank (IDB) has approved financing for new and ongoing projects during its 309th meeting in Jeddah, KSA.

Four member countries – Kazakhstan, Lebanon, Pakistan and Turkey – will receive US$466.4 million for development projects: 

• US$273 million to reconstruct the Aktobe-Makat Road project in Kazakhstan
• US$90 million to assist the polio eradication programme (2016 to 2018) in Pakistan
• US$82 million to support the Konya PPP Hospital project in Turkey
• US$20.7 million to construct the Bir-Al Hith Qartaba Road (phase III) in Lebanon

The agenda for the 41st Annual Meeting of the Board of Governors slated for 18 to 19 May 2016 in Jakarta, Indonesia, was also approved.

IDB approves new financing for projects around the world

The 308th meeting of the Members of the Board of Executive Directors (BED) of the Islamic Development Bank (IDB) has resulted in approvals for US$593.5 million of new financing for development projects in countries such as Kazakhstan and Turkey. 

US$478,000 was also approved in grants from the IDB Waqf Fund for three educational and vocational projects to benefit Muslim communities in three non-member countries, including Singapore.

The approved financing includes US$249.5 million towards the rehabilitation of irrigation and drainage in Kazakhstan aimed at enhancing agriculture and reducing the import of foodstuffs. Other financing approved include US$59 million as extra funding for an electric locomotive project (2TU-0148) project in Turkey, which brings the total financing for this project to a total of US$278.9 million. 

IFSB unveils Islamic Financial Services Industry Stability Report for 2015

The Governor of the National Bank of Kazakhstan, HE Kairat Kelimbetov, launched the Islamic Financial Services Industry (IFSI) Stability Report 2015 during the opening session of the 12th Islamic Financial Services Board (IFSB) Summit on 20 May in Almaty, Kazakhstan. The report aims to contribute to a wider cross-border engagement on stability issues in Islamic finance, while helping to strengthen the building blocks needed for greater resilience.

Said the Secretary General of the IFSB Jaseem Ahmed: "The issuance of the IFSB’s third Islamic Financial Services Industry Stability Report takes place at a time of continuing concern over a fragile and uneven global economic recovery, and the potential for volatility in the financial sector. Against this backdrop, the regulatory changes to the capital and liquidity framework initiated by the Group of Twenty (G20) and the Financial Stability Board (FSB) has seen the issuance of a range of guiding principles by the IFSB, culminating in two standards in 2015, on liquidity management and on core principles.” 

Both standards set the stage not only for the integration of the IFSI into the global economy, but also into the global surveillance mechanism for financial stability. The IFSI Stability Report 2015 complements the standards with discussions on the following topics: 

An overview of the IFSI as well as updates on trends and developments in the three sectors of the industry – Islamic banking, the Islamic capital market and takaful. It also assesses the resilience of the Islamic financial system, which includes technical analyses of selected indicators as well as assessment of risks and vulnerabilities in the sectors.

Initiatives undertaken by international standard-setting bodies to further ensure the stability of the financial institutions and markets, as well as the implications of such reforms for institutions offering Islamic financial services (IIFS). It also reviews the progress of various projects and initiatives undertaken by the IFSB to enhance the supervisory framework so as to ensure stability and soundness of the IFSI.

A surveillance framework for the global financial system including identification of the gaps in the global surveillance framework in the absence of a set of core principles for Islamic finance, which eventually led to the development of an advanced approach to the assessment of supervisory and stability regimes for Islamic finance. It also tracks the implementation mechanisms undertaken by the global standards-setters, which provide a valuable reference for strengthening implementation efforts in the IFSI.

Emerging issues in Islamic finance, including financial consumer protection in Islamic finance, and the importance of having a global Islamic finance database for financial stability, focusing on the IFSB’s initiative on the Prudential and Structural Islamic Finance Indicators (PSIFIs).

Interested?

Download the IFSI Stability Report 2015. 

Read the Suroor Asia blog posts on PSIFIs and core principles.

IFSB, INCEIF renew cooperation agreement

The Islamic Financial Services Board (IFSB) and INCEIF – The Global University of Islamic Finance have renewed an agreement to facilitate international cooperation between the two organisations to provide relevant activities relating to capacity building and awareness promotion in Islamic finance. The Memorandum of Understanding (MoU) was signed on the sidelines of the 12th IFSB Summit in Almaty, Kazakhstan on 19 May.

This mutual co-operation aims to strengthen the efforts of the two institutions in promoting an exchange of information, undertaking research, development, training and education in the Islamic financial services industry. More specifically, the MoU identifies the following areas of cooperation between the IFSB and INCEIF: 

• Jointly exploring and undertaking various research issues concerning Islamic financial services industry. 
• Providing reciprocal staff development and exchange programmes. 
• Building awareness among the industry players through jointly conducting learning and awareness programmes including among others: conferences, seminars, workshops, roundtables, trainings (including custom-designed learning and training programmes). 
• Cooperating in providing technical assistance to facilitate the implementation of the IFSB standards and to assist in building the necessary financial infrastructure for development of a sound and stable Islamic financial services industry. 

Under the first MoU, signed in 2012, the IFSB and INCEIF successfully held a series of six Executive Forums (EF) covering topics in Islamic finance. The IFSB-INCEIF Executive Forums on Islamic Finance aim to provide a platform for industry’s global leaders to discuss emerging issues facing the global Islamic financial services industry with an emphasis on issues related to supervision and prudential regulation at the national and international levels.

The next Executive Forum on Islamic Finance, themed Building Momentum for Islamic Liquidity Management, will be held 3 to 4 June 2015 in Kuala Lumpur, Malaysia.

IFSB Annual Summit to discuss prudential and supervisory infrastructure for Islamic finance

The 12th Annual Summit of the Islamic Financial Services Board (IFSB) will be held on 20 and 21 May 2015, in the commercial capital of Kazakhstan, Almaty. The Summit is aimed at harnessing the latest developments and innovation in regulation, prudential standards, current market practices and future challenges to keep stakeholders informed about the global Islamic financial services market; to provide a platform for dialogue with peers; and to give delegates a voice in contributing to the future direction of the industry.

According to the organisers, the Islamic finance landscape is populated by sovereign sukuk issuances by non-traditional markets such as the UK and Hong Kong; reforms underway in both Asia and the Middle East to integrate Islamic finance into governmental budgets; and increased interest from international institutions such as the International Monetary Fund and the World Bank. 

Developments such as new IFSB standards on stress testing, liquidity management, capital adequacy are occurring alongside strong private sector activity, the organisers note, especially on the sukuk front: 

• The Islamic Corporation for the Development of the Private Sector (ICD), the private sector funding arm of the Islamic Development Bank (IDB) Group has won mandates from Jordan, the Ivory Coast and Senegal to assist them in issuing sukuk. 
• Dubai’s Noor Bank recently debuted a US$500 million sukuk wakālah. 
• Kuveyt Turk Participation Bank inaugurated a RM300 million sukuk murābahah in the Malaysian market. 
• The syndicated sukuk murābahah market helped AlBaraka Turk Participation Bank raise US$268 million.
• The first sharī`ah-compliant insurance product was launched through Lloyd’s of London by XL Group and Cobalt Underwriting.
• The Central Bank of Bahrain launched a new wakālah liquidity management instrument.

The transformational impact of the Islamic finance industry can only be truly enhanced if the requisite prudential and supervisory infrastructure is in place. As such, issues relating to Core Principles for Islamic Finance: Integrating with the Global Regulatory Framework, the Summit theme, require discussion. Discussions at the 12th IFSB Summit in Almaty with focus on the new regulatory developments, policy and market trends in the global Islamic financial services industry, concluding with a panel on The New Silk Road: The Importance of Regulatory Cooperation for Cross-Border Integration.

Need background? Read the Suroor Asia blog posts:

IFSB introduces core principles for Islamic finance
IFSB launches indicators for soundness and growth of Islamic finance banking systems 
ADB and IFSB launch book on Islamic finance for Asia

An Illustrated History of Kazakhstan offers expert insights into past and present

Source: Odyssey website.

Odyssey has published An Illustrated History of Kazakhstan, a 200-page hardback by Hong Kong-based Jeremy Tredinnick which charts the country's long and complex history.

Released in November 2014, the book begins in prehistoric times and covers the colonisation of Central Asia by Imperial Russia as well as independence for the Central Asian states.

Many experts were invited to contribute to the book, including Zhaken Taimagambetov, a Professor in Prehistoric Archaeology and Dean of the Department of History, Archaeology and Ethnology at the Al-Farabi Kazakh National University; Renato Sala and Jean-Marc Deom, archaeologists at the Laboratory of Geoarchaeology at the Al-Farabi Kazakh National University; and Karl Baipakov, Director of the Institute of Archaeology of the Academy of Sciences of Kazakhstan.

National Bank of Kazakhstan becomes AAOIFI member

The National Bank of Kazakhstan, the central bank and financial services regulator of the Republic of Kazakhstan, has taken up membership in Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). The signing ceremony took place on 2 December at the World Islamic Banking Conference 2014 in Manama, Kingdom of Bahrain.Dr Hamed Hassan Merah, Secretary General of the AAOIFI, said the membership would allow AAOIFI to work more closely with the National Bank of Kazakhstan and the finance industry in the Republic of Kazakhstan to support continuing development of Islamic finance.

Nurlan Kussainov, Deputy Governor, Bank of Kazakhstan said, "The membership gives us an opportunity to gain from the international experience in development of Islamic finance industry, to benefit from recommendations of international experts and financial institutions, and to participate in workshops and conferences organised by AAOIFI”.

The Republic of Kazakhstan introduced in early 2009 law and regulations for operations of Islamic financial institutions. This then led to establishment of the first Islamic bank (Al Hilal) and the first Islamic insurance (takaful) company in 2010. The Development Bank of Kazakhstan then became the first sukuk issuer in the Central Asia region with its sukuk al murabaha issuance in July 2012, denominated in Malaysian ringgit at the equivalent amount of approximately US$76.7 million (RM240 million). Earlier in 2014, the first Islamic leasing (ijarah) company was set up in the Republic of Kazakhstan through participation of the Islamic Corporation for Private Sector Development, a member of the Islamic Development Bank Group.

AAOIFI is a leading international Islamic finance industry development body primarily responsible for development and issuance of standards for the global Islamic finance industry. It has issued a total of 88 standards in the areas of shari’ah, accounting, auditing, ethics and governance for international Islamic finance. 

It is supported by over 200 institutional members, including central banks and regulatory authorities, financial institutions, accounting and auditing firms, and legal firms, from over 45 countries. Its standards are currently followed by all the leading Islamic financial institutions across the world and have introduced a progressive degree of harmonisation of international Islamic finance practices.