It would be hard to find many countries geographically more different to Kazakhstan than Dubai and Singapore. They are, after all, both tiny in size, border the sea and enjoy hot climates all year round – something which those of us who live in Astana know full well is not the case here.
But look beyond geography and it does not take too long to find striking similarities. In global terms, we are all relatively new countries whose success was, by no means, assured. Each are situated on ancient trade routes, which have found a new relevance in modern times.
In recent decades, all three have been fortunate as well to have benefited from the stability and ambition of visionary leaders. Major public investment has in all three countries provided a powerful springboard for economic growth. With the launch of the Astana International Financial Centre this year, we could be seeing the beginning of another important similarity.
Dubai and particularly Singapore are, of course, already major financial centres. Astana and Kazakhstan are just at the start of this journey with many challenges to overcome. But both states have shown not only what can be achieved in a relatively short time frame but also the positive wider impact on prosperity and the economy.
Singapore has grown from a banking backwater to become one of the world’s most important financial centres in just half a century. More than 200,000 finance professionals are based there in a sector which contributes as much as one fifth of its GDP. The investment which flows through the city state has helped modernise, diversify and strengthen Singapore’s economy as well as provide the money to support development across the region.
Dubai’s progress has, in some ways, been even more remarkable. Its financial centre was only launched in 2004. While, of course, far smaller than the one in Singapore, it is already recognised as a major source of investment for the Middle East and increasingly the fast-growing economies of Africa and South Asia.
Around 2,000 companies have set up a base within the centre’s purpose-built complex. Its continued growth, and that of Dubai’s financial sector as a whole, is seen as crucial for the further development of a modern, diversified and resilient economy.
These are the same ambitions which lay behind the decision to launch the Astana International Financial Centre. The AIFC is an important element in Kazakh President Nursultan Nazarbayev’s vision for Kazakhstan to join the ranks of the world’s 30 most-developed nations. It is seen as key to improving the country’s investment climate, supporting the move to a market economy and encouraging innovation.
On a wider front, the goal for the AIFC is that it will quickly become the acknowledged financial gateway for Central Asia as well as provide partners and investors access to the wider Eurasian Economic Union area, the Caucasus and Western China. It is hoped it will play a major role in supporting the ambitions of the Belt and Road Initiative in improving links between Asia and Europe and spreading prosperity across the region as well as strengthening links with the global economy.
These are big ambitions in a very competitive area. It is why, in creating the AIFC, great care has been taken to learn the lessons behind successful financial centres including Singapore and Dubai. Understanding the importance of the need for the highest international standards to give investors confidence, the bold decision has been taken that it will operate under the principles and rules of English common law.
A new commercial court – the first in Eurasia – has been set up and is being chaired by Lord Woolf, the former English chief justice, with the help of a team of senior U.K. judges and lawyers. An International Arbitration Centre has been established to help settle disputes, if the parties agree, without the need for full court rulings.
On a practical level, red tape has been cut to make it easier for firms to work with, and within, the AIFC which is based on the convenient and modern site of EXPO 2017 with its first-class infrastructure. Additional incentives, such as tax advantages and rent-free periods, are being offered.
Following in the footsteps of Singapore and Dubai and, of course, other financial centres such as Hong Kong and Shanghai will not be easy. As we have said, a thriving financial sector delivers huge direct and indirect benefits to the country where it is situated. But increasingly Central Asia is recognised as an area of growing importance and great potential. And the ambition, planning and hard work that has gone into setting up the AIFC means that it is in a prime position to meet the needs of both investors and our region.