Central Asia Offers a Vast Ocean of Possibilities for Asean

In a global landscape radically changed by Covid-19, expedience is the name of the game. An impending post-pandemic climate, fraught with unpredictability, means previously unlikely partnerships are now possible. Every option should be explored for Asean countries like Singapore. While Central Asia is usually not the first that comes to mind for South-east Asian business leaders, I would like to suggest that the tide is slowly but surely changing, and a vast ocean of possibilities are there to dive into.

Kazakhstan is no stranger to Singapore companies. Some have already blazed a trail to leave their imprint there, such as Meinhardt Group, Keppel Corporation and Surbana Jurong. Singapore Exchange-listed Food Empire, a giant in food manufacturing, has been in Kazakhstan since 1994.

There is much space for working together with not just Singapore, but Asean. A potential area of collaboration is fintech, where Singapore has been a pioneer. For Singapore fintech businesses, this is a great opportunity to enter new attractive territory. In the area of Islamic finance, Malaysia’s Zico Shariah jointly developed a five-year masterplan for Kazakhstan to develop this industry.

There is also huge opportunity in agriculture, especially in a post-pandemic world where food supply chains have been disrupted. Kazakhstan can be a reliable source of exported food for Southeast Asia. A fruitful partnership between the regions would abound with promise for the world.

Many people ask me why they should consider Kazakhstan, especially if their companies are in South-east Asia thousands of kilometres away. But as governor of the Astana International Financial Center (AIFC), I see my role as not just advocating for investors to come to Kazakhstan, but to enter the region of Central Asia.

After all, more than 70 percent of foreign direct investment (FDI) in the region goes to Kazakhstan. Central Asia, with a market of more than 70 million people, offers an array of economic opportunities, resources and trade routes as it is well-positioned between China, Europe and Russia. 

There is a need now – more than ever – for multilateralism, a point emphasized by Singapore Prime Minister Lee Hsien Loong at the United Nations General Assembly last year. Kazakhstan provides inroads not just into Central Asia, but farther beyond, as it has a network of free trade agreements (FTAs) and connections such as the Eurasian Economic Union (EAEU). The EAEU – which also includes Russia, Belarus, Armenia and Kyrgyz Republic – has a combined population of 184 million with $1.9 trillion in total gross domestic product. It is an attractive market for Asean countries. In 2015, Vietnam was the first Asean country to sign an FTA with EAEU, followed by Singapore in 2019.

Other Asean countries such as Indonesia, Cambodia and Thailand have signed memorandums of cooperation with the Eurasian Economic Commission, the EAEU’s regulatory body. In addition, the business infrastructure in Kazakhstan has been steadily improving to ensure ease of entry. Besides the storms caused by Covid-19, there are all manners of risks that companies face in this uncertain new era. Geopolitical upheaval, cybercrime, data breaches and regulation issues are but some of them.Financial centers have to respond to these concerns. 

Taking close reference from other global financial centres, we have based the AIFC framework on common English law, known for its transparency, and established an independent regulatory body, the Astana Financial Services Authority (AFSA). The Astana International Financial Center Authority, AFSA and the Monetary Authority of Singapore signed a tripartite Cooperation Agreement in 2018 to ensure constructive cooperation in fintech innovation.

These ties in new areas are especially critical today as disruption occurs at an inexorable pace in the banking and finance industries. The roles of financial institutions are being continually refined and revisited; and frameworks and business models must be tweaked in kind.


For instance, as the sharing economy becomes more widespread, consumers will use it for more than just commutes and food deliveries, but even for financial services, as smart technology becomes distributor and arbitrator. Financial centers worldwide have to work together to be at the crest of the wave, or be swept away by the tide of disruption. 

At the same time, trust in traditional institutions is slowly being eroded in these uncertain times, even more than a decade after the global financial crisis when banks which were “too big to fail” crumbled. The pandemic has been a litmus test for public confidence in societal institutions such as the government and media. It is vital that large state organisations keep a close ear to the ground to be attuned

to the needs of citizens and enterprises, especially as the ground is as shaky as it is in these unprecedented days.

To businesses, a trustworthy guarantor of the rule of law and secure return of investment remain paramount, and the AIFC seeks to provide that safe haven through the AIFC Court and the International Arbitration Center (IAC). To provide sojourners with assurance, a stringent dispute resolution system is a must for any finance node. With the help of our Singaporean partners Crimson-Logic, AIFC launched a unique online version of such a system for the convenience of businesses. 

This allows the use of the AIFC judicial system from almost anywhere in the world, and Singapore businesses entering Central Asia can count on a reliable and familiar legal system. Firms also want a deep and liquid capital market. To provide a regional liquidity pool, we have established the AIFC International Exchange (AIX), empowered by Nasdaq and further supported by the Shanghai Stock Exchange, Silk Road Fund and Goldman Sachs. For example, we offer the bonds of the China Construction Bank (CCB Nur-Sultan branch), which are the first bonds in Kazakhstan denominated in yuan to the tune of nearly one billion yuan (US$197.5 million). These bonds will go towards financing local infrastructure projects under China’s Belt and Road Initiative.

Like Singapore, Kazakhstan has a never-ending mission to remain relevant to the world. To do this, the AIFC was envisioned by founding president Nursultan Nazabayev in 2015 to be a financial hub for the country and region. The aim is to fill a gap in Central Asia, modelled after key nodes of the world such as New York, Dubai and Singapore, to attract capital, talent and expertise. Since our 2018 launch, we have attracted 500 companies from more than 42 countries. As dangerous fault lines erupt in the interconnected global system, forging new connections will be the way forward.

The author is the Governor of Astana International Financial Center. 

The article was originally published in The Business Times website. 


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