Second Islamic Finance Forum in Astana Raises Business Awareness

Sep 23. MFA

Second Islamic Finance Forum in Astana Raises Business AwarenessThe development of the Islamic finance in Kazakhstan will be one of the strategic tasks supported by the Government within the Islamic finance development road map. Holding relevant forums and conferences is considered a way to boost public and business’ awareness of the Islamic finance in Kazakhstan. They play a role of platforms for exchanging information and pursuing dialogue where the current problems are discussed and resolved.

The Second Islamic finance forum held in the Kazakh capital at Rixos President Astana hotel on 20 September 2011 is one of the notable examples of such platforms.

This event follows on from the First Islamic Finance Forum held in January last year, which succeeded in attracting senior figures from the Kazakh government and the National Bank, as well as foreign and domestic investment banks.

Kazakhstan’s Аkyl-Kenes Consulting initiated the Forum for the second time, and this year’s forum was held jointly with local Grata and international Herbert Smith law firms.

Forum participants discussed the prospects of attracting foreign investments by means of Islamic financing, its basic tools and mechanism such as sukuk for corporative and public sectors at the Forum.

Islamic finance is set to play a major role in the development of the financial system in Kazakhstan. It can introduce new financial instruments, bring investors into contact with potentially lucrative projects in need of financing, and strengthen relationships between Islamic investors and financial institutions.

According to experts, the world has been increasing its interest in Islamic finance, and primarily due to the fact that it does not include speculative capital. Islamic finance is one of the fastest growing trends with the average annual growth of 15%. The annual turnover of Islamic banking, according to estimates, is around US$ 750 billion, more than 300 financial institutions worldwide practicing it, operating not only in Muslim countries, but in the U.S., Europe and Southeast Asia. According to unofficial estimates, the assets related to Islamic finance have exceeded US$ 1 trillion.

“Global trends suggest the need for development and support of Islamic finance in Kazakhstan. Here it is seen as an alternative and long-term model of funding, aimed at projects in the real sector of economy. It would be interesting to discuss the possibility of issuing Islamic securities for specific industrial and innovative projects in Kazakhstan,” Head of Centre for Strategic Research and Analysis of the Presidential Administration Darmen Sadvakassov said at the Forum.

Vice Minister of Finance Berik Sholpankulov highlighted that Kazakhstan has already created a legal framework for the development of Islamic finance. And country has the possibility to become a “hub” for Islamic investments in the post-Soviet realm.

If the first forum became a platform where the representatives of the Kazakh Government discussed with the investors its measures for the ongoing enhancement of the country’s investment image, the task of the second forum was to discuss the relevant issues in legal, educational, and regulatory aspects of bringing Islamic investment into Kazakhstan.

The development of Islamic finance in Kazakhstan is gaining momentum as the country has embarked on a one-year chairmanship of Council of Foreign Ministers of the Organization of the Islamic Cooperation (OIC). As part of it, the state is paying additional attention to the issues related to the development of the economic cooperation within the Ummah.