Islamic Finance Forum held in Astana


Rizvana Sadykova

Islamic Finance Forum held in AstanaKazakhstan Islamic Finance Conference is being held for two days in Astana. This is the first event on Islamic Finance in Kazakhstan since the new law on IF was signed on February 12, 2009. Stable financial condition of Islamic financial institutions and resistance to the global crisis has led that many countries are making changes to existing legislation to implement the principles of Islamic finance. The KIFC is to be a main dialogue platform between the Government of Kazakhstan and top-managers of Islamic financial institutions.

The conference was devoted to discussion of the current situation, tendencies and prospects of local market and the way towards Islamic finance and banking.

In his welcome address Mr. Asset Issekeshev, Kazakh Ministrer of Industry and New Technologies said that “while determining the development of Kazakhstan for the new decade President of the Republic of Kazakhstan Nursultan Nazarbayev in his annual address to the people of Kazakhstan “New Decade – New Economic Growth – New Opportunities of Kazakhstan” defined foreign direct investments as the main source for diversifying our economy”. This strategic plan determines such goal as “Kazakhstan must become a regional center for Islamic banking in the CIS and Central Asia, and enter the top ten leading financial centers of Asia”. He also said that one of the main activities to implement the above objective is to attract international investors to our country form the Middle East and South-East Asia through various instruments of Islamic finance. These investors have convincingly demonstrated high immunity to the economic crisis and nowadays have considerable financial resources for investment. The Government of Kazakhstan takes various concrete steps to improve the investment climate in the state and create favorable conditions for foreign investments. Thus, in February 2009, first in the CIS, Kazakhstan adopted amendments to the legislation creating favorable conditions for the Islamic financial institutions.

He expressed his confidence that the conference would become an annual platform for fruitful meetings, serve as an impetus in the development of Islamic finance in our country and contribute to attracting direct foreign investment to Kazakhstan. He concluded that ‘on the threshold of Kazakhstan’s chairmanship in the Organization of the Islamic Conference in 2011, our joint efforts will be aimed at achieving mutually beneficial partnership’.

“Understanding the real nature of Islamic Finance is inevitable in order to achieve success,” said one of the speakers Senior Manager, Shariah supervision division of Al-Hilal Bank of Abu Dhabi Muhamed Ismet Becic. Each Islamic financial institution maintains its own Shariah Board. Final approval to proceed with deal is given by Shariah Board. True Shariah compliance may only be achieved by joint efforts of financial institutions, investors and consumers. He spoke on Regulatory Challenges that include Shariah harmonization, legal infrastructure and proactive regulators.

Managing Director IFAAS UK and France Mohammad Farrukh Raza spoke on Islamic finance in the United Kingdom, France and other European countries. The UK has successfully performed  as a key player in industry with London as the fastest emerging international hub.

British institutions are likely to ‘passport’ into the EU and growing professional expertise is becoming the latest ‘export commodity’. More reforms are anticipated, facilitating the development of further products and attracting more investments. A significant growth in the industry is expected in the coming years. The natural robustness and reliability of Islamic finance emerging strongly amidst the current financial crisis. Many heavy-weight EU institutions already involved in Islamic Finance outside the EU (e.g. Deutcshe Bank ,BNP Paribas, ABN AMRO, SocGen, Calyon, AXA, Prudential etc). Mohammad Farrukh Raza emphasised that the potential for Kazakhstan to attract inward investments is much greater than any other country in the region. The domestic market has a great potential for growth.  “The UK model is a success and the lessons drawn from the European experience can be easily implemented here”, he added.

A true commitment and working partnership between the market authorities and the industry professionals will be required for quick achievement of the objective.