21 November 2018

Singapore, Kazakhstan promote bilateral trade

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.