Speech by SMS Koh Poh Koon at the Kazakhstan-Singapore Business Forum

Emeritus Senior Minister Mr Goh Chok Tong

Your Excellency Prime Minister of the Republic of Kazakhstan
Mr Bakytzhan Sagintayev 

Excellences and distinguished guests

Ladies and Gentlemen

1 It is a pleasure to join you here this morning at the Kazakhstan-Singapore Business Forum. I would like to take the opportunity to welcome His Excellency, Prime Minister Bakytzhan Sagintayev, and our friends from Kazakhstan to join us at this forum.

Singapore and Kazakhstan share warm bilateral relations, and we are continuing to build upon this. The Singapore-Kazakhstan Bilateral Investment Treaty (BIT) and the Eurasian Economic Union-Singapore Free Trade Agreement (FTA) will mark new milestones in our relationship. 

2 Singapore and Kazakhstan share warm relations and this year marks 25 years of our bilateral relations. I am glad to see that our countries continue to collaborate closely, and conduct high-level exchanges and visits. 

3 Singapore and Kazakhstan have an existing bilateral Avoidance of Double Taxation Agreement (DTA) that entered into force in 2007. The DTA has served us well, and has benefited companies from both countries to help relieve double taxation of income that is earned by Singaporeans in Kazakhstan, and vice versa. The DTA has facilitated trade and investment flows, and this is reflected in the growing momentum of bilateral trade between our countries.

4 Bilateral trade in goods amounted to S$133.6 million last year, more than three times the total trade a decade ago. Total bilateral trade in services grew 16% over the last five years to reach S$40 million in 2016. Similarly, bilateral investment grew approximately 30% over the same five-year period. In 2016, Singapore’s direct investment abroad amounted to S$180 million, and Kazakhstan’s foreign direct investment into Singapore was S$2.5 billion. While the growing trend in our bilateral trade is in the right direction, we have headroom for trade to grow further. Hence, the Kazakhstan-Singapore Business Forum this morning is a timely platform to encourage businesses from both sides to look for opportunities in each other’s markets. We are doing more to put in place a more robust trade architecture to boost investor and business confidence.

5 To complement the DTA, our countries will sign the Kazakhstan-Singapore Bilateral Investment Treaty (BIT) later today. The BIT will grant investors protection benefits such as Non-discrimination 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; freedom to transfer capital and returns; and access to international arbitration for investment disputes. This will encourage investors from both sides to take a closer look at opportunities in Singapore and Kazakhstan.

6 Singapore and Kazakhstan are also part of the on-going negotiations on the Eurasian Economic Union (EAEU)-Singapore Free Trade Agreement (FTA). Singapore looks forward to the expeditious conclusion of the EAEU-Singapore FTA, which will mark a new milestone in bilateral relations between Singapore and Kazakhstan. This would also be the first FTA between Singapore and the Central Asian region.

7 The EAEU-Singapore FTA will bring together a combined market of more than 200 million people in the Central Asia region and a combined GDP of S$2.32 trillion. This diverse region will have a chance through Singapore to enter the 650 million people market in Southeast Asia, that is growing at a tremendous pace of 5.2% growth over the next few years. As the FTA goes beyond the traditional trade in goods, to include services, investment, e-commerce, competition policy and intellectual property rights, both Singapore and Kazakh businesses can enjoy better access to each other’s markets across many sectors. Of particular note, the EAEU-Singapore FTA is likely to contain elements that explore linking Singapore’s national single window to that of the EAEU member states. For those who are not familiar with the concept, this would eventually allow international cross-border traders to submit regulatory documents at only one location or to a single authority. This would allow Kazakh businesses to enjoy the connectivity that Singapore currently offers. On a regional level, this could help realise the export potential between the EAEU and Singapore, which is projected to grow to more than S$71.4 billion.

Kazakhstan can be a node to Eurasia and China. It can also serve as a thought leader in the region by innovating and demonstrating its commitment to the values of free trade, openness, and cooperation. 

8 We live in interesting times. Our operating environment is growing increasingly complex with rising protectionism and trade tensions between major economic powers. It is still unclear how supply chains and investment patterns will shift as a result of the evolving global situation, but Kazakhstan is uniquely placed to tap opportunities and trade flows resulting from these changes.

9 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. 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.

10 President Nazarbayev’s institutional reforms and modernisation plans to become the world’s top 30 most developed countries by 2050 will serve Kazakhstan well in establishing itself as a node and thought leader in Eurasia. 

11 Kazakhstan’s reforms to improve its business environment have already started showing effects. Kazakhstan has seen steady economic growth in recent years, averaging at 4% coupled with a total volume of more than US$5 billion of global FDI flows. Kazakhstan has risen by eight positions in the World Bank Group’s Doing Business ranking from 36th place to 28th place this year, becoming one of the top 30 countries in the world to do business in. Some of these improvements include the reduction in time required to start a business from nine to five days; and the introduction of an electronic customs declaration system and reducing of customs administrative fees to make cross border trade easier. Kazakhstan’s commitment to improving the business environment will facilitate trade and investment flows, and serve as an example in Central Asia. The government’s Digital Kazakhstan initiative and the development of Smart Cities enhances Kazakhstan’s dynamism and potential as an innovator of smart solutions that could be applied in other Eurasian countries. 

Singapore looks forward to participating in Kazakhstan’s development in the Eurasian region

12 Singapore remains committed to participating in Kazakhstan’s development, and there is scope for us to do more together. Singapore can also facilitate Kazakh businesses’ expansion into Southeast Asia, bringing both our regions closer.

13 I am glad to note that the Singapore Cooperation Enterprise (SCE) and Kazakhstan are inking two Memorandum of Understandings (MOUs) today. First, SCE and Kazakhstan’s Ministry of Information and Communication (MIC) are signing an MOU today to modernise Kazakhstan’s information and communication technologies (ICT) infrastructure. This represents an expansion of our capacity building efforts to build e-government systems and the opportunities for our companies to create new business linkages. Second, SCE and Kazakhstan’s National Managing Holding Baiterek JSC are entering an MOU to collaborate on the formulation of strategic directions, a practical implementation roadmap and enhancement of regulatory procedures and policies to improve the provision of affordable housing for Kazakh citizens.

14 When the EAEU-Singapore FTA is completed, existing companies operating in Kazakhstan can also tap on the FTA to continue to grow their operations. For example, Food Empire, a SGX listed global branding and manufacturing company in the food & beverage sector has a flagship brand MacCoffee that is very popular and has established itself as one of the leading three-in-one instant coffee brands in Kazakhstan and Russia. The FTA can complement Food Empire’s internationalisation efforts in Kazakhstan and the EAEU. In the realm of services, Educare has conducted professional development programmes for early childhood teachers for the National Centre for Professional Development of Kazakhstan. Surbana Jurong shared its sustainable planning and energy optimisation methods at the World Expo in Astana last year. Through the FTA, companies can benefit from the liberalisation of the services and investment sectors and the protection of their intellectual property rights that can increase companies’ confidence to form business ventures. 

15 Singapore can also assist Kazakh businesses looking to tap opportunities in Southeast Asia. For instance, three Kazakh start-ups participated in the Fintech Festival last year in Singapore with the support of the AIFC. The Kazakh developers demonstrated their projects to leaders of the world financial industry, took part in workshops and had an opportunity to attract the interest of global investors to their projects. According to the founder of one of the start-ups StockMetrix, their participation in the Fintech festival opened up prospects of potential partnerships, and financing ventures and acceleration in Asia. We also have KazMunaiGaz, Kazakhstan’s national oil and gas company that has a marketing office in Singapore since 2011 that can expand and internationalise its operations in Southeast Asia and beyond from Singapore.

16 I hope that today’s Kazakhstan-Singapore Business Forum will catalyse many successful partnerships between our business communities, and encourage our business leaders to continue exploring potential collaboration. 

17 I wish Prime Minister Sagintayev and his government a fruitful and successful visit. Thank you.