Kazakh government's strong response to the global pandemic
The government introduced a comprehensive plan to restore economic growth. According to it, the Astana International Financial Centre (AIFC) plays a pivotal role in the implementation of Kazakhstan's economic agenda and its strategic course in the mid and long term. In turn, the AIFC's development strategy aims including but not limited to:
- Intensify the use of the potential of the AIFC to attract investments and develop the stock market. This activity is vital for the forthcoming privatization of state assets.
- Provide Kazakhstani entrepreneurs access to the International Arbitration Center for resolving business disputes and the general practice of the common law.
- Start the work on the phased transfer of individual structures of national companies from foreign jurisdictions to the AIFC.
- Possibly create a specialized crypto-exchange on the AIFC site without circulation of unsecured digital assets (cryptocurrencies) on the territory of the Republic of Kazakhstan.
All these activities intend to support local businesses, investment projects, and job creation, which is especially important during a pandemic.
The pandemic hit the hardest SMEs, and they have become highly dependent on domestic government programs. This crisis increased the financial fragility and demand for financing among Kazakhstani SMEs.
Astana International Exchange (AIX) has long recognized the importance of small and medium-sized businesses for boosting capital markets in the region. To support Kazakhstani and Central Asian companies in raising capital, AIX has established a Regional Equity Market Segment (REMS) aiming to give SMEs better access to public equity finance. Apart from the reduced administrative burden for the prospective issuers, REMS will foster a greater interest from foreign and regional investors to ensure a dynamic and more liquid marketplace.
In light of the pandemic and the rising importance of Sustainable Development Growth in many countries, AIFC also draws particular attention to green projects. JSC "Entrepreneurship Development Fund "Damu" in cooperation with the United Nations Development Programme (UNDP) has registered and issued green finance bonds on AIX. This placement is the first listing of securities that comply with the green principles in AIX's Green Bond Rules and the first listing of green bonds in Kazakhstan.
As a positive effect of the pandemic, we could highlight the acceleration of financial deepening and inclusion. The development of financial technology is essential to decrease the share of the informal economy and help SMEs reconsider their business models under continuous digitalization. To help SMEs, for example, the Visa payment system, together with the Fintech Hub of the AIFC, the Ministry of Trade and Integration, and the Atameken National Chamber of Entrepreneurs, launched a free educational program. It teaches entrepreneurs the skills and ways to transfer their business to an online format, as well as to promote and advertise.