Former EDB chairman Philip Yeo: Why we shouldn't dismiss Kazakhstan as the 'middle of nowhere'

Soft truths to keep Singapore from stalling.

Mothership | July 18, 2020, 09:23 AM

COMMENTARY: Singaporeans should start taking notice of Kazakhstan, a Central Asian country which is undergoing rapid development.

The former chairman of Singapore's Economic Development Board (EDB), Philip Yeo, shares his experience as an independent director of Kazahkstan's Baiterek National Managing Holding, a government institution that oversees the economical development of the country.

Here, Yeo shares several reasons why Singaporeans should seriously consider entering Kazakhstan for business:

  • The present state of Kazakhstan's economic development parallels that of Singapore in its early days.
  • Why Kazakhstan? The Central Asian country is keen to attract foreign investment and has invested heavily in education.The people are also hungry to change how the world perceives them.
  • The market in Southeast Asia is becoming tighter, and it is in the interest of Singaporean businesses to seek out opportunities elsewhere.

By Philip Yeo:

I made my first trip to Kazakhstan in 2007. I visited Almaty and Nur-Sultan, then known as Astana. Astana was a city just coming into its own then.

The capital of Kazakhstan is rapidly developing

It was at that time just a 10-year-old capital city, as the Kazakh government had shifted the capital north from Almaty in 1997. Its skyline was dotted with skyscrapers and landmarks with unique architecture, as well as a dozen or so buildings still under construction.

In July 2013, I joined Baiterek National Managing Holding as an independent director. Baiterek is responsible for driving Kazakhstan’s economic development, through innovations, trade and productivity.

Since then, I travel to the capital, which was renamed Nur-Sultan last year, about four times a year for the quarterly board of directors meeting.

Yeo at the Astana Government Complex with his Singapore team. Photo from Philip Yeo.

Each time I visit, the city looks different, with newer and taller buildings. There is no doubt that Kazakhstan is on a fast track to rebrand itself as the financial and business hub of Central Asia. It is also on a drive to attract Singapore companies to enter its market.

In many ways, I see similarities between Singapore in the early days, and present-day Kazakhstan.

Such a pace of development is reminiscent of Singapore in its earlier days

In the 1980s, Singapore set out to woo businesses and investors aggressively. We knew we could not compete with our lower-cost neighbours for labour.

Besides, that was not the economy we wanted for ourselves too.

We had to carve out our own niche, and give investors and multinational corporations (MNCs) good reasons to come to Singapore. We focused on providing high-quality value-added services to these investors.

Singapore marketed ourselves as their gateway to South-east Asia. We offered them tax incentives, allowed their companies to be fully foreign-owned, and provided top-notch and personalised “concierge services” to these foreign guests, that extended to even helping them sort out the paperwork to get their children enrolled in international schools here.

We pursued these investors and MNCs aggressively. Bluntly put, we knew that we needed them more than they needed us. We needed them to create jobs for the locals and boost the economy.

My staff who worked with me at the Economic Development Board back then pushed themselves triply hard – there was no such thing as a 9-to-5 job. We saw ourselves as being in the hospitality businesses, providing service to these foreign companies. And anyone in the hospitality trade will tell you that it is a 24/7 industry that does not sleep. That was us.

It is this same fighting spirit that I see in Kazakhstan today. Its people, though polite, are fighting to be recognised on the world stage, and are hungry for change.

They are not contented to be known as the middle of nowhere, and are working to change that perception, and to be plugged in with the world.

A few Singapore companies have already set up shop in Kazakhstan

In the last decade, they have opened the Astana International Financial Centre, a financial free zone in Nur-Sultan, invested in education for its youths, and its overseas missions around the world have worked hard to attract foreign investors to the country.

Enterprise Singapore has also led two business missions focused on the technology, oil and gas sectors to Kazakhstan in the last two years, to facilitate market familiarisation and access. A number of Singapore companies already have a presence in the Central Asian country in various fields, such as venture capital, e-governance, infrastructure, food and hospitality.

But it remains a challenge convincing more businesses and companies of the opportunities in landlocked Kazakhstan.

Its geographic location means its main mode of transportation in the logistics chain is mainly via road, a slower option compared to air and sea transport.

Singapore companies should look beyond Southeast Asia

Singaporeans might also ask themselves why they should enter Kazakhstan, given that there are other opportunities to be found elsewhere, especially closer to home in the South-east Asian region.

Yet those who see Kazakhstan for just its domestic market are missing the bigger picture. Its domestic market may be small, yet it is located next to Russia and Western China, and is connected to Central Asia, the Middle East, and Eastern Europe.

These are not areas that Singapore companies have traditionally ventured into. But competition in the more familiar South-east Asian markets is getting tighter. Local businesses seeking expansion and breakthrough, to counter the stagnation caused by Covid-19, must know that the way to do so is to seek out new opportunities elsewhere, and with new partners.

I believe that the allure of Kazakhstan as an investment destination will only truly take off with direct flights between the two countries. Convenience is after all a major factor when doing business.

Direct flights between Singapore and Kazakhstan are in the works

Kazakhstan’s flag carrier, Air Astana, was due to offer direct two-way flights from Singapore to Nur-Sultan this year. Once the plan comes to fruition, it will give travellers here more reason to head there and check out the scene for themselves.

The global pandemic has delayed any plans of direct flights. But Covid-19 will not remain here forever.

Sure, we may find ourselves operating in a new normal, but the economy will turn, businesses will have to move on, and people will need to have jobs.

Singapore companies must be ready to make the leap to new markets when the time comes.

Philip Yeo is the chairman of's board.

Top collage photos from Philip Yeo.