Article Prepared by:

Mohd Khairul Fidzal Abdul Razak
Chief Executive Officer
Malaysian Bioeconomy Development Corporation (Bioeconomy Corporation)

BIO BREAKTHROUGHS: UNLOCKING WEALTH WITH BIO-BASED & BIOTECH IN MALAYSIA

As the global economy shifts towards sustainability, biotechnology and bio-based industries are emerging as lucrative sectors that align with current trends in food security, healthcare innovation, and environmental responsibility. Malaysia, with its abundant natural resources, robust infrastructure, dynamic research and development ecosystem, and government-backed incentives and policies, is positioned as a leader in bioeconomy. It is an economy that utilises biological resources, technology, and processes to drive economic growth, enhance societal well-being, and unlock high-value opportunities across multiple industries. For top industry players looking to diversify, investing in bio-based and biotechnology industries is not only a strategic move for business expansion but also a contribution to sustainable development.

The Rising Bioeconomy: A Global and National Perspective

The global bioeconomy is currently valued at approximately USD 4 trillion and is projected to surge to USD 30 trillion by 2050^[1] – accounting for nearly one-third of the world’s total economic value. Malaysia, recognising this opportunity, has been actively developing its bioeconomy through targeted policies and incentives, including the National Biotechnology Policy 2.0 (NBP 2.0) under the Ministry of Science, Technology and Innovation (MOSTI). Its vision is to transform Malaysia into a high-tech nation that is progressive, prosperous, inclusive, and sustainable by 2030, driven by bio-based and biotechnology industries. To achieve this, NBP 2.0 focuses on advancing three core areas within the biotechnology and bio-based industries that are crucial to Malaysia’s development, namely agriculture, healthcare, and industrial biotechnology.

Transforming Agriculture for Food Security

Biotechnology is helping to develop high-yielding, resilient crops, livestock, and fish that can better withstand diseases and climate challenges. Beneficial microorganisms used as biofertilisers and natural pest control reduce the need for chemical fertilisers and pesticides, making agriculture greener and food safer to eat. In livestock and aquaculture, these good microbes also help cut down antibiotic use, promoting healthier and more sustainable food production. Meanwhile, alternative protein sources like Black Soldier Fly (BSF) larvae and macro- and microalgae provide a nutrient-rich, affordable option for animal feed. By reducing reliance on imported protein, they help ensure a steady and locally available supply. Backed by policies like NBP 2.0 and the National Agrofood Policy 2.0, these innovations are strengthening Malaysia’s food security while supporting a more resilient and sustainable food system.

Advancing Healthcare with Biotechnology

Malaysia’s healthcare sector is embracing biotechnology for smarter, more personalised treatments. Vaccines, genetic testing, and targeted therapies allow earlier disease detection and more precise treatments. Developments in local insulin production and stem cell innovation are strengthening the nation’s medical security and enhancing quality of life. Wearable biosensors can track health in real time, 3D-printed implants offer better fits for patients, while AI-powered diagnostics help doctors detect diseases earlier. Beyond medicine, bio-based wellness products, such as bird’s nest skincare and Kacip Fatimah supplements, cater to growing consumer demand for natural health solutions, while Malaysia’s position in healthcare tourism continues to strengthen.

Powering a Sustainable Industrial Future

Rising environmental challenges and the need for sustainability are driving bio-based and biotech innovations in the industrial sector. These solutions support the circular economy by turning waste into valuable resources, reducing pollution, and promoting renewable alternatives. Rice straw and palm oil residues are repurposed into packaging and paper that decompose naturally instead of being burned. Biogas, a fuel made from organic waste, generates electricity and heat for homes and businesses. Even used cooking oil is being turned into Sustainable Aviation Fuel, a cleaner jet fuel that lowers carbon emissions, with Malaysia set to begin production by 2027. Meanwhile, plant-based plastics and eco-friendly construction materials offer greener alternatives to conventional single-use plastics and concrete. With policies like NBP 2.0, National Biomass Action Plan 2023-2030, and the National Energy Transition Roadmap driving bio-based industries, businesses can tap into new opportunities while contributing to Malaysia’s circular economy.

Supporting Success in Bioeconomy

To fully seize the opportunities in biotechnology and bio-based industries, businesses need the right support – whether in forming partnerships, working with policymakers, expanding into new markets, developing talent, or securing funding. This is where Malaysian Bioeconomy Development Corporation (Bioeconomy Corporation) plays a key role. As an agency under MOSTI, it connects businesses with government, research institutions, academia, and local communities to accelerate growth and technology adoption. Through initiatives like BioNexus Status and the Bio-based Accelerator (BBA) programme, Bioeconomy Corporation provides tax incentives, training, funding support, and market access to help businesses scale up and stay competitive.

Since 2006, Bioeconomy Corporation has supported over 600 companies, attracting more than RM14 billion in approved investments and generating over RM38 billion in revenue for Malaysia’s economy. It has also helped create more than 16,400 jobs, strengthening the nation’s biotechnology and bio-based industries.

As Bioeconomy Corporation nears its 20th anniversary, it remains committed to driving “bioeconomy for all” – ensuring businesses, communities, and the nation benefit from sustainable innovations. By working with Bioeconomy Corporation, companies gain access to the expertise, resources, and networks needed to thrive in Malaysia’s growing bioeconomy, unlocking new opportunities in high-value, sustainable industries.

COUNTRY FEATURE
REPUBLIC OF KAZAKHSTAN
(KAZAKHSTAN: WORKING FOR PEACE, COOPERATION, AND DEVELOPMENT)

Article by:
Embassy of the Republic of Kazakhstan in Malaysia
and Brunei Darussalam

Overview

Since gaining independence in 1991, Kazakhstan has pursued a balanced and pragmatic foreign policy, fostering mutually respectful and beneficial relations with its neighbours, global actors such as Russia, China, the European Union, and the United States, and the international community at large.

In recent months, Kazakhstan’s active international engagement has led to its recognition as an emerging middle power capable of contributing more significantly to the global agenda. This paper aims to explore the factors underlying such expectations.

Strategic Economic Position and Connectivity

• • Kazakhstan’s strategic geographic location and its role as a transit hub for global trade routes underscore its role in global cooperation. The country’s participation in China’s Belt and Road Initiative and the EU’s Global Gateway project has positioned it as an important link between East and West.
• • Kazakhstan’s investments in infrastructure, especially in transportation and logistics, have positioned it as an important part of the global supply chain. Kazakhstan leverages its geographic and economic strengths to contribute to international trade and economic development. Specifically:
• • The ASEAN railway network presents a promising alternative to existing routes. In July 2024, the ASEAN Express freight train was launched, connecting Selangor State (Malaysia), Latkrabang Inland Port (Thailand), Tanaleng Dry Port (Laos), and Chongqing (China). Delivery from Malaysia to China takes under 14 days, which is a week faster and 30% cheaper than sea transportation. However, the route faces challenges, such as the need to reload containers at the Thailand-Laos border due to different rail gauges and customs procedures. Integrating this route with Kazakhstan’s railway network could grant Kazakhstani producers access to the Southeast Asian market.
• • Western Europe-Western China Expressway: Kazakhstan has developed its section of the Western Europe-Western China expressway, which is a key part of the international highway network connecting Europe and China.
• • The North-South transport corridor combines rail and maritime transportation, delivering goods from Kazakhstan to Malaysia via Iran and Bandar Abbas Port. The transit time is approximately 25-35 days. This route has medium complexity due to mixed transport modes, geopolitical risks in Iran, and customs processes in several countries. However, it offers a shorter transit time compared to alternative routes and features a well-developed railway infrastructure.
• • Trans-Caspian International Transport Route (TITR): This route connects China to Europe via Kazakhstan, the Caspian Sea, Azerbaijan, Georgia, and Türkiye. Kazakhstan has invested in developing this corridor as part of its broader strategy to become a transit hub. This Corridor provides an alternative to traditional routes, which has gained importance, especially in light of geopolitical tensions. The route has seen noticeable growth in cargo volume in recent years, with Kazakhstan playing a key role in facilitating trade between Europe and Asia​.
• • Khorgos Gateway: Located on the Kazakhstan-China border, the Khorgos Gateway is a major dry port that serves as a link in the Belt and Road Initiative (BRI). This facility allows for the seamless transfer of goods between railways of different gauges (standard in China and broad in Kazakhstan).
• • Caspian Sea Ports Expansion: Kazakhstan has invested in expanding its Caspian Sea ports, such as the Aktau and Kuryk ports, to increase their capacity and efficiency. These ports are important to the TITR, enabling Kazakhstan to export oil, minerals, and other goods to European and global markets. This expansion aligns with Kazakhstan’s broader strategy to strengthen its logistics infrastructure.

Diplomatic Engagement and Pragmatic Foreign Policy

• • Kazakhstan has sought to contribute to addressing global and regional issues by initiating and participating in international forums and helping to ease regional conflicts. These efforts have enabled Kazakhstan to support international stability while pursuing its national interests. For example:
• • Leadership in International Organisations: Kazakhstan chaired several international organisations in 2024 alone, including the Shanghai Cooperation Organisation (SCO), the Organisation of Turkic States, the Consultative Meetings of States of Central Asia and the International Fund for Saving the Aral Sea. These leadership roles allow Kazakhstan to contribute to regional cooperation on security, economic, and cultural issues. For instance, under Kazakhstan’s chairmanship in 2023-2024, the SCO focused on enhancing regional security cooperation and economic connectivity among its member states.
• • Kazakhstan initiated and continues to host the Conference on Interaction and Confidence-Building Measures in Asia (CICA), a forum aimed at enhancing cooperation and security in Asia. The CICA includes 28 participating states, including China, Russia, and India, and serves as a platform for dialogue on regional security issues. Kazakhstan’s role in this forum demonstrates its commitment to fostering peace and cooperation in a volatile region.
• • Kazakhstan established the Congress of Leaders of World and Traditional Religions in 2003, which serves as a platform for fostering dialogue among diverse religious leaders from around the globe. Dedicated to promoting mutual understanding and peace, the Congress advances cooperation across different faiths, contributing to international stability. Its 8^th convocation is scheduled to take place in Astana in September 2025.
• • In 2023, Kazakhstan launched the Astana International Forum, an annual platform for addressing key global challenges. The Forum serves as a venue for high-level delegates from foreign governments, international organisations, businesses, and academic circles to engage in dialogue and seek solutions to issues such as climate change, food shortages, and energy security. The next forum is scheduled for May 29-30, 2025
• • Organised by the Kazakhstan Institute for Strategic Studies and held under the auspices of the Astana International Forum on October
  16-17, 2024, the Astana Think Tank Forum featured an engaging programme of keynote speeches, panel sessions, roundtables, and networking opportunities. With top think tanks, foreign policy advisors, diplomats, and researchers from over 20 countries in attendance, the two-day event offered thought-provoking insights that are expected to have a lasting impact on global policy discussions around the growing role of middle powers. President of Kazakhstan Kassym-Jomart Tokayev delivered a keynote address, underscoring the responsibility of middle powers to foster cohesion and cooperation in the international system.
• • Kazakhstan actively participated in major international environmental events in 2024, including the “One Water Summit” in Riyadh and COP29 in Baku. As a co-organizer of the Summit, alongside France and Saudi Arabia, Kazakhstan addressed issues such as global water resource management, innovative water infrastructure, and sustainable development.

At COP 29, Kazakhstan demonstrated leadership in the climate agenda, reaffirming its goal to achieve carbon neutrality by 2060 and presenting initiatives on methane emission reduction, climate financing, and land restoration.

Kazakhstan’s Commitment to Humanitarian Aid

• • Kazakhstan is committed to providing humanitarian aid, both regionally and globally. Since its independence, Kazakhstan has allocated resources to humanitarian efforts through the Kazakhstan Agency of International Development (KazAID).
• • This aid includes disaster relief, food security initiatives, and support for education and healthcare in developing nations. Specifically:
• • Palestine: In January 2025, Kazakhstan participated in the dispatch of a 1,000-ton humanitarian aid convoy to the Gaza Strip as part of an international relief effort. The aid, valued at over $5 million, included essential food supplies, medicine, medical equipment, and other necessities for the Palestinian population affected by the ongoing crisis. Kazakhstan’s contribution was coordinated with international organizations and humanitarian partners to ensure effective distribution. This initiative underscores Kazakhstan’s commitment to global humanitarian efforts and support for crisis-affected regions.
• • Afghanistan: Kazakhstan has supported Afghanistan’s development, particularly in education and infrastructure. Through the Kazakhstan-Afghanistan Partnership, Kazakhstan has provided scholarships to Afghan students, enabling them to pursue higher education in Kazakhstan. Additionally, Kazakhstan has supported infrastructure projects in Afghanistan, helping to rebuild sectors such as agriculture and transportation.
• • Humanitarian Assistance in Response to Global Crises: Kazakhstan responded swiftly to global humanitarian crises, providing aid to countries affected by natural disasters, conflicts, and pandemics. For example, during the COVID-19 pandemic, Kazakhstan sent medical supplies and personal protective equipment to several countries in need, including its neighbours in Central Asia and beyond.

Contribution to Global Security and Peacekeeping

• • Countries are often recognised for their ability to contribute to global governance and conflict resolution without being major military powers, and Kazakhstan exemplifies this through its role in international peacekeeping and diplomacy. Specifically:
• • United Nations Disengagement Observer Force (UNDOF) in the Golan Heights: Kazakhstan has deployed peacekeepers to the UNDOF mission, which has been monitoring the ceasefire between Israel and Syria in the Golan Heights since 1974.
• • United Nations Interim Force in Lebanon (UNIFIL): Kazakhstan has contributed peacekeepers to the UNIFIL mission, which is tasked with monitoring the cessation of hostilities between Lebanon and Israel.
• • United Nations Mission in South Sudan (UNMISS): Kazakhstan has also participated in the UNMISS, which focuses on consolidating peace and security in South Sudan, protecting civilians, and supporting the implementation of the peace agreement.
• • United Nations Interim Security Force for Abyei (UNISFA): Kazakhstan has provided peacekeepers to the UNISFA mission, which operates in the Abyei Area between Sudan and South Sudan, a region plagued by territorial disputes and intercommunal violence.

Environmental Stewardship

• • Kazakhstan is committed to taking decisive action against climate change, with a clear roadmap to achieving carbon neutrality by 2060. Specifically:
• • Reduction of carbon emissions: The country’s updated Nationally Determined Contributions under the Paris Agreement reflect this commitment, with a pledge to reduce carbon emissions by 15% unconditionally by 2030. Additionally, Kazakhstan has set a conditional target of a 25% reduction, contingent on climate investments and technology transfer. This is a key milestone towards a greener, more sustainable Kazakhstan, ensuring the country contributes to global climate efforts.
• • Water Diplomacy: Kazakhstan and France hosted the One Water Summit in December 2024. This summit served as a platform for global leaders to discuss and implement strategies for sustainable water management.
• • Aral Sea: Kazakhstan is committed to the restoration and revitalisation of the Aral Sea region. The country is chairing the International Fund for Saving the Aral Sea in 2024-2026 to foster collaboration among Central Asian nations in this area.
• • Regional Climate Initiatives: Kazakhstan launched the Project Office for Central Asia on Climate Change and Green Energy in Almaty, which will serve as a hub for coordinating efforts across the region. In 2026, Kazakhstan will host the Regional Climate Summit under the auspices of the UN and other international organisations, bringing together regional and global leaders to address climate challenges.
• • Reforestation and Biodiversity Conservation: The government has made considerable efforts in reforestation and biodiversity conservation. From 2021 to 2023, Kazakhstan planted around 840 million trees. A significant achievement in this area is the successful reintroduction of Przewalski’s horses to the “Altyn Dala” nature reserve, with plans to continue this programme until 2029. Additionally, Kazakhstan is advancing the Tiger Reintroduction Programme, with plans to reintroduce tigers into the Ile-Balkhash nature reserve.
• • “Altyn Dala” Initiative: This project, dedicated to protecting Kazakhstan’s steppe ecosystems, won the prestigious Earthshot Prize 2024 in the “Protect and Restore Nature” category. The award recognizes its remarkable success in restoring the saiga antelope population and expanding protected natural areas in Kazakhstan.

Born Bold Campaign

• • “Born Bold” is Kazakhstan’s recent international promotion campaign, showcasing the country’s dynamic, forward-thinking approach to economic growth, social progress, and innovation.
• • It highlights Kazakhstan’s strategic sectors, such as energy, logistics, education, and tourism, positioning the country as a bold and attractive destination for global businesses, investments, and cultural exchange.
• • The campaign promotes Kazakhstan’s economic diversification, reducing reliance on traditional sectors and positioning the country as a leader in new industries, from AI and technology to renewable energy and finance.
• • Most importantly, the campaign is centered around Kazakhstan’s most valuable asset: its people. In addition to capturing the unique Kazakh mindset, the campaign highlights a workforce that is young, highly educated, highly skilled, digitally native, and dynamic.
• • Kazakhstan invites global investors, businesses, and innovators to harness the bold spirit of our population, explore Kazakhstan’s many opportunities, engage with our vibrant economy, and contribute to a shared vision of sustainable progress. 

FACTS ABOUT KAZAKHSTAN

Territory

Kazakhstan is the ninth largest country in the world, equivalent in area to Western Europe (2,724,900 km²). It is also the world’s largest landlocked state, bordered by the inland Caspian Sea. Approximately 94.5% of the country’s territory is located in Asia, and 5.5% in Europe (about 148,000 km²), which is comparable to the territory of Greece (131,957 km²).

Borders

Kazakhstan’s land borders span a total length of 13,200 km. The country shares borders (clockwise from the north) with Russia, China, Kyrgyzstan, Uzbekistan, and Turkmenistan. Kazakhstan’s 7,591 km land border with Russia is the second longest in the world (after the U.S.-Canada border) and the longest continuous land border. This distance is roughly equivalent to the straight-line distance from New York to Istanbul (8,069 km).

From north to south, Kazakhstan stretches 1,700 km, and from east to west, it extends more than 3,000 km.

Population

Kazakhstan has a population of 20,243,981. The population density is 7.5 people per km².

The largest ethnic group is Kazakhs, comprising more than 70% of the population. The remaining 30% includes Russians (15.2%), Uzbeks (3.3%), Ukrainians (1.9%), Uighurs (1.4%), Germans (1.2%), Tatars (1.1%), Azerbaijanis (0.8%), Koreans (0.6%), Turks (0.5%), Belarusians (0.4%), Kyrgyz (0.2%), Poles (0.2%), Armenians (0.1%), and other groups. In total, there are more than 120 ethnic groups in the country.

The largest cities, with the status of national significance, are the capital of Astana (1,511,807 people), Almaty (2,280,296 people), and Shymkent (1,249,581 people).

According to 2024 data, the average life expectancy is 75.09 years; the birth rate is 18.47 per 1,000 population; and the infant mortality rate is 6.5 cases per 1,000 births.

Religion

According to the Constitution, Kazakhstan is a secular state.

The majority of the population (about 70%) are Sunni Muslims, while 26% are Christians, including Orthodox, Catholics, and Protestants. The remaining 4% of the population consists of adherents of other religious movements, individuals who are undecided, or atheists.

Overall, there are approximately 4,000 registered religious organizations in Kazakhstan representing 18 denominations. These include mosques, churches, synagogues, Buddhist temples, and other places of worship.

Civil sector

Currently, more than 18,000 non-governmental organisations (NGOs) operate in Kazakhstan. Most of these NGOs are based in Almaty, Astana, Shymkent, Karaganda, and Kyzylorda regions.

Visa-free regime

As of October 2024, citizens of Kazakhstan benefit from a visa-free regime with 41 countries through bilateral and unilateral agreements.

In turn, Kazakhstan offers visa-free travel to citizens of 86 countries, including Malaysia.

Diplomatic representation

Kazakhstan has established diplomatic relations with 187 states.

The country maintains 121 diplomatic missions in 80 countries, including 75 embassies, 26 general consulates, 6 consulates, 7 permanent missions to international organisations, 3 other diplomatic missions and 4 temporarily non-functioning missions.

There are 128 diplomatic missions of foreign states and international organisations based in Kazakhstan. These include 71 embassies, 24 general consulates, one consulate, and 32 representations of international organisations.

Security and multilateral diplomacy

Kazakhstan is a full member of nearly all major international organizations dedicated to maintaining global security and stability. Its notable contributions include chairing the Organisation for Security and Co-operation in Europe (OSCE) in 2010, the Organisation of Islamic Cooperation (OIC) in 2011, and serving as a non-permanent member of the UN Security Council in 2017-2018.

In 2024, Kazakhstan has held the chairmanship of several key organizations, including the Shanghai Cooperation Organisation (SCO), Collective Security Treaty Organisation (CSTO), Conference on Interaction and Confidence-Building Measures in Asia (CICA), Islamic Organisation of Food Security (IOFS), International Fund for Saving the Aral Sea (IFAS), and the Organisation of Turkic States (OTS).

Additionally, Kazakhstan plays an active role in the International Atomic Energy Agency (IAEA) and the Organisation for the Prohibition of Chemical Weapons (OPCW).

Gross domestic product (GDP)

According to IMF data, Kazakhstan’s GDP per capita in 2024, measured in purchasing power parity (PPP), is $34,530, while nominal GDP per capita stands at $14,780. This figure surpasses the GDP per capita of several countries, including Russia ($14,390), China ($13,140), Georgia ($8,830), Armenia ($8,580), Azerbaijan ($7,640), Belarus ($7,560), Uzbekistan ($2,670), Kyrgyzstan ($1,920), and Tajikistan ($1,270).

At the end of 2023, Kazakhstan’s GDP reached $264 billion. Plans indicate that by 2029, the GDP will amount to $450 billion, requiring an average annual growth rate of 6%. GDP growth rates were 5.1% in 2023, 3.3% in 2022, and 4.3% in 2021.

Foreign trade

In 2023, Kazakhstan’s foreign trade volume reached $139.8 billion, with exports totaling $78.7 billion and imports amounting to $61.1 billion, marking a 3.2% year-on-year increase.

Major trading partners:

• • China: $31.5 billion (22.5%)
• • Russia: $26 billion (18.6%)
• • Italy: $16.1 billion (11.5%)
• • South Korea: $6 billion (4.3%)
• • Türkiye: $6 billion (4.3%)
• • Netherlands: $4.4 billion
• • Uzbekistan: $4.4 billion
• • France: $4.2 billion
• • USA: $4.1 billion
• • Germany: $3.9 billion
• • Malaysia: $246,7 million

Main export items:

• • Oil: $42.3 billion (53.8%)
• • Uranium: $3.4 billion (4.4%)
• • Copper products: $3.2 billion (4.1%)
• • Copper ore: $3 billion (3.9%)
• • Ferroalloys: $2.3 billion (3%)
• • Natural gas: $2.1 billion (2.6%)
• • Wheat: $1.8 billion (2.4%)
• • Petroleum products: $1.1 billion (1.4%)

Main import items:

• • Equipment and electrical machinery: $15.5 billion (25.3%)
• • Motor vehicles and parts: $7.8 billion (12.7%)
• • Non-precious metals: $5.6 billion (9.2%)
• • Food products: $4.8 billion (7.8%)
• • Textiles: $4.8 billion (7.8%)

From January to October 2024, Kazakhstan’s foreign trade turnover reached $116.9 billion, reflecting a 1.5% increase compared to the same period in 2023.

Investments

Since 1993, Kazakhstan has attracted a total of 441 billion dollars in foreign direct investments (FDI). Top 10 investors since 2005 have been the Netherlands, the USA, Switzerland, China, Russia, France, the UK, Belgium, the Republic of Korea, and Japan.

In 2023, Kazakhstan’s gross FDI inflow reached $23.4 billion, while the first half of 2024 saw an inflow of $9.8 billion. Key investors during this period included:

• • Netherlands: $6 billion
• • Russia: $2.8 billion
• • Switzerland: $2.1 billion
• • China: $1.7 billion
• • South Korea: $1.2 billion
• • USA: $1 billion
• • Belgium: $1 billion
• • France: $884 million
• • UAE: $868.8 million
• • UK: $794.5 million

Transportation

Between January and November 2024, Kazakhstan handled a total of 977.4 million tons of cargo, a 9.2% increase from the same period of 2023. The breakdown is as follows:

• • Rail transport:6 million tons (+2.6%)
• • Road transport:5 million tons (+19.9%)
• • Pipelines:7 million tons (+4.1%)
• • Sea and coastal transport:6 million tons (+2.2%)
• • Inland water transport: 349,700 tons (-53.6%)

A total of 13 international transport corridors cross Kazakhstan, including 5 railroad and 8 road corridors. In 2023, transit traffic volume reached 32 million tons, with a target of 35 million tons by 2029.

The Trans-Caspian International Transport Route (TITR), also known as the Middle Corridor, has a throughput capacity of 6 million tons, including 100,000 TEU, spanning a total length of 6,180 km.  

In 2023, 2.76 million tons of cargo were transported along the TITR, a 65% increase from 2022 (1.7 million tons) and three times the volume in 2021 (840,000 tons). In the first eleven months of 2024, cargo transportation along the TITR increased by 63%, reaching 4.1 million tonnes, with the total for the year projected to reach 4.2 million tonnes.

Kazakhstan and its international partners have expressed strong interest in further developing the TITR, which serves as a key link between Europe and Central Asia. At the Global Gateway Investment Forum in Brussels in January 2024, the EU committed €10 billion to interconnectivity projects in Central Asia. Additionally, the European Investment Bank and EBRD signed MOUs worth €1.47 billion with the governments of Kazakhstan, Kyrgyzstan, and Uzbekistan, as well as the Development Bank of Kazakhstan.

To enhance the TITR’s efficiency, Kazakhstan Temir Zholy (KTZ), Georgian Railway, and Azerbaijan Railways established a joint venture, Middle Corridor Multimodal Ltd., offering a one-stop-shop multimodal service on the China–Europe/Türkiye–China route.

In November 2024, Kazakhstan, Azerbaijan, and China formed a joint venture to build a 40-hectare intermodal cargo terminal at the Port of Baku, as announced during COP29. Scheduled for completion in 2025, the terminal aims to boost container traffic along the China-Europe-China route via the TITR by reducing delivery times, costs, and transshipment delays.

Industry and energy

In 2023, Kazakhstan experienced 4.3% production growth, with industrial products worth 103.1 billion tenge produced.  

The country produced 90 million tons of oil, marking an increase of 6.9% from the previous year’s 84.2 million tons. Additionally, 58.8 million cubic meters of natural gas and 107.8 million tons of hard coal were produced. At the start of 2024, oil production averaged 1.6 million barrels per day (bpd), an increase of 15,000 bpd, while liquefied natural gas and condensate production stood at 0.4 million bpd, a decrease of 10,000 bpd. The oil production target for 2024 is set at 90.3 million tons. Kazakhstan’s estimated oil reserves stand at 78 billion tons.

Kazakhstan ranks 18th globally in gold reserves. In 2023, the country produced 132.8 tons of unprocessed and semi-processed precious metals, a 2.3% increase from the previous year. Gold refining remained stable at 73 tons.

The production of all types of ores, except for iron and lead-zinc ores, showed growth. Notably, manganese ore production reached 907,900 tons, a 2.6-fold increase, aluminum ores 4.6 million tons (+9.2%), and chrome ores 6.1 million tons (+6.8%).

The country is rich in various solid minerals, including iron, copper, uranium, zinc, molybdenum, tungsten, manganese, gold, and aluminum. Kazakhstan holds significant shares of the world’s reserves in tungsten (63%), chromium (48%), uranium (14%), silver (6%), and copper (more than 4%).

Kazakhstan is the world’s largest producer and exporter of natural uranium, accounting for over 40% of global production and exports.

The country has 15 rare earth metal deposits across three regions: Turkestan, Mangistau, and Kostanai. It also possesses significant ore deposits of tantalum, niobium, and rare earth elements from the yttrium and cerium groups. Its raw material reserves include tungsten (2.2 million tons), molybdenum (1 million tons), lithium (75,600 tons), tantalum (4,600 tons), niobium (28,100 tons), and beryllium (58,000 tons), among others.

Kazakhstan produces 18 of the 34 types of raw materials identified as “critical materials” by the EU.

Agro sector

Kazakhstan, a top ten grain exporter, plays a role in addressing food shortages in Central Asia, the Middle East, and Africa due to its vast arable land and strategic trade routes.

In 2024, Kazakhstan harvested 26.7 million tons of grain—a decade-high—contributing to a 12.7% growth in its agricultural sector. The country has 200 million hectares of agricultural land, with about 100 million hectares regularly utilized.

Kazakhstan’s agro-industrial sector experienced significant growth in 2024, driven by record-breaking harvests, increased investment, and robust government support.

Positive Dynamics in the Agricultural Sector in 2024

• • Growth: Increased by 13.4% to 7.8 trillion tenge (US$14.9 billion), surpassing the annual target of 11.6%.
• • Crop Production: Increased by 18.8%.
• • Livestock Production: Grew by 3.3%.

Crop Production

• • Fertilizers:3 million tons of mineral fertilizers applied, nearly double last year’s amount.
• • Seeds: Use of elite seeds rose from 7.1% to 9%.
• • Machinery: Renewal rate of agricultural machinery increased from 4.5% to 5%.
• • Grain Harvest:7 million tons, including:
  • – Wheat:8 million tons
  • – Rice: 563,000 tons
• • Other Crops:
  • – Potatoes: 2.9 million tons
  • – Vegetables: 3.9 million tons
  • – Oilseeds: 3.2 million tons
  • – Cotton: 300,000 tons

Livestock Production

• • Meat: Slaughter-weight meat production increased by 4%.
• • Dairy & Eggs: Cow’s milk production rose by 4.4%; chicken eggs by 1.2%.
• • Livestock Numbers: Cattle (+20.6%), sheep and goats (+9%), horses (+4.9%), camels (+4.7%).

Food Production

• • Overall Growth: Food production increased by 2.1% to nearly 3 trillion tenge (US$5.7 billion).
• • Key Increases:
  • – Groats:7x increase
  • – Cheese & Cottage Cheese: +8.7%
  • – Vegetable Oil: +12%
  • – Fermented Dairy Products: +5.2%
  • – Sausage Products: +4.1%
  • – Butter: +2.9%
  • – Dairy Farms: 65 new farms added 372,000 tons of annual milk production.

State budget

In 2023, revenues totaled $58.9 billion (+23.1%), with tax revenues contributing $57.3 billion (+27.4%). The budget deficit was maintained at 2.7% of GDP.

In the first 11 months of 2024, state budget revenues amounted to $35.9 billion (19 trillion tenge), achieving 90% of the planned target.

Kazakhstan’s public debt stood at $56 billion (22.7% of GDP). As of November 2024, gold and foreign exchange reserves totaled $44.2 billion, including $25.2 billion in gold. The assets of the National Fund reached $60.8 billion during the same period, with a net contribution of over $5 billion in 2023.

Astana International Financial Center (AIFC)

As of 2024, over 3,400 companies from 85 countries were registered at the Astana International Financial Centre (AIFC). The official Astana International Exchange (AIX) list includes 150 securities issued by 94 different issuers, 37 trading members, and around 15 custodial companies.

In 2023, the total trading volume on the AIX reached $582 million, reflecting a 236% increase from 2022. This included $130 million in equity trading and $452 million in debt trading.

Since its inception in 2018, the AIFC platform has facilitated investments exceeding $14 billion.

Official Development Assistance (ODA)

Since gaining independence, Kazakhstan has provided over $600 million in humanitarian aid and official development assistance (ODA).

In 2023, Kazakhstan’s ODA and humanitarian assistance totaled more than $11.8 million, distributed as follows: Türkiye – $1 million, Palestine – over $1 million, Pakistan – $0.5 million, Tajikistan – $4.6 million, Afghanistan – $4.5 million, Syria – $174,700.

In December 2020, Kazakhstan established the Kazakhstan Agency for International Development (KazAID), a non-profit joint-stock company dedicated to coordinating the country’s international development initiatives.

RATINGS

• • Policy and Security

In the 2024 Global Soft Power Index, Kazakhstan ranked 80^th out of 193 countries, emerging as the top performer among Central Asian states according to the barometer.

Kazakhstan has been recognized as the most peaceful country in the Eurasian region according to the Global Peace Index (GPI) for 2024.
The country’s ranking rose from 78^th to 59^th place in the global index, which includes a total of 163 countries. This progress of 10.8% compared to 2023 highlights Kazakhstan’s commitment to fostering peace and stability in the region.

According to Numbeo’s 2024 Crime Rate Ranking, Kazakhstan ranked 75th out of 146 countries, with a crime index of 45.9, indicating a moderate level. The country’s security level is comparable to Greece and Canada. Among CIS countries, Kyrgyzstan and Belarus reported higher crime rates than Kazakhstan.

In the 2024 Global Firepower ranking, Kazakhstan secured 58^th place out of 145 states in terms of military power, improving by five positions from 2023. Following Kazakhstan are Azerbaijan (59^th), Belarus (64^th), Uzbekistan (65^th), Turkmenistan (83^rd), Kyrgyzstan (100^th), Armenia (102^nd), and Tajikistan (107^th).

Kazakhstan ranked 32^nd out of 113 countries (1^st among CIS countries) in the Global Food Security Index 2022, which assesses food security based on four parameters: availability, variety, quality, and adaptability.

• • Economy and Finance

In 2024, Kazakhstan achieved highest-ever Moody’s rating: Baa1 with stable outlook. The international rating agency upgraded the Kazakh government’s long-term local and foreign currency issuer ratings from Baa2 and changed the outlook to stable from positive.

According to the international rating agency FitchRatings, Kazakhstan’s sovereign credit rating is BBB, with a “stable” outlook.

Rating agency S&P Global Ratings affirmed Kazakhstan’s long-term and short-term sovereign credit ratings on foreign and local currency liabilities at “BBB-/A-3” in 2024. The outlook on the ratings remains “stable”.

In the 2024 IMD World Competitiveness Ranking, Kazakhstan ranked 35^th among 67 nations, climbing 8 positions from 2022. This study evaluates factors such as Economic Performance, Government Efficiency, Business Efficiency, and Infrastructure.

According to the FDI Intelligence ranking of the best markets for investment in emerging markets in 2024, Kazakhstan secured 6^th place in terms of the dynamics of attracting foreign direct investment.

Kazakhstan has improved its position in the Basel AML Index
for 2024, a global ranking assessing the risks of money laundering and terrorist financing. The country ranked 111^th out of 164 nations, marking
the best performance in Kazakhstan’s history in this index. In this ranking, Kazakhstan outperformed several developed countries, including the United States, Japan, Singapore, China, Qatar, Italy, Hungary, and Türkiye.

• • Sustainable Development and Social Progress

In this year’s independent World Happiness Report, Kazakhstan ranked 49th out of 137 countries. The World Happiness Report is an annual publication that assesses global happiness. Following Kazakhstan are Kyrgyzstan (75^th), Tajikistan (88^th), Türkiye (98^th) and Azerbaijan (101^st).

In the Social Progress Index, Kazakhstan ranked 63^rd out of 170 countries, surpassing Russia (76^th), Uzbekistan (81^st), Kyrgyzstan (86^th), Azerbaijan (99^th), Turkmenistan (104^th), and Tajikistan (116^th).

Kazakhstan is ranked 67^th out of 193 countries in the Human Development Index 2023/2024 and has been classified under the “very high level” of human development category for the last several years. In comparison, Belarus is ranked 69^th, China 75^th, Azerbaijan 89^th, Ukraine 100^th, Uzbekistan 106^th, and Kyrgyzstan 117^th. This index, calculated by the UN Development Program, measures standards of living, literacy, education, and longevity.

In the ESG Index 2023, an international ranking in the field of sustainable development, Kazakhstan ranked 52^nd out of 183 countries.

In the UN Global E-Government Development Index, Kazakhstan ranks 28^th for the development of e-government, the highest position among landlocked developing countries. The ranking is based on assessments of electronic services, human capital, and telecommunications infrastructure.

At the end of 2023, Kazakhstan ranked 54^th out of 76 countries (1^st among CIS countries) in the Green Future Index 2023. This rating takes into account the progress of countries in transitioning their economies to green technologies in various spheres.

In the 2024 WIPO Global Innovation Index, Kazakhstan entered the top three nations in Central and Southern Asia, advancing to 78^th place.

• • Travel & Tourism

In the World Economic Forum’s Travel & Tourism Development Index 2024, Kazakhstan ranked 52^nd among 119 countries, receiving high scores in health and hygiene, price competitiveness, and the socio-economic impact of tourism. In the previous 2021 ranking, Kazakhstan was 66^th among 117 countries.

In the 2024 Henley & Partners International Passport Index, Kazakhstan advanced to 65^th place, up from 73^rd in 2022, due to an increase in the number of countries allowing visa-free entry for its citizens.

In Arton Capital’s 2024 Passport Index, Kazakhstan ranked 53^rd, improving from 56^th in 2023.

Kazakhstan Introduces New Visa Options for Skilled Professionals and Digital Nomads

Kazakhstan has launched three new visa categories designed to attract skilled professionals, entrepreneurs, and remote workers, reinforcing the country’s position as a hub for global talent and innovation. Neo Nomad Visa (B12-1), the Digital Nomad Visa (B9-1), Visa for Permanent Residence (B9) offer flexible pathways for those seeking long-term opportunities in Kazakhstan, whether for career growth, business expansion, or remote work.

Neo Nomad Visa (B12-1): A Unique Offer for Remote Workers

The Neo Nomad Visa (B12-1) is specifically designed for professionals and digital entrepreneurs who want to live in Kazakhstan and work remotely while maintaining their foreign income.

• • The Neo Nomad Visa is a multiple-entry visa valid for up to one year.
• • Visa holders can extend their stay for up to an additional year within Kazakhstan.
• • Family members and dependents can obtain a visa for the same duration, though work and religious activities are restricted under Kazakh law.

With its modern infrastructure, affordable cost of living, and growing international business environment, Kazakhstan presents an excellent opportunity for remote workers looking for a dynamic and well-connected base in Central Asia.

Digital Nomad Visa (B9-1): A Path to Permanent Residence

The Digital Nomad Visa (B9-1) is intended for highly sought-after professionals in the IT industry who are relocating to Kazakhstan to obtain permanent residence. It provides an opportunity to integrate into Kazakhstan’s workforce and contribute to its economic development.

• • A single-entry electronic visa is available via the Visa and Migration Portal, valid for up to one year.
• • A multiple-entry paper visa, also valid for up to one year, can be obtained through the Ministry of Internal Affairs on a basis of single entry electronic B9-1 visa.

Kazakhstan offers a stable, business-friendly environment with growing opportunities in technology, finance, and other high-demand industries. The Digital Nomad Visa allows professionals to settle in Kazakhstan while completing the permanent residence application process. A petition from Astana Hub or an authorised body in Kazakhstan’s IT sector is required to obtain the Digital Nomad Visa.  

Visa for Permanent Residence (B9): A Long-Term Opportunity for Skilled Professionals

The B9 visa provides a structured pathway for foreign professionals with in-demand skills in fields such as medicine, science, innovation, education, and the creative industries, enabling them to establish a long-term presence in Kazakhstan.

• • Kazakh diplomatic missions issue:
  •    – Single-entry visas valid for up to 90 days.
  •    – Multiple-entry visas up to 90 days, issued once per year.

Once in Kazakhstan, professionals can transition to permanent residency, offering stability and the ability to integrate into the local job market. Kazakhstan’s strategic location, strong economic growth, and business-friendly policies make it an attractive destination for those seeking career advancement and a high quality of life.

Why Kazakhstan?

Kazakhstan is one of the fastest-growing economies in the region, offering a high standard of living, strong digital infrastructure, and expanding professional opportunities. The country provides a unique blend of modern urban centres and stunning natural landscapes, making it an ideal destination for professionals seeking both career growth and an adventurous lifestyle.

Whether you are a skilled professional looking for long-term opportunities or a digital nomad seeking a fresh, inspiring location, Kazakhstan’s new visa options provide the flexibility and support needed to thrive in an emerging global hub.

For more details on visa applications and requirements, please contact a Kazakh embassy or consulate.

Astana International Forum 2025: Bridging Divides in a Polarized World

As global tensions intensify and the international order faces growing uncertainty, the Astana International Forum 2025 (AIF 2025) emerges as a timely and critical platform for meaningful dialogue. Scheduled for May 29–30, 2025, in Astana, Kazakhstan, the forum will convene under the resonant theme: “Connecting Minds, Shaping the Future.” With its growing reputation as a diplomatic and strategic nexus, Astana is set to host a diverse constellation of global leaders, policymakers, and thinkers aiming to find common ground on the most pressing issues of our time.

(a)    A Platform for Multilateralism in a Fragmented World

The overarching message of AIF 2025 is clear: dialogue and pragmatic collaboration are essential in an era of increasing polarization. As geopolitical rivalries deepen and trust in international institutions wanes, the forum offers a much-needed space for open, inclusive, and solution-oriented conversation. The presence of high-level participants such as Kazakhstan’s President Kassym-Jomart Tokayev, Qatar’s Prime Minister Mohammed bin Abdulrahman Al Thani, and Ban Ki-moon, the former UN Secretary-General, underscores the forum’s growing diplomatic significance.

Unlike many summits that focus on political posturing, AIF 2025 is geared toward practical outcomes. Its mission is to strengthen multilateral cooperation by fostering dialogue across divides—between developed and developing nations, public and private sectors, and traditional and emerging powers.

(b)    Focus Areas: Addressing Global Complexity

The agenda of AIF 2025 is both ambitious and urgent, structured around four interlinked pillars:

1. 1. Foreign Policy and International Security
   In an age marked by regional conflicts, cybersecurity threats, and the erosion of arms control regimes, the forum will address strategies to rebuild trust and promote collective security frameworks.
2. 2. International Development and Sustainability
   With the 2030 Sustainable Development Goals at risk, discussions will focus on accelerating global development efforts, reducing inequality, and building resilience in the Global South.
3. 3. Energy and Climate Change
   As climate crises intensify and the global energy transition remains uneven, AIF 2025 provides a critical stage to bridge the interests of fossil-fuel-dependent economies and green energy advocates.
4. 4. Economy and Finance
   From inflationary pressures to debt crises in the developing world, the forum will explore innovative financial cooperation mechanisms and the role of institutions like the IMF and World Bank in a changing economic landscape.

(c)    Strategic Importance of Kazakhstan

Kazakhstan’s role as host is itself symbolic. Positioned at the crossroads of Europe and Asia, the country has increasingly sought to play a neutral, bridge-building role on the world stage. Under President Tokayev’s leadership, Kazakhstan has promoted dialogue-driven foreign policy and positioned itself as a venue for constructive diplomacy, from nuclear disarmament talks to regional cooperation in Central Asia.

AIF 2025 reinforces this strategy, signaling Kazakhstan’s ambition to act as a convening power in global affairs—one that champions stability, sustainability, and inclusivity.

(d)    The Road Ahead

With its emphasis on pragmatism over ideology, the Astana International Forum 2025 has the potential to become a model for future international gatherings. In contrast to forums mired in rhetoric or gridlock, AIF 2025 aspires to facilitate actionable partnerships and consensus-based solutions.

By promoting “Connecting Minds, Shaping the Future,” the forum invites the global community to reimagine cooperation – not as a lofty ideal, but as a necessity for shared survival and progress.

For more information, updates, and full list of participants, visit astanainternationalforum.org and follow #AIF2025 on social media.

MASSA extends its appreciation to the Embassy of the Republic of Kazakhstan in Malaysia and Brunei Darussalam for this Country Feature.

The High Commission of the Republic of Namibia and the Namibia Investment Promotion and Development Board (NIPDB) with the support of MIDA organised the Namibia – Malaysia Business Forum on 20 December 2024 at Grand Millennium Kuala Lumpur.

The forum saw a delegation from Namibia who was led by Dr Nangula Uaandja, CEO of the Namibia Investment Promotion and Development Board (NIPDB), and was graced by H.E Mr Herman Pule Diamonds, High Commissioner of the Republic of Namibia to Malaysia. MASSA was represented by Ms Ng Su Fun, Executive Secretary of the Malaysia South-South Association (MASSA) and the MASSA Secretariat.

This event aimed to promote and facilitate investment opportunities, by way of Malaysian businesses setting up their manufacturing / production hub in Namibia to leverage its cross-border agreements with its neighbours and the African region for the purpose of import substitution and job creation, especially in the highlighted sectors of agriculture, textiles (cut, trim, make), infrastructure, pharmaceuticals, halal financing, tourism, mining, new & renewable energy materials.

Ms Ndapewa Hangula, Senior Manager, NIPDB gave the Introductory Remarks and served as Director of Ceremonies.

The Embassy of the Republic of Uzbekistan in Malaysia, with the support from the Malaysian Investment Development Authority (MIDA) organised the Uzbekistan-Malaysia Business Forum on 5 February 2025 at Grand Hyatt Kuala Lumpur in conjunction to the Official Visit of His Excellency Shavkat Mirziyoyev, President of Uzbekistan to Malaysia.

The forum strengthened business collaboration and economic ties between Malaysia and Uzbekistan, and presented an opportunity to explore further opportunities for economic collaboration between the business communities of the two countries.

The Uzbekistan delegation included senior government officials and business leaders from sectors such as chemicals, construction, food & beverages, healthcare, textiles, manufacturing, electronics, agriculture, tourism, energy, and more.

Presentation on Uzbekistan’s investment climate and opportunities for Malaysian investors by Mr Mansurjon Rasulev, Director of the Investment Promotion Agency under the Ministry of Investment, Industry and Trade of the Republic of Uzbekistan.

Presentation on the agricultural sector by H.E. Alisher Shukurov, Deputy Minister of Agriculture of the Republic of Uzbekistan.

Presentation by Mr Fazliddin Sharofitdinov, Director of Project Officer under the Ministry of Energy of the Republic of Uzbekistan.

Presentation by Mr Akbar Kurbanov, Deputy Chairman of the Board “UZKIMYOSANOAT” Joint-Stock Company.

A series of bilateral documents were also exchanged, highlighting bilateral intentions to collaborate across multiple sectors including food & beverage, energy, retail & trading, and services amongst others.

YB Senator Tengku Datuk Seri Utama Zafrul Tengku Abdul Aziz, Minister of Investment, Trade and Industry of Malaysia delivered his speech.

H.E. Laziz Kudratov, Minister of Investment, Industry and Trade of the Republic of Uzbekistan delivered his speech.

YAB Dato’ Seri Anwar Ibrahim, Prime Minister of Malaysia delivered his speech.

H.E. Shavkat Mirziyoyev, President of Uzbekistan delivered his speech.

H.E. Bulat Sugurbayev (left), Ambassador of Kazakhstan to Malaysia and Ms Ng Su Fun (right), Executive Secretary, MASSA.

From left-to-right: Ms Chan Pei Ling, Manager, Digital Exports, MDEC, Mr Michael Tan, Senior Manager, Digital Exports, MDEC, Ms Ng Su Fun, Executive Secretary, MASSA and Mr Samuel Loh, Programme Executive, MASSA.

From left-to-right: Ms Iza Nurfarisha, Executive, Market Access & Business Support, Industry Support Division, Bioeconomy Corporation, Mr Samuel Loh, Programme Executive, MASSA, Mr Joel Michael Ponniah, Senior Manager, Market Access & Support, Bioeconomy Corporation and Mr Haziq, Executive, Bioeconomy Corporation.

Tan Sri Azman Hashim (left), President, MASSA and U Zaw Min Win (right), Senior Executive Advisor & Past President, UMFCCI.

(from left-to-right) Datuk Lim Hong Yeu, Head of Legal Services & Board Member, ERA & National Council Member, Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), Ms Ng Su Fun, Executive Secretary, MASSA, Mr Ooi Tat Lean, Executive Director, Bina Puri Builder Sdn Bhd, Tan Sri Azman Hashim, President, MASSA, U Zaw Min Win, Senior Executive Advisor & Past President, UMFCCI, Dr Pwint San, Former Union Minister of Commerce, Former Minister of Labour & Former Secretary General, MIA, Hla Myint Shwe, Managing Director, United Pacific Co Ltd and U Aye Tun, Chairman, MIA & Vice President, UMFCCI.

Tan Sri Azman Hashim, President, MASSA and U Zaw Min Win, Senior Executive Advisor & Past President, UMFCCI.

The delegation also met with the Expertise Resource Association (ERA) at MASSA’s office before the meeting with MASSA President, Tan Sri Azman Hashim.

This meeting was co-chaired by Ms Ng Su Fun, Executive Secretary, MASSA and Mr KS Chen, President, ERA and was attended by Board Members of ERA.

(front-row, from left-to-right) Mr KS Chen, President, ERA, Ms Ng Su Fun, Vice President, ERA & Executive Secretary, MASSA, U Zaw Min Win, Senior Executive Advisor & Past President, UMFCCI, and Dr Pwint San, Former Union Minister of Commerce, Former Minister of Labour & Former Secretary General, MIA.
(back-row, from left-to-right) Datuk Lim Hong Yeu, Head of Legal Services & Board Member, ERA & National Council Member, Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), Mr Danny Siew, Hon. Assistant Secretary, Board Member, ERA, Hla Myint Shwe, Managing Director, United Pacific Co Ltd, Mr Ong Song Howe, Member, ERA, U Aye Tun, Chairman, MIA & Vice President, UMFCCI and Mr Samuel Loh, Programme Executive, MASSA.

From left to right: Ms Shafina Syafei, Director, Group PR and Communications, CHHB, Tan Sri Azman Hashim, President, MASSA, Admiral Tan Sri Dato’ Setia Mohd Anwar Bin Hj. Mohd Nor, Chairman, CHHB, Ms Ng Su Fun, Executive Secretary, MASSA.

Dato’ Lawrence Lim Swee Lin, Hon. Secretary of MASSA
delivered the Welcome Remarks.

Mr Harmender Singh, Vice President, Super PMO & Special Projects, Cradle Fund delivered the Opening Remarks.

Mr Sivavenayakam Velayutham, CEO, KolaXus and
Executive Committee Member of Malaysia-Japan Economic Association (MAJECA) delivered his remarks and moderated the Startup Sharing Session.

Based on the theme of “Cross-Border Collaboration & Market Expansion” the following four startups shared on their respective businesses moderated by Mr Sivavenayakam Velayutham, CEO, KolaXus and Executive Committee Member of Malaysia-Japan Economic Association (MAJECA):

Mr William Lee, CEO, Easybook

Mr Aiemaan Mohd Noor,
Country Director, Neoreka Asia

Mr Owen Chen Chee Onn, CEO, Neurogine

Mr Lim Chin Wan, Founder & Director, GriPP

Datuk Merlyn Kasimir, Hon. Asst. Secretary of MASSA
delivered the Closing Remarks on behalf of Tan Sri Azman Hashim,
President of MASSA & MAJECA.

Photo Gallery:

‣ President’s Statement

‣ Editorial

‣ Article: Follow the New Silk Road: Malaysia’s Strategic Pivot to Africa

‣ Diary of Events

‣ 18 September 2024
MIDA-Deloitte: Direct Investment Abroad (DIA) Study – Focus Group Discussion with Industry Players

‣ 24 September 2024
MIDA-Deloitte: Direct Investment Abroad (DIA) Study – Strategic Visioning Workshop

‣ 2 October 2024
Meeting with Malaysia Chambers Jakarta (MCJ)

‣ 14 October 2024
Working Visit from Indonesia

‣ 5 December 2024
MASSA-KolaXus-MAJECA iDeas Xchange Start-up Meet-up & Sharing Session – 2024/2025 Series – Session #1 – Introducing Tomorrow’s Innovators

‣ Forthcoming Events

Tan Sri Azman Hashim
President
MASSA 

Global growth for 2024 is projected by the IMF to be 3.2% compared to the previous year’s 3.3%. Across the year, disruptions to production and logistics, conflicts, civil unrest, and extreme weather events had dampened global economic performance against increasing demand for semiconductors and electronics, powered by significant investments in artificial intelligence.

Malaysia’s economy achieved a commendable GDP growth of 5.1% in 1H2024, and projected to increase to 5.3% in 3Q2024. The performance was attributed to stable labour market, moderate inflationary pressures, accommodative fiscal and monetary policies, net inflow of foreign funds and ongoing recovery in tourism. These will provide the momentum for the economy going forward.

Looking ahead into the coming year 2025, the global economy is projected by the IMF to grow by 3.2% in 2025 and headline inflation is expected to fall from 5.8% to 4.3% as the US and China economies are expected to moderate, but strong investments in technology, renewable energy and healthcare will present opportunities.

With the recent unveiling of Budget 2025, Malaysia’s GDP growth for 2025 is expected to be between 4.5 – 5.5%. This growth is anticipated to be driven by private consumption, consistent improvements in the labour market and wage growth. Supportive tailwinds include FDI in new sectors, the realisation of approved investments in the private sector, the global tech upcycle, the civil service wage adjustments catalysing increased consumption and strategic infrastructure projects (e.g. ECRL). Weighing against this outlook would be cost-of-living pressures, brought on by the potential implementation of RON 95 fuel subsidy rationalization, introduction & enhancement of tax revenue measures (e.g. alignment with Global Minimum Tax, sugar tax, high-value goods tax, SST), and rising healthcare costs and consequent medical insurance premiums amongst others.

As the world undergoes further geopolitical shifts and changes, I believe cross-border partnerships are more critical than ever. MASSA is supportive of Malaysia taking on a greater presence in the regional & international landscape, especially when Malaysia assumes chairmanship of ASEAN in 2025, while it joins the ranks of Thailand and Indonesia as a partner country of BRICS. In addition to the RCEP and the CPTPP, BRICS will offer another avenue / platform for Malaysia to further develop deeper trade, investment & financial ties with the member countries who, when combined, comprise nearly half of the global population & whose economies are already worth over USD 26 trillion (over a quarter of the global economy).

Encouraged by our Prime Minister of Malaysia’s stand on the Global South, MASSA is encouraged to further its collaboration with business associates in the South-South regions to highlight new, greenfield & tech-enabled opportunities for members by bringing to members’ attention, these emerging opportunities in the South-South markets.

Additionally, MASSA is also building a new platform to highlight the burgeoning domestic startup ecosystem, to introduce & highlight new, innovative and transformative homegrown solutions & ideas. This platform is an avenue for MASSA members to get acquainted with various innovators, entrepreneurs & founders for collaborative prospects in these startups’ expansionary phase, and to ultimately connect and grow in the markets of the South-South developing countries. These economies have the potential to leapfrog development and innovation through tech-forward solutions and we want Malaysia to be part of this growth phase.

I appreciate the continuing support and cooperation of all members, especially my fellow Executive Committee Members, Representatives from Government Ministries and Ex-Officio partners with your attendance, support and contributions at our regular meetings & events and not forgetting the sponsors of our website.

I also want to thank all who have contributed valuable and insightful articles over 2024.

My best wishes to everyone, Merry Christmas and a happy, healthy and successful 2025!

Tan Sri Azman Hashim
President
28 November 2024

Greetings from MASSA !

2024 saw a year faced with many geopolitical challenges, that resulted in contagion and systemic complexities.

As we come to the close of 2024, we are thankful to MASSA members, article contributors, and collaborators for their participation and persevering support throughout the year. MASSA will continue to highlight to members, trade, investment and business leads from the South-South countries.

For this issue, we want to acknowledge Dr Mohamed Ashraf Iqbal, Chairman of Waafi Bank for connecting us with Ms Aparupa Chakravarti, Director of Botho Emerging Markets Group who had provided an article encouraging Malaysians to consider exploring & enhancing business ties with the burgeoning market of Africa, especially through capitalising on the halal economy leveraging Malaysia’s leadership in the global halal ecosystem. The article encourages businesses to consider navigating the continent, through the grouping of DUKES (Djibouti, Uganda, Kenya, Ethiopia and Somalia), by tapping the emergence of Djibouti as a potential powerhouse of trade and finance cum logistics hub as a gateway economy.

This December Newsletter also shares with readers MASSA’s participation in MIDA’s efforts to enhance the competitiveness of Malaysia’s manufacturing industry through Direct Investment Abroad (DIA), which involves conducting a detailed assessment on Malaysia’s DIA landscape and subsequently to devise suitable DIA policies and strategies for the relevant DIA focused sectors. This took shape across a focus group discussion and a strategic visioning workshop on 18 September and 24 September, respectively.

MASSA had also connected with Malaysia Chambers Jakarta (MCJ), an entity under the patronage of the Ambassador of Malaysia to Indonesia on 2 October. This meeting led to a Working Visit from Indonesia by MCJ where MASSA had facilitated a leg of their Working Visit on 14 October 2024. The visit highlighted the business and investment opportunities in Indonesia, especially in Batam. Batam is well-positioned and strategically located as a neighbouring city to Singapore & Johor, and is one of the top 3 ports in Indonesia.

Cognisant of the important role of the burgeoning Malaysian startup ecosystem in spurring innovation, MASSA has partnered with KolaXus and the Malaysia-Japan Economic Association (MAJECA) to organise a series of Start-up Meet-up & Sharing Sessions from 2024-2025. The kickoff event on 5 December 2024, supported by the Malaysia Digital Economy Corporation (MDEC), with the theme Introducing Tomorrow’s Innovators brought together corporates and startups to explore innovation and collaboration, with the view for Corporates to discover cutting-edge startups and build strategic partnerships, grow & scale up these innovations, and for Startups to showcase ideas and connect with industry leaders.

Moving ahead, several events & engagements are in the works with our partners and collaborators for the year ahead. They include a webinar on business opportunities in Timor-Leste on 15 January 2025. For more information, please do look out for our Circulars and Forthcoming Events announcement on the MASSA website.

We also welcome members’ & readers’ initiatives to work with the MASSA Secretariat on innovative programmes that may be beneficial to members and the business community.

We wish all members and readers, season’s greetings, a happy new year 2025, stay safe and keep well.

Ng Su Fun

Editorial MASSA

The Malaysian Investment Development Authority (MIDA) is undertaking a study to enhance the competitiveness of Malaysia’s manufacturing industry through Direct Investment Abroad (DIA).

MIDA has appointed Deloitte as the consultant to conduct this study. The main scope of this study involves conducting a detailed assessment on Malaysia’s DIA landscape and subsequently to devise suitable DIA policies and strategies for the relevant DIA focused sectors.

Deloitte organised a Focus Group Discussion on 18 September 2024 at MIDA’s head office. This group discussion aimed to gather more insights, perspective, challenges, opportunities related to DIA and recommendations on policy measures needed to advance the Malaysian manufacturing sectors through DIA. Representatives from chambers of commerce, industry associations, business associations and private sector players participated in the discussion. MASSA was represented at this discussion by Mr Samuel Loh, Programme Executive.

From left-to-right: Mr Samuel Loh, Programme Executive, MASSA, Mr Sivavenayakam Velayutham, CEO & Founder of Kolaxus & Director – Partnership & Key Project, Finexus Group, Mr Mani Wannan, Vice President, Malaysia Chambers Jakarta (MCJ), Mr Alvidyan Virgarazman, CEO, PT Vitka Inti Internasional, VITKA Holdings, Dr Asman Abnur, Chairman, PT Vitka Inti Internasional, VITKA Holdings, Dato’ Lawrence Lim Swee Lin, Hon. Secretary, MASSA & Director, MASSCORP, and Ms Ng Su Fun, Executive Secretary, MASSA & General Manager, MASSCORP

4. Luncheon Meeting hosted by Tan Sri Azman Hashim

The delegation extended an invitation to Tan Sri Azman Hashim & MASSA to consider investments in Indonesia, particularly in Batam.

Batam is well-positioned and strategically located as a neighbouring city to Singapore & Johor, and is one of the top 3 ports in Indonesia.

Follow the New Silk Road: Malaysia’s Strategic Pivot to Africa

Article by Ms Aparupa Chakravarti, Director, Botho Emerging Markets Group

Malaysia has undergone substantial economic transformation, evolving from a commodity-dependent economy to a diversified middle power. This progress has been largely driven by South-South cooperation and ASEAN’s regional growth. With aspirations to achieve high-income status by 2050, Malaysia’s trajectory now demands an expanded scope of international partnerships. Strengthening ties with Africa, particularly through the emerging halal economy, strategically aligns with Malaysia’s long-term growth prospects.

Africa’s role in the global economy is rapidly shifting. The UN projects that by 2050, one in four people worldwide will reside in Africa, underscoring the continent’s demographic significance. Africa’s working-age population, already the youngest globally, is growing by over 12 million individuals annually, contrasting with aging populations in other regions that threaten to constrain economic dynamism. Sub-Saharan Africa’s economic growth, forecast to reach 4% by 2025-26 against the global growth average of 2.7%, positions the continent as an increasingly vital component of global economic activity. These demographic and economic trends present an opportunity for Malaysia to broaden its markets beyond traditional ASEAN partnerships.

Recognition of Africa’s strategic importance is also evident in global diplomacy. The African Union’s recent inclusion in the G20 reinforces the continent’s influence in global governance, reflecting the region’s shift from a passive participant to an active contributor in international decision-making. At the latest BRICS summit, African countries led by South Africa advocated for global policy reforms, securing a formal role among higher-income nations like Russia and China. These developments indicate a geopolitical recalibration, with global powers seeking to deepen relations with Africa as they recognize its potential for growth and influence.

Economic engagement in Africa by non-Western nations has accelerated. Brazil, the world’s largest halal exporter, recorded over $8 billion in halal exports to Africa in 2022—a 35% increase from the previous year—and has announced plans to scale this further. The UAE has also intensified its investments, committing over $60 billion to Africa between 2012 and 2022, making it the continent’s fourth-largest investor after China, Europe, and the US. Trade between the UAE and Sub-Saharan Africa has expanded by more than 30%, with trade volume now twelve times greater than a decade ago. Notable investments include DP World’s $80 million logistics hub in Egypt’s Suez Canal Economic Zone and Turkish e-commerce firm Hepsiburada’s partnership with African retailer Jumia. These examples underscore the growing recognition of Africa as an emerging economic frontier.

In this context, Malaysia has a distinct opportunity to deepen its economic engagement with Africa. While China remains Africa’s dominant trading partner, other Asian nations are increasingly active in the region. South Korea, for instance, has integrated Africa into its “global pivotal state” strategy, leading to a 29% annual increase in bilateral trade as it seeks to diversify supply chains. Unlike other Southeast Asian countries, with the notable exception of Indonesia, Malaysia has established relationships across Africa, largely rooted in its South-South cooperation narrative.

From a Marine Insights article on Djibouti Ports

Malaysia’s established agreements with African countries provide a strong foundation for expanding its presence. The Kenya National Chamber of Commerce and Industry’s MoU with the Kuala Lumpur & Selangor Indian Chamber of Commerce & Industry, along with various partnerships between Malaysia, Ethiopia, and South Africa, facilitate cooperation across sectors like trade, industry, and agriculture. Malaysian firms such as Petronas, Golden Africa Kenya Ltd., SMH Railways, Probase Manufacturing, Serba Dinamik, and BSMART Technology are already operational in Kenya, South Africa, Uganda, and Tanzania, demonstrating Malaysia’s foothold on the continent. Malaysia exports $6.9 billion in goods to Africa, and its imports have grown to $3.6 billion, signaling a solid trade foundation for further expansion.

Malaysia’s leadership in the halal economy further strengthens its position as an ideal partner for Africa. Consistently ranked first in the Global Islamic Economy Index, Malaysia’s expertise in Islamic finance, halal food, and Muslim-friendly tourism can support Africa’s growing halal sector. By 2030, 17.6% of the global Muslim population is projected to reside in Africa, and the halal cosmetics market alone represents an $8 billion opportunity. Islamic finance initiatives are also expanding: Kenya has amended its capital market policies to allow sukuk issuances, while Tanzania and Uganda are progressing toward similar offerings. Ethiopia has recently established full-scale Islamic financial institutions. Djibouti, which boasts one of Africa’s most developed Islamic finance sectors after Sudan, exemplifies this growth through its funding of major projects like the $65 million Djibouti Africa Regional Express fiber cable. The $590 million Dolareh Multipurpose Port further solidifies its potential as a significant regional trade and financing hub. With its strategic location at a global crossroads and deep-sea ports, Djibouti’s financial infrastructure positions it as an ideal partner for Malaysia’s African expansion, particularly in the halal trade and Islamic finance sectors. Given that Malaysia’s halal industry is projected to reach $113.2 billion by 2030, the country is well-positioned to tap into this potential and forge mutually beneficial partnerships across African markets.

From Pew Research Center

Malaysia’s primary economic focus has been on ASEAN markets, which have been instrumental in driving the country to middle-income status. However, diversifying into African markets could accelerate Malaysia’s medium- and long-term growth objectives while hedging against risks associated with overreliance on its immediate region. A targeted Africa-Malaysia strategy could provide Malaysia with a competitive advantage within ASEAN, positioning it as a leader in South-South trade while meeting its aspirations for global economic integration.

A broad, monolithic approach to engaging Africa would be inefficient for Malaysia, given the number and diversity of individual countries combined with the complex web of regional blocs. Instead, Malaysia would benefit from a more nuanced and targeted strategy to navigate the continent, one that goes beyond conventional value chain mappings and geographic groupings. Departing from the typical delineation separating the East and Horn of Africa, for example, the Djibouti, Uganda, Kenya, Ethiopia, and Somalia (DUKES) region presents a compelling frontier for Malaysia’s strategic entry. This collective, with its mix of dynamic emerging markets and asymmetrical opportunities, offers a pathway to gradually expand Malaysia’s influence. Djibouti, in particular, stands out as a potential financial and trading powerhouse with developed Islamic finance infrastructure and strategic deep-sea ports. Leveraging Djibouti’s position as a gateway economy, Malaysia can establish a foothold in the DUKES region, facilitating deeper economic integration and partnerships that can eventually extend across the wider African continent.

Malaysia’s prospects for high-income status depend on strategic engagements that diversify supply chains and tap into growing markets. Africa’s economic landscape, demographic trends, and Malaysia’s existing relationships create an opportune environment for a proactive, structured approach to bilateral and multilateral cooperation. Establishing a clear Africa-Malaysia partnership strategy could be a critical step in realizing Malaysia’s economic potential on the global stage.

Botho Emerging Markets Group is a strategy consulting and investment advisory firm that facilitates the exchange of partnerships, opportunities, investments and knowledge between African countries and emerging economies around the world. For close to 20 years, we have guided Fortune 500 companies, governments, development institutions, SMEs, start ups, and nonprofits in entering into and navigating the world’s fastest growing markets. Botho is keen to build on this foundation and build similarly strong relationships between the Malaysian private sector and its African counterparts, through targeted market research and intelligence; strategy development; partnerships and government relations; and curated convenings. For further information, please contact Aparupa Chakravarti at aparupa@botholtd.com or Naam Chakravorty at naam@botholtd.com

‣ President’s Statement

‣ Editorial

‣ Country Feature: Federal Republic of Somalia

‣ Article: Understanding MSBDF and its Significance for Malaysian Businesses

‣ Diary of Events

‣ 30 May 2024
Meeting with the Malaysian Institute of Economic Research (MIER)

‣ 11 June 2024
Visit to SHRDC – Malaysian Smart Factory (MSF) 4.0 Discovery Day

‣ 12 June 2024
Sharing Session on e-Invoicing Implementation and Solutions at Finexus Campus

‣ 24 June 2024
33rd Annual General Meeting of MASSA

‣ 6 August 2024
Budget 2025 MITI Dialogue with Industry

‣ 7 August 2024
Courtesy Call on H.E. Lisualdo Gaspar, Ambassador of Timor-Leste to Malaysia

‣ 14 August 2024
Meeting at the Embassy of the Federal Republic of Somalia to Malaysia

‣ Forthcoming Events

‣ Remembering the late Tun Michael Chen Wing Sum (1932 – 2024)

COUNTRY FEATURE
FEDERAL REPUBLIC OF SOMALIA
(SOMALIA)

Article by:

Dr. Mohamed Abdi Dahir Sh. Hassan.
Head of the Commercial & Industrial Office
Embassy of the Federal Republic of Somalia in Kuala Lumpur
E-mail: comattache.somembassy@gmail.com;
Malaysia.attache@moci.gov.so

The Commercial & Industrial Office at our Embassy will be dedicated to providing free, comprehensive and confidential information, advice, assistance and all manner of support to all southeast Asian investors.

A Brief on Trade and Investment Opportunities in Somalia – Presented to Malaysian Investors

General Information

Pro-Business Climate – Political and Security Context

Somalia was recovering in the last view years and consolidating gains in peacebuilding, the government was focusing its efforts on setting up strong national institutions and promoting inclusive political & Development processes, ensuring security, promoting equal access to justice and the current government struggles to provide basic social services including security, health, education, water, electricity, employment etc. to ordinary citizens.

Political stability, Peace building, security and the rule of law are among the priority topics listed in the current National Development Plan (2020-2024). The tasks listed by the government include revising the constitution, establishing a multi-party democracy with fair and credible elections, strengthening the federal system and the political dialogue on national reconciliation, and reforming the security sector and the legal system.

The security issues may be a concern for some investors and trade partners, however significant efforts have been made by the FGS in cooperation with international partners, to strengthen security in Somalia. Both the frequency and impact of insecurity incidents are on the decline and the biggest misconception is that Somalia is continuously in a state of conflict and operating in the country is impossible.

The Current Government looks the security as an important aspect to pay attention and the Government aims to eliminate Al-Shabaab by the year’s end as the Somali President Launched in June last year a major Offensive, which liberated a large area of the southern and central Somalia.

Economic Performance

Over the past decade, Somalia has shown resilience and gradual economic improvement despite facing significant challenges. Key indicators such as GDP, GDP per capita, and GNI have increased, reflecting a slow but steady economic recovery. The agriculture and livestock sector remains the backbone of the economy, while the services sector has been growing, particularly in telecommunications and financial services. The industrial sector remains small but has potential for growth with proper investments and stability.

• – According to the International Monetary Fund, Somalia’s “economic activity was expanding and the GDP Growth was good by average of 3.5% per year from 2012 till 2018, driven by growth in agriculture, construction, and telecommunications.
• – From 2019–2022 Real GDP growth has been low and volatile, averaging around 2% per year while real GDP per capita averaged -0.8% per year because of the Covid-19 Pandemic and severe drought.
• – In 2022/ 2023 The GDP in Somalia was worth 10.5 Billion US dollars and the GDP growth was around 2.8%, as the country recovered from drought, however the Somali’s economy is expected to record GDP growth of 3.7% in 2024 and 3.9% in 2025. Fiscal restraint combined with a favorable international environment for food and fuel costs has helped to reduce inflation.
• – Somalia’s GDP by economic Sectors: Agriculture/ Livestock: 58.3%, Services: 23.2%, Industry: 18.5%

IMF, World Bank and African Development Bank group Reports.

Efforts to improve infrastructure, governance, and security are crucial for sustaining this economic growth and ensuring a stable and prosperous future for Somalia.

Government Economic Strategy

The Somali Government’s economic strategy aims to address key challenges and leverage opportunities to foster sustainable development, enhance economic stability, and reduce poverty. Here is a conceptual overview of the strategy based on various sources:

1. 1. Macro-Economic Stability and Fiscal Policy

Objective: Achieve and maintain macroeconomic stability by implementing sound fiscal policies and budgetary processes to enhance transparency and accountability. Implementing tax reforms to broaden the tax base and increase domestic revenue. Reduce external debt and enhance debt sustainability through prudent borrowing and effective debt management.

2. 2. Economic Diversification and Private Sector Development

Objective: Diversify the economy to reduce reliance on agriculture and build a resilient economy by promoting private sector investment in key sectors such as fisheries, manufacturing, and services. Improving the business environment by simplifying regulations, reducing bureaucracy, and enhancing access to finance for SMEs. Fostering public-private partnerships (PPPs) to attract investment in infrastructure and key economic sectors.

3. 3. Infrastructure Development

Objective: Develop critical infrastructure to support economic growth and improve living standards by investing in transportation infrastructure, including roads, ports, and airports, to facilitate trade and connectivity. Enhance energy infrastructure to ensure reliable and affordable access to electricity. Improve water and sanitation infrastructure to support public health and economic activities.

4. 4. Human Capital Development

Objective: Invest in human capital to build a skilled and productive workforce by expanding access to quality education and vocational training to equip the workforce with relevant skills. Improving healthcare services to enhance the overall health and productivity of the population. Promoting gender equality and empower women to participate fully in economic activities.

5. 5. Agricultural and Rural Development

Objective: Enhance agricultural productivity and promote sustainable rural development by supporting smallholder farmers with access to modern agricultural inputs, technology, and training. Promoting sustainable agricultural practices to ensure long-term productivity and environmental protection. Developing rural infrastructure, such as irrigation systems and rural roads, to support agricultural activities and improve market access.

6. 6. Governance and Institutional Capacity Building

Objective: Strengthen governance and build institutional capacity to implement economic policies effectively. Enhance the capacity of government institutions to design and implement economic policies and programs. Promote good governance practices, including anti-corruption measures, to build public trust and ensure effective service delivery. Foster inclusive governance by ensuring participation from all segments of society in the decision-making process.

Foreign Direct Investment in Somalia

Somalia’s NDP outlines the government’s strategic objectives for economic development, including reforms in the business environment, public financial management, infrastructure development, and laws to attract foreign investment.

There has never been a better time to invest in Somalia. The government is determined to restore the country as the regional hub for commerce, transportation, trade and industry.  Our strength in agriculture, fisheries and livestock can help to overcome the food security challenges of many parts of the world, our unique wind and solar capabilities can pioneer a new age of affordable and clean energy to Spur further economic growth across the region. We welcome investors to participate in the rebuilding of hope, opportunity and prosperity in the Horn of Africa.

The Somali Parliament passed a foreign investment law in 2015, to promote and protect foreign investment, the law also provides flexible incentives to ensure the investor’s needs are met effectively and efficiently including Tax advantages, guarantees against expropriation & revenue sharing agreements to attract investment

The FGS has enacted the Investors and Investment Protection Bill into law on 20 March 2023, which will enhance investors’ confidence through providing legal protection to their investments, legal framework for investor-state dispute settlement, fair treatment, and a robust dispute resolution mechanism, as well as it will address Competition and anti-trust laws, expropriation and the transfer and repatriation of investments

The Federal Government of Somalia (FGS) welcomes foreign direct investment and offers a variety of opportunities for investment, especially in the key national priority sectors like Food Security Sectors [Livestock, Agriculture and fishing], Energy, and Infrastructure as well as finance and Health sectors.

The FGS and the Federal Member States (FMS) have a positive attitude towards all foreign direct investment (FDI) forms including public private partnerships, Joint Venture Partnership and other alternative investment financing Modalities. “Somalia is open for business” is the message that the Federal Government of Somalia is sending out to the world loud and clear and In line with this, our Government is making every effort to further enhance the investment environment.

Under the Foreign Investment Law Somalia Investment Promotion Office (SOMINVEST) Was established to promote foreign investment, provide potential investors with guidance on investing in Somalia and continuously advocate for improved investment policies.

Performance Requirements and Incentives

Somalia imposes no performance requirements on foreign investors  all foreign investors with eligibility for incentives and facilities, incentives shall include the ability to have long term leases for up to 99 years for substantial investment in accordance with the applicable legislation governing such incentives and facilities.

Private Ownership Rights

There are no restrictions on the establishment of private businesses, size of investment, sources of funds, marketing products, source of technology, or method of training in Somalia.

Reasons to Invest in Somalia

Investing in Somalia presents a mix of opportunities and challenges, investing in Somalia presents significant opportunities, driven by economic expectations, financing possibilities, strategic location, and government reforms. While there may be some challenges, including political, infrastructure, or regulatory challenges, these can be mitigated through careful planning, due diligence, and leveraging international support. By focusing on sustainable development and building strong local partnerships, investors can tap into the burgeoning opportunities in Somalia and contribute to its long-term economic development.

1. 1. Economic Expectations
   • 1.1 Strategic Location:

• > Gateway to Africa and the Middle East: Somalia’s location along the Horn of Africa provides strategic access to major shipping routes, making it a potential hub for trade between Africa and the Middle East.
• > Ports and Trade: Major ports like Mogadishu, Berbera, and Kismayo are critical entry points for regional trade. Investments in port infrastructure can enhance trade and logistics capabilities.
• > Economic Regional and global integration: EAC (2023), COMESA (2018), IGAD, AFCFTA, AGOA, WTO, MIGA, OIC and Arab League. 
  • 1.2 Government Reforms and Stability:

• > Policy Reforms: The Somali government is implementing reforms aimed at improving the business environment, including regulatory improvements and anti-corruption measures.
• > Stabilization Efforts: International and domestic efforts to stabilize the political and security situation are creating a more conducive environment for investment. 

• 1.3 Economic Growth Potential:

• > Untapped Resources: Somalia has vast untapped resources, including minerals, oil, and natural gas. The potential for exploration and development in these sectors is significant.
• > Agricultural Sector: With appropriate investment, Somalia’s agricultural sector can be revitalized. The country has arable land that can be developed for commercial farming. 
• 1.4 Growing Population and Urbanization:
• > Demographic Dividend: Somalia has a young and growing population, which can be a significant driver of economic growth. A youthful demographic can provide a labor force that is adaptable and trainable.
• > Urbanization: Increasing urbanization is creating new markets for goods and services, driving demand for housing, infrastructure, and consumer products.

2. 2. Financing Possibilities
   • 2.1 Access to International Financial Institutions: 

• > IMF and World Bank Support: Somalia has re-engaged with international financial institutions like the IMF and World Bank, which provide financial support and technical assistance.
• > Development Assistance: Various international donors and development agencies are active in Somalia, providing grants and concessional loans for development projects. 
• 2.2 Private Equity and Venture Capital:
• > Growing Interest: There is increasing interest from private equity and venture capital firms in emerging markets, including Somalia. Investors are looking for high-growth opportunities in frontier markets.
• > Diaspora Investment: The Somali diaspora is a significant source of investment. Remittances from the diaspora contribute to local business funding and development projects.
  

• 2.3 Microfinance and Local Banking:
• > Microfinance Institutions (MFIs): MFIs are expanding their reach in Somalia, providing much-needed credit to small and medium-sized enterprises (SMEs).
• > Banking Sector Development: Local banks are improving their services, and there is potential for partnerships with international banks to enhance access to finance.

National Investment Priority Sectors

Somalia: Trade in goods

Trade Performance

Somalia has traditionally been a net importer of goods, but the government has been working to promote exports of products like livestock, fish, and agricultural goods. In 2016, the government launched the National Export Strategy, which aims to promote exports and increase competitiveness in key sectors such as agriculture, livestock, and fisheries. This has involved investing in infrastructure like ports and roads, as well as providing support to small and medium-sized enterprises (SMEs) that are looking to export.

In the past ten years, Somalia has experienced consistent export growth, averaging 2.4% annually; however, the growth of imports has been much more significant, leading to a negative trade balance. However, Somali Exports are consistent across multiple sources, showing Somalia’s Total Exports at Over 1 Billion with modest growth projected for 2024 and Beyond.

Somalia offers opportunities to invest in its farming sector as it is currently heavily import dependent on food and other food related products. Export promotion and increased investment in domestic supply chain development would be attractive for investors.

Somalia’s exports by product category.

Over the past decade From 2013 to 2023, Somalia’s export landscape have been consistently dominated by a few key product categories, The main exports include live animals, gums and resins, precious stones and metals, fish, and various agricultural products. These categories have remained relatively stable in their contribution to Somalia’s export economy, with minor fluctuations based on market demand and production capacities, reflecting the country’s reliance on its natural and agricultural resources.

The key trading partners for these exports include the United Arab Emirates, Oman and Saudi Arabia, reflecting the regional trade dynamics and the demand for these specific products in these markets.

Somalia’s imports by product category.

Over the past decade, Somalia’s imports have shown significant growth, reflecting the country’s reliance on foreign goods to meet domestic needs. It has primarily included food & fuel (This category has consistently been the largest, accounting for above 50% of total imports.), then construction materials, Electric and Electronics, Manufactured goods, Chemicals & pharmaceuticals and lastly Machines and transport vehicles.

Key import partners were the United Arab Emirates, China, India and Turkey, reflecting Somalia’s trade relationships and geographical trade dynamics. The import trends indicate a consistent increase over the years, from 2013 to 2023, the total value of imports has seen a steady increase with notable growth in construction material categories.

Market Potential for Exporters

1. 1. Strategic Geographic Location: Somalia’s strategic location along major maritime routes enhances its potential as a key market for exporters looking to expand their reach in the Horn of Africa and beyond.
2. 2. Market Growth: With an increasing demand for various manufactured goods, Somalia presents a growing market for exporters.
3. 3. Rising Middle Class: The growing middle class with increasing purchasing power is a significant driver for demand in these categories.
4. 4. Urbanization and Consumer Trends: Rising urbanization and changing consumer preferences leads to higher consumption of modern goods and create opportunities for exporters to introduce new products and brands.
5. 5. Diaspora Influence: The Somali diaspora maintains strong ties with the home country, influencing market preferences and creating demand for international products.

Exporters looking to enter the Somali market should focus on competitive pricing, quality, and understanding local consumer preferences to maximize their potential in this emerging market. These insights highlight the critical role of international trade in Somalia’s economy.