Islamic Finance and the State in Central Asia

in Central Asian Affairs
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Islamic finance is a rather recent phenomenon in Central Asia. Only with the beginning of the financial crisis in 2007 did the cooperation between the states and the Islamic Development Bank result in domestic initiatives to establish forms of Islamic banking. The case studies in this article indicate a correlation between the subsequent development of such initiatives and the unfolding political crises. The states in Central Asia were eager to connect to available streams of Islamic investment capital in the early stages of the financial crisis. Their commitment to further adapt, however, declined when they entered periods of political crisis that brought about quick and sudden reshuffles of reform priorities.

Islamic Finance and the State in Central Asia

in Central Asian Affairs




Asadov and Gazikhanov“Ijarah’s Prospects in Central Asia” 65; Malik “Halal Bank­ing” 36.


Asadov and Gazikhanov“Ijarah’s Prospects in Central Asia” 73 80; Malik “Halal Banking” 33 36–37.


Davinia Hoggarth“The rise of Islamic finance: post-colonial market-building in central Asia and Russia,” International Affairs92 no. 1 (2016): 115–136.


 See for example“Kazakhstan nachal vnedryat’ islamskiy banking,” Deutsche WelleMay 4 2012’-islamskij-banking/a-15925120 (accessed January 29 2016).


 See for example“Kazakhstan Turns to Sukuk After Eurobond Offering Dropped: Islamic Finance,” BloombergJuly 29 2010–07–29/kazakhstan-turns-to-sukuk-after-eurobond-offering-dropped-islamic-finance.html (accessed January 29 2016).


 See for example“Kazakhstan poka ne ochen’ uspeshen v razvitii islamskogo finansirovaniya,” LiterNovember 17 2015 (accessed January 29 2016).


Aliyev“The Politics of Islamic Finance in Central Asia and South Caucasus”; “Informatsiya po islamskim principam finansirovaniya i bankovskogo dela,” National Bank of Kyrgyzstan (2012); “Kyrgyzstan: Islamic Banking Offers Alternative to the ‘European System’” Eurasianet June 14 2011 (accessed January 29 2016).


 See Alieyev (2012); “Islamic Corporation for Development of Private Sector provides $11 mln to Uzbek banks” Trend April 6 2012 (accessed January 29 2016); Asadov and Gazikhanov “Ijarah’s Prospects in Central Asia.”


At least at the beginning of 2016neither Ipak Yuli Bank nor Uzbek Leasing International or Uzpromstroybank another idb partner use Islamic financial instruments for their operations according to their websites.


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