May 1 (Reuters) - The Kyrgyz government has enlisted an international law firm to help it develop regulations for Islamic bonds (sukuk) and insurance (takaful) in the mainly Muslim central Asian country of 5.5 million people.
The consultancy services will be funded by a technical assistance grant from the Jeddah-based Islamic Development Bank , law firm Simmons & Simmons said in a statement on Thursday.
The former Soviet republic expects to expand Islamic finance to help attract foreign investment, Tayirbek Sarpashev, First Vice Prime Minister of the Kyrgyz Republic, said in the statement.
“The government expects the economy to attract large investments that will favourably affect the development of the financial market and banking sector,” he was quoted as saying.
The statement did not give a time frame for when the rules would be introduced. Developing Islamic finance, which follows religious principles such as bans on interest and monetary speculation, could conceivably help the country attract money from the Gulf and southeast Asia.
Last month, Kyrgyzstan’s parliament voted overwhelmingly to appoint reformer Joomart Otorbayev as prime minister and avert a political crisis in the central Asian nation where two leaders have been overthrown in the past decade.
The country faces a daunting task to reduce poverty and speed up economic growth in a nation whose per capita gross domestic product is about $1,300, or just a tenth of that in oil-rich neighbor Kazakhstan. (Reporting by Bernardo Vizcaino; Editing by Andrew Torchia)