Schmidt V.A., Nursultanova D.B., Ismailov M.A.
Kostanai State University named
after A. Baitursynov,
Kostanai, Kazakhstan
DEVELOPMENT OF SMALL BUSINESS IN KAZAKHSTAN
The structure of the economy is undergoing fundamental
changes in the modern period. The economic mechanism, the most important components
of which are the market institutions and levers of the government influence on
the economy, creates a new structure of the productive process, and small
businesses should take one of the most significant places there.
Small business in Kazakhstan is
a necessary step in creating a market economic system, as well as an essential
element in the social transformation of the society. The main criterion
according to which an enterprise is referred to small businesses, is the
average number of employees taken over a certain period of time. Besides such
factors as the size of the authorized capital, the value of assets, turnover (profits,
revenue ) are taken into account .
The following classification standards of the subjects of
entrepreneurship are in force in Kazakhstan at present [1]:
Table 1
|
|
|
Number of employees |
Average annual operating value of assets |
|
1 |
Small
subjects of entrepreneurship |
to 50 |
To 500 USD |
|
2 |
Average
subjects of entrepreneurship |
to 250 |
to 3 million
USD |
|
3 |
Large subjects of
entrepreneurship |
îò 250 |
from 3 million
USD |
The value of small business in the
economy of the world's major powers is large, it's the basis for the formation
of the middle class, which has always been the basis for the sustainable
economic and social development.
Organization of small business will
improve productivity, reduce production costs through the efficient use of
equipment, acceleration of the turnover, simplicity of management , low
transportation costs, cheap raw materials, it will also help to save investment
and create new jobs .
As it can be seen, the development of
small business plays a huge role in the stable economic development of a state.
In Kazakhstan, entrepreneurship plays a special role. Presenting the content of
the strategy "Kazakhstan -2050", the head of the Republic of
Kazakhstan Nursultan Nazarbayev said: “
Domestic business is the driving force of the new economic course . The share
of small and medium-sized businesses in the economy should have grown by 2030,
at least twice. First, we must create the conditions for a person to try
himself in business, to become a full participant in the country's economic
transformation, rather than wait for the state to settle all the problems for
him. It is important to raise the overall level of business culture and
stimulate entrepreneurial initiative."
In acute internal and
external competition effective development of small business is almost
impossible without the state support. The state support for small business is
carried out in the context of the global financial crisis.
Devaluation is a chance
for small businesses. On the other hand, it is a direct financial support from
the state. Thanks to the state injections within the framework of the anti-crisis
measures, agribusiness only this year will receive about 120 billion tenge of
investment that will saturate the food market of the country, and, in it’s turn,
will contribute to the reduction in food prices, which have been known to
demonstrate the basic growth of inflation.
The allocated substantial
funds for small business loans within the framework of the stabilization plan
must also produce a positive social effect. At the same time, the increase of
the availability of financial resources for the population will expand the opportunities
for opening and keeping their businesses and create certain conditions for the
growth of the demand in the market, and this according to the laws of market
economy will ultimately promote the reduction of prices. The costs of production
and trade in Kazakhstan cheapen, new "niches" in the market open, the
conditions for expelling foreign manufacturers are created. That year, when the
devaluation is being carried out, small business costs are minimal.
Created in 1997, "Entrepreneurship
Development Fund "Damu" is the main public institution of
entrepreneurship development in the Republic of Kazakhstan.
The
main objective of its creation was the effective implementation of the government
programs of the support of small businesses in Kazakhstan. In 2011, at the
Ministry of Economic Development and Trade of the Republic of Kazakhstan the
Committee for Entrepreneurship Development was created. During the years of
"Damu" Fund’s activity various programs of assistance to entrepreneurs
were implemented.
At
present in Kazakhstan "Damu" fund has worked out a new program. The
program is devoted to the organization of business service centers, on the base
of which businessmen have a unique opportunity to be served according to the
principle of a "single window" – to get the necessary consultations
on public support measures, to execute documents for financial assistance and
so on. The centers are organizing forums, seminars, events to discuss business
issues in various industries with the purpose of increasing the further growth
of entrepreneurial activities.
At the same time the courses on the basics of doing business are
held here.
In addition, the adopted program “ Road Map of Business-2020
"contributes to the development of small business, this is a program to
issue government grants and loans, reduction of interest payments on the loan, loan guarantee and training of
entrepreneurs, focused on support and development of small business in
Kazakhstan.
Small business has a high
efficiency potential, primarily through the mobilization of the human factor.
The main advantage of small businesses is the ability to reduce production
costs through specialization, better utilization of equipment, saving on administrative
and managerial staff.
Currently the small business sector
employs about 1.5 million people , more than a quarter of total employment in
the country.
Table
2.The structure of the small business sector of Kazakhstan
for 2010-2012, in %
|
|
Number of
active subjects(specific gravity) |
Number of
employed(specific gravity) |
Production
output |
||||||
|
2010 |
2011 |
2012 |
2010 |
2011 |
2012 |
2010 |
2011 |
2012 |
|
|
Total |
100,0 |
100,0 |
100,0 |
100,0 |
100,0 |
100,0 |
100,0 |
100,0 |
100,0 |
|
Legal entities of small business |
9,1 |
8,6 |
8,2 |
26,9 |
27,4 |
26,1 |
21,1 |
21,1 |
19,4 |
|
Individual entrepreneurs |
65,0 |
66,9 |
69,1 |
28,1 |
28,2 |
32,5 |
7,0 |
7,3 |
9,2 |
Analyzing the data in Table 2, it can be
concluded that the proportion of the growth of individual entrepreneurs is 4% in
comparison with the specific weight of small businesses (SSB). It should be
noted the positive trend of industrialization base creation. The table shows
that the proportion of individual entrepreneurs (IE) in the total number of
active subjects is 3-8 times higher than the proportion of small businesses.
The number of people employed in the sector of small business grows every year,
which reflects the growth of entrepreneurial activity among the population.
Table 3. Sectoral structure of private enterprises in Kazakhstan, %
|
|
Trade |
Services |
Transport and Communications |
Construction |
Agriculture |
Industry |
|
Individual entrepreneurs |
61 |
26 |
9 |
1 |
— |
3 |
|
Small businesses |
34 |
26 |
7 |
18 |
6 |
9 |
Individual entrepreneurs are mainly engaged in trade (61%)
and services (26 %), and small businesses - in trade, industry and construction
(see Table 3).
One of the most effective
methods of promoting the development of small business is the tax system. At
present in the Republic, according to the expert estimates, the direct and
indirect taxes are 50-70 % of the income of the entrepreneurs and that encourages
entrepreneurs to evade taxes, delaying the return of credits. As the state has
no opportunities for the direct financial support of business, it is necessary to
establish different rates of contributions to the state budget and the
provision of benefits and delays.
An important factor in the development of small business is
the business information environment. Information in the process of becoming an
"information society" in conjunction with the capital, labor, land
and entrepreneurial ability becomes a powerful factor in the acceleration of
economic growth.
Therefore, to provide information and
methodological advice to small businesses it is necessary to build small
business development centers, business incubators, technology parks on the experience
of foreign countries. As part of the implementation of government programs,
using international experience, experimental bases, open -type laboratories with the modern
production lines have been created in Kazakhstan. National Agency for
Technological Development, 8 regional industrial parks, special economic zone
"Park of innovative technologies," Scientific and Technological
Holding "Parasat", Joint-Stock Company "KazAgroInnovation "
4 design offices, 7 industry innovation centers, 9 commercialization offices, 4
domestic venture capital funds have made up the framework of the innovation
system in Kazakhstan. Over the past three and a half years in Kazakhstan
innovators allocated 200 grants per 9.5 billion tenge. More than 100 projects
have received government support through the program of technological business
incubation. Due to the work of the design bureaus 100 items of products were mastered,
and 18 of them have been produced. Now domestic products are exported to 110
countries.
In perspective the private capital should
become one of the major donors for
financing of innovations. A small business has a number of economic
advantages over a large one. These include a relatively small start-up capital
in the sphere of trade, services and agriculture, lower costs of jobs in
comparison with big businesses, flexibility and agility of small businesses at
the slightest changes in the market.
The main impediments to
the development of small businesses, especially in areas located far from financial
and industrial centers of the country, which have been called by the experts,
are:
• low level of solvency
of the population , especially in rural areas , coupled with high unemployment
and a large share of the population living below the poverty line;
• Inadequate equipping
of companies with high-performance equipment due to its high cost;
• Lack of high-quality
raw materials and semi-finished products;
• low competitiveness of
products of local small businesses in comparison with imported analogues;
• insolvency of small
businesses (especially enterprises processing agricultural raw materials);
• underdeveloped
communications.
Based on the above mentioned it
can be concluded that for the development of small business the following
factors are essential:
• combination of direct
and indirect measures to support small businesses;
• flexibility of the
system of priorities and a variety of forms of state support along with coherence
and consistency of the measures;
• interaction of public
authorities at different levels, unions and associations, representing the
interests of employers;
• significant
improvement in the accounting system and the state statistics of small
businesses;
• conducting educational
and propaganda campaign.
At present the procedure
for the registration of small businesses is simplified - model
statutes have been introduced, and registration fees have been reduced by 4
times ;the procedure for the certification of products for small businesses has
been simplified; the incentives for the registration of the real estate and
land rights have been introduced; the
number of controlling and inspecting
public authorities and paid services provided by them have been reduced; the
tenders for the transfer of unused
sites and lands, and the objects of unfinished construction to small businesses, engaged in production
activities, are being held; a
simplified system of accounting for small businesses has been introduced .
These measures will contribute to the successful development of small business
in the Republic of Kazakhstan.
Literature :
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