New National Chamber of Entrepreneurs to Help Small Businesses

ASTANA – Rahim Oshakbayev, deputy chairman of the Kazakhstan National Chamber of Entrepreneurs, calls the new body “a big breakthrough and a big reform”.

OshakbayevThe new chamber will benefit two main groups, he said. “First, small and medium enterprises [in outlying areas], where we have a real lack of competence, a lack of awareness about government instruments and the basic knowledge of how to deal with business at a more efficient level.” The second is regional and industrial business associations.

The National Chamber of Entrepreneurs is important for Kazakhstan, Oshakbayev said, because entrepreneurs in post-Soviet countries aren’t trained to protect and represent their interests. It will also address the problem of the government’s lack of feedback from the business community. The liberal model Kazakhstan had been following, in which businesses were free to set up their own associations to represent their interests, resulted in very few business associations with any influence. “So we understood that we needed to build the institute and there should be reform not from the bottom, but top down reform.”

The new chamber is intended to help businesses protect their rights, to increase the bargaining power of the business community when dealing with the government, to work with government in drafting legislation and other activities that affect business, to improve the competitiveness of Kazakhstan’s business and the business climate overall and to thereby attract investment.

It will do this through a number of mechanisms, most on the macro level. One is helping create legislation. “We asked Parliament to give the national chamber [the power] … to participate in the elaboration, in the early stage of legislation,” Oshakbayev said. “Because when the draft of the law is already done by the government, by themselves, and sent for review, it’s too hard to change their minds. But if we participate in writing these drafts from an early stage, it’s much more efficient … In addition to providing expertise, we will participate in writing [business] legislation.” Committees within the Chamber’s presidium devoted to different industries will establish the chamber’s position on those industries.

The chamber will also monitor regional business climates, ranking them annually according to their attractiveness to business. They’ll also report on how business-friendly local authorities and ministries are. “We hope that these two ratings will be quite efficient leverage in negotiating, with local authorities, especially. Because if they don’t pay attention to the interests of business, they’ll get low ratings, and we’ll report these ratings annually to society and to the government and to the president.”

To attract investment, a task Oshakbayev will be supervising, he said, “First of all, [we will] make potential investors aware of the opportunities in our business sphere. Second—if somebody comes to Kazakhstan and invests, they should understand that they have an institute especially designed for them, to protect their interests, their rights. Third, we will help regions prepare feasibility studies for different industries.”

Though the chamber will also be a resource for individual entrepreneurs, particularly for individuals in conflict with corrupt local authorities, Oshakbayev said, the macro-level work won’t be noticed immediately. “Now, we have more than 850,000 active entrepreneurs, including individual entrepreneurs, companies and farmers. And 98 percent of this number is small business. Most of them are not aware of these regulations—they are doing their small business, their family business, and they don’t care about this stuff.”

The effects will be felt later, Oshakbayev said. “In the long term, we hope that we will be an effective, competent partner of the government and together we will significantly improve the business climate, especially in terms of the protection of property rights, the rule of law, competitiveness of costs and infrastructure.”

Small business will not have to take action to join the chamber, Oshakebayev said. “There is no special procedure of registration. [Entrepreneurs] will not have to fill out forms or apply somewhere. If you are an entrepreneur, you are a member … Write to the national chamber and they should react. You can ask for a consultation.”

Only big companies will have to pay for the organisation. “The sum is quite low and we consider this a part of corporate responsibility,” Oshakbayev said. For the vast majority of the affected businesses in Kazakhstan, he said, the chamber will mean only rights. “Rights to be protected, rights to the opportunity for someone more competent to talk to ministries, to the government, to protect their interests. Rights to elect, because … after the transition period, all the managing positions [of the chamber] will be elected for four-year terms.”

This will be a big difference between the new chamber and past institutions, said the deputy chairman. “I am supervising agriculture. … If I don’t talk to the government about the problems of agriculture and take them the hard truth, immediately someone will ask me in the press or in our presidium, ‘Why isn’t Mr. Oshakbayev talking about the big problems, the real problems?’ and immediately I will lose my job.” He said after a one or two year transition period, all positions will be elected.

The law establishing the new chamber was signed in July, and on September 9th the government of Kazakhstan and the Atameken Union, the country’s former economic union, jointly created the National Chamber of Entrepreneurs. Since then, the new entity has elected a 35-member presidium, which will serve over the initial transition period. The presidium elected eight board members, including Oshakbayev and Chairman of the Board Timur Kulibayev.

The chamber has so far received more than 6,000 resumes for 351 advertised vacancies. “We are trying to be, from the initial stage, quite transparent: we published all positions, we published all salaries, all duties,” Oshakbayev said. The chamber is looking for industrial, legislation, taxation and customs administration experts. Oshakbayev expects the National Chamber of Entrepreneurs to begin to function by mid-November.

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