UNDP Project Supports Rural Business in Eastern Kazakhstan

UNDP_Aid for tradeASTANA – A United Nations Development Programme’s “Wider Europe: Aid for Trade for Central Asia, South Caucasus and the Western CIS” project funded by the Ministry of Foreign Affairs of Finland supports small and medium-sized businesses in the region as a way to support human development. The project, which began in October 2009 and will end at the end of 2013, worked both regionally and individually with eleven countries in the Western region of the Commonwealth of Independent States (Belarus, Moldova and Ukraine) the South Caucasus (Armenia, Azerbaijan and Georgia) and Central Asia (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan). Shynar Imambekova, manager of the project in Semey, told The Astana Times about the project’s step-by-step implementation as well as the organisers’ goals and plans.

What were the different phases of the project?

First of all, we conducted research. Our management from the Bratislava regional centre came to the United Nations Development Programme (UNDP) and met potential partners in the project. After that, we elaborated the work plans, including all the measures they wanted to have implemented in the East Kazakhstan region, which is the pilot site for such initiatives. In the first phase, they focused on women’s entrepreneurship and women’s initiatives, including workshops and consultations, which covered the training measures. We also implemented microcredit programmes in the first phase through local microcredit organisation Bereke in Semey. [Bereke was founded in 2007 with UNDP support, but is now an independent organisation, working without UNDP assistance.]

What did you do in the different phases of the project?

We supported agricultural producers within the first phase. We did not limit ourselves to Semey, but worked in the whole region. We held various workshops and many partners of the Customs Union participated in the workshops and talked about launching businesses. Those workshops were both for new entrepreneurs and existing companies. The first phase was implemented from 2009 to January-February 2011.

In the second phase we decided to strengthen our trainings. We decided to focus on the sustainability of our measures. In the second phase, from May 2011 to now, we created a network of 13 business consultants, one in each district of the region. … We increased the capacity of the local population, we employed specialists from the districts, people who can start working with akimats (city or regional administrations), because our national partners are the regional akimat, the akimats of Semey and Ust-Kamenogorsk and the akimats of districts and rural districts. Without their support, we cannot come to a district and say that we need something. We should cooperate with them.

How did you choose specialists?

The specialists were chosen from among the employed and unemployed populations, excluding civil servants. We looked for experienced people who could work with the population and render consulting services for rural populations on a permanent basis, writing business plans, helping with taxation and accounting issues and others. Of course, we trained them as well. We held trainings and workshops for them to get to know the basics and do further work. Of course, the akimats also helped us. The akimat provided us with an office and office equipment.

What did the project achieve?

In the second phase in the region we opened 32 online centres, so in 32 villages local libraries are now equipped with the necessary office equipment. We chose 32 schools according to the criterion of supporting schools … and tried to expand their access to information. Local libraries hadn’t been popular before, though they existed, but now within the joint UNDP programme for raising the competitiveness of the region … there are 32 online centres equipped with laptops, projecting cameras, screens and printers and any person can come and use the Internet. 

What was the goal?

The first goal was the support of businesses. We lined up the work in coordinating the online centres controlled by one consultant. We see that now people really get information from governmental websites; they have access to e-services. They can do some work from the village and they don’t have to go to a city to submit documents and get a list of necessary documents for social issues. Students can easily come there and work on papers.

What else was implemented within the second phase?

Within this phase we also planned the grant programme. We deviated a little from the microcredit programme, because it involves interest rates, pledges, etc. Everyone knows that not every bank will take a pledge from a rural citizen against his house. Not every entrepreneur has other options for obtaining a loan. We created a mechanism of implementation of the grant programme in close cooperation with the state Business Road Map 2020 and Employment Road Map 2020 programmes. This was the pilot experience. We invited the Youth Entrepreneurship Development Fund to help us, and we exceeded the initial indicators we set. We initially planned two projects; now we have 16. We exceeded fivefold what we had. We had $100,000, which is not a big amount, and we attracted $545,000 more. The Business Road Map has a grant programme which provides 3 million tenge [US$19,470] for innovative projects. The innovative projects are new for our population in the region, but we supported the idea. We had a goal that these should be not just innovation but socially valuable projects.

So we supported two projects within the Business Road Map. New businesses were opened for processing waste paper, producing toilet paper, automating stations of technical servicing, etc. The Department of Entrepreneurship and Industrial and Innovative Development provided us with the list of projects. They gave us information and we could choose other entrepreneurs to give grants to. We created a grant committee to choose projects.

Other projects were approved in accordance with the employment programme. They give microcredits to those who can pay and pledge 10 percent of their own contribution. They gave us a list of six entrepreneurs and we approved them. They are more social projects—a sewing shop, a heat insulation shop, etc.—which are needed in a rural settlement. Next year, they also expect further financing from us and people learned through their countrymen that the process wasn’t difficult.

Does the project support other measures?

Other measures advanced the training of civil servants. We understand that there is a passive dialogue, so to speak, between business representatives and civil servants who work with businesses. We invited both sides to workshops to talk and identify problems and obstacles in obtaining information.

We also researched the development of internal trade models—analytical research for developing commodity markets. Our experts discussed public procurement, problems, how to participate in the procurement process [and] how to get information. We held workshops for interested parties.

Who sits on the grant committee?

Representatives from our national partners, the Department of Entrepreneurship and Industrial and Innovative Development of the East Kazakhstan Region and its Department of Coordination of Employment of Social Programmes; UNDP representatives, the Damu Fund for Entrepreneurship Development, representatives of the Atameken National Chamber of Entrepreneurs and the European Bank for Reconstruction and Development in Ust-Kamenogorsk.

How will entrepreneurs be supported after the project ends?

As I said, we aim for sustainability. We have a joint programme from 2011 to 2015 in the region and in that programme we have the third component: social and economic development. Social and economic development is also aimed at vulnerable groups of entrepreneurs. In the third component, we plan to continue the business consultants’ network; we plan to continue our work with 32 online centres.

We also plan to monitor their activity in online centres as well as the number of applicants to them. We know as of today that more than 150 people have opened their businesses with the assistance of business consultants. This is a good indicator. More than 9,500 people were trained and got consultations during the entirety of our project. We plan to continue the grant programme. For now, our budget is under consideration. I think we should continue the pilot project. We also plan advanced training for our consultants. We want to strengthen our focus on the Damu programme for the support of women’s entrepreneurship. This is our initiative and idea. Next year, we plan to hold a joint workshop during which their specialists will train our consultants.

Why is the Foreign Ministry of Finland funding the project?

Finland’s Ministry of Foreign Affairs wants to assist trade and support business in rural areas in particular.