Kazakhstan’s government has developed a road map aimed at ensuring the stability of the domestic economy.
Private companies and businesses are the main players in developed economies, and prosperity and economic growth depend on them to a great extent. Therefore, it seems quite logical and relevant that the road map pays special attention to enhancing the business sector and searching for new factors of growth.
In general, the development of entrepreneurship and improving the business environment are priorities of the Kazakhstan 2050 Strategy and the Concept of Kazakhstan’s joining the 30 most-developed countries of the world.
International experience suggests that great success in increasing business activity is provided by developing modern infrastructure, promoting transparent competition, creating a friendly environment for investment, as well as reducing the cost of doing business. The government’s new road map reflects this. Among the measures to be taken are stimulating investment activity, increasing financial support for business, optimising the public sector and developing sectors of the real economy.
Together with practical steps already taken to implement the Business Road Map 2020 programme, including the moratorium on inspections of small and medium-sized businesses, reducing administrative barriers and improving regulatory and licensing procedures, the road map is expected to give a new impetus to the growth of private initiatives and the improvement of the business climate, which, in turn, will have a positive impact on economic growth.
According to experts, investments and technologies follow an attractive market and favourable business environment. That is, the dynamics of investment depends largely on the quality of a favourable business environment and is a consequence of it. Therefore, the road map’s measures to introduce principles of long-term legislative stability in the sphere of investment and tariff policy, to develop a new format for investment contracts and introduce the institute of an investment ombudsman should be considered systemic, important steps by the government to welcome investors.
The planned measures to develop the country’s financial system as a whole, to rehabilitate the banking sector and to introduce new financing tools for business projects within the allocated 500 billion tenge (US$2.7 billion) of budgetary funds, will also contribute to that.
At the recent meeting of the National Investors Council, the President spoke about the relatively small role of small and medium-sized enterprises (SMEs) in economic growth, especially in the production of finished products and advanced services. In the coming period, the diversification of SME structures, types and areas of activity will become an urgent task of public policy.
Today, domestic SMEs are mainly represented in sectors that do not require high technologies or complex forms of cooperation, with relatively low added value: trade, real estate, consumer services and agriculture. The road map’s steps to promote the processing of agricultural products, the manufacturing sector and the transport and logistical capacity of the country will undoubtedly contribute on one hand to the diversification of the economy and, on the other hand, to the development of SMEs in more productive sectors of the economy, with high added value. This will allow SME operators and employees to increase their incomes and create new products and services that can be offered for export.
This task will require from business an active search for new market niches and the introduction of modern business solutions and innovations, and will enhance the skills and professional competence of business personnel. Appropriate mechanisms of state support are also provided in other existing government programmes like the Business Road Map 2020 and Employment 2020, and the State Programme of Accelerated Industrial and Innovative Development.
In addition, the mechanisms of public-private partnership and cluster development, subcontracting, as well as various forms of cooperation between small and large businesses, have great potential for economic growth. Full and active use of these tools, along with an effective competition policy, will have an additional effect on the growth of business activity and the dynamics of economic development.
No less important a role in improving the business environment belongs to the regulatory standards used by the state in the Organisation for Economic Cooperation and Development.
Recently, the government has done much work to optimise business regulation. In particular, an inventory of permitting documents was carried out and the draft law “On permissions and notifications,” aimed at improving the licensing system, was developed.
Switching to the best international standards in the sphere of regulation, investment and business administration will allow Kazakhstan to create a competitive business environment and to gain momentum for sustainable economic growth in the country.
The author is Chairman of the Institute of Economic Research under the Ministry of Economy and Business Planning.