The leader of the National Chamber of Entrepreneurs "Atameken" Timur Kulibayev has offered a clear program to accelerate the development of small and medium business in Kazakhstan

"Atameken" is entering a new phase of activity. Speaking at the meeting, dedicated to the three-year period of work, the Chairman of the Presidium of NCE Timur Kulibayev announced highlights of the program "10 Steps for Business Development"

Trust – A Tool For Development

"The most important result of 25 years of Kazakhstan's independence was the fact that we have created the institution of private property and a new social class - the entrepreneurs. Now our task is to develop the process", - said Timur Kulibayev in his speech.

Summing up the three-year activity of the National Chamber of Entrepreneurs, the head of "Atameken" focused on the essentials. The large-scale work for the protection of entrepreneurs' rights, elimination of legislative gaps and reduction of the number of permits for certain types of activities allowed to win the trust of business and to improve the business environment.

This was confirmed by the Business Ombudsman Bolat Palymbetov. "Today, the entrepreneurs go with their problems not to the state bodies, but they address straight to "Atameken". They believe that here they will be listened to and take action", - said the Ombudsman in his speech.

But now the Chamber has a much more important task: to ensure large scale development of business and, therefore, employment.

Study is the light, ignorance is darkness!

And in this regard much has been done: there was set up business training infrastructure, a large number of people learned basic concepts of commerce, and others even got credit for the creation of their own business. But the pace of this process leaves much to be desired.

Deputy Chairman of NCE "Atameken" Nurzhan Altaev expressed his criticisms. According to him, the conditions of some of the state programs, under which the business is trained, "are not always effective". The term of training within the programs of the fund DAMU "Business Advisor" and "Business Growth" was reduced to two - five days.

"Often such "training" only leads to a race of indicators", - said the deputy chairman of NCE. According to him, to improve the effectiveness of this work, you need to change its algorithm. Education must be combined with micro-credit, support of the project, provision of entrepreneurs with industrial infrastructure in small industrial zones, its cooperation with like-minded, and, finally, the sale of products on the market. Only in this way, the work on the development of entrepreneurship will be systemic.

"The current format of training to the basics of business – is usually in an unprepared environment - is ineffective and formal", - said Nurzhan Altaev. From this point of view, two pilot projects of NCE “Atameken” – “Bastau Business" and "Bastau Kasіp" in Munaily District of the Mangistau region deserve the attention. There was conducted a business training in synergy with support and microcredit, which gave a result of growth in the number of strong farms in rural areas.

"Given the efficiency of projects exceeding the duration of short-term government training programs 6-10 times, their flexibility and adaptability to the requests of students, as well as the presence of the element of support for business projects, it is proposed to cascade it to all regions of the country. Their inclusion as a non-financial instruments to support entrepreneurship in the framework of the Unified Program of business support and development the “Roadmap of business - 2020” would be a logical and rational step", - said Nurzhan Altaev.

Happiness is not in money, but in their quantity

The main problem of business is still the availability of credit resources. The only way out of the current situation an expert of the National Chamber sees in development of microcredit. Despite the fact that micro-credits for small businesses are available in a number of state programs, they are actually unattainable. The reasons are the same: the problems with collateral and a large number of required documents - for example, to obtain a microcredit within the “Roadmap of Business – 2020”, an entrepreneur must submit 13 different inquiries.

"Analysis of the situation in the micro-credit market has shown: on the one hand - low coverage of rural areas, on the other - the majority of micro-business start-ups are not available due to the high interest rates (on average 40% per annum)", - said Nurzhan Altaev.

Earlier this year, NCE "Atameken" by attracting private investment and local budgets has started a pilot project of micro-crediting of business in five regions of Kazakhstan.

Microloans are issued in the amount of up to 15 million tenge at 6% per annum for up to five years without sectoral restrictions. At the same time to obtain a microcredit, an entrepreneur must provide 5-6 documents. The infrastructure of NCE "Atameken" enables broad coverage in each region.

Currently, 365 applications for the amount of 1 billion 942 million tenge have been received. Funding has been given for 185 projects amounting to 825 million tenge.

NCE intends to put the question to the government regarding the expansion of micro-lending experience of NCE RK "Atameken".

Moreover, out of the mouth of entrepreneurs, participating in the meeting for the first time it was proposed: to make NCE "Atameken" the single operator in the field of entrepreneurship education as well as in the field of micro-credit for all state business support programs.

Export orientation

The issue of business development is inextricably linked with the search for partners and new markets. Here, the Chamber has a unique effective tool - Regional Development Map. According to Deputy Chairman of NCE "Atameken" Tulemis Shotanov, uniqueness of the map is that it combines information about the region and about the business in a given region, and the existing infrastructure there. The card can be used as a "Business Constructor" and serve as a wonderful reference for investors in the formation of the feasibility studies for future investment. Alas, the regional map is almost never used by official agencies when dealing with investors. That is strange, at least.

Summing up the discussion, the Chairman of the Presidium of "Atameken" Timur Kulibayev made a number of proposals, which are based on the three-year experience of the National Chamber.

The expansion of microcredit program and the improvement of entrepreneurial learning process now remains a priority of NCE RK "Atameken". Now this process is inseparably linked with the creation of small industrial zones on the basis of the transfer of unclaimed or ineffectively used production facilities, which are usually owned by local Akimats. These small industrial areas with engineering networks are ideal for rental to small businesses. It is noteworthy that the money for the establishment of such zones is actually provided in the framework of state programs.

The power is in the unity

The main activity of NCE remains the creation of agricultural cooperatives on the basis of small-scale farming households and private farms. The Chamber has already the experience: 283 agricultural cooperative, uniting more than 7000 enterprises of different ownership forms were established with the support of the Ministry of Agriculture in the country. Moreover, thanks to the efforts of the cooperatives, "Atameken" managed to find partners in foreign markets in Russia and China. The main problem is still the money for development. In this regard, NCE proposes the Government to focus the microcredit program on personal household farms, united in co-operatives, and to formalize it in the form of a new credit product of JSC Holding "KazAgro".

Among the proposals of the Chamber is the creation of wholesale and distribution center (WDC) for handling, packing, storage, transportation and marketing of agricultural products, appropriate phyto-sanitary and veterinary control, and the distribution between the regions at the domestic market.

To stimulate domestic demand for the products of local entrepreneurs, it was offered to centralize public procurement system and, following the example of the United States, to create a Contract office. The experts suggest to establish this body on the basis of the National Agency for the development of local content “NADLoC”, where all long-term state contracts will be concluded. "Atameken" is ready to establish this work on the basis of trust management.

The next step will be to develop a unified strategy of export promotion. The existing documents virtually does no mention SMEs, which have untapped potential. It is proposed to link all existing business support programs in the new strategy for the solution of this problem and the creation of a coordinating body, working on the principle of "one window". "Atameken" is ready to take the role of such a body.

To expand the range of users of the regional business development map, the experts offer to include reimbursement of the expenses of entrepreneurs on development of a feasibility study in the program "Business Road Map - 2020", as a measure of public support. It is proposed to adopt the requirements for companies to provide feasibility study services.

State For Business

Finally, in his speech Timur Kulibayev stated the most important: the abundance of different support programs and various institutions that implement them, create chaos and discord at the market. The ministries, which are administrators of the state programs often substitutes the real picture by "their vision". As a result, the Accounts Committee for Control over Execution of the budget each year gets the untapped "surpluses".

"Today the time has come when it is necessary to consolidate these support measures, to make them comfortable and efficient, providing business support measures on the principle of "single window" by analogy to "Government for citizens". The project of creation of the corporation "Government For Business" will create synergies by consolidating support measures in a "single window", it will increase the coverage and availability of support measures for entrepreneurs, as well as increase the transparency of support measures", - said Timur Kulibayev.

"In other words, all state services will be provided to entrepreneurs in one place online", - said the chairman of the Presidium of the National Chamber.

Given the fact that NCE "Atameken" has a well-developed infrastructure of business support centers in every region of the country and experience on servicing entrepreneurs, it is suggested to transfer the function of the single operator on NCE. Of course, in coordination with the Government.

The law reflects the realities of the time

Concerning the protection of business rights, Timur Kulibayev stressed the need for further work to change the law. He said that for three years, in collaboration with members of the Parliament and the Government, it was possible to change the "face of the Law", to make it more "friendly to the businessman".

But there is a need to continue to inventory control and supervisory functions of state bodies with the subsequent abolition of that part which relates to business. Today in Kazakhstan there are 512 control and supervisory functions, there  are 61 bodies, which exercise the supervisory control, and there are 18 000 requirements in relation to entrepreneurs. This archaism of total control was inherited from the Soviet system, it is not fit at the present market society. It is fertile. And the Chamber will continue to work to modernize the legislation.

Timur Kulibayev again raised the issue of humanization of criminal legislation. "Unfortunately, the current Criminal Code is repressive in relation to entrepreneurs. We do not observe substantial softening for economic crimes. Penalties for some of them are quite comparable to the punishment for a murder. For example, for issuance of a fictitious invoice, tax evasion, pseudo-entrepreneurship, a person can get up to ten years in prison", - said Timur Kulibayev.

Taking into account the current policy of transition from the punitive measures to prevention, the experts of the National Chamber propose to apply the economic measures of responsibility for criminal offenses in the economic sphere. "We need to resolve once and forever the problem of pseudo-entrepreneurship", - mentioned the head of "Atameken".

All offers of NCE will be formalized in the program "10 Steps for Business Development" and presented to the Government and the Head of State. Over a three-year period the National Chamber of Entrepreneurs has already proved its effectiveness. "Atameken", having a unified highly professional team, is ready to implement the most complex tasks.

Aleksei Bantsikin