Phillip Richardson
Expert profile
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Private sector businesses create the majority of new employment opportunities and are therefore vital to ensuring economic growth and social well being. They also contribute in increasing numbers to wealth creation, providing the investment resources and tax revenues that are necessary for sustained economic growth, as well as the provision of infrastructure and social welfare services to ensure that economic growth is equitable.
And it is well known that the number of registered small and medium enterprises in Central Asian countries increases from year to year. The Governments of Central Asian states support this sector, which remains a high policy priority for the Governments.
I think that the main mechanism of supporting the growth of Private Sector Initiatives and SMEs remains the creation of healthy business environment.
Let’s discuss the following issues: what should be done in the near future for improve development of Private Sector Initiatives in Central Asia and what kind of difficulties and administrative barriers are identified there? |
Arykbayeva L.A
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As a development of SMEs are continuing, the major obstacles can be seen in administrative procedures. Kazakhstan had created the department that is responsible for development of SME, which in turn created the business association that are divided into different fields. Therefore each association is concentrated on their field and clearly see the problems faced by SME in this sector. Nowadays in Kazakhstan 156 administrative barriers exist for SMEs, 60 of which cannot be resolved. Everyday a lot of RLAs come into force, which sometimes contradicts each other. Sometimes, entepreneurs are confused with this big amount of legislative acts, and simply do not know them. |
Mered Batyrov
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Dear Forum participants:
Most of us would agree that SME growth/proliferations, while important, is not a stand-alone policy issue, but rather a by-product of overall economic governance. For the pusposes of this discussion, let me push it even a bit farther: there will be no or very little SME proliferation as long as a society-wide and prosperous middle class (establishment of which is one outcome of SME development) is being perceived as a source of distant threat to the ruling elites.
This is exactly what happens in the region today: either SME is being treated as a peripheral policy issue, or, at best, the small and medium enterprises are encouraged only in few sectors, under laws and regulations applied selectively, and subject to various kinds of red tape. Tackling with the issue of 'administrative barriers' thus seems to be addressing the consequence, rather than the cause of the problem.
Hence, my short answer to the question posed by Phillip and Ms. Artykbaeva would be that the best way to encourage SME in Central Asia would be to encourage modalities and opportunities for peaceful rotation of the elites (both at the national and regional levels), which would allow the latter to treat proliferation of middle class as a lesser threat, or no threat at all, and thus remove the disincentives for them to encourage - in deeds, not in words - SME development. |
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