Problems of development of small and medium business in the Republic of Kazakhstan

Table of contents: The Kazakh-American Free University Academic Journal №10 - 2018

Mamyrbekova Dinara, Kazakh American Free University, Kazakhstan
Akman Shyngys, Kazakh American Free University, Kazakhstan
Ishkinina Gyuzel, Kazakh American Free University, Kazakhstan

Today Kazakhstan is acknowledged as more than 120 states, almost with all diplomatic relations are established. Kazakhstan entered in July, 1992 the International Monetary Fund and the World Bank, Kazakhstan participates in activities of OSCE, the UN, UNESCO, etc. Promoted formation of modern Kazakhstan intensive development of the sphere of a small and average entrepreneurship which is base of economic and social and economic stability of society and in estimates of various analytical agencies shall occupy at least 40-50% in national economy, so, for example, in Great Britain the share of medium and small business in economy of the United Kingdom occupies at least 64%, in Germany – 58%, and in Holland – about 51,5%. Unfortunately, it is necessary to admit the fact that the share of small and medium business in RK economy didn't reach desirable indicators yet, however, this process is rather dynamic, the country leaders in every possible way promote an intensification of these processes, including by the organization of consulting, consulting services on a grant basis, by financing, joint financing and subsidizing of some projects on development of small and medium business in particular connected with development of the priority directions of national economy and so forth. Recently the entrepreneurship of Kazakhstan was characterized by unstable dynamics of growth of number of the entities and the workers occupied in them. Industry and regional structure are irrational. Business criminalization amplifies. Attempts of management of formation of an entrepreneurship often have incidental and unscientific character. The cash system of protection of the entrepreneur and his property from encroachments isn't fulfilled. A number of the problems connected with development of an entrepreneurship in general in the country is solved. There is a concept on an authorization system. The program of industrial and innovative development, industry programs are created. Some other the programs connected with such important issues as financing on favorable terms of real production sectors which operator is the fund "Lady": with rendering free consulting services which operators are public organizations the consulting companies the correct solution – a national economy rate on work performance improvement, that is process in general quite good is found. However, today there is a problem connected with influence of financial and industrial groups on the legislation. The law plays advantage of large lobbies, and representatives of small and medium business – heads of public associations which professionally are engaged more than ten years in it, in Parliament of the Republic of Kazakhstan - No. The opinion of small business in working groups is practically not considered. The reasons of it not only in limitation of the financial resources allocated for support of business activity, poor development of market infrastructure but also that in time consecutive state strategy of support of an entrepreneurship wasn't developed. Industry, regional priorities weren't revealed. The entrepreneurship wasn't determined as "a pole of intensive growth" which it would be necessary to influence to cause rough economic recovery. Besides, there was no feedback with entrepreneurial structures. Monitoring of the happening processes, their identification and the system analysis wasn't carried out. The adequate statistics wasn't adjusted. It is available miscalculations of both strategic, and tactical nature. Also a problem of a small entrepreneurship is not the correct business management, decision makings, personnel policy. Any kind of an entrepreneurship requires quite flexible management and fixed search of new decisions, technologies and the markets. One of the main problems which the owner of the small entity faces is enhancement of small business at all stages of its development. One of the main shortcomings of many small enterprises is lack of accurate planning of financial performance. Enhancement of small business also shall affect personnel policy. If at an initial stage of development of the entity it is possible to hire workers, having told about your business by the acquaintance, then in the course of expansion of small business it is necessary to address to recruitment agency or to place announcements on the Internet of search of "labor power". One of the most important stages of enhancement of small business is distribution of powers. The owner of small enterprise can't physically solve all problems which arise in case of enterprise management. The unique right direction of development of the entity is fixed enhancement of small business and use of new technologies, as in case of production, or provision of services, and in case of enterprise management.

According to the Law RK "About the State Support of a Small Entrepreneurship" one of the main directions of the state support of small and medium business is establishment of a legal regime of preference for subjects of the small and average entrepreneurship including the preferential tax treatment and payments of customs duties. For the purpose of gradual and consecutive involvement of subjects of a small and average entrepreneurship in the sphere of legal economy at the initial stage reduction of level of the taxation within the current legislation, including regulation of cost of patents and licenses is necessary. Particularly important tax incentives for the organizations providing general terms of functioning and development of small and medium business including assistance of own business to the organization, providing with information in the field of marketing, engineering and management become. Implementation of the mixed form of small and large business – a franchizing – to the sphere of small and medium business shall be promoted by an exemption of the value added tax of services in assistance in the organization of business for agreements of a franchizing. Forming of customs policy, favorable for subjects of small and medium business, is inseparably linked with the solution of questions in the sphere of the taxation that determines its integrated approach. As a matter of experience the countries with market economy prevalence of general economic interests over fiscal shall become the basic principle of creation of fair and reasonable system of the taxation of subjects of small and medium business. One of key forms of enhancement of the mechanism of the state support of a small and average entrepreneurship is implementation in economy of new forms of production organization and the services capable to replace effectively former and which shall become a basis for forming of middle class. Experience of the countries with developed economy demonstrates that the state support of small and medium business is provided not only through assistance in the solution of specific problems of registration, the taxation of crediting and other questions of activities, but also through regulation in a legislative order of social and legal and economic aspects of activity of representatives of the separate social groups constituting the base of middle class. It is possible to allocate two groups of the reasons constraining development of small and medium business.

The first are the reasons of general economic nature pledged in economic policy of the state, the second – private, mainly organizational nature.

The main complexity in the analysis of our economic policy is connected with the fact that the concept of development of the market relations initially wasn't accurately determined. The world practice demonstrates that in development of the market relations two tendencies are possible: forming of the controlled market or spontaneous, having speculative character.

Lack of a clear understanding of these two tendencies and orientation to an exception of the state of system of economic regulation led to the fact that in Kazakhstan formation of the market relations went by the second option. When compare the controlled market and spontaneous, mean, first of all moral, ethical aspect. But it isn't enough, each of them has the economic basis. Feature of the spontaneous market is functioning mainly in the sphere of the address, but not in the sphere of production of goods. The fact that only an insignificant part of the population whereas the majority of the population – low purchasing power has the big income is inherent in this type of the market. One of the reasons that in Kazakhstan deformed market type is created should consider noncritical judgment of experience of the western countries and its unreasoned transferring to domestic practice. Experience of the western countries demonstrates that one of the purposes of entering of "shock therapy" is the need to open the bottlenecks constraining development of economy where the entrepreneur without delay directs. Arranging the corresponding productions (it is frequent with the state support), the entrepreneurial sphere "embroiders blood clots" in economy and in short terms removes it from crisis. Feature of the controlled market is, first, availability of conditions for free investment of means to various spheres, and the sense of state regulation consists not in impact on a price system, and in forming of optimum proportions. Secondly, such market requires the perfect mechanism of regulation of the sales demand, i.e. forming of the raised income, and, therefore, and higher purchasing power at the majority of the population, as acts as a driving force of production. From this the second reason constraining development of a production entrepreneurship - decrease in the sales demand and folding of the domestic consumer market follows. The majority of the population in Kazakhstan constitute the third class – with the small sales demand which determines the level of requirements for which production shall be guided and work. Thus, a restraining factor of development of an industrial entrepreneurship is narrowing of the domestic consumer market. It is caused by the process of reducing general solvency of the population purchasing more and more notable nature. On the other hand, owing to fixed increase in prices the share of expenses on acquisition of food products increases, demand for manufactured goods is reduced. Aggravates an expense reduction tendency on nonfoods fixed rise in price housing and utilities.

The third reason of cardinal nature braking an entrepreneurship is connected with the existing system of the taxation. According to survey conducted it is general the Kazakhstan center of studying of public opinion, 86,2% of heads of the entities as the main reason which is negatively influencing an economic situation of the entities called imperfection of taxes and their high level. Tax policy of the state in relation to a small entrepreneurship more carries the fiscal, but not stimulating nature. It provides interest to be engaged in any kind of activities, only not entrepreneurial. Its main shortcomings consist, first, in excessively high level of taxes. They don't stimulate increase in production that in the conditions of its fall is necessary. Secondly, the taxation system is unstable, often changes. Besides a number of tax laws don't carry direct action, and are supplemented with a set of bylaws, as a rule, of the laws which are late and quite often changing the purpose. Thirdly, plurality of taxes in which the entrepreneur just loses reference points. For these reasons in production of specific goods it became unprofitable to be engaged. It is quite obvious that so far in the country there will be enrichment sources out of the sphere of production giving huge profits on the invested capital, investments into national production won't be. Thus, the importance of work which is recognized the unique source wealth is undermined. It is obvious that in modern conditions of transition state of society and a transitional economy in Kazakhstan the harmonious system of measures of public and state support of an entrepreneurship at all levels of management is necessary: federal, regional, local, based on the analytical methods of knowledge and management connected, of course, with considerable costs for scientific, information and analytical ensuring program and project developments. So far in the country formally there was developed infrastructure of support of an entrepreneurship which theoretically shall create more favorable conditions for forming and development of private firms and to promote economic growth, however results of this strategy are far from expected.

The main problem consists in lack of growth trends in response to actions of the state bodies stimulating and supporting an entrepreneurship. It is noted by many economists. During the analysis of the realized and planned programs of support of a small entrepreneurship of various level inconsistency of stated purposes and the used means, insufficient clearness of identification criteria come to light.

The main directions of overcoming problems of small business in RK - the following:

- creation of legal and organizational conditions for growth of business activity of small enterprises;

- implementation of economic policy, including scientific and technical, innovative, investment, price;

- implementation of tax and credit and financial policy for ensuring effective development of small business;

- rendering to small enterprises assistance in implementation of foreign economic activity;

- application in relation to small enterprises of special measures of support taking into account features of each industry and the region, separate groups of entrepreneurs and types of activity: encouragement of crafts, seasonal works, collective and family forms of the organization of activities;

- simplification of an order of registration and forms of the reporting, reducing the list of the licensed types of activity.

- expense reduction on social insurance. Assistance to development of a small entrepreneurship is intended to provide implementation of the purposes of state policy of regulation, namely:

1) maintenance of employment, social and economic stability, growth of a general welfare of the population;

2) intensification of investment processes;

3) stimulation of innovations by financing of new product developments.

Enhancement of small business also shall raise many questions. This enhancement of tax, personnel, investment and financial and administrative policy. The solution of a complex of these problems will promote development of MSB in Kazakhstan.



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4. The law RK No. 131-1 from 06.2016. "About the state support of small business"//the Collection of legislative legal acts "Small and medium business: Legislation of the Republic of Kazakhstan. – Almaty, 2016.

5. Small and medium business: checks and requirements of public authorities. – Almaty: Publishing house: BIKO, 2015.

Table of contents: The Kazakh-American Free University Academic Journal №10 - 2018

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