NCE RK "Atameken" proposes to create a National Centre for the promotion of export of Kazakhstani goods to external markets

The new organization will ensure coherence between state agencies and effective use of the infrastructure of the diplomatic service of Kazakhstan abroad for promotion of Kazakhstani goods at external markets.

These and other proposals and objectives of the National Chamber of Entrepreneurs for 2017, as well as the results of 2016 were announced by Deputy Chairman of NCE Nurzhan Altaev at the enlarged meeting of the Presidium of "Atameken".

He said that today the export orientation of small and medium-sized business is the key growth driver of the economy of Kazakhstan. For local entrepreneurs, especially in the field of agriculture and food industry, open up big sales markets like China, the Russian Federation, the Gulf countries and Iran.

"Creation of the proposed National Export Centre must provide a link with both the state authorities and the efficient use of the infrastructure of the diplomatic service of Kazakhstan abroad, carrying out export support functions, insurance, and finance, as well as the function of JSC "KazExportGarant ", JSC "DBK", JSC "KazNexInvest”, JSC “Fund "Damu", the Trade representation of MNE of RK abroad. At the same time a state agency must act as a united body which will be responsible for export. Because now different state agencies have different functions for export of our products, there is a certain absence of coordination", - said Nurzhan Altaev.

NCE is ready to act as coordinator of such a center, taking it in trust management. Altaev noted that, according to market analysis data, export of Kazakh products to Russia can be increased up to 330 million USD, to China – up to 680 million USD and to the Gulf states – up to 370 million USD in the very near future.

But for the promotion of domestic products in the country and, as a consequence, the fight against unemployment, deputy chairman of NCE offered to be guided by the principles of reasonable protectionism, learn to find a compromise with the international standards, without losing sight of the domestic interests, as do other countries today.

Nurzhan Altaev said that in 2016 at the request of the Government for support of domestic producers in public procurement and procurement of quasi-public sector, NCE established 16 regional working committees. As a result of their work contracts worth 261 billion tenge were concluded within the frames of public procurement, in quasi-public sector, they recommended to conclude contracts for more than 993 billion tenge, however, contracts worth 414 billion tenge were concluded.

"As for procurements of a group of companies Samruk-Kazyna, for transparency was introduced a mechanism of preliminary discussion of the draft tender documents and the institution of "independent industry experts", who will participate in development of the tender documents for 8 sectors (food, commerce, engineering, manufacturing, etc.) in the amount of over 250 million tenge. The use of industrial certificate, as the document confirming the status of producers, is also provided. Overall, during the period of joint work of NCE RK and SK from 1^st of August  2014 to 1^st of December 2016 with our assistance were concluded more than 1500 thousand long-term contracts with domestic manufacturers, worth more than 500 billion tenge", - said Nurzhan Altaev.

He also suggested a step by step algorithm of the mechanism for increasing the proportion of local content in the construction through the implementation of pre - and post tender control on the example of a pilot project in the East Kazakhstan region. "Now we need to implement this mechanism in all regions of Kazakhstan", - said Altaev.

Microcredit program of NCE is demand

Another important task for the next year, the deputy chairman of NCE named the expansion of micro-credit program. He said that since the beginning of 2016 "Atameken" implements microcredit program in six pilot regions - Almaty, Aktobe, Kyzylorda, Kostanai, Mangistau and Zhambyl. During this time, 1.5 billion tenge of private investment has been attracted and the same number of akimats of regions funded 563 applications of rural entrepreneurs in the amount of 2 705 million tenge. Through this program, NCE provided with stable income 2544 person. According to the results of the pilot project, "Atameken" has made proposals for the inclusion of this mechanism in the "Employment Roadmap 2020".

"This is a proposal to increase the loan amount up to 50 billion tenge amount for micro-credits (of which 15 billion tenge will be annually funded through microfinance institutions), an increase of the loan amount from one million to 16 million tenge, the loan period from 5 to 7 years, and the credit guarantee and subsidizing operating expenses of MFIs in the amount of 16% of the amount of acquisition. Almost all of these proposals were included in the new draft program of employment. Taking into account the accumulated experience of "Atameken" through its micro-credit system, it is ready to distribute 10 billion tenge in 2017 from the total amounts allocated on behalf of the Head of State", - said Nurzhan Altaev.

Talking about the accessibility to finances, infrastructure and sales markets and the results of work of NCE in that direction, Altaev said that in 2016 the state allocated additional 200 billion tenge at the expense of JSC "ENPF" for working capital and refinancing of current SME liabilities, increased marginal subsidy rate from 14% to 19% per annum, the floating rate is set depending on the base rate of the National Bank. Subsidies for PPP projects were also included, additional subsidies for loans to replenish working capital, loans issued from the funds raised from international financial institutions. In addition, there were removed industry restrictions on subsidizing the interest rate on the new micro-credits, issued for implementation of projects by small businesses in rural areas, small towns and single industry towns", - he stressed.

NCE has initiatives for state programs to be implemented in the future. For example, NCE proposes to introduce subsidy mechanism for coupon remuneration on issued bonds, to exclude from "Roadmap of business-2020" or to revise the concept "efficient project", which is now a serious barrier, as well as to provide the optimal rate of working capital at a level not higher than 12%, for investment purposes - not more than 7%. And, importantly, it is necessary to continue to eliminate the flexible interpretations and arbitration for inspection bodies in respect of companies involved in state programs.

Everybody needs knowledge

Nurzhan Altaev paid special attention during his speech to the preparation of entrepreneurs and skilled workers, which are in high demand by business today. He noted that Kazakhstan has a huge potential for the development of the agrarian sector, but we are far behind the advanced countries on key indicators such as labor productivity, yield and productivity. To address these fundamental problems, NCE undertook a mission to improve the competence of the local farmers.

"Thanks to the extensive network of NCE, together with the Ministry of Agriculture was organized effective feedback from farmers and we have started the work on improvement of agricultural competences. NCE signed agreements with the Ministry of Agriculture in the amount of 1.1 billion tenge for training of farmers. There were conducted 668 training seminars for agricultural producers with 25 major agribusiness directions. We trained about 11 thousand farmers", - said Altaev.

He noted that in the course of learning a good result has been achieved, and asked the Government not to reduce the level of funding.

Under the current program "Employment Roadmap 2020", NCE taught free of charge the basics of entrepreneurship on the basis of Business Support Centers and Centers for Servicing Entrepreneurs more than 3 thousand people.

"An important strategic priority is the development of human capital. This year for the first time in the legislation of Kazakhstan was introduced the concept of dual education, previously there was different understanding of it. We have identified the need of enterprises in personnel in the current year, more than 7,000 companies participated in the surveyed and we found that the need is 134 thousand. And now we are working with the Ministry of Education and educational organizations on their education", - said Nurzhan Altaev.

In addition, NCE has created 63 study centers at enterprises, and 22 of them are involved in the program of the state order, about 2,000 people have been trained and retrained there.

Changes in the structure of state ownership have not occurred

Nurzhan Altaev named as one of the priorities the observation of the interests of business in the process of privatization and development of PPP. He reported that in the framework of the carried out work, the representatives of NCE RK joined the project offices of JSC "NMH" KazAgro "and MFRK, there was reached an agreement on inclusion in the project office of JSC "National Welfare Fund "Samruk-Kazyna", there were eliminated legal barriers on attraction of participants of the domestic securities market to privatization of large objects. State bodies agencies and local executive bodies with the active participation of NCE RK completed the first phase of inventory, as a result it was decided to transfer to the competitive environment 51 Organization of the Republican property and 454 organizations of communal property.

"But it is worth to note that, despite the legislative changes and the large-scale work on deregulation, significant changes in the ownership structure of the state have not occurred. In this regard, we propose a series of measures. In particular, to work out unified, sectoral approaches, including the clear criteria of privatization. On the basis of the yellow pages principles to determine the sectors of economy, where the presence of the state is not compulsory, to reconsider and to reduce the activities of state enterprises. We also suggest to make a priority for asset management, to simplify procedures in the sphere of PPP and to work out practice of long-term contracts, long-term state orders", - said Altaev.

He stressed that under the orders of the Head of the State, it is necessary to reduce the proportion of state involvement in the country’s economy to 15% in 2020, but now it is more than 50% of GDP – this is the size of assets of quasi-public sector, the state's share has decreased only by 0.3%.

Facts and Figures of 2016

Summing up the results of work in 2016, Nurzhan Altaev said that the National Chamber of entrepreneurs managed to solve positively 40% of the appeals of business. As a result, the total amount of protected property rights amounted to 41.7 billion tenge. The largest number of complaints concerns the taxation of SMEs and actions of tax authorities, in second place - land issues 13%, the third - the procurement sphere.

The Registry of problematic issues includes 438 system problems, of which 285 (or 65%) were resolved. The largest number of problematic issues is related to the following spheres: construction, transport, logistics and communications, as well as medical and pharmaceutical industry.

During the first 11 months of 2016 the National Chamber carried out expertise of more than two thousand draft RLAs, 86% of which the state authorities have taken into account the comments of NCE.

Between March and November 2016 the website of the Regional Map for Business Development was viewed more than five hundred thousand unique visitors. Over two 2 million pages are viewed daily on the website by more than 10 thousand visitors from the Republic of Kazakhstan, the Russian Federation, Ukraine, the USA, Belarus, China, Germany and other countries.

In conclusion, the deputy chairman of NCE proposed to implement a similar service to "Government for people", the idea of ​​"Government for business". The new platform unifies all business support measures in a "box" and would contribute to the removal of barriers that exist on the way of entrepreneurs.