Breaking Down Administrative Barriers to Entrepreneurship in Kazakhstan
In 1999, Kazakhstan was still in the beginning stages of its transition to a market-based economy. The transition had begun during perestroika in the late 1980s, when individuals were permitted to form their own businesses, called co-operatives. These entrepreneurial pioneers immediately attracted skilled workers from the state sector.
This paved the way for private sector development after 1991, though small- and medium-sized enterprises (SMEs) faced significant societal, institutional, and political barriers to growth. In its formative years, small-scale entrepreneurship in Kazakhstan was characterized by highly variable growth dynamics. In addition, a consistent national strategy in support of SMEs was not established, nor were sector and regional priorities identified.
Nevertheless, the Kazakh Government is working to develop its economy and SME sector by forming a relevant and favorable legislative environment, attracting both foreign and domestic investment, developing programs to support entrepreneurship, and prioritizing policy objectives. These and other support mechanisms are essential to building Kazakhstan’s private sector and sustaining economic growth.
Aliya Kantarbayeva is Professor of Economics and Management at the Kazakh National Technical University in Almaty, Kazakhstan, having recently completed work with the Institute for European, Russian, and Eurasian Studies at The George Washington University in Washington, D.C. She has worked extensively with the Economic Research Institute, a leading Kazakh economic think-tank, and during 1991-1997 devoted herself to public service by taking an active role in developing Kazakhstan’s transition strategy from a centrally planned economy to a market one. Ms. Kantarbayeva has published numerous papers on various issues of economic theory, and holds a Ph.D. in Economics from Kyoto University, Japan.
Parts of this article are based on a discussion paper released in 1999 by the Institute of Economic Research, Kyoto University. The views expressed by the author are her own and do not necessarily represent the views of the Center for International Private Enterprise. The Center for International Private Enterprise grants permission to reprint, translate, and/or publish original articles from its Economic Reform Feature Service provided that (1) proper attribution is given to the original author and to CIPE and (2) CIPE is notified where the article is placed and a copy is provided to CIPE’s Washington office.
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