Научная статья на тему 'THE ANTHROPOLOGY OF ENTREPRENEURSHIP IN POST-SOVIET KAZAKHSTAN'

THE ANTHROPOLOGY OF ENTREPRENEURSHIP IN POST-SOVIET KAZAKHSTAN Текст научной статьи по специальности «Экономика и бизнес»

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Ключевые слова
ЕNTREPRENEURSHIP / ECONOMIC HISTORY / BUSINESS ANTHROPOLOGY / CORPORATE CULTURE / ANTHROPOLOGY

Аннотация научной статьи по экономике и бизнесу, автор научной работы — Mami Anar, Dukenbayeva Zadash, Sailaubayeva Nurgul, Nomogoeva Viktoriya, Mahdee Junainah

The purpose of the study is identifying the main directions of public policy in the development and formation of small and medium enterprises in Kazakhstan since independence in terms of modern historical knowledge. The importance of this research topic allows us to address an important historical issue about the importance of the formation of new social groups in Kazakhstan. In particular, it allows us to determine the nature of the owner in post-Soviet Kazakhstan, its features, as well as the genesis of the new economic model in real historical conditions of the late XX and early XXI centuries. The subject of the study identifies and confirms the sources of changes in the social structure of society during the period of reforms and the emergence of a new type of people who had no place in Soviet society - entrepreneurs. The relevance of the topic is determines by modern challenges in improving the concept of public policy for support and development of small business. The research aim was to study directions of the state policy in transforming society and its implementation in Kazakhstan mainly in the process of forming entrepreneurship since independence; from the view of historical knowledge. This study conducted using the Systematic Literature Review (SLR). Different types of common reviews on entrepreneurship research of Kazakhstan examined.

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Текст научной работы на тему «THE ANTHROPOLOGY OF ENTREPRENEURSHIP IN POST-SOVIET KAZAKHSTAN»

I Journal of Siberian Federal University. Humanities & Social Sciences 2022 15(12): 1892-1901

DOI: 10.17516/1997-1370-0960

EDN: MKSUVS

УДК 338.22(574)+316.334.23

The Anthropology of Entrepreneurship in Post-Soviet Kazakhstan

Anar Mami*a, Zadash Dukenbayevaa, Nurgul Sailaubayevaa, Viktoriya V. Nomogoevab,

Junainah Mahdeec and Talgatbek Manashd

aL. N. Gumilyov Eurasian National University Astana, Republic of Kazakhstan bJ.Banzarov Buryat State University Ulan-Ude, Russian Federation "Multimedia University Cyberjaya, Malaysia dUniversity of Szeged Szeged, Republic of Hungary

Received 18.07.2022, received in revised form 09.19.2022, accepted 30.09.2022

Abstract. The purpose of the study is identifying the main directions of public policy in the development and formation of small and medium enterprises in Kazakhstan since independence in terms of modern historical knowledge. The importance of this research topic allows us to address an important historical issue about the importance of the formation of new social groups in Kazakhstan. In particular, it allows us to determine the nature of the owner in post-Soviet Kazakhstan, its features, as well as the genesis of the new economic model in real historical conditions of the late XX and early XXI centuries. The subject of the study identifies and confirms the sources of changes in the social structure of society during the period of reforms and the emergence of a new type of people who had no place in Soviet society - entrepreneurs. The relevance of the topic is determines by modern challenges in improving the concept of public policy for support and development of small business. The research aim was to study directions of the state policy in transforming society and its implementation in Kazakhstan mainly in the process of forming entrepreneurship since independence; from the view of historical knowledge. This study conducted using the Systematic Literature Review (SLR). Different types of common reviews on entrepreneurship research of Kazakhstan examined.

Keywords: entrepreneurship, economic history, business anthropology, corporate culture, anthropology.

Research area: economic history.

© Siberian Federal University. All rights reserved

* Corresponding author E-mail address: anara_mamy@mail.ru

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Citation: Mami, A., Dukenbayeva. Z., Sailaubayeva, N., Nomogoeva, V. V., Mahdee, J., Manash, T. (2022). The anthropology of entrepreneurship in Post-Soviet Kazakhstan. J. Sib. Fed. Univ. Humanit. soc. sci., 15(12), 1892-1901. DOI: 10.17516/1997-13700960

Антропология предпринимательства в постсоветском Казахстане

A. Мамиа, З. Дукенбаеваа, Н. Сайлаубаеваа,

B. В. Номогоеваб, Дж. Махдив, Т. Манашг

аЕвразийский национальный университет Республика Казахстан, Астана бБурятский государственный университет Российская Федерация, Улан-Удэ Мультимедийный университет Малайзия, Киберджая гСегедский университет Венгерская Республика, Сегед

Аннотация. Цель исследования - выявление основных направлений государственной политики в области развития и становления малого и среднего предпринимательства в Казахстане за годы независимости с точки зрения современных исторических знаний. Актуальность данной темы позволяет нам обратиться к значительному историческому вопросу о важности формирования новых социальных групп в Казахстане. В частности, она позволяет определить природу собственника в постсоветском Казахстане, его особенности, а также генезис новой экономической модели в реальных исторических условиях конца XX и начала XXI веков. Предмет исследования выявляет и подтверждает источники изменения социальной структуры общества в период реформ и появления нового типа людей, которым не было места в советском обществе, - предпринимателей. Актуальность темы определяется современными вызовами в совершенствовании концепции государственной политики поддержки и развития малого предпринимательства. Целью исследования является изучение направлений государственной политики в преобразовании общества и ее реализации в Казахстане преимущественно в процессе формирования предпринимательства за годы независимости с точки зрения исторического знания. Это исследование проводилось с использованием Систематического обзора литературы (SLR). Рассмотрены различные виды общих обзоров исследований малого и среднего предпринимательства в Казахстане.

Ключевые слова: предпринимательство, экономическая история, антропология бизнеса, корпоративная культура, антропология.

Научная специальность: 08.00.00 - экономическая история.

The process of forming market relations in Kazakhstan has a huge impact not only on the economy, but also on politics, social rela-

tions, culture and mentality of its society. Historical science is no exception in this respect, like all spheres of life, is obliged to react when

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changes taking place. Under their influence, in modern historiography, there is a significant shift in research topics and methods of theoretical comprehension of the material in the light of modern social requests for historical works. Thus, interest in the problems of the history of market development and entrepreneurial practice has grown immeasurably, which is due to prevailing social situation, and on the other hand, to its falsification, deformation of positive potential of market in Soviet times. Conclusions about the purely capitalist, private property, exploitative nature of market system in the works of Soviet historians had a canonized meaning. The roots of this aberration of the vision of the past lay in the dominant ideology (Botanov M., 2001).

This study conducted using the Systematic Literature Review (SLR). Different types of common reviews on entrepreneurship research considered.

As for the original history of the word "entrepreneur", in different epochs, Western scholars have given it different interpretations. The word "entrepreneur" appeared much later in the literature of economic history; It was first used by the Irish-French economist Richard Cantillon in 1755 in his Essay sur la Nature du Commerce en General. Cantillon's concept described the entrepreneur as a risky person who opens up market opportunities. This mainly distinguishes the entrepreneur from the idea of the entrepreneur as an organizer of factors with its risky, fresh qualities (Chris Brown and Mark A. Thornton, 2011). Later, until the end of the XIX century this idea were developed by Adam Smith, Jean-Baptiste Say, Karl Marx. According to the classical view, an entrepreneur is neither a capitalist, nor a landowner, nor a manager. According to Blaug, an entrepreneur "must be a decision-maker ... Only his activity and this function, worthy of the name" entrepreneurship" (Blaug, M., 2000). However, the significant achievements of the second industrial revolution in the early twentieth century provided new evidence for the existence of forces other than the conditional distribution and coordination of production factors that contribute to economic development.

In 1934, Joseph Schumpeter described the entrepreneur as an innovator who developed new technologies. Joseph Schumpeter took a completely different approach to economic development (Schumpeter, J.A., 1926). He saw economic growth, progress and development as the result of entrepreneurial innovation, which neoclassical economists hate: creatively disrupting the static economic balance through the introduction of new combinations of factors of production, including technical innovation, thus shaping the country's economic development. The creative destruction caused by innovation and entrepreneurial leadership is not unique to a market economy. He believed that this phenomenon could flourish in a socialist economy or in a primitive horde as a ubiquitous phenomenon in different historical contexts and in different social and political contexts.

In 1579, Bodo described the entrepreneur as a responsible manager, planner, and organizer of the enterprise. In 1964, Peter Drucker described an entrepreneur as a person who makes the most of every opportunity. In 1985, Robert Hizrich described entrepreneurship as a process of emergence of new things with cost. These concepts are widely used, mainly in Western countries. The idea of continuous structural changes arising from entrepreneur-ship, which stimulates economic development, has had a huge impact on economic thinking (Li H.,2013). The theory of growth (Abramow-itz, Solow) has influenced the study of the dynamics of innovative firms (Porter), economic history, which studies the relationship between institutional change and the economy (Cassis, Youssef and Minoglou, IoannaPepelasis, 2005).

In Kazakhstan, "entrepreneurship" legally introduced only in the 90s, but the history of entrepreneurship dates back to antiquity and has its own peculiarities. In the ancient Turkic era, the city of Semirechye was not only a stop, but also a center of trade and crafts. In the XIII century and the first quarter of the XV century through the territory of South Kazakhstan passed the West-East international trade route, which played an important role in the development of trade. In the XVIII century, Kazakhs traded in the kingdoms of Central Asia, Russia, China and Iran - cattle, horses, leather, wool

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and hunting products. Caravans sent from Central Asia to Russia via Kazakh lands. Trade through Orenburg, Tobol and Semipalatinsk was very important (Akhmetova G., 2012).

In the first half of the XIX century, the development of salt mining began. In addition, mining of copper, tin, silver, coal began, and smelting and tanning plants began to open. In the second half of the XIX century, the division of subsistence farming followed by the continuation of Kazakhstan's trade relations with Russia, Central Asia and China. The influx of Russian and foreign capital greatly contributed to the development of industry in Kazakhstan in the early twentieth century. The most widely developed was the bank's capital. Stationary and fair trade are very well developed. Fair trade began to take on an All-Russian character. During this period, the impact of foreign capital was very significant. The impact of the February and Kazan revolutions led to the weakening of market economic ties. Prior to the reorganization, entrepreneurship not officially allowed in the Kazakh Soviet Socialist Republic.

After the collapse of socialist system, radical political and economic changes had occurred in most former socialist countries. According to Hesse, former socialist countries have a number of common characteristics:

1) a transition from one party rule to the multi-party, pluralist system with democratic and accountable government;

2) the de-concentration and decentralization of political power;

3) the creation of distinct spheres of economics and politics;

4) economic liberalization (Hesse J., 1993).

No socialist country has yet completed

full process of economic liberalization. This is mainly due to task of transforming a former socialist economy is significantly more complicated than the issues facing a typical developing country. Even rudimentary institutions that can easily converted to market concepts and terminology. The processcharacterized not simply by a transition to a new economic system but also as a fundamental transformation of whole society and all of its institutions in line with market philosophy.

The collapse of Soviet totalitarian system significantly shaken such approaches and led to de-ideology of historical science. Modern researchers of market and entrepreneurship, studying the prospects of market economy, are trying to show that they are very significant in comparison with Soviet planned system based on excessive centralization of the economy. Today, many works are devoted to the history of market and entrepreneurship. Some of them are of scientific value due to introduction of new factual material into scientific circulation, development of original conceptual approaches. Other part of the works suffers from an extremely emotional approach, an unconditionally enthusiastic tone in assessing the phenomenon of the market, which is no less dangerous for science than previous ideological dogmas. Such an influx of works on topic of market, undoubtedly, actual study of this problem in historian aspect (Aktamov E, 2016).

The pre-revolutionary official historiography dedicated to problem of development of market relations and entrepreneurship in Kazakhstan characterized by an obvious ten-dentiousness. Most of Russian researchers inflated the 'civilizing' role of the tsarist government, trying to ascribe positive phenomena to it. Official historiography limited itself to throwing remarks to express its contempt for the peoples of the national borderlands. The studies of tsarist officials praised the colonial policy of 'Tsarism'.

Since the early 1990s, a new methodological approach has emerged, which has been the "subjective dimension" of the past in the development of historical science. In 1989 at the "round table" of the magazine "Questions of History" it noted that historiography is divided into "totalitarian" and "revisionist". The subject of study of the "totalitarian" school was the absolutization of power, its control and influence on society. The independence of society, its independence from the decisions of the authorities, the "return of man to history" became the object of study of the "revisionist" school (Moiseeva L., 2004). Within the framework of the "totalitarian" school, the issues of the New Economic Policy began reconsidered, and the possibility of repeating its experience

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not ruled out (B. Gimpelson et al.). The works of D. Valova, A. Osipov, L. Gordon, E. Klop-ov, N. Greenin and others are devoted to the problems of Russian society deprived of entrepreneurs (Osipov A., 1990). Written in the spirit of the "revisionist" school, these works introduced into the scientific community many new sources that reflect the changes in the entire socio-political and economic structure of society. The direction of modern historiography determined by the publication of collective research, as result of the struggle between the "totalitarian" and "revisionist" directions. As a result, we see that the study of Soviet everyday history (the school of "everyday life history") has relegated to the background by directing society to the transition to the market. A characteristic feature of the historiography of 1990-1991 was the strengthening of the readiness of the masses to accept the market reality and private property. During this period, ways to overcome the consequences of the systemic crisis sought. A. Shkuropat, Y. Osipov, S. Zhi-linsky and others (Shkuropat A., 1990).0ther authors believe that a systemic crisis logically requires systematic measures to eliminate it. Nowadays in modern historiography goes a productive process of overcoming the ideology approach, in assessing importance and role of market and entrepreneurship in history of the development of society.

Kazakhstani scientists emphasize that there are number of historians today have a penchant for mythmaking (Masanov N. E., AbylkhozhinZh. B., Erofeeva I., 2007). One of the reasons for this situation is the weakness of the theoretical and methodological foundations of historical science. Many modern historians are engaged in solving this problem. In the article "Some aspects of theoretical and methodological problems of the historiography of Kazakhstan" K. Nesipbaeva clearly outlined the tasks of modern historiography: 'to establish the basic theoretical and methodological principles characteristic of this period, struggle of opinions around them, replacement of some prevailing theories and concepts with others' (Nesipbaeva K., 2008).

A review of theoretical and methodological literature indicates that scientists are ac-

tively developing the problem of the specific of transformation of traditional society and transition to market model. Nowadays, they are widely introducing into scientific circulation works that previously considered reactionary, pseudoscientific. Works of foreign scientists, where access was previously limited and intensively studied. Under the influence of foreign researcher's works, the theory of modernization is becoming widespread in modern historiography. Proponents of the theory of modernisation sought to prove that "modernization" is a certain type of steady changes that are a consequence of industrialization and urbanization, development of institution of private property and entrepreneurial activity. From logic of reasoning of the supporters of this concept, it follows that whole complex of measures carried out by the metropolis in relation to the colonial national periphery is positive.

Zh. Abylkhozhin says that there are still many unexplored horizons in front of the historical science of Kazakhstan: 'It cannot be said that degree of penetration of scientific knowledge into the essence of ongoing socio-economic processes and phenomena has reached limiting parameters, i.e. rather clear prospects for growth are seen here. The prerequisites for this formed against background of the priority inclusion of moments of the intensive series and deepening of the theoretical and methodological context of problem, complication of cognitive tools. It is in the outlined plan that strongest impulses are localized, capable of stimulating process of real increment of historical knowledge (AbylkhozhinZh., 1987).

K. Kozybayev has a number of works where determined the vector of scientific research in modern historiography on qualitative new conceptual basis. His works are most interested today not only from the viewpoint of specific content of works that have turned into historiographical facts, but the spirit of the times has also been preserved in his works. 'History and Modernity', 'Problems of Russian history: methodology, historiography and sources' in 2 volumes and many other researches defines a number of key problems of modern historiography (Kozybayev M., 1999). He identified following problems related to the topic

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of our research: history of the formation of the entrepreneurial elite of the Kazakh society; development of Kazakh entrepreneurship proper in the pre-revolutionary period; problems of international capital in the mining and manufacturing industry of Kazakhstan in the second half of the XIX - early XX century.

In H. M. Abzhanov's works, there were a very wide range of problems in Russian history being generalized and determined promising lines of research, which impetus for the renewal of the problems of historical research and the acquisition of a new quality. Particular attention paid to the study of the Kazakh history of second half of XIX - early XX centuries, when there was a large-scale process of adaptation of the Kazakh society to the market. According to the scientist, this process was not (as it still seems to some researchers) a passive adaptation of the degrading traditional society. It was a promising process of socio-historical adaptation, in which there was a positive civi-lizational dynamics. In the course of this process, the internal preconditions of market relations developed in Kazakh society, and their social carriers appeared in a certain amount. In general, the Kazakh society gradually began to take new starting positions for development in the XX century (Nazarbayeva G., Abzhanov H., 2003).

It is important to note that there were specific features of entrepreneurial activity, mainly innovation (innovativeness) and ownership factors of production, among economists (before there is still no unity in approaches). They identified four main approaches.

The first approach (J. B. Say, Austrian school, Soviet economic school) describes characteristic features of business activities where entrepreneur has ownership of means of production and innovative Nature of activity. Representatives of Soviet economic school consider the formation and development of concept of 'entrepreneurship' in its close connection with concept of property, where entre-preneurship and property considered as two sides of same process developing during time and space.

According to the second approach, entrepreneurial activity requires ownership of the

means of production, but the innovative nature of activity is not necessarily required. Such views held by and adhered to by most scientists and economists such as A. Smith, J. Baudot, I. Lipsits, A. Busygin (Grishaeva L., 2012).

A proponent of the third approach (R. Cat-illon) believes that an entrepreneur can be the owner of a business, or maybe only a manager, where innovative character activity is optional. This approach is the largest in terms of coverage of economic units.

Representatives of the fourth approach (J. Schumpeter, P. Drucker, V. I. Kushlin) believe that the main thing in entrepreneurship is an innovative activity, where ownership of the enterprise is not an essential feature of en-trepreneurship, thus how entrepreneurship is possible without own capital (for example, with using borrowed funds or at the expense of government subsidies). Innovation as J. Schumpet-er clearly separates the specific entrepreneurial function from the functions of the owner and the factors of production and the manager (Ra-daev V., 1994).

Nowadays, small and medium enterprises in Kazakhstan face a number of difficulties in their developments. The lack of professionals who know the ins and outs of entrepreneurship, poor quality of its training in higher education have led to a shortage of strong professionals in this field. The globalized developed countries are conquering world markets and building a strong economic system by bringing innovation to entrepreneurship. If this trend continues in Kazakhstani businesses, then the share of entrepreneurship in the economy will increase. Conversely, the low level of innovation directly related to the poor quality of this knowledge. Thus, the predominance of exports of raw materials, the low share of SMEs in Kazakhstan's GDP, the relative underdevelopment of enterprises is producing added products. The share of small and medium-sized businesses in 2010 GDP averaged 20.6 %, in 2019 was 30.8 %, and in January-March 2020 reached 27.7 % (Statistics Committee of the Ministry of National Economy of the Republic of Kazakhstan).

According to the World Bank, the share of SMEs is ranging between 62-63 % in most developed countries. The highest rate among

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the EAEU countries is in the Kyrgyz Republic, which is 39.3 %. In modern globalization, developed countries are building a strong economic system by conquering world markets through innovation in entrepreneurship. By improving education system, we receive high quality specialists in the field of entrepreneur-ship. New ideas will create new business opportunities for citizens where they can raise their income, hence a transparent support from government will be very important («DAMU» Entrepreneurship Development Fund, 2020).

According to statistics, Kazakhstan's innovative products in 2018 were at 1.9 % of GDP. Entrepreneurship development, which is the basis of a market economy, is currently a strategic priority for Kazakhstan, and it planned to increase the share of small and medium-sized businesses in the country's economy to 36 % by 2030 and 50 % by 2050. Thus, entrepreneurship is an important element of Kazakhstan's economy. From this point of view, measures to support entrepreneurship by the state are very appropriate, and development of domestic entrepreneurship, improving the structure of various business sectors and their effective use will allow Kazakhstan becoming a stable, industrialized country.In 2006, the Forum of Entrepreneurs of Kazakhstan and Almaty Association of Entrepreneurs with the support of the Center for International Private Entrepreneurship CIPE conducted a research to understand the current situation of small and medium-sized businesses and improve the situation in the business environment. The objectives of this survey were: to study the opinions of entrepreneurs on the existing problems associated with the "shadow" economy and corruption in the Republic of Kazakhstan; study of the reasons for entrepreneurs leaving the "shadow"; identification of economic, legislative and administrative measures to reduce the size of the "shadow" economy.

According to the survey, representatives of small businesses in Kazakhstan did not feel ready to compete with imported goods. It noted that almost a third of the interviewed entrepreneurs, 31.7 %, are unequivocally sure that they will not be competitive. The study showed that special forms of state support for the develop-

ment of entrepreneurship are undeveloped. Thus, 59 % of entrepreneurs believe that such a form of support as business incubators is not sufficiently developed. 53 % of respondents believe that techno-parks need special attention due to insufficient development.Entrepreneurs are confident that shadow economy has penetrated into all spheres of public life and is an integral part of the state's economy. Moreover, 53.2 % of respondents believe that the level of development of the shadow economy in the country undermines its national security. More than a third of entrepreneurs believe that the level of the shadow economy is 40 to 50 percent of GDP. Only 9.9 % of entrepreneurs agree with the official statistics, estimating the level of the shadow economy at 20-30 % of GDP. The researchers found that from the entrepreneurs' perspective, the state needed to implement a comprehensive program of protective measures in order to maintain the competitiveness of small and medium-sized businesses and successfully enter the 50 most competitive countries in the world. There is a need to remove administrative barriers; fight smuggling; ensure transparency in public procurement; to form a new customs and tariff policy. Only with such integrated approach is it possible to change the situation for the better and take a worthy place in the international community. Moreover, 82.1 % of respondents believe that entrepreneurs do not have opportunity to protect themselves from corruption. The majority of entrepreneurs 69.2 % are sure that government officials are interested in maintaining corruption, which complicates the solution of this issue. With regard to VAT, 48.7 % of the respondents identified 5 % as the most acceptable rate. 12.5 % of entrepreneurs expressed the opinion that in order to increase business transparency, VAT should totally cancelled. Entrepreneurs had expressed unanimity regarding the corporate income tax (CIT). 90.1 % of respondents believe that for the full legalization of a business, the optimal CIT rate should be 15-20 % ('DAMU' Entrepreneurship Development Fund).

All data related in Kazakhstan shows that the development of entrepreneurship in Kazakhstan has achieved a success. This ev-

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idenced by the achievements of Kazakhstan in the World Bank Report 2020 in doing business. It has dramatically improved from 37th to 25th place in last 3 years.On the other hand, as shown by Kazakhstan's experience on transformation, the destruction of the old office of the state apparatus does not automatically lead to the birth of a new system of governance and public service; it needs a package of measures and aims at radical staffing update. It is clear that an economy could not be competitive without the state apparatus and transparent national companies. Therefore, as international experience shows that any 'administrative reform' usually begins for several reasons, this may be due to financial and economic problems, public awareness of the inefficiency, existing management system and interaction between state and society. At times, this awareness comes to the country's leadership, which sees that the bureaucracy did not have time to respond to the objective needs of economic and political development. The result of maturing internal bureaucratic tension, when the lower-level bureaucrats can no longer get richer and the upper does not want to share. Furthermore, the voltage should somehow remove, including through 'administrative reform'.

The diversity of circumstances in the regions of Kazakhstan, in turn, requires individual policy clarification at the regional level. In terms of economic structure, the regions of Kazakhstan differ significantly from each other. These differences need to take into account, for which Kazakhstan needs to improve regional and international coordination. In addition, it requires the implementation of a more transparent mechanism for the distribution of funds between regions, based on strategic priorities. In turn, akimats should be able to adjust policies to meet the needs of small and medium-sized businesses in their region, in particular to focus on creating a more favorable business environment for those active in international trade. In particular, local targeted support can focused on export development, product quality improvement and professional development.

Kazakhstan's economy dominated by state-owned enterprises (SOEs) and large private industrial and financial conglomerates,

which are the legacy of the Soviet central planning system. In the early 1990s, 87 -% of the workforce worked in state-owned enterprises, and structural changes such as privatization were still ahead. Many major changes have taken place since then, but the transition period is not over yet, and redefining the role of the state in the economy, as well as accelerating the development of the private sector, remains an important task. There is no generally accepted methodology for estimating the share of the state in GDP, and any such calculation is highly dependent on the procedure and distribution that apply to enterprises owned jointly (public-private) or fully or partially controlled by public organizations.

In addition, there are many critics of the ineffectiveness of these programs. Pradumna Bikram Rana, an expert at the Asian Development Bank and a scientist at Nanyang Technological University, wrote in 'Strategic Reforms in Transition Economies: The Case of Asian Countries' that 'a market economy planning policy cannot immediately replace a centralized system'. It is a mistake to think that an independent market develops at the same time and destroys the centralized system. It is one of the necessary steps in a market economy. The development of the market in the economy will be difficult and long if the institutions of the state not ensure the development of the mar-ket(Rana, Pradumna B., 1995).Summarising the results of the program, the following system errors occurred:

1) Inefficient mobilization of available resources;

2) Lack of connection with other individual inter-sectoral programs;

3) Lack of speed of action between local authorities and development institutions;

4) Lack of a common methodology for data collection, monitoring, aggregation.

Thus, market economy policy and planning mechanisms have not yet replaced the previous systems. 'It is wrong to presume that a free market will develop overnight if central planning is eliminated and the market freed. Scrapping the central planning system is obviously a necessary step toward the evolution of a market economy, but unless existing in-

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stitutions can readily be converted to facilitate production and distribution under market conditions, the transition process will be difficult and lengthy'.To sum up, a good government must have a firm belief and stable continuously practiced professional staff to achieve great goals in order to be an efficient, effective and non-corrupt. There is a need to shift from 'public administration' to 'public management'; the emphasis should be placed more on the managerial functions, rather than representational. This means more independence and opportunities in the manifestation of initiatives for government agencies, which creates a high level of responsibility of public sector and leads for further development of entrepreneurship. It is essential to improve governance in Kazakhstan, which provides an accurate diagnosis of the political situation in order to identify options for optimizing the control system as well as to

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