ORDER OF THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN

of April 27, 2022 No. 250

About approval of the Concept of development of small and medium business in the Republic of Kazakhstan till 2030

According to Item 66 of System of state planning in the Republic of Kazakhstan approved by the order of the Government of the Republic of Kazakhstan of November 29, 2017 No. 790, the Government of the Republic of Kazakhstan DECIDES:

1. Approve the enclosed Concept of development of small and medium business in the Republic of Kazakhstan till 2030 (further – the Concept).

2. To the central, local executive bodies, state bodies, directly subordinate and accountable to the President of the Republic of Kazakhstan (in coordination), and to the organizations (in coordination), responsible for implementation of the Concept:

1) to take necessary measures for implementation of the Concept;

2) to provide information on the course of implementation of the Concept according to the procedure and the terms established by the order of the Government of the Republic of Kazakhstan of November 29, 2017 No. 790 "About approval of System of state planning in the Republic of Kazakhstan".

3. To impose control of execution of this resolution on the Ministry of national economy of the Republic of Kazakhstan.

4. This resolution becomes effective from the date of its signing.

Approved by the Order of the Government of the Republic of Kazakhstan of April 27, 2022 No. 250

The concept of development of small and medium business in the Republic of Kazakhstan till 2030

Section 1. Passport

Section 2. Analysis of the current situation

Section 3. Overview of the international experience

Section 4. Vision of development of small and medium business

Section 5. Basic principles and approaches to development of small and medium business

Section 6. Target indicators and the expected results

Appendix: The action plan on implementation of the Concept of development of small and medium business in the Republic of Kazakhstan till 2030

Section 1. Passport

Section 2. Analysis of the current situation

Chapter 1. Assessment of the current situation of condition of development of small and medium business

The concept of development of small and medium business in the Republic of Kazakhstan till 2030 (further – the Concept) is the document of System of state planning (further – SGP) determining vision of development of small and medium business (further – MSP) in the Republic of Kazakhstan till 2030.

Dynamics of condition of development of MSP in the Republic of Kazakhstan during the period from 2015 to 2020 shows the positive results expressed in the following indicators:

production of MSP increased more than twice and reached 33, 6 trillion tenge in nominal terms;

the contribution of MSP to the gross domestic product (further – GDP) the Republic of Kazakhstan for the specified period grew by 13 trillion tenge and reached 23, 2 trillion tenge in nominal terms;

the share of MSP in GDP grew by 7,9 of % and reached % 32,8;

the total quantity of subjects of MSP grew by 9% and reached 1,36 of one million subjects;

total number occupied in MSP grew by 9% and reached 3,5 of one million people.

At the same time the new model of development of the country putting the citizen in the center of state interests requires continuation of transformation of all components of activity of the state, the population and business.

As of January 1, 2021 the total quantity of subjects of MSP according to official statistical information constituted 1357500 companies, including:

1) the subjects of MSP who are legal entities, belonging to the category of small business, 280 thousand (% 20,6);

2) the subjects of MSP who are legal entities, belonging to the category of medium business, 2,5 thousand (% 0,2);

3) the subjects of MSP who are individual entrepreneurs, 858 thousand (% 63,2);

4) subjects of MSP which are country and farms (further – peasant farm), 217 thousand (16%).

Despite growth of indicators of the country in the field of development of MSP, for ensuring further positive influence on diversification of economy, realization of the export potential and ensuring stability of long-term economic growth of the country the high-quality changes caused by several factors are required.

First, the potential of influence of medium business on diversification of economy and stability of economic growth is not realized.

In the traded sectors promoting diversification and stability of economy, the companies of all categories MSP are quantitatively provided approximately in equal proportions: 39% of medium scale enterprises, 37% of small enterprises and 32% of the microcompanies. At the same time the aggregate gross value added (further – VDS) medium scale enterprises in the traded sectors made 1376 billion tenges, small enterprises – 601 billion tenges, the microcompanies – 63 billion tenges.

In general in economy the total amount of release of medium scale enterprises grew by 33% to 5, of trillion tenge. Counting on one medium scale enterprise the amount of release increased by 54%. Growth of release is reached against the background of decrease in number of medium scale enterprises by 14% to 2,5 thousand and reducings their share in total quantity of subjects of MSP from % 0,23 to % 0,19.

Average employment counting on one medium scale enterprise made 146 people, having increased by 20%. The labor productivity (on release amount) increased for 28%.

The total amount of release of small enterprises increased by 55% to 22, of 9 trillion tenge, but the release amount counting on one company increased by only 6%. It demonstrates that in case of growth of number of the companies by 47% to 258 thousand, on average release of one company is more than 25 times lower than average.

Average employment counting on one small enterprise made 5,5 of people, having reduced by 19% that led to increase in labor productivity (on release amount) for 31%.

The share of the companies of MSP in GDP in 2020 on statistical data constituted 32, %. Medium scale enterprises provided contribution of MSP to GDP for 19%, small (including micro) the companies – for 81%. However, if to clear data on MSP of the companies relating by the size of the annual turnover to large, then the share of MSP in GDP will decrease to % 12,7, and the contribution of medium scale enterprises to general contribution of MSP to GDP will increase to 30%, the contribution of small enterprises will constitute 63%, the microcompanies – 7%.

Thus, despite higher growth rates of amount of production and services, much higher performance and employment at one company, and also higher export potential, share of medium-sized companies in GDP it is very low because of the small number.

Secondly, limited influence of MSP on creation of high-quality workplaces.

The main share in structure of employment individual entrepreneurs provide small enterprises (further – SP). So, in small enterprises it is employed with 41% of total number occupied in MSP, in SP – 40% while in medium scale enterprises (further – the joint venture) – 11%, in peasant farm – 9%. At the same time small business entities (further – MT) concentrate in the sectors which are directly depending on general state of the economy and the consumer demand.

Owing to these reasons, MT are subject to high risks of the termination of activities in case of economic downturn and have no sufficient stability.

The workplaces created by MT in the most part are not high-quality workplaces as do not provide the permanent workplaces meeting safety requirements of work with the salary above average on the region.

So, the average monthly salary in MT in 2020 constituted 141379 tenges with an average across Kazakhstan in 169855 tenges. At the same time, average monthly salary in medium and large enterprises – 207317 tenges.

Thirdly, the main potential for development of MSP is concentrated in the large cities. Rural settlements, small and monotowns have extremely limited potential for development of MSP.

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