Kazakhstan offers far and away the most business-friendly climate in Central Asia, but even so, half of the entrepreneurs running small and medium-sized businesses (SMEs) are struggling to get by, a new poll shows. They face all kinds of hurdles, from financial difficulties to recalcitrant officials – and yet a majority of these resilient businesspeople remain upbeat about the future.
The study of 2,000 entrepreneurs was conducted by the Almaty-based BISAM Central Asia center, which researches the business climate. “Half of entrepreneurs are balancing on the brink of survival,” BISAM Central Asia’s president, Leonid Gurevich, told a conference on SMEs on December 14.
The news will come as a disappointment to the state's Damu entrepreneurship development fund, which supports small businesses and which commissioned the poll. Damu has stepped up assistance to SMEs in recent years due to the global financial crisis, offering micro-credits and preferential loans, but the poll indicates that many entrepreneurs are still fighting against the odds to survive.
Some 40 percent would like to overhaul and modernize their businesses but lack the funds to do so. Small farmers are worst off, with 65 percent saying that they only have enough funds to keep afloat or that their businesses are in critical condition.
Almost two-thirds of small and medium-sized entrepreneurs painted a bleak picture of their relationships with the authorities, Gurevich said: “Sixty-five percent of those polled spoke of the disdainful and negative attitude of the local authorities. Over 20 percent of those polled believe that the attitude of the authorities to business is neutral, 10 percent believe that support from officials is extremely perfunctory, and only 2 percent of those polled expressed a positive view.”
Nearly a quarter (22 percent) thought the attitude of the local authorities had changed for the better in the last three to five years – but 11 percent thought it had worsened and 66 percent saw no change.
The poll didn’t tackle the question of corruption, which many small businessmen identify as factor hampering entrepreneurship in Kazakhstan.
Amid these rather dismal findings, 15 percent of small businessmen said they see no prospects for business development.
But as Astana continues to promote SMEs to boost the economy, it can take heart from one finding: Most small-time entrepreneurs display a remarkably resilient attitude in the face of all these hurdles and are looking to the future with optimism.
“Overall, the entrepreneurs polled view the prospects for developing their business positively: 86 percent of those polled voiced this view in the research,” Gurevich concluded.
Joanna Lillis is a journalist based in Almaty and author of Dark Shadows: Inside the Secret World of Kazakhstan.
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