Assessing the prospects for small enterprise development in Kazakhstan

This paper presents an assessment of the factors hindering small enterprise development in the Republic and outlines a strategy for USAID assistance to the small business sector. The assessment, which concentrated on the capital city of Alma-Ata, and, partly, on the regional district of Taldy-Kurgan, reached one overriding conclusion: Kazakhstan"s business environment still operates within the shadow of the state, whose stronghold on the private sector remains firmly entrenched. For would-be businesspeople the result has been limited access to financial services, poorly articulated or monopolistic markets for inputs and outputs, limited access to technology and information, legal and regulatory problems, and poorly developed business services. These technical constraints, coupled with a dysfunctional economy and a deep-rooted mistrust of capitalism, have virtually paralyzed private enterprise development in this struggling new democracy. This assessment proposes that A.I.D. could help promote small enterprise development in Kazakhstan by strengthening the voice of small businesses in policy debates and strategically assisting local organizations to expand their finance, advisory, and training services, thereby forming an effective business development support network. The strategy plan, which includes details for formulation and implementation procedures, is included in a final section.