EFFICIENCY OF STATE PROMOTION OF SMALL AND MEDIUM ENTREPRENEURSHIP IN KAZAKHSTAN IN POST-COVID SITUATION

Abstract

The global pandemic, which has engulfed the entire world and all sectors of activity, has undeniably exerted a negative impact on the economic development of all nations. This impact has not spared small and medium-sized businesses, in addition to larger enterprises. In response to the economic challenges faced by small-scale enterprises, governmental authorities have initiated comprehensive support measures, encompassing both financial and humanitarian assistance. However, upon closer examination, these measures reveal certain shortcomings and inadequacies. The declaration of a state of emergency and the enforcement of quarantine measures within Kazakhstan have had detrimental consequences for the commercial landscape. Approximately 300,000 business establishments temporarily halted their operations, while the adverse effects of the pandemic were directly felt by approximately 1 million business entities, with a predominant concentration in the service and trade sectors. A noteworthy concern emerges from the situation of the workforce during this period. A significant number, amounting to 1.6 million individuals, were placed on furlough without accompanying sustenance, raising valid questions about the sufficiency and efficacy of the government's support programs in safeguarding their livelihoods. Furthermore, a subset of the business community, approximately 14,000 to 15,000 establishments, that had previously obtained loans from second-tier financial institutions, sought relief through deferment mechanisms. It is essential to critically assess whether these mechanisms, despite their intention to aid businesses, provide genuine respite or merely represent a temporary postponement of financial obligations. The fundamental problems of business remain the lack of access to finance and loans, and those that are available are offered by banks at exorbitant rates. The fact that the National Bank of the Republic of Kazakhstan raised the rate only worsens the situation - this tool for fighting inflation does not work, but despite this, the National Bank persists. There is an imbalance in the government. The government is expanding budget expenditures, and the National Bank is trying to level it out, only banks and a very narrow layer of rich citizens who have deposits will earn from this high-interest rate, and they will be able to give them at high interest rates. In summary, while governmental efforts to alleviate the economic impacts of the pandemic are commendable, a critical analysis reveals areas where improvements may be necessary. A more comprehensive and effective approach may be required to address the profound economic challenges encountered by businesses and individuals within Kazakhstan. The principal characteristic of the entrepreneurial environment within the Republic of Kazakhstan resides in the division of the country, based on its geographical structure, into distinct macro-regions characterized by divergent resource endowments and economic attributes. Consequently, Kazakhstan exhibits heterogeneity in its business activities.