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LIKE THEM: CHALLEGNGES IN OTHER COUNTRIES

The prevalent view in Kazakhstan is that we lack adequate “technical” prerequisites for doing business. In response to these distressing allegations, we would like to consider the level of economic progress.


To invoke clarity into the discussion, we investigated the most resonant challenges of 20-25 countries that are featured on the Atlas Network platform of think tanks with varying economic levels. One can keep track of which issues grow more important as they become more prevalent. In brackets will be the gross national income per capita (Atlas method, World Bank), which is 9,470 USD in Kazakhstan.


Democratic Republic of the Congo (590 USD)

The DRC ranks poorly in terms of access to power because of the national monopoly on energy and restrictions on private investment with only 10% of the population having access. A lack of a fundamental resource not only has an impact on the quality of life, but it also limits the potential of entrepreneurs.


In comparison, Kazakhstan has 100% access to electricity (according to the World Bank), albeit disruptions are becoming more frequent.


India (2,380 USD)

The country has many rules and regulations. Until 2017, for example, a minimum of 100 thousand rupees (1,408 USD) was required on the account to create a business. Many were unable to raise this amount and were forced to quit their business plans.


Taking salary differences into account, the equivalent in KZT is 2 million. In Kazakhstan, no money is required to start an individual entrepreneur, however a limited liability partnership requires 750 USD (100 MCI).


The difficulties for Indian enterprises did not stop there. Additional barriers were erected, such as requiring a minimum distance between two water carts or that the owner and driver of a pedicab (a specially constructed bicycle for carrying passengers) be the same person.


Entrepreneurs are driven into the informal sector as a result of such constraints. Informal employment is a serious issue, accounting for 88.2% of the working population, according to the International Labour Organisation.


According to National Statistics Bureau, that figure in Kazakhstan is 13%.


Egypt (4,100 USD)

Following the Arab Spring, there was a considerable surge in the need for government budget monitoring. One think tank collaborated with the government on three fronts: online publication of the budget, budget detailing, and publication of the civil budget.


Kazakhstan already has Open Government portals, and civil budgets are published on government agency websites.


Indonesia (4,580 USD)

Food security policies are being implemented by the government: high tariffs, import bans, and price controls. As a result, 68 million persons are subject to rising food inflation, and 26 million are unable to purchase adequate nutrition. Analysts believe that the recent easing in import restrictions on a number of commodities saved families 1.9 billion USD over three years.


Kazakhstan has lower indicators of price discretion and foreign trade than Indonesia (Heritage Foundation Index). Furthermore, their dynamics were negative until 2022 (statistics are delayed).


Brazil (8,140 USD)

Entrepreneurs were hampered by the cumbersome licencing system. The Economic Freedom Act was passed to alter this system. The list of low-risk occupations has grown, allowing more people to work for themselves. The average number of firms surged by 88.9% in municipalities with loosened regulations.


Kazakhstan was far ahead of Brazil in terms of commercial freedom until 2020, when the disparities became small (Heritage Foundation Index).


In this section, we have emphasised the goals of countries with lower GDP than Kazakhstan. Now we shall examine cases with higher income levels.


Mexico (10,410 USD)

The country was plagued by significant levels of corruption, prompting the establishment of the 3de3 movement. State personnel must now submit paperwork on their annual declaration of property, any possible conflicts of interest, and tax payment confirmation. The success of the campaign also resulted in the establishment of the Anti-Corruption Agency.


In Kazakhstan, a similar body has operated since 1994, however the Heritage Foundation rates the metrics for “executive integrity” as “repressed” (among the worst).


Argentina (11,620 USD)

One of the most important issues is high government spending in the developing world (44% of GDP). Argentina is ranked second in the world in terms of private enterprise taxation. Only 8 million individuals work in the private sector, whereas 21 million work for or get compensation from the government. People see the state as the “provider of prosperity,” despite the fact that corruption has become ingrained in the official apparatus.


According to the IMF, Kazakhstan’s government spending as a percentage of GDP is 22%, albeit this excludes various extra-budgetary monies and unstated social spending by state and private firms. Because of commodities revenues, tax rates are low. According to various estimates, 6.5-7 million individuals work for or get income from the state.


Croatia (19,470 USD)

The state agreed to implement a property tax in 2017. Since over 90% of citizens own their own homes rather than rent, this tax would have a significant impact on the economic health of both rich and poor people.


Kazakhstan has more real estate ownership than Croatia, but its income level is two times smaller. Despite this, such reform is suggested on a regular basis.


Several conclusions can be drawn from this review. First, the economic agenda is generally suitable for Kazakhstan’s current level of development. The developing world has much more constraints on business and issues with legal systems.


Second, as richer nations have experienced, fiscal and regulatory burdens should not be increased prematurely without more fundamental reforms to the core institutions of the rule of law and competition.

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