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Potential business opportunities and the real picture
Why do ideas that have been successfully implemented in other countries have the opposite effect in Kazakhstan, emptying the treasury in the process; why are the country's second-tier banks preferred by financial institutions and receive unsecured loans from the state, while businesses are required to provide absurd guarantees - our conversation with businessman Serikbay Bisekeev. WRENCHED OUT OF CONTEXT - Serikbay, according to the number of ideas put forth - both viable and not so viable - Kazakhstan outstrips many countries. However, most of these ideas remain unrealized, although the same projects overseas bring benefits. Recently, the agency for state service affairs announced that it will only be possible to enter the elite corps of civil servants if you have been educated overseas. The suggestion was also made of creating a career map for officials - previously there had been an idea to set up a 'genealogical tree' for each civil servant... what is your opinion on such initiatives? - The essence of the proposed ideas is progressive. The problem is that the proponents of these ideas in Kazakhstan just wrench them out of context with the words "Oh, it's international practice, we have to do it!", without understanding how to implement them. A striking example - the National Chamber of Entrepreneurs (NCE). Established along the lines of the Turkish model, the Kazakhstan Chamber failed to see its main principle - that of transparency. The NCE decided to take on certain powers of individual ministries - but why was it necessary to recruit more than two thousand employees? Are they skilled in the relevant areas? Do they have an influence on the business environment? What is the cost efficiency of the NCE's budget? These questions remain unanswered - much as the effectiveness of the Chamber has not been clearly determined. If people are needed to make advances in the legal system, take 20 or 30 strong lawyers, each with an assistant, and let them be responsible for lobbying the interests of entrepreneurs in specific areas. Or another recent example: right now the second Kazakh-Singapore Business Forum is under way. We found the venue, set up the meeting, and the Singaporeans themselves paid for their flights. But when I approached the NCE branch office in Almaty to provide quality translators for our local businessmen, since not all of them speak English, I was told that the funds were not available! I was shocked: the NCE claims to support business, but refuses to provide them with minimal services! By the way, one of the officers asked me a question: why have you invited so few investors from Singapore? In point of fact, Kazakhstan not only has still to create a comprehensible legislation, provide security and direct flights for foreign investors, but has also still to do away with visas for the citizens of this country! Are we afraid that Singaporeans will come and live here? On the subject of visas, last year visas were cancelled for 10 countries, but the migration policy has remained the same: all foreigners have to stand in a long queue for general passport control, without separate queues for residents and foreigners, as is done in the rest of the world. And citizens of Kazakhstan are still required to receive a stamp in their passports each time on arrival, although most other countries ceased this practice long ago - passengers return to their native countries simply by passing through automated passport scanners for a couple of seconds. I proposed introducing such a system in our country, but our border guards and other services prefer paper documents instead of new technologies... By the way, speaking of technology: as part of our online forum, businessmen can ask their Singaporean colleagues questions directly by using our online-option in the "Damu" Fund's regional branches, thus avoiding the cost of a trip to Almaty and Astana. 10 YEARS OF TALK - Speaking of "Damu". Since last year, you have been an independent director of the fund. What conclusions have you made during your tenure of this post? - There are many things that take rather a long time to resolve. Accordingly, businesses trying to secure loans still find themselves in the role of a beggar. Banks specify both conceivable and inconceivable requirements for securing a loan. I propose creating simple conditions for all business entities, beginning with a single standard application form for a loan. The entrepreneur fills out the form, "Damu" helps him with the application - to make sure all the information is correct and given in full - and this application is placed on a single portal, and the banks have three days to review it. Or on another subject: there has been talk for the last 10 years of the need to make Almaty the financial centre of Kazakhstan. Recently, the President reiterated this. But the specific challenges of this project have not yet been addressed: the
building of an area 10 by 10 km in a clear zone; creating an infrastructure for investors that is better than in Singapore, so that any corporation could come, settle down and live here according to international laws. - It has been suggested introducing separate legislation for the future financial centre in Almaty... - In order not to reinvent the wheel and not to take a sensible idea out of context, English law can be extended to this special economic zone, since it has been proven to operate successfully in the offshore world. Then we will impose our own conditions on investors; not the other way round, as the situation is right now. Incidentally, when I come up with initiatives I very often hear: why do you need this? Some functionaries are sure that I, like many people in their opinion, have my "price of loyalty." They are wrong - fortunately, not everything in this world is measured in terms of money. - You mentioned the privileged position of domestic banks and the servitude of businesses. In your opinion, how can the situation of ultra-high interest on business loans be changed? - This requires saturation of the economy with money, as in America or Europe. But this depends on those same investors. With the increasing presence of investors in the country, the supply of money will grow, increasing competition and thus revenue - and no bank will be able to do business at 10-20% per annum as they do now. Financial institutions will therefore be looking for opportunities to give loans to businesses at rates of under 2%. That means that banks will go running after the businessmen, as happens all over the world, and not the other way round like it is here. PLAYING BY SOMEONE ELSE'S RULES - Nuclear power plants and a fourth oil refinery are going to be built in Kazakhstan - these are topics that touch your area of business. Have you already planned your participation in these projects? - In 5 years' time, no one will need nuclear power plants or oil refineries. Officials in Kazakhstan do not believe me, and it's understandable why: they need to continue "utilising" the budget. Meanwhile, in the near future cars will be running on solar energy, natural gas and hydrogen fuel, so why spend money on a new oil refinery? It is more viable to develop renewable energy sources, and to adopt the experience of other countries in this area. - The topic of introducing a single currency in the Eurasian Economic Union is being actively discussed. What is your opinion about this? - If you want to be a successful country, don't get involved in a single currency. We see what is happening with the euro. And the prospects for a possible common EEU currency are no better. If we plan to create a financial centre in Almaty, we need our own currency - to be more flexible, more mobile, and allow the state to make financial policy decisions independently. In a single currency scenario, all the other members of the union will tell us how to make decisions, and we will lose our flexibility and competitiveness. Incidentally, in light of the Western sanctions against Russia, which in my opinion will only be further intensified, Kazakhstan has an excellent chance to develop existing and establish new production, supplying products to our northern neighbour. In addition, now is the best time to attract those investors who are hastily departing from Russia. The source is here
