ASTANA - Tuesday, January 11, 2011 -
When the government ordered the Economic Research Institute to move to the new capital of Astana in 2007, most of the staff decided to stay in the agency’s longtime home of Almaty.
The institute, whose statistics and analysis had been a cornerstone of Kazakhstan’s economic policy for decades, was forced to assemble a new team overnight.
Not only did the team gel quickly, but it is playing a growing role in Kazakhstan’s economic development. It has moved beyond its traditional functions of gathering data and analyzing trends to helping set policy and implementing programs.
Institute Vice President Aigul Toxanova has been a key player in that effort. One of the first persons to join the Astana-based team, she is an expert in small- and medium-sized businesses and entrepreneurship.
That background has come in handy because one of the responsibilities the institute assumed last year was promoting small- and medium-sized enterprises in Kazakhstan.
Toxanova said in an interview with Central Asia Newswire (CAN) that in addition to helping develop small- and medium-sized businesses, the Economic Research Institute’s scope includes:
-- Macro-economic forecasting. This involves predicting economic trends across an entire country rather than in specific regions or industries.
-- Forecasting where population growth will occur. This helps governments and businesses plan better.
-- Helping the government develop economic programs, a key example being the program for accelerated innovative and industrial development through 2014.
-- Helping the government reduce the paperwork needed to start businesses.
-- Helping move the customs union consisting of Kazakhstan, Russia and Belarus from a trade bloc to an economic common market.
-- Helping organize world-class economic conferences in Kazakhstan. The Astana Economic Forum, for example, annually draws renowned experts, including Nobel Prize winners.
Generating new businesses critical to economic success
The institute’s effort to develop small- and medium-sized businesses is so high-profile because officials from Kazakh President Nursultan Nazarbayev on down are aware that entrepreneurs create much of the world’s economic growth and jobs.
“It’s very important (for economic growth) to create new businesses,” especially ones that are innovative, said Toxanova, who left a professor’s job at the Almaty-based Kazakhstan University of Finance and Trade to join the institute.
Toxanova became acquainted firsthand with the U.S. approach to entrepreneurship when she obtained a master’s degree in the subject in 1997 at Baylor University in Waco, Texas. She attended Baylor under the U.S. government’s Fulbright program, which sends American professors abroad and brings professors in other countries to the United States for study.
Toxanova’s doctoral dissertation at Eurasian National University in Astana was on “Small Business Development in Kazakhstan,” and she’s written many books on the subject.
She said the Economic Research Institute has borrowed from the United States and other countries’ experiences in creating a multipronged approach to small- and medium-sized business development.
It includes consulting services, training and financing opportunities.
The startup-financing approach it uses is what Westerners call the “business-elevator” model.
Under this system, the government helps many entrepreneurs with the first round of start-up financing. Only the 10 percent of startups that show the greatest promise obtain a second round of government financing.
The third financing step is venture capital, which comes from private sources but which the government helps make happen.
Toxanova said the full economic integration of the customs union will create many opportunities for small- and medium-sized businesses in Kazakhstan.
Kazakhstan, Russia and Belarus will shift from a duty-free trade bloc to a common market in 2012. That means that not only goods but also capital and labor can move freely across the three members’ borders.
“We’ll have a lot of advantages with integration” because it will expand Kazakhstan’s market from its domestic base of 16 million people to 170 million, Toxanova said.
Nazarbayev views customs union integration as a way for Kazakhstan to gain trade experience that helps it on the world stage, she said.
“The president said we should compete with our neighbors first of all,” Toxanova said, “then go to the WTO (World Trade Organization membership) and compete with the rest of the world.”
Strength of conference, young staff fortifies organization
Toxanova becomes animated when she discusses the institute’s role in putting on the annual Astana Economic Forum.
That event is becoming increasingly important in international business and economic circles, attracting top corporate executives, heads of state and Nobel Prize winners.
The 2010 version last summer attracted 3,000 people.
One of the speakers was Nobel Prize-winning economist Robert Mandel, the father of the euro currency. The timing of his appearance was pertinent, given the economic crisis in several European countries this year that has some Europeans questioning the wisdom of their countries adopting the euro.
Toxanova said one reason the Economic Research Institute can handle tasks as wide-ranging as economic data-gathering and putting on world-class conferences is the new blood it attracted when it moved to Astana in 2007.
A number of today’s 100 staff members, most of whom are young, have master’s degrees and Ph.D.s. Many were educated in the West, Russia and Asia under Kazakhstan’s Bolashak Program.
Nazarbayev established the program to send Kazakhstan’s brightest to universities overseas. Bolashak Scholarship winners work in Kazakhstan for a specified period as a way of repaying their country’s investment in them.
In many ways it’s easier “to work with young people – they’re like empty vessels,” Toxanova said. “They’re very flexible. You don’t have to retrain them” into a new way of thinking.
The only downside, she said, is that some returnees “don’t know Kazakhstan’s reality. It sometimes takes time to adjust to this reality.”
That’s a small price to pay for the good ideas and the energy they bring to the job, however, Toxanova said.
“We’re lucky to obtain several of them every year,” she said.