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Civic-oriented state business corporations failed in Kazakhstan
Almaty. March. KazTAG – Rassul Rysmambetov. In 2007, Kazakhstani President Nursultan Nazarbayev ordered to create civic-oriented state business corporations in Kazakhstan and to name them Social-Business Corporations (SBC). In early 2010, President Nazarbayev orders to transfer them into regional administrations (akimats). The measure is a forced one, as the SBCs failed to show any results for over than 2 years, despite Nazarbayev’s hopes. This transfer of SBCs to local akimats would ruin a model of economic democracy, which was planned by the president when he ordered their creation. There is a hope that under guidance of local akimats, SBCs would be efficient, though some experts think that akim (governor) would not have time to ponder over business models. Regional akims are busy enough accomplishing other orders from Astana. And personally I see the model that upgraded Japan and South Korean to global leading positions, this model fails in Kazakhstan. And it is likely to be buried deep in Kazakhstani oilfield and metal mines. And Kazakhstan will seek for success in Finnish economy, Singaporean healthcare system and the US democracy – without adapting them to local features. After Customs Union of Russia, Kazakhstan and Belarus gains its full swing, it will produce dozens of thousands of unemployed. It will be an army of clever, ambitious but unemployed – who were trading outside Customs Union before its creation. And it does not take to be a security expert to predict outburst of criminal activity and uncontrolled migration of Kazakhstanis within Kazakhstan and all over the world – young ambitious people who would seek for job and for money. At the same time, we have SBCs – the companies that would minimize negative effect from the Customs Union. I suspect that the Kazakhstani authorities cannot adopt successful models and apply them here. It is incorrect to blame only authorities or only local managers. President Nazarbayev has voiced dozens of breakthrough projects, but local managers cannot fulfill them. They spend budget and do not remember where the money went. SBCs were set up on president’s order In 2006, Kazakhstan still suffered from inefficient state assets despite outburst of privatization. Therefore, the president was suggested to follow South Korean example – to create business conglomerates of state assets –mainly for social purposes. The conglomerates were named SBCs – to focus on social issues. Another goal was to take away economic functions from local administrations – as an anti-corruption measure. The main goal of the corporations was to be an engine for Kazakhstani companies, and to reinvest revenues to social and cultural projects, regional development – via efficient management with state assets. President Nazarbayev suggested to give SBCs lands, state property, unprofitable enterprises – for starting new projects. So the republic set up 7 SBSc in the reigons. They were meant to be kind of local Samruk-Kazyna – to cooperate with Kazakhstani and foreign businessmen in the regions. We didn’t start the fire The idea of civic-oriented business corporations is not new for Asia. It started from zaibatsu – Japanese conglomerates – that were ruined by occupation by allied powers after WWII. Zaibatsu were the engine of the economic growth of Japan before WWII. After occupation, zaibatsu were revived as keiretsu – same names, same functions, but changed management structure. Keiretsu are still the pillars of the economic power and independence of Japan. Mitsubishi, Mitsui, Sumitomo, Fuyo and other corporations. For other countries and gaijins (foreigners) – these corporations are just successful business conglomerates. However, in Japan, for Japanese, these holdings are more than just companies. They are armies where they serve and families where they live. Same thing goes for South Korean chaebols – that were organized in early 1960-ies. The government of Korea chose about 30 advanced business groups to make them captains of the national economic growth. Korean authorities supported them through direct financial aid, tax preferences, limitation of labor migration and other measures. A sincere and devoted work of these chaebols made Korea that we know today. Before Soros-crisis in 1998, there were 30 large chaebols in Korea that controlled up to 50% of the national economy. When Korea became a tasty treat for the international financial groups – Korean currency – won – was depreciated, the country was made to borrow dozens of billions. This cut national economy open and international groups entered the market. The most important step was to make Korean authorities to refuse direct support of chaebols. Although chaebols – same as zaibatsu and keiretsu were the fundament and walls and roof of the sovereign economy against economic colonialism of today. Chaebols were shaken though they still are the captains of the Korean economic growth - Samsung, LG, Lotte, Daewoo, Hyundai, SK Group, GS Group, SaangYoung, What is the main common feature of zaibatsu, keiretsu and chaebols? The main goal is adherence of these conglomerates to national economic priorities, creation of jobs, mutual aid within corporations, social focus. It is quite common when these corporations earn billions of revenue – but net profit is much lower. Why? Asian corporations spend large portion of their revenues for staff training, financial stimulation of its personnel, and charity to funds. Moreover, the larger part of revenues is re-invested in innovations and new technologies. The core idea This was the main idea of the president – as the initiator of SBCs – to provide economic and social security of the state with the hands of the Kazakhstani business. However, it seems that Kazakhstani officials decided to stonewall this initiative of President Nazarbayev. SBCs set too high salaries and placed most of their funds to the deposit accounts in the commercial banks – instead of investing money into development. Nipped in the bud From the very moment of creation, SBCs faced harsh counteraction from local administrations and ministries. E.g. all these years we witness a cold war of the energy ministry against social corporations. One of the reasons is struggle for sources of illegal profit – control over deposits. SBCs failed to achieve any success with mines and deposits. Infrastructural construction also failed. At the same time, SBCs were twice transferred from industry ministry to Samruk-Kazyna and back. The ministry and SWF SK both demonstrated astonishing absence of proper management over the corporations. So subordination of the corporations to local akimats might be a good move. But is there any local administration capable of boasting of perfect management to share? Road of by and by Any doctrine is divided into strategies. Strategy consists of tactical purposes, accomplished by operations. This is a basic scheme – easy to remember, hard to hold to. The militaries could do it well: samurais and former Japanese officer – president of Korea Park Jon Hee. The naval officers of the British Empire – long before zaibatsu and chaebols could build one of the most trading successful corporations. So the keywords are discipline, dedication and patriotism. President Nazarbayev already defined strategy for our so-called economic managers. And I am not sure whether they can divide strategy into tactics and achieve any success. Very surprising is that there are few Bolashak graduates among SBCs staff – though they at last could apply their overseas experience to local conditions. Research into analogues of social business corporations boils down to a few rules. SBCs cannot have any net profit for the first five years. Of course, there should be revenues, but all money should be reinvested to corporations. It is ok, because the main goal of the SBCs is not profit. The basic mission is to prepare all conditions for private business, support of the regional enterprises and creation of jobs. This would give jobs to all people for their purchasing capacity. Revenues of the corporations should always be invested into infrastructure, charity among pensioners, families with many children, orphan homes, and homes for disabled. Scholarships for pupils and students. These regular investments create an environment of local society – where people would feel a caring hand of the state on their shoulders. However, so far SBCs are hoppled institutions with lack of discipline, lack of dedication and absence of patriotism. Failure of SBCs plan is a logical stage after failure of the program for support of rural areas where Kazakhstan spent billions, failure of industrial-innovation development program, where the government lost time and money. This ruins ambitious plan to enter world’s 50 most competitive countries and current accelerated industrial development program. Strategies come and go but same performers stay as executors of all plans. Losses of billions stay unpunished; managers get promotion for their failures. At last, after 3 years of sleep, SBCs managers should understand purpose of their existence in this world – to make the Republic of Kazakhstan a social state. And we, Kazakhstani citizens, should not feel ourselves as the third rate people, as we aren’t here only to be food for our officials. All the more, the authorities lost any connection with their nation. But SBCs had a chance to prove that we are a social state, and the one undividable society in one state.
Almaty. March. KazTAG – Rassul Rysmambetov. In 2007, Kazakhstani President Nursultan Nazarbayev ordered to create civic-oriented state business corporations in Kazakhstan and to name them Social-Business Corporations (SBC). In early 2010, President Nazarbayev orders to transfer them into regional administrations (akimats). The measure is a forced one, as the SBCs failed to show any results for over than 2 years, despite Nazarbayev’s hopes. This transfer of SBCs to local akimats would ruin a model of economic democracy, which was planned by the president when he ordered their creation. There is a hope that under guidance of local akimats, SBCs would be efficient, though some experts think that akim (governor) would not have time to ponder over business models. Regional akims are busy enough accomplishing other orders from Astana. And personally I see the model that upgraded Japan and South Korean to global leading positions, this model fails in Kazakhstan. And it is likely to be buried deep in Kazakhstani oilfield and metal mines. And Kazakhstan will seek for success in Finnish economy, Singaporean healthcare system and the US democracy – without adapting them to local features. After Customs Union of Russia, Kazakhstan and Belarus gains its full swing, it will produce dozens of thousands of unemployed. It will be an army of clever, ambitious but unemployed – who were trading outside Customs Union before its creation. And it does not take to be a security expert to predict outburst of criminal activity and uncontrolled migration of Kazakhstanis within Kazakhstan and all over the world – young ambitious people who would seek for job and for money. At the same time, we have SBCs – the companies that would minimize negative effect from the Customs Union. I suspect that the Kazakhstani authorities cannot adopt successful models and apply them here. It is incorrect to blame only authorities or only local managers. President Nazarbayev has voiced dozens of breakthrough projects, but local managers cannot fulfill them. They spend budget and do not remember where the money went. SBCs were set up on president’s order In 2006, Kazakhstan still suffered from inefficient state assets despite outburst of privatization. Therefore, the president was suggested to follow South Korean example – to create business conglomerates of state assets –mainly for social purposes. The conglomerates were named SBCs – to focus on social issues. Another goal was to take away economic functions from local administrations – as an anti-corruption measure. The main goal of the corporations was to be an engine for Kazakhstani companies, and to reinvest revenues to social and cultural projects, regional development – via efficient management with state assets. President Nazarbayev suggested to give SBCs lands, state property, unprofitable enterprises – for starting new projects. So the republic set up 7 SBSc in the reigons. They were meant to be kind of local Samruk-Kazyna – to cooperate with Kazakhstani and foreign businessmen in the regions. We didn’t start the fire The idea of civic-oriented business corporations is not new for Asia. It started from zaibatsu – Japanese conglomerates – that were ruined by occupation by allied powers after WWII. Zaibatsu were the engine of the economic growth of Japan before WWII. After occupation, zaibatsu were revived as keiretsu – same names, same functions, but changed management structure. Keiretsu are still the pillars of the economic power and independence of Japan. Mitsubishi, Mitsui, Sumitomo, Fuyo and other corporations. For other countries and gaijins (foreigners) – these corporations are just successful business conglomerates. However, in Japan, for Japanese, these holdings are more than just companies. They are armies where they serve and families where they live. Same thing goes for South Korean chaebols – that were organized in early 1960-ies. The government of Korea chose about 30 advanced business groups to make them captains of the national economic growth. Korean authorities supported them through direct financial aid, tax preferences, limitation of labor migration and other measures. A sincere and devoted work of these chaebols made Korea that we know today. Before Soros-crisis in 1998, there were 30 large chaebols in Korea that controlled up to 50% of the national economy. When Korea became a tasty treat for the international financial groups – Korean currency – won – was depreciated, the country was made to borrow dozens of billions. This cut national economy open and international groups entered the market. The most important step was to make Korean authorities to refuse direct support of chaebols. Although chaebols – same as zaibatsu and keiretsu were the fundament and walls and roof of the sovereign economy against economic colonialism of today. Chaebols were shaken though they still are the captains of the Korean economic growth - Samsung, LG, Lotte, Daewoo, Hyundai, SK Group, GS Group, SaangYoung, What is the main common feature of zaibatsu, keiretsu and chaebols? The main goal is adherence of these conglomerates to national economic priorities, creation of jobs, mutual aid within corporations, social focus. It is quite common when these corporations earn billions of revenue – but net profit is much lower. Why? Asian corporations spend large portion of their revenues for staff training, financial stimulation of its personnel, and charity to funds. Moreover, the larger part of revenues is re-invested in innovations and new technologies. The core idea This was the main idea of the president – as the initiator of SBCs – to provide economic and social security of the state with the hands of the Kazakhstani business. However, it seems that Kazakhstani officials decided to stonewall this initiative of President Nazarbayev. SBCs set too high salaries and placed most of their funds to the deposit accounts in the commercial banks – instead of investing money into development. Nipped in the bud From the very moment of creation, SBCs faced harsh counteraction from local administrations and ministries. E.g. all these years we witness a cold war of the energy ministry against social corporations. One of the reasons is struggle for sources of illegal profit – control over deposits. SBCs failed to achieve any success with mines and deposits. Infrastructural construction also failed. At the same time, SBCs were twice transferred from industry ministry to Samruk-Kazyna and back. The ministry and SWF SK both demonstrated astonishing absence of proper management over the corporations. So subordination of the corporations to local akimats might be a good move. But is there any local administration capable of boasting of perfect management to share? Road of by and by Any doctrine is divided into strategies. Strategy consists of tactical purposes, accomplished by operations. This is a basic scheme – easy to remember, hard to hold to. The militaries could do it well: samurais and former Japanese officer – president of Korea Park Jon Hee. The naval officers of the British Empire – long before zaibatsu and chaebols could build one of the most trading successful corporations. So the keywords are discipline, dedication and patriotism. President Nazarbayev already defined strategy for our so-called economic managers. And I am not sure whether they can divide strategy into tactics and achieve any success. Very surprising is that there are few Bolashak graduates among SBCs staff – though they at last could apply their overseas experience to local conditions. Research into analogues of social business corporations boils down to a few rules. SBCs cannot have any net profit for the first five years. Of course, there should be revenues, but all money should be reinvested to corporations. It is ok, because the main goal of the SBCs is not profit. The basic mission is to prepare all conditions for private business, support of the regional enterprises and creation of jobs. This would give jobs to all people for their purchasing capacity. Revenues of the corporations should always be invested into infrastructure, charity among pensioners, families with many children, orphan homes, and homes for disabled. Scholarships for pupils and students. These regular investments create an environment of local society – where people would feel a caring hand of the state on their shoulders. However, so far SBCs are hoppled institutions with lack of discipline, lack of dedication and absence of patriotism. Failure of SBCs plan is a logical stage after failure of the program for support of rural areas where Kazakhstan spent billions, failure of industrial-innovation development program, where the government lost time and money. This ruins ambitious plan to enter world’s 50 most competitive countries and current accelerated industrial development program. Strategies come and go but same performers stay as executors of all plans. Losses of billions stay unpunished; managers get promotion for their failures. At last, after 3 years of sleep, SBCs managers should understand purpose of their existence in this world – to make the Republic of Kazakhstan a social state. And we, Kazakhstani citizens, should not feel ourselves as the third rate people, as we aren’t here only to be food for our officials. All the more, the authorities lost any connection with their nation. But SBCs had a chance to prove that we are a social state, and the one undividable society in one state.
Issue #1
Formatting issues.
- Kesantielu Dasefern
- Incorrect formatting of old page's source
- Declined by admin
- Type of issue
- IV page is missing essential content
- Reported
- Jun 18, 2017