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More than half a million self-employed people to find a job in regions this year – N. Altayev on fulfilment of the President’s instructions

by March 2, 2018 Key Issues

Before proceeding directly to the discussion of the issue, let me clarify: Who are the self-employed?

In general, in the concept of “self-employed” in the formulations adopted in the international community by the International Labor Organization and our Kazakhstan legislation, it is stipulated that the self-employed are people who provide themselves with work, they are founders of legal entities. Let’s say shareholders of joint-stock companies. These are those who are not in any individual labor contract with someone and are not hired to work by someone. That is, if he provides himself with work, it can be a major shareholder of an enterprise. It can be a person who lives in a village and he, relatively speaking, has several cows. He milks these cows, sells it, and therefore makes living of it. That is, they are absolutely different people who occupy themselves, they do not work with anyone and earn their living by themselves.

Then what is the essence of the problem?

Here in Kazakhstan, there is a negative connotation that considers that self-employed people are close to the unemployed. In fact, this is not true. Some of them are well-off people who keep buzy, who are engaged in business, entrepreneurship. But, of course, among them there is a very large number of people who do not have any stable income, stable earnings. They can be referred to as inefficiently self-employed. The order of the Head of State is precisely related to such people, so that these people are involved in the economy. So that they either find a job with a fixed salary, or start doing some kind of entrepreneurship. Moreover, of course, there is a certain number of unemployed people who are registered in employment centers. Of course, we have to draw them into the economy, we must provide them with work. There is a very interesting moment: almost all enterprises, the whole business of Kazakhstan, says that they lack people, there are not enough specialists. On the other hand, we see a lot of people who are either self-employed or unemployed.

How many unemployed are there in Kazakhstan?

We have more than 400 thousand unemployed people according to official statistics. In general, this is a low percentage of unemployment. For example, in the world in developed countries, this figure is much higher than ours. We have somewhere at the level of 4.9%. On the other hand, we have a large number of the self-employed. If you count them together with the unemployed, it’s something like two million people.

What measures are you taking to solve this problem?

We have developed clear roadmaps with akimats for each region on how we will employ and how we will involve these people. We see that in 2018 in Kazakhstan there are more than 700 thousand vacancies, where we need to employ these people. In these road maps, we agreed with akimats that more than 500 thousand people from our self-employed base, which we determined by means of a backstage detour, will be arranged for these vacant jobs.

In addition, a roadmap for productive employment and mass entrepreneurship is being implemented. It is supposed to teach doing business to self-employed and unemployed people. This is such a good trend for today. They will also be given microloans to do business.

Of course, we now see that the amount of these microcredits is not so great. Funding is still small, but we are now taking the initiative to increase funds for microcrediting this year. We plan to teach business to about 30 thousand of these unemployed and self-employed through the Business Bastau program this year.

Nurzhan Baurzhanovich, what will the formalization of the self-employed population give?

As you can see, there is a large number of people who actually work among the self-employed. They work, but they work without labor contracts, without working relationships with the employer. They are in the shadows and receive wages in envelopes. At the same time, there are no social and pension deductions. This is actually a big problem. Because if something happens to this person tomorrow, he gets sick or a social problem happens to him, then the state will not be able to help him, because he did not make deductions in due time. If a person reaches the retirement age, he will not receive any pension payments because he did not pay the pension and all the time he received cash in an envelope. This is a serious violation of the law. We are taking measures this year to address such issues as “Why does the company keep these people in the shade”, “Why do they pay him in an envelope.” It’s simple � they are afraid of the corresponding tax burden and the burden on social deductions. We want this year to go to the Parliament with a bill that provides tax remissions for small businesses so that they do not hide these people.

Another direction there is a large number of people about 200 thousand people who are actually engaged in their business, engaged in small entrepreneurship, but they are not registered as entrepreneurs, do not pay any social deductions. They are afraid of tax burden. We also plan incentive measures and tax incentives that would allow them not to be afraid and to register themselves as entrepreneurs. Let’s say this can be a single very small payment, which can be done through a mobile application. Then entrepreneurs will stop being afraid to officially register themselves, they will be able to legalize themselves and continue to do their business. I think that this year we will solve this problem.

Thanks for the interview!

Source: The Prime Minister of Kazakhstan