Parallel worlds

Based on the order of the Centre of Research and Monitoring of Economy of Kazakhstan the research “Business, state authority and society in Kazakhstan: stereotypes, potential stress points and prospects of cooperation” has been carried out in string this year. Here we publish the short version of the results of the work, conducted by the well-known Kazakhstani political scientist Dosym Satpaev.

 

Unfortunately, there is an opinion in Kazakhstan, that the business acts in its selfish ends and causes damage to the society. This is the result of the expert survey conducted by Risk Assessment Group (ARG) in Almaty during February and March 2007. 85 people were surveyed, including political scientists, journalists, economists, sociologists and representatives of political parties. Negative assessment was given to the role of the business in Kazakhstan by almost 60% of respondents. People haven’t over come the bad memories of privatization and “wild capitalism” of mid 1990s. The main problems of perception of the business by the people are as follows:
1) Psychological stereotype of entrepreneurs as criminal and destructive part of the society, it was formed in 1090s;
2) Increased income inequality, which leads to increased tension in the society. Of course, representatives of bureaucracy are no less mercenary and aren’t trusted either, but the people have already got accustomed to it. The social perception doesn’t understand that, although the business acts according to its selfish interests, under healthy competition it is still a core of country’s economy. After all, the business, not the government, fuels economic growth. Distribution of the answers to the question about the most widely spread types of large business in Kazakhstan is also interesting. To a large extent the negative perception of the business is explained by the fact that for a long time the business and state power were closely related. This is shown by the result of the experts survey below. According to the respondents, the influence of the business on the life of ordinary people is rather negative than positive. The same influence is made on the political sphere of the country. In general, negative perception of large business dominates the public opinion; there is a presumption of the business’s guilt. People consider the business form the position of “injustice”; it is based on the results of privatization. According to the public opinion, the influential people privatized everything based on the laws they wrote themselves. More importantly, majority of the population doesn’t see any positive results of the privatization. It has lead to great difference between the rich and the poor. Because poor people are the majority, the public opinion is such that they are the victims robbed by the businessmen. It creates social conditions that make reconsideration of privatization results possible. Even greater rupture in the relations between the business and the society is shown by the assessment of current situation. The results of the experts’ survey show that there is a serious misunderstanding in the relations between the business and the society in Kazakhstan. The relations between the business and the society haven’t developed into social partnership yet. Many of the entrepreneurs have understood the importance of systematic social actions for the formation of favourable public opinion; however, the cooperation among the businesses is weak, which decreases the quality of realized projects and fragments the efforts of socially responsible entrepreneurs. The experts note the absence of the ground for contacts between the business and society. If this tendency is preserved, the misunderstanding between the business and society will grow. Interestingly, the representatives of business are not of the same opinion. It is shown by the results of the anonymous interviews with the representatives of large business in Kazakhstan, conducted by the authors of this survey. Summarizing the answers of the business representatives to the question of social perception of the large and medium business, we see the following picture. Many businessmen think that the perception is generally positive, because majority of people associate improvements in their lives with the business. Maybe, this opinion proves the statement that the large business and society live in different dimensions. For the sake of objectivity we should note that not all representatives of Kazakhstani business were optimistic about the issue. Below are some of such opinions.

 Anonymous interviews
1. “To my opinion, the society still negatively perceives the large business. I don’t know who should initiate the changes of social perception, especially its attitude towards bourgeoisie. Most likely, it should be done by the state power itself. The state power should learn to trust the business. The business is perceived negatively not because it is bad, but because the state power has lead to this. After all, the main channels of delivering public information are in the hands of the state power. It is natural for the population to feel the distrust of the state power towards the business.”
2. “In our country everything depends on the state power. It can manipulate public opinion using the mass media, it has the law enforcement bodies, which can be set on the business to destroy our reputation and create a negative image.”

Hence, the conclusion of the experts, that the business follows the rules of the state authority is also true. In general, several stages of development of the relations between the business and society can be identified:
1. Confrontation: The community of the problems is missed, people search for the party guilty in the social problems, and there is social distrust to both the business and state power. Currently the prices are rising, the laws that restrict the business are adopted, and the society has a negative attitude towards the economic and political structures. Hence, the business cannot develop external cooperation and responsibility for the personnel. Often this stage ends up with a revolution, overthrow of the ruling power, etc. We are gradually leaving this period behind, it peaked in mid 1990s.
2. Search for consensus: Unity and continuity of social processes are being understood. At this stage contact points are searched for, first large social project appear, which are one-time only. The business starts a dialogue with the state authority, which reconsiders the legislative base and creates conditions favourable for economic development. The entrepreneurs end ungrounded increase of prices, introduce ecological programs and implement adequate corporate policy. Social responsibility and its principles come to place. T the same time, the social loyalty to the business and the state power is low. There is no understanding that nobody owes anyone more than determined by the law. Kazakhstan is at the beginning of this stage.
3. Stage of mutual understanding or “social partnership”: At this stage social responsibility is properly understood; the business understands the importance of its participation in the development of social connection – partnership with the elements of social environment and formation of proper PR. Therefore, transition to mature social partnership is the key task for the business among its issues of relations with the society. The movement of the society, represented by the NGOs, towards the partnership from the other direction will also have a significant importance. The following question of the expert’s survey discovers what exactly the citizens of Kazakhstan expect from the business. The survey shows that the social sphere and charity are the best investments into the business’s reputation today. At the same time, majority of the respondents think that in solving the social problems the business should cooperate with the government, and that the business cannot replace the government in this issue. At that, for some issues the positions of the business and the society are similar, for example, regarding the mission of creating jobs and tax payments.

 Anonymous interview
“First of all, the business has purely economic mission plus the social responsibility. We have to pay taxes, and the fair distribution of the taxes should be ensured by the government.”

However, lately the government requires the business to participate in socially significant projects; the private-state partnership is always discussed. By the way, the President’s meeting with the representatives of large business in Kazakhstan in April covered this issue. The President said: “It is time for you to seriously work for economy of the country, which prepared you and involved in solving the social problems. And it is time for the government to seriously cooperate with the domestic business…” Moreover, Karim Masimov, the Prime-Minister, listed the main prospective areas of development of private-state partnership: power industry, infrastructure, processing of raw materials, oil chemistry, creation of new free economic zones, development of industrial and technological zones, agricultural production, construction and production of construction materials, pharmaceutical industry, new technologies, tourism, etc. However, ordinary citizens of Kazakhstan perceive this process in different ways. After all, the private-state partnership is a new think for them, even the word combination is not in use yet. One may suppose that the attitude towards this phenomenon will depend on the general attitude towards the business and the state power. Depending on the context, the same event can be perceived in opposite ways. For example, if the majority of the population has a negative attitude towards the government and the business, then the private-state partnership will be seen as a plot against the society. And this plot doesn’t leave any place for the interests of the third party – the society. This is the first version. Second version. If the context is positive, combining the efforts of two positively perceived institutions should be seen positively. Unfortunately, in Kazakhstan the general perception of the business and the government is characterized by the first version. Although, the government is traditionally considered to be of significant importance, the real image of the government is low efficiency of the state apparatus, corruption, discrepancy between the stated goals and the policy. All of this has lead to low valuation of the government by the society. Regarding the business, the opinion that the business should return its debt to the society is widely spread. The opinion is such that, it is not the society that should support the business, considering it to be the engine of economic growth and prosperity of the nation, but it is the large business that is in debt to the society. Therefore, people have negatively-waiting attitude towards the business. It is waiting, because people are waiting for the time when the business will start to repay the social debt. Therefore, speaking of high assessment of private-state partnership, both of the parties should show the society the benefits of the partnership to the country, rather than its benefits to the business of the government. Thus, any socially significant initiative should be accompanied by social examination and clear description of its benefits to the society. Hence, besides conducting charity, the companies are expected to be socially responsible. However, the social responsibility of the business cannot include fulfilling the government’s instructions, which damage the profitability, and extortion of finances from the companies in excess of the tax payments. Freedom of entrepreneurship requires defending property rights. Continuous references to the results of privatization damages the business’s trust to the government and societies trust to the business. Here again I’d like to cite an interesting part of the anonymous interview, which partially helps to solve the problem.

 Anonymous interview
“Together we should teach the society to be proud of our rich people, just like they are proud of our scientists, writers and sportsmen. It is good, if a rich person has legally earned his money, but what about the rest? It seems, that people should be proud of their rich men regardless of the way they earned their money; otherwise we’ll come to a dead-end, and property redistribution.” 

To be continued in the next issue.