Promoting SME internationalisation is an important feature of Kazakhstan’s agenda to diversify its export structure and target markets. This chapter analyses the export promotion framework for SMEs, with a particular focus on the institutional and strategic arrangements, the advisory and financial support services available to SMEs, and the scope of Kazakhstan’s foreign trade representation network.
Diversifying Kazakhstan’s Exports
Institutions, Policies, Infrastructures
Abstract
As part of Kazakhstan’s efforts to diversify its economy, most elements of a robust export promotion framework have been put in place. This includes clearly identified institutions in charge of policy design and implementation, as well as a broader network of public and private actors providing exporting firms with capacity and financial support (Figure 2.1). However, these activities for the most part lack a specific SME dimension, while other activities, such as monitoring and evaluation, branding, and certain financial instruments are not yet developed.
Note: Green indicates a private sector entity. Entities in brackets indicate the overarching body. QazStandard was not added to this chart, as its mandates only covers certification of products, and not export promotion per se.
Source: OECD analysis.
The Ministry of Trade and Integration (MTI) co-ordinates most state entities involved in export promotion; it analyses and monitors export activities, and develops regulatory proposals and other measures to enhance exports, though not necessarily targeting SMEs. Within the structure of the MTI, the QazTrade Centre for Trade Policy Development provides exporting SMEs with the full range of non-financial measures of state support, including consulting services, analytical and information support, acceleration programmes, access to international trade platforms, service support measures (organisation of trade missions, national stands at international exhibitions and trade fairs, etc), and partial reimbursement of costs related to: transport of products abroad, international certification, brand registration and advertising (QazTrade, 2022[1]). The Kazakhstan Chamber of International Commerce (CIC) also referred to at times as the Foreign Trade Chamber (FTC) of the National Chamber of Entrepreneurs "Atameken", in turn, also provides consulting and analytical services, and registration of force majeure for exporters on a fee basis. (Atameken, 2022[2]; Chamber of International Commerce of Kazakhstan, 2022[3]).
For governments, the development of a national export strategy and export promotion framework can be an efficient way to identify priority sectors and target countries for export growth. Such a strategy relies on a careful assessment of the potential contribution of exports to economic growth, the sectors with the highest export growth potential, and the priority destination markets, as well as monitoring and evaluation of export promotion policies. The institutional framework should combine public and private stakeholders at home and abroad and be complemented by domestic measures to support SMEs that are seeking to start or increase exports, and representation abroad to link exporters with foreign buyers.
Within this export framework, public and private actors can provide a broad array of measures, including developing export infrastructure, expanding the trade representation network abroad, providing export insurance and financial support, offering advisory services to improve knowledge of export processes and foreign markets, and monitoring the impact of export institutions and measures. Export promotion policies generally seek to help SMEs address asymmetric information, capacity gaps and market failures when exporting; foster spillovers, technology sharing, and learning-by-doing for exporters; and identify and leverage competitive advantages. These overarching dimensions can be divided into policy-making, soft services (such as promotion and networking activities, national branding strategies, sector-specific analyses, and trainings), and financial support and risk mitigation measures, which themselves can be translated into specific support activities for SMEs (Figure 2.2).
Source: OECD analysis adapted from (Lederman D., 2006[4]; Belloc and Maio, 2011[5]).
In principle, firms from all sectors and industries can receive export promotion support. Benefitting from the financing of DAMU, Kazakhstan’s Entrepreneurship Development Fund, the Export Insurance Company KazakhExport JSC’s mandate is to support firms of any size in non-extractive industries, with however the food industry, machinery, and metallurgy receiving around 80% of the support provided (KazakhExport, 2022[6]). The Development Bank of Kazakhstan (KDB), and the Industrial Development Fund (IDF) only support large manufacturing exporters (Baiterek, 2021[7]).
Even if an increasing number of SMEs are exporters, assistance in overcoming export barriers is required to maintain the internationalisation profile of already exporting SMEs and bring new SMEs to internationalise. According to QazTrade data, SMEs represent around 75% of exporting firms and their share in aggregate export revenues has remained stable at around 25%. In 2021, in Germany, by contrast, SMEs represented about 97% of all exporting firms, and generated about 24% of export revenues, and in France, they represented respectively 96% and 24% (Eurostat, 2023[8]). The data thus suggests that if Kazakhstan’s SMEs are generating a comparable share of export revenues, compared to their OECD peers, fewer SMEs have yet internationalised.
With targeted support, SMEs in Kazakhstan can play a prominent role in supporting the government’s ambition to increase and diversify exports. SMEs’ size allows them to innovate more and adjust more quickly to a changing trading environment than larger firms, while also being key contributors to job creation, especially in the trade sector, and GDP (OECD, 2019[9]). Targeted government support can help offset SMEs’ more limited capacities, knowledge and resources compared to larger firms (OECD, 2020[10]). In particular, support should help already exporting SMEs reach new markets, while supporting new SMEs internationalise.
In Kazakhstan, enabling SMEs to grow and internationalise will require adapting and enhancing the export promotion framework and policies to address more effectively the specific needs of SMEs. Based on recent OECD work, and interviews with public and private stakeholders in Kazakhstan (see Methodology), this chapter focuses on three key dimensions of export promotion frameworks: (i) the institutional and policy architecture; (ii) the provision of capacity-building and financial instruments to help SMEs overcome barriers to exports, including legal and consulting advisory services, on how to prepare for and manage export processes; and (iii) the existence of foreign trade representation to connect domestic exporting SMEs with foreign buyers.
Challenge 1.1: Kazakhstan’s export promotion framework could be strengthened by developing an integrated strategy, a focus on SMEs, and a systematic evaluation system
Kazakhstan’s export promotion strategy seems to lack a clearly defined and integrated approach involving all stakeholders
Existing strategies for export promotion could better define objectives. The past National Export Strategy (NES) 2018-2022, the Kazakhstan 2050 Strategy, the Programme for Industrial and Innovative Development (SPIID) 2020-2025, the Law on Industrial Policy, and the Code of Entrepreneurship all cover export promotion, but their main objectives are vague, mainly setting targets for increased non-commodity trade turnover, without setting out specific financing measures or designating the bodies responsible for implementation. Best practices among OECD and partner countries show that most successful export promotion strategies outline clear principles and objectives, and clearly define institutional mandates. If the export promotion responsibility is shared among multiple ministries, representatives of each should be included in the strategy-development process alongside other actors, while the private sector should also be given a voice, starting with the consultation of a wide and representative range of business organisations or chambers of commerce during strategy design (EESC, 2018[11]).
Mandates for export promotion are not clearly defined, nor are all relevant actors involved in strategy design and implementation. The Ministry of National Economy (MNE) is responsible for export strategy development and the former Ministry of Industry and Infrastructural Development (then-MIID) for its implementation. However, the MTI and Ministry of Foreign Affairs (MFA) took auxiliary roles in both the NES design and its implementation, even if in practice the MTI is the key supervising institution on export matters, and the MFA is entrusted with the identification and development of new target markets. QazTrade, Baiterek, and Atameken and their sub-bodies are responsible for and active in export promotion, though their responsibilities within the NES were ambiguous. In addition, the private sector’s involvement in developing the export strategy appears limited, with Atameken and expert councils having only a limited role in commenting draft laws, strategies and regulatory acts, and little opportunity to provide inputs (Adilet, 2016[12]).
Recent trade and business strategies do not contain specific provisions to support SME exports
Indeed, despite the NES’s targets to increase non-commodity exports, the strategy lacked a dedicated SME pillar, as well as concrete roadmaps or action plans to develop SME exports. The SPIID 2020-25 touches upon SMEs only within the mining and metallurgy sectors, Strategy 2050 does not include SMEs within the export strategy at all, and the Law on Industrial Policy focuses only on the promotion of manufacturing exports. The Business Road Map 2020 aimed at developing the export of agricultural products and included some financial support for exporting SMEs in the manufacturing sector, though the Business Road Map 2025 lacks such measures (DAMU, 2017[13]; Adilet, 2022[14]). Though SMEs are within the scope of many export promotion activities provided by public and private institutions in Kazakhstan (Table 2.1), OECD interviews indicated that uptake by SMEs of the support on offer is still very limited. Moreover, PPD mechanisms appear limited to business chambers and experts; they thereby risk incorporating only part of SME needs.
Source: OECD analysis.
The absence of advanced monitoring and evaluation processes seems to limit the impact of export promotion institutions and policies
While trade and export promotion strategies include a monitoring component, reporting in Kazakhstan is largely focused on inputs. For instance, QazTrade, KazakhExport, Atameken and the CIC provide information on the number of firms assisted, financial support committed, the number of outreach activities undertaken, and participation at fairs supported; or the number of reports provided (QazTrade, 2022[15]; Atameken, 2022[16]; KAZCIC, 2022[17]; Qazaqstan Exportal, 2022[18]). QazTrade does track the output of certain activities, such as the value of contracts signed during outreach activities, and KazakhExport measures financial support allocated to firms and their export earnings, both of which provide a basis on which to assess policy outcomes and impacts.
In addition, it remains unclear how these results feed into the analysis of the effectiveness of measures and the realignment of priorities. No business surveys appear to be undertaken after firms received support from QazTrade, KazakhExport, or other agencies, though this is pivotal to understanding the changing needs of firms and the effectiveness of government support. Atameken/CIC follows up with firms to assess their satisfaction with the support they receive, but they do not measure the impact of services provided on business performance. Finally, evaluation outcomes are rarely made public by the different agencies, while most information online appears out of date.
Recommendation 1.1: Clarify and expand the institutional export promotion framework for SMEs
Action 1: Clarify and streamline the mandate of stakeholders involved in export promotion strategy design and implementation
Kazakhstan could clarify the roles of stakeholders within the internationalisation framework and expand the range of those included to create a more inclusive overarching export promotion structure for SMEs. In particular, the role of the MTI could have been formally clarified within the NES design and could bring together all ministries and bodies responsible for export promotion, as Denmark has done under its MFA (Box 2.2). In addition, the MFA should be consulted in all export promotion-related policies. The entities responsible for implementing export promotion strategies should also be clarified. For instance, the then-MIID was listed as the responsible entity for implementation of the NES, while the MTI, Baiterek and Atameken appear responsible for export promotion. These two responsibilities overlap considerably and should be aligned. For instance, the MTI could be given the role of supervising institution for implementation, with common cross-ministerial working groups created for specific aspects of the export strategy, including export promotion, and regular reporting from implementing bodies such as Baiterek and Atameken.
The elaboration of roadmaps, action plans, and key performance indicators (KPIs) would also improve matters. Kazkahstan’s regular export strategies should be concretised in roadmaps and associated action plans, with all relevant entities, objectives, and KPIs clearly set out. The government should ensure that the monitoring and evaluation system for each entity is clarified and standardised, and that it includes private sector consultation. The government could build on the Investment Policy Concept of the Republic of Kazakhstan until 2026, which succeeds the National Investment Policy 2018-2022 and includes the overall direction of the investment ecosystem, target indicators, and an action plan.
Denmark is considered a leading example of having created a well-structured and coordinated export promotion strategy:
Institutional framework: The work of all bodies active in export promotion activities (embassies, consulates, the Trade Council, the Export Credit Agency (EKF), and Invest in Denmark) is unified under its MFA, the main entity responsible for export policies. It is responsible for designing the NES and the country’s economic diplomacy strategy, which identify priority sectors for export promotion, in consultation with relevant public and private stakeholders.
Domestic support: Responsibilities between the regional business development agencies or Vaeksthus and the Trade Council are clearly defined: in each of Denmark’s regions, the Vaeksthus is responsible for making sure that a firm has the necessary capabilities to start exporting, while the Trade Council supports the firm on its journey towards exports. The Vaeksthus are owned and funded by local governments and operate as independent commercial foundations. The Trade Council nominates an expert for each of Denmark’s five regions to ensure close co-ordination with the regional agencies. The experts and regional agencies consult with firms looking to internationalise and determine their export readiness. If a firm’s export potential is identified, the expert connects the company with other Trade Council experts to provide further support. Denmark also developed an indicator to measure the effectiveness of export promotion for all employees working in a specific sector, body, or area. The Trade Council provides information, advisory services, and financial support to around 3,000 SMEs annually.
Source: (EESC, 2018[11]; Trade Council, 2022[19]).
Action 2: Integrate SME needs and support into export promotion strategies and policies
Kazakhstan should consider including SME-specific measures in all export strategy and policy documents. While OECD countries generally have embedded export promotion strategies for SMEs into their policy frameworks or addressed SME internationalisation within equivalent documents (OECD, 2023[20]), dedicated export support measures concerning SMEs in Kazakhstan are sparse, and current policies tend to focus on medium or larger enterprises without providing a dedicated focus on the needs of smaller firms. The government could design a dedicated SME dimension in the upcoming national export strategy with a roadmap and sector breakdown, involving SME representatives in the process. Based on this overarching policy document, all related trade strategy and policy documents, or amended programmes could then incorporate SME-related programmes in their respective fields.
In 2015, the French export promotion agency (EPA) Business France revised its approach to export development services and transitioned from quantitative and input-focused KPIs towards user-needs and outcome-based indicators to ensure more visibility.
Value feedback from customers (external KPIs)
Evaluation of businesses’ appreciation of the export services they received is part of the “Objective and Means Contract” signed between Business France and its supervising Ministries for a period of four years. The contract sets the KPIs and quantified objectives over that period, and reporting of progress is done quarterly every year. The feedback scheme is run with a specific budget financing a dedicated internal team, as well as independent research institutes, and consists of: (i) customer focus group and roundtables moderated by external experts; (ii) studies and reports to propose solutions for specific needs in cooperation between the internal team and external experts; (iii) online evaluations after each service delivery; (iv) and an “impact barometer” assessing the long-term impact of services in terms of business generation and job creation.
Assessing the efficiency of export promotion services (internal KPIs)
The “impact barometer” is built on quantitative and qualitative measures, as well as exporter surveys. These include macroeconomic indicators (total SME exports, share of SMEs in total exports), and purely output based indicators (number of SMEs supported by the EPA through collective events or individual support, number of new business contracts after one and two years following the first business contact facilitated by the EPA, new export markets, and additional turnover).
Source: OECD analysis, (Business France, 2017[21]).
Kazakhstan could develop regular public-private dialogue (PPD) mechanisms that include SMEs. Kazakhstan could build on the recent experience of Azerbaijan, Georgia, the Republic of Moldova, and Ukraine which incorporated PPD consultation processes when preparing SME internationalisation strategies. For instance, QazTrade could head such an initiative and liaise with the MTI, MNE, MFA, Baiterek, Atameken, and SME representatives. Systematic dialogue mechanisms would ensure the government is up to date on the needs of SMEs looking to internationalise and can adapt its policies accordingly. In addition, to ensure a wide reach, agencies and business associations could support SME participation upfront through dedicated outreach and partially offset attendance costs (e.g. per diems).
Action 3: Develop integrated and outcome-based monitoring and evaluation processes to assess and adapt the work of export promotion institutions
A constantly evolving trade environment requires export-promotion bodies to reassess and realign priorities regularly and to provide timely and adequate support (EBRD, 2023[22]). For instance, QazTrade could develop and systematise export surveys and launch formal surveys of businesses at various stages of the export cycle as it is done in France and other OECD countries (Box 2.3). This would allow QazTrade to better assess the impact of export-promotion activities, understand the concrete needs of exporting businesses, and adapt funding and service allocation accordingly.
Kazakhstan could then transition to a more complex and outcome-based monitoring system, covering all bodies providing export promotion support. Entities providing advisory, capacity-building, and financial support activities, such as those under Baiterek and Atameken, would be regularly and systematically reviewed based on an agreed set of actionable KPIs defined at the market, sector, or company level, depending on the priorities selected for export promotion (OECD, 2017[23]). Feedback loops can be further developed to include trade houses and diplomatic missions as Kazakhstan expands its export promotion framework abroad. This could also help gather more inputs and insights from actors that are present and active in target markets.
Challenge 1.2: The reach of existing export support appears to be limited despite recent improvements, and a lack of financial support seems to hamper SME internationalisation
Advisory and capacity-building services for exporting SMEs are increasingly available, but their reach and effectiveness are unclear
QazTrade has actively sought to help exporting businesses acquire market knowledge. Exporting SMEs (and those interested in exporting) have limited information about foreign markets and difficulties in accessing export distribution channels and contacting overseas customers (OECD, 2023[24]). QazTrade has stepped up efforts to address this through the provision of relevant analytical information on its online portal and through the new Trade Facilitation Information Portal (tradeinfo.kz) launched in July 2022, which is an information and reference tool executing the WTO Agreement on Trade Facilitation norms. It provides firms with a description of procedures, forms and sample documents, and the relevant authorities, thereby complementing the 2018 Single Window for Export and Import Operations, which grants firms with 42 e-permits for the import and export of goods. Such centralisation of information and support provision on single windows, portals and websites provides a basis on which to make further improvements.
Kazakhstan has developed its capacity-building offer to firms, but their reach remains modest. QazTrade has successfully developed two accelerator programmes providing each participant with custom support to internationalise (Box 2.4) – a proven success factor in supporting exporting firms. However, the application information provided on QazTrade’s website is out of date, potentially limiting the programme’s reach. Indeed, with 326 firms participating since its launch in 2020, the export programme’s reach so far seems modest (Government of Kazakhstan, 2022[25]; QazaqstanExportal, 2022[26]). The online marketplace accelerator programme is even smaller, having supported 290 participants so far. In addition, since September 2022, with support from Ready4Trade Central Asia, the QazTrade Academy has been providing free e-courses on aspects of internationalisation. This is complemented by the Smart Export and Smart Export 2.0 programmes, a series of webinars and in-person workshops led by QazTrade, and organised with the support of Astana International Finance Centre in 2021 and 2022 to improve export capacities of SMEs in all stages of their internationalisation journey (QazTrade, 2022[27]; Kapital, 2022[28]).
Several online portal exist to provide information on export support, but the iinformation provided remains scattered across multiple portals. QazTrade’s portal so far refers only to SME support provided by itself or KazakhExport, excluding relevant resources from other public and private agencies, rendering access to useful information more difficult for SMEs (Chapter 3). QazTrade’s portal does not provide a comprehensive step-by-step guide on how SMEs can start or increase exports, a tool often used by export promotion agencies by OECD and regional countries (OECD, 2017[23]). In addition, both the QazTrade Academy and Smart Export websites remain isolated and could be better integrated into other relevant channels, including each other’s social media channels (Telegram, Facebook, Instagram) and websites. QazTrade’s Telegram channel includes regular updates on digests, analyses, and upcoming events such as webinars and training, but the reach seems limited with, at the time of writing, less than 1000 followers.
Export Accelerator Programme
QazTrade has successfully developed a free accelerator programme for firms active in food production, light industry, machinery, chemicals, and service provision industries. It provides each SME with training, diagnostics, export strategy development, marketing, promotion, and foreign outreach support. 500 firms participated since the 2020 launch, signing contracts valued at USD 437 million in Kazakhstan’s target markets (CIS markets, China, United Arab Emirates (UAE) and Saudi Arabia). The programme is growing to accommodate at least 210 SMEs annually from 2023 onwards.
E-Commerce Accelerator Programme
Kazakhstan provides direct support to promote start-ups and experienced entrepreneurs on online marketplaces abroad. Participants receive support on how to create and effectively use e-commerce sales channels. Since the programme was launched in 2019, 290 firms have received Gold Supplier accounts on Alibaba.com amounting to a USD 300 million turnover. Foreign buyers can find 7000 Kazakh products on the online platforms, which is set to expand, as QazTrade aims to support a further 70 SMEs each year.
Finally, most support provided remains general and is not tailored to the specific challenges that SMEs face. While QazTrade and Atameken provide capacity-building services, informational analyses, and consulting services to firms looking to export, their service offer remains general, without a specification for SMEs (State Committee on Statistics, 2021[30]). For instance, many OECD countries (e.g., France) and emerging economies, such as India, have developed SME-specific outreach and training activities to ensure that SMEs are aware of the services provided, and are able to make use of them. Market and sector analyses (including sectoral export barrier analyses) are also adapted to the perspective of SMEs, generally targeting more niche segments than larger firms. More generally, adapting available export promotion tools to SMEs requires adopting their perspective, and making up for their lack of internal resources to map and understand their export potential, to understand and meet the regulatory requirements of target markets, to connect with potential buyers in foreign markets, or even to finance participation in training sessions. Finally, if Atameken/CIC seem to offer many of the same activities, available information and reports online are outdated, and many web links are broken, making it difficult for SMEs to find accurate information on foreign markets and sectors (Qazaqstan Exportal, 2022[18]).
SMEs rarely benefit from export financing instruments
Kazakhstan has developed financial instruments to support exporters. Access to trade finance can facilitate SME engagement in international trade by helping firms overcome counterparty risks when exploring new markets and dealing with new customers and suppliers, as well as operating with limited working capital (OECD, 2021[31]). QazTrade partially reimburses firms for certain marketing and outreach activities abroad, such as participation in fairs, organisation of networking events, or foreign translations of product material, with QazTrade having reimbursed 971 firms an average of nearly USD 39,000 from 2019 to 2021 (Atameken, 2022[2]; Atameken, 2022[32]; State Committee on Statistics, 2021[30]). QazTrade details how firms can get reimbursed for such outreach costs. Other types of support usually provided by export credit agencies (ECAs), such as the coverage of currency risks, direct crediting, the launch of securities/bonds, or the insurance of faulty securities/bonds, are not yet provided by KazakhExport, even if legislation is currently being developed to transform the agency into a full-fledged ECA, in line with OECD best practices (Box 2.5).
As Kazakhstan’s only official insurance organisation, KazakhExport offers firms a range of services, including voluntary insurance, reinsurance, and conditional contributions to help promote local producers in non-commodity sectors in all stages of the export process. To further support this objective, a new law “On the introduction of changes and additions to several legislative acts of the Republic of Kazakhstan on the Export Credit Agency and export promotion of non-hydrocarbon goods (work, services)” was passed on 23 January 2024 and its provisions are being completed by subsequent regulations seeking to meet the objectives set in the Prime Minister’s decree of 9 February 2024.
The new legal framework makes KazakhExport evolve into the national Export Credit Agency which provides guarantees to domestic exporters of services and expand its offer to include subsidised interest rates on export trade finance to be able to better compete in target markets, in line with best practices of ECAs in other countries such as for instance Bpi France.
However, SMEs only rarely benefit from such financial support. For instance, subsidised loans offered by the KDB and preferential leasing provided by IDF are only available for larger manufacturers. Export credit and risk services from KazakhExport remain partially in reach, as the agency provided insurance to 71 SMEs in 2022, most of which appear to have been medium enterprises. However, no specific offer for credit and insurance products tailored to SMEs seems to have been developed (Ekonomist, 2021[36]; ADBI, 2019[37]). Finally, DAMU seems to have stopped offering subsidised loans and leases to exporting SMEs (Adilet, 2022[14]; DAMU, 2017[13]).
Recommendation 1.2: Domestic export promotion actors should expand capacity-building and financial instruments for exporting SMEs
Action 4: Improve the reach of advisory services for exporting SMEs
Kazakhstan could develop an online single guidebook for exporting SMEs providing step-by-step information and links to available resources (Box 2.6). Given its central role in export promotion, QazTrade could be entrusted with developing such a tool to provide free information and a single online access point for resources at each step of the entire export process. Kazakhstan’s guidebook should reference existing online single window and trade portals (Chapter 3), as well as related internationalisation toolkits, services, and other relevant resources available for SMEs. The guide, as well as relevant information for exporting SMEs, could be made available and regularly updated through QazTrade and private sector representatives’ online channels.
The development of such a guide could serve as an opportunity to improve the offer for advisory services targeted at exporting SMEs. In the process of developing this guide, QazTrade could reference all existing support services offered to exporting SMEs, identifying gaps and duplication of effort. The agency could then be charged with co-ordinating the adaptation of capacity support activities for exporting SMEs in collaboration with relevant ministries and public and private agencies. To ensure the maximum reach of the guidebook, SME representatives should also be consulted during the drafting phase.
Enterprise Georgia
Enterprise Georgia focuses on enhancing the country’s export potential, promoting foreign direct investments, and increasing the competitiveness of the private sector. On the export front, the agency’s mandate is to increase the competitiveness of local products on international markets and diversify Georgian export markets by providing targeted support to firms, especially SMEs. The Agency’s website provides detailed information, among others, on export procedures, tariffs, and priority sectors. SMEs can apply for technical assistance through the Export Assistance Programme, while an online chat allows speaking to an export consultant within moments in Georgian or English. In addition, the website provides an extensive online course, covering ten modules of export fundamentals adapted to the Georgian context.
The Netherlands’ KVK
The Dutch Chamber of Commerce, KVK, provides information, training, and support on a wide array of topics relevant to firms and SMEs, including internationalisation. It developed a comprehensive 14-step plan in Dutch and English to help firms understand the export process, from initial market research to entering new markets. Each step links the SME to relevant services, including online and telephone support, bespoke market surveys, analyses and entry strategies delivered by experts, online toolkits on insurance, pricing, foreign import criteria, and more. All information and links are collected in a single source, kept up to date and linking to all relevant public and private actors. In 2021 it responded to 115,000 questions and delivered 600,000 export documents to Dutch firms.
In addition, QazTrade could develop a communication campaign and enhance its networking with SMEs and SME associations at the local level to improve the awareness of available services. Online and offline awareness-raising campaigns could be developed on the occasion of the launch of the online guidebook to increase the reach of QazTrade’s internationalisation offer for SMEs. This should be done in collaboration with Atameken and other business associations, especially SME associations art the local level. The tool should also be advertised to other institutions in relation to businesses, for instance the offices in charge of business registration, DAMU, banks, or even customs. Finally, this could also be the occasion for QazTrade to scale up their capabilities to reach out to more clients and users.
Action 5: Expand financial support and risk management instruments available to SMEs
Kazakhstan should launch financial instruments to support exporting SMEs. Easing access to credit for exporting SMEs, through targeted and preferential financial instruments to SMEs, is a particularly relevant topic in Kazakhstan, as credit constraints are generally more binding on SMEs than on larger firms (Ekonomist, 2021[36]; OECD, 2021[31]). Existing reimbursement of foreign outreach and marketing costs is effective but insufficient to scale up SME exports and should be supported by the provision of export credits, subsidised financing rates, bank guarantees, and insurance. OECD countries such as Denmark, Germany, Spain, Poland, and the Slovak Republic (Box 2.7) use such instruments to help SMEs initiate or increase exporting activities, with good results (EESC, 2018[40]). In particular, DAMU could offer subsidised interest rates to SME exporters to reduce currency risks, as it used to do (DAMU, 2017[13]), while KDB and IDF could extend their services and products to SMEs.
Kazakhstan should also broaden the offer of export insurance products available for SMEs. Coinciding with KazakhExport’s ten-year development strategy coming to an end in 2023, it could prove the right moment to extend its service provision to encompass a broader variety of financial support instruments while offering a larger volume of (re)insurance products, and expanding its offer to cover SME-specific products in line with the practices of OECD ECAs (Box 2.7).
EXIMBANKA – Slovak Republic’s Export Credit Agency
EXIMBANKA offers instruments to support exporters, including Slovak SMEs that wish to start exporting or expanding their export volumes. EXIMBANKA financial support for SMEs has increased every year since 2016, when it offered €38 million in bank credits and guarantees to SMEs compared to over €133 million in 2020, while SME share in risk management increased over this period from 32.8% to 39.7%. For SMEs in particular, EXIMBANKA offers:
Export financing including direct credits, refinancing credits, guaranteed products, and favourable financing (a rate reduction of at least 0.25%) for SMEs.
Export insurance to eliminate risks related to uncertainty on the foreign market (e.g. insolvency of the foreign buyers, political and economic risks, etc.). EXIMBANKA also offers simplified insurance packages to cover accounts receivable specifically designed for SMEs, for which they can apply online 24/7. Applicants must have fewer than 10 employees and an annual turnover of €2 million or less. Authorities report that the eSME insurance product is winning in popularity as application criteria are less stringent than for other firms and online application removes significant barriers to financial usually faced by micro firms.
Concessional loans in target markets to allow market entry of Slovak exporters under conditions where the risk level is considered too high for commercial banks.
Consulting services free of charge and tailored to the situation of the applicant to suggest the best tools to adopt to finance the exporting activity.
Bpifrance – France’s Export Credit Agency
Bpifrance, the French ECA, provides tailored export financing and insurance products with increased coverage to support exporting SMEs:
Market prospection repayable advance: firms with a turnover below €500 million can receive such an advance, which is both immediate cash support and insurance against the risk of the firm’s prospecting efforts. It is paid in the form of an advance and its reimbursement is composed of a minimum flat-rate reimbursement of 30%, followed by an additional reimbursement (in a period of up to 5 years) based on the turnover achieved in the targeted countries or paid by the state if unsuccessful. The advance covers part of the prospecting costs incurred by the company which could not be amortised by a sufficient level of sales in the geographical area covered.
Working capital and bond insurance: firms with a turnover below €150 million can benefit from a coverage increase from 50% to 80% at no additional cost.
Export insurance for commercial contracts: cover for risks associated with commercial contracts can increase from 95% to 100% for firms generating a turnover below €150 million.
Discounts and supplier credit assignments insurance: cover against the risk of non-payment of receivables by a foreign debtor may be raised from 95% to 100% for companies generating a turnover below €150 million at no additional cost.
Challenge 1.3: Kazakhstan’s SMEs lack adequate representation channels abroad and a clear branding strategy for their products in foreign markets
Kazakhstan’s economic representation abroad is limited, yet efforts are underway to expand it. The MTI’s representation abroad was limited to Russia, where it supervised two permanent trade missions that since have been closed, and to contacts established through QazTrade’s accelerator programmes. KazakhExport has two foreign representatives in Russia and one each in China, Kyrgyzstan, Tajikistan, and Uzbekistan, while it plans to open offices in Beijing and Moscow. Atameken’s CIC has a single representative office in Russia. However, at the time of writing, two new trade missions are under consideration – to Dubai (UAE) and Urumqui (China) – and public export promotion bodies, such as the MTI and QazTrade, have been active in foreign visits, fairs and exhibits, and have attended business forums abroad (QazTrade, 2022[46]; QazTrade, 2022[15]; KazInform, 2024[47]).
In addition, attempts to create national brands in Kazakhstan have not yet paid off. A “Made in Kazakhstan” trademark has been under discussion for several years but has not been developed so far, while the SPIID 2020-2025 programme includes in its mandate the support for “the creation of a positive image of Kazakhstani brands”, without translating this into precise measures (Turanpress, 2021[48]). On the sectoral front, the previous SPIID programme led to the creation of three food brands – Qazaq Organic Food, Halal Kazakhstan, and KazMeat – each adapted to one target market: respectively, Russia, Iran, and China. Each sectoral food brand had been tied to precise quality standards, but they were not used for long (Adilet, 2017[49]).
However, Kazakhstan has developed certification services, which could ground a quality-based branding strategy. Atameken has developed a comprehensive certification offer for firms, including for SMEs, that is easily accessible (Ekonomist, 2021[36]), while the authorities recently also accredited a Halal product certification authority.
Recommendation 1.3: Expand the export promotion network abroad and provide a clear branding strategy in target markets in co-operation with the private sector
Action 6: Expand the network of representative offices abroad
Kazakhstan needs a comprehensive foreign trade strategy that could include an export dimension for SMEs. The government should update or redesign its export-promotion strategy, to include all relevant public and private actors, including the MFA, Atameken, and key private sector representatives abroad, and define clear mandates. The strategy should also reassess, in co-operation with the private sector, priority markets for exports and targeted actions in each. For instance, while Kazakhstan has currently designated Russia and China as the top-two priority markets for exports, this designation could be re-evaluated considering recent developments enabling new opportunities elsewhere (OECD, 2023[50]). In particular, trade with the EU could be strengthened following Europe’s interest in wheat and other commodities previously imported from Russia. MENA countries could also be interesting target markets, tied to the same type of commodities.
Export promotion in Germany builds on a close collaboration between the public and private sectors. Since 2009, the federal government directly supervises export promotion through the Germany Trade and Invest (GTAI) agency and co-finances the Chambers of Commerce Abroad (AHK). Regional and local governments and business associations complement this institutional set-up co-ordinated by the Ministry for Economic Affairs and Climate Action.
GTAI builds its export market knowledge and export-promotion capacity upon a specialised workforce and a large international network of abroad offices. The agency operates through two offices in Germany and more than 50 offices abroad and is in close relation with the German diplomatic network of 220 embassies and consulates. German exporting companies are also supported by 120 overseas chambers of commerce in more than 80 countries.
Export market information is provided by about 60 industry analysts, located in the GTAI offices in the main export markets, and complemented by legal, tax, country and customs experts based at the central locations. These services aim at supporting mainly exporting SMEs in targeting specific countries, and sectors. Support includes the provision of market and sector information such as macroeconomic analyses and forecasts, country and industry analyses, and business contacts; legal, tax, and custom advice; and assistance in finding business partners and representation at fairs.
The marketing activities of GTAI are mostly provided free of charge to businesses and covered by public funds, while more specialised consulting activities and targeted reports are paid for by businesses, albeit at below-market prices.
Based on this prioritisation, Kazakhstan should start expanding its network of public and private trade representative offices abroad. Following the example of Germany, Kazakhstan should expand its network of public and private trade representative offices abroad (Box 2.8), starting from the constitution of a competent trade representative staff in major Embassies. Trade counsellors should be familiar with both Kazakhstan’s export potential, and the opportunities offered and procedures required in the export market, and hiring should aim to recruit multilingual staff with strong experience in the sectors of interest and business development skills (Naray, 2011[53]).
Action 7: Create a national branding strategy for priority sectors
Kazakhstan should develop a national or sectoral branding strategy tied to strong quality standards. Once priority export target markets are identified, the government should formulate a clear value proposition for each, which requires to establish a well-publicised branding and marketing strategy. In close collaboration with the private sector, for instance through public-private consultations, QazTrade or another relevant agency should identify the export positioning and value-added message that Kazakhstan wants to adopt when addressing foreign markets, in particular beyond Central Asia, while specialised companies can help find out how the country’s products are perceived in the latter. Based on these insights, Kazakhstan should reinitiate efforts to create sectoral and national brands, as Moldova has done for its priority sectors (Box 2.9). Doing so would require setting objective quality standards, a unified image, and a consistent use of the brand to promote Kazakh goods on international markets. As product quality helps to build confidence in brands, initial efforts could be built around food and agriculture, Kazakhstan’s most advanced sectors in terms of certification.
Once established, brands should be consistently represented and promoted by public and private bodies abroad. Branding strategies based on clear sectoral and market targeting are a key component of successful export-promotion policies, as they increase awareness of Kazakh products abroad, and benefit SMEs most, since they typically have very limited marketing budgets and product lines (OECD, 2017[54]). Once the national and/or sectoral brands established, the MTI, QazTrade, and private entities should actively promote them in trade fairs and other B2B networking events in foreign countries.
Country brand: “Tree of Life”
In 2007, Moldovan government agencies initiated a strategy to develop a quality-driven national brand. “The Tree of Life” became Moldova’s country brand in 2014 with the support of the Tourism Agency. Now, the Invest Moldova Agency is the country’s brand administrator and the institution in charge of promoting the country’s image on the economic and investment dimensions. It aims to create a common identity to gain international recognition, affiliate within a community of country brand promoters, and join efforts to promote Moldova’s image abroad. “The Tree of Life” has been the mainstay of over 30 international fairs and exhibitions in over 20 countries. The brand can only be used following a request approved by the Invest Moldova Agency, which can be completed online. Each tree branch represents a strategic sector of the Moldovan economy, including textiles, wine, and fruits and vegetables.
Sectoral branding: “From the Heart”
The high fashion industry adopted a strategy to rebrand itself as a high-quality Moldovan export oriented toward global designers and markets. In 2012, the Moldovan Ministries of Economy and Culture and the Moldovan Light Industry Association launched a project to improve Moldovan fashion exports bringing many fashion labels under a new national brand, “From the Heart” and supporting the capacity of manufacturers to shift toward high value-added, high-quality products.
Many of the companies that benefited were women-owned SMEs with only one or two patented designs, while the fashion industry has continuously grown (a 10% increase in export sales each year since 2015) thanks to a consistent emphasis on quality in public, BIOs, and private promotional materials. By of 2019, most Moldovan clothing factories had complied with key international quality and ethical standards.
Source: OECD analysis, (OECD, 2017[23]; WIPO, 2016[55]; Tree of Life, 2022[56]).
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