|Baimukhanova S.B., Istaiyeva A.A.|
|Market and its Infrastructure|
|Journal "Vestnik KazGU". Serial of Economic Siences. Almaty, Kazakhstan, 1999, ¹1.|
Transformation processes and the strategy of extricating the economy of the country out of the crisis presuppose strengthening measures on promoting entrepreneurship, on creating the competitive market environment and more developed market infrastructure. The necessity of observing the ratio between the making up of the market relations and the market infrastructure (inside it as well) requires the programmed purpose-oriented approach to the development and perfection of all its elements in order to consolidate comprehensively the so-called "home front." Undoubtedly, it is considered to be the priority direction under the conditions of radical transformations in the economy of Kazakhstan.
It is obvious that the market of the goods and services is an integral system with its definite hierarchy, interrelations and shares in different sectors of the economy. In the market there operate the same economic laws, the basic categories of the market, the same marketing mix and techniques. A market is the system providing interrelations among a great number of agents where a huge number of transactions of a wide variety of goods and services take place.
It is a complicated system which embraces such operations as exchanges, sales and purchase of goods and services and which demands the expenditure of labor and material-technical maintenance.
The creation of the competitive market environment and enhancing the entrepreneurial activity depend on the development and operation of the appropriate market infrastructure.
The infrastructure is the category denoting the service sphere, organizing and materially providing and supporting the main market processes of the mutual search of "sellers-buyers," the movement of goods, the exchange of goods for cash, as well as the financial-economic activities of all the intermediary structures.
The market infrastructure offers the services related to four principal functions:
The nature of infrastructure may be defined as the complex of specific labor processes producing a variety of services necessary for the activity exchanges in production and every day life of a man. Thus, the main feature of infrastructure is production of services.
But there never existed some kind of reciprocity between the activities of infrastructure branches and comprehensive approach to the development of infrastructure.
Market infrastructure is an integral part of the developed market economy, that determines its reproduction and competitive possibilities. It will be of great significance for creating the working places and ensuring the rational employment of the population.
The economic assignment of market infrastructure is to provide the operating part of the national economy with market signals that are necessary for successful functioning of the relatively isolated market entities.
Implementing this function, market infrastructure partly plays the coordinating role, which previously was inherent to the state economic planning.
The political assignment of market infrastructure lies in creating a stable operating economic complex, sensitive to the indirect managing stimuli on the part of the state organizations.
Besides, state enterprises and organizations, participating in the activities of market infrastructure, determine the nature of production relations and directly implement the national economic policy.
The social assignment of market infrastructure is expressed in extending the employment possibilities of the population and in free choice of an appropriate place by each member of society in the system of public labor division.
For providing different kinds of services, it is necessary for intermediary enterprises to acquire not only deep knowledge and professionalism but also the creative approach.
Most of the enterprises combine their activities in the sphere of market infrastructure with manufacturing of the goods and offering a wide variety of services.
That’s why all those enterprises that fulfil the functions of market infrastructure may belong to the objects of market infrastructure.
Market infrastructure is the system that creates favorable conditions for free exchange of resources – financial, labor, commodity, raw materials, information, technological and intellectual.
For timely and full-blooded development of the infrastructural system an action program in the following directions must be worked out:
At present a great number of objects of market infrastructure such as banks, stock and trade exchanges, leasing, auditing, consulting, insurance, advertising, information, telecommunication and marketing research companies are operating in the republic. But the development and introduction of certain necessary links of infrastructure as an integrated whole haven’t been completed yet.
Stabilization and further development of monetary – credit and financial systems to a greater extent depend on the development of financial market infrastructure. So, by the end of 1998 the number of banks in Kazakhstan had reached 80. In fact, it is not few, but the number of affiliates is not sufficient. The density of the banking network (the number of persons per branch) has been calculated by foreign specialists. In Kazakhstan it totals 15952 people, in the USA – 2214, in Japan – 1780, in Germany – 1000, in Switzerland – 835, in Belgium – 717. And what is more, the banks of the RK offer a very limited range of services (not more than 20), while in highly developed countries, the amount of services provided by them is ranging between 300 to 500.
Strengthening of the financial sector is expected to carry out in the following directions: strengthening of the banking control; rehabilitation of banks, restructuring the financial and operational activities; creation of the organizational and legal frameworks for getting and using credits. Besides, the banks is the main financial institution which is empowered to finance investments.
One of the most important elements of financial market infrastructure is the securities market. It requires the creation of the appropriate normative acts and purpose-oriented stimulating of its development, promoting the feedback between the marketers of securities and regulating bodies, development of the mechanism how to use securities among the different strata of the population and enhancement of their interest to investments.
The participation of foreign investors in this process and the assistance of competent international organizations give a considerable impetus to the development of securities market in Kazakhstan.
For effective functioning of the securities market it is necessary to create the system of the state regulation of the stock exchange markets, combining the interests of investors and the state; to continue developing the legal foundation; to develop market infrastructure; to create an efficient institutional system of controlling over its activities.
The effective activity of enterprises and firms in a long-term perspective, ensuring the high rates of their competitiveness under the conditions of transition economy mostly depend on the level of investment activity and its scope. Investments play a great role in the development and effective formation of market infrastructure. It is known that all kinds of property and intellectual values invested into the objects of entrepreneurial and other forms of activities are considered to be investments, as a result of which profits or social effect may be achieved.
The main task of the state promotion system is to settle the issues of the priority sectors of the economy for attracting direct foreign and domestic investments. In the structural policy of any country among the priority branches, that can become the starting points of the economic growth, there is always an attempt to use their main wealth: labor and natural resources. In this case they are mainly oriented towards manufacturing the import substituting products.
There is no use of supporting the domestic producers and of stimulating investments of production enterprises manufacturing non-competitive goods. Home market protection and measures on stimulating domestic production may lead to the increase of norms and amount of net income, that is one of the strongest motivations of investment.
We think that state capital investments are directed to those sectors of the economy that are to create favorable economic and technical conditions for entrepreneurial activities.
The basic economic potential of the Republic of Kazakhstan is its natural resources. There are a lot of enterprises processing and manufacturing products, though they are not competitive in the domestic and foreign markets.
It is, to a large extent, a result of the state policy which is lacking the market orientation.
Accordingly, there is no state strategy in the domestic and foreign markets.
The raw material export orientation may lead to the increase of differentiation of the regions according to their shares in forming the GDP. Such kind of orientation increases, in its turn, the unevenness of production positioning, marking the making up of the regions in a quite new quality, primarily, extractive or processing industries. It often happens so when one enterprise in the region proves to be the main supplier of revenues to the state budget, including currency takings.
All these phenomena may decrease the motivation of production development, namely, because of the redistribution of revenues through the state budget. The contemporary departmental structure of production and export in Kazakhstan is characterized by domination of the large- scale tonnage of products. That’s why a great role is given to the development of transport means and communications. But their inconformity with the current requirements gives rise to the serious impediments in international trade with other states and in gaining access to new sales markets.
It is necessary for Kazakhstan to settle the strategic tasks on creating the possibilities to gain access to the international sea ports, to establish the rational network of international transport communications, first of all, pipelines. That’s why in the list of the priority sectors of the economy for attracting direct investments, the paramount role is given to the following elements of production infrastructure: 1) oil and gas pipelines; 2) transport and communication systems(railways and all the faculties necessary for the railway means of transport; objects of air navigation; objects of postal services , telecommunication and information systems); 3) sea and river ports; 4) electrical transmission lines. All these elements of production infrastructure are necessary for the solution of the strategic tasks on creating favorable conditions to gain access to the international sea ports. The geographical position of Kazakhstan also plays a significant role, being the EuroAsisn "bridge" between the East and the West, including the countries of the APR.
Despite the fact that these objects are capital-intensive, they must be built and developed very swiftly. It is necessary for the economic growth of the country.
Besides, Kazakhstan is a member of the Economic Cooperation Organisation (ECO). It is actively cooperating with all the member-states (almost all the Central Asian states) on the issues of the development of transport and communication infrastructure. The UNO also renders great assistance and support in this field, declaring the period from 1995 to 2004 as the decade of developing the transport and communications of the ECO member-states and opening new perspectives to attract foreign investments for these purposes.
One of the priority directions for the Central Asian Region is the construction of the Transasian Railway Line: Beijing – Almaty – Tashkent – Teheran – Ankara – Istanbul, the total length of which will be 10.5 thousand kilometres. 18% of the total length will run via the territory of Kazakhstan. The process of adapting to each other of all the market institutions and the possibilities of the economic integration are also of great importance.
On the one hand, the increase of the amount of the accumulated import capital shows the participation of foreign investments in the development of the material base and the national economy.
On the other hand, importing of the capital is mainly connected with the participation in the privatization process of the best Kazakhstani enterprises and branches, promising great material and financial flows to the addresses stated by the investors and owners.