Download Maidirova Aigul, doctor of economic sciences

Maidyrova Aigul, Doctor of Economic Sciences
Head of the department
“Management and Human Resources managing”
Academy of Public Administration under the President of the Republic of
Kazakhstan
Social Responsibility of business in Kazakhstan
On the present stage of development of the Republic of Kazakhstan the realization of
social policy is aimed at two goals: protecting socially vulnerable part of the population and
encouragement of economic activization of able-bodied citizens. Here the function of social
defense is the main in the procedure of implementing social policy. But the protective function
shouldn’t come to passive form only which is connected with material support to the disabled
and socially vulnerable part of the population when it is more profitable to receive social benefit
than to work as the increase of productive activity of the population helps to enlarge total labour
contribution of all social group in social and economic development of the country.
The effective way of solving many social problems, particularly those of social security,
can be the participation of home business in the realization of measures on social policy.
Finally taking the social responsibility business voluntary proposes to the state and the society
its assistance in solving different problems [1]. The constitution of the Republic of Kazakhstan
underlines that Kazkhstan is a socilly responsible state. Worldwide trend to reinforce the role of
the state in solving social problems is stressed in the report of World Bank in 1997 “The role of
the state in the changing world”. The USA were the first to position the issues of social
responsibity. In 1905 there appeared the mouvement Rotayr the essential of which was that
people who are on velvet should contribute to improve professional field and the society. In the
beginning of the 90's the project of social responsibility to the society was introduced by certain
companies, such as english The Body Shop, american Ben & Jerry's and canadian Van City. In
1995 leading companies of the European Union established the Initiative Corporate Social
Responsibility-Europe, which today unites about 50 large corporations. In 1999 Great Britain
elaborated an international stavdart Account Аbility 1000, designed to measure the results of
activities of companies from the ethic point of view i.e. a kind of social audit. In the year 2000
the Global agreement invoking to unite efforts of business and civil community in favour of
nine principals in the field of human rights on he initiative of General Secretary of the UN Kofi
Annan. Several hundreds of companies from all over the world have loined this initiative,
including 10 Russian ones as UKOS, RUSAL, Volga-Don etc. Our country in this organization
is presented by two companies – company of social security «London - Almaty» and
«Kazcommerts» [2]. They gave a start to the new relationships in 1994 when the Decree of the
president of RK “On social partnership in the area of social and economic and labour relations”
was adopted. In 2004 round table on the topic “Socially responsible business in Kazakhstan”
was held for the first time and in 2008 there was a meeting of the Heads of governments with
top-managers of the biggest companies of Kazakhstan. On the second Congress of
entrepreneurs our President underlined the social partnership of the authorities and NGOs and
marked concepts of new ideology of development of small and medium business. Today the
biggest companies of Kazakhstan successfully offer safety stocks to the leading stock
exchanges of the world and attract big amount of foreign investments. Kazakhstan businessmen
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have become successful investors in the internal market and actively work in the countries of
the near abroad. The achievements of Kazakhstan business let start the project “30 corporate
leaders of Kazakhstan” which will promote home product to world markets. Expenses to
support social policy have reached 66,4 million US dollars (they are free treatment, 4
sanatoriums, 7 children camps for rest, 36 kindergartens, 1 million dollars for education of
students, 23 million USD yearly for environmental protection, 120 million USD for
construction of factories on sulphur utilization); “Kazkommertzbank” annually invests 1 million
USD for realization the project of the fund “Kus - zholy”; limited partnership “TCO” has sent
more than 120 million USD since the day of its founding. They have sent 900 million USD for
protection of ecology by 2010. The President of Kazakhstan established annual contest of social
responsibility “Paryz” [3]. In September of 2008 they organized the forum on social
responsibility of business where the Ministry of labour has signed 15 memorandums with
companies working in Almaty.
Not long ago the term “social responsibility of business” was known to few people in
Kazakhstan. Now a big part of businessmen see that this is a many-sided concept which consists
of several elements such as: responsibility to own employees, responsibility to consumers,
responsibility to partners, local society and entire country. In the Republic of Kazakhstan there
are three directions of responsibility of business: financial, ecological, social. The program of
ecotourism is supported by the companies OSCE, Shell, VSO. The task is to reduce to
minimum recreational damage to natural objects of the national park Aksu-Dgabagly and
Katon-Karagay. Local inhabitants of Dgabagly village-district are involved in solution of
economic, social and cultural and ecologic problems of buffer zone of the national park AksuDgabagly. The results did not take long to wait: they organized the group of Green patrol (132
people taught to the basis of tourist business), 40 local inhabitants rendered service to the
tourists, 401 tourists visited ecotouristic sides. Also 57 new working places were created, local
community gained more than 6000 USD in two tourist seasons, reserved area and the national
park took 1,5 thousand USD from the activity based on the program [4].
Tobacco Company Philip Morris Kazakhstan introduced the system of patronat as the
alternative form of children-orphans tutorship; Exxon Mobil prepared new stuff of kazakhstani
economists. In 2002 The company Chevron-Texaco in whole world invested 62,8 million USD
in different social projects. Since the day of establishing Chevron-Texaco under Joint Company
“Tengizshevroil” has offered 143 credits without percentage on total 5,5 million USD and
renered assistance in creating new working places[4].
The Company Philip Morris Kazakhstan presented some results of public expectation
research in respect to the corporative social responsibility of business. And they found out that
39% of population expects the production of qualified products, 14% are for the work in the
frame of law. Further they spoke about care for employees, tax payment, creation of working
places, ecology, organizing charitable activities.
The Company Foodmaster supports villages. This is needed to provide itself with qualified
raw materials. The Company installed high qualified reservoirs for milk, so called tanks for 800
thousands USD. They provided the inhabitants of the villages, who make small milk farms,
with job. Now the company tries to realize the program of schoolmilk following the experience
of such country as Thailand [4].
The large business of Kazakhstan is mature enough to introduce advanced models of social
security and is ready to realize large-scale and long-term social projects. Social activity of small
and medium business, in its turn, can be efficient enough on the local level and while realizing
certain projects. Its social role is in creating new working places, tax payment and improving
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the GDP. It is too early to demand from medium and especially small business something more
than it legally fixed.
The idea of creation of social - entrepreneurial corporations (they are 10 in Kazakhstan) are
fated to be successful. The state passes to businessmen the community property, land,
unprofitable but working enterprises which can be used in new business.
The concept of
social - entrepreneurial corporations (SEC) is based on social trend as the big part of income
will reinvested for realization of social and cultural needs of the society. Every SEC is a kind of
regional institute of the development.
At the same time it is necessary to activate the elaboration and introducing the principals of
social responsibility of business in business practice of Kazakhstan by uniting forces of the
state, business and civil society. As the principal measure they can conduct the serial of
meetings of business circles representatives, government and NGOs to elaborate together the
national standard of the social responsibility of business. Taking into consideration plans of
Kazakhstan on creation modern stock market, it is advisable ti introduce index of social
responsibility of different companies. This undertaking can become another stimulus to improve
their social activities.
There is inequality in the dialogue between business and state power, which must be
eliminated. The state cannot be the only arbiter in the field of social responsibility of business.
If business wants to know the public opinion concerning prior social programs it should address
to the other interested groups i.e. public organizations, academic and expert communities.
Anyway business is an independent part of the society and no one can control it, tell it how to
spend the earned money.
Telling about the dialogue “business – civil society”, there is a significant progress. Now
many companies begin to realize joint programs with non-commercial organizations. The
examples of such a partnership can be seen on republican level as well as regional level.
It’s important to say that the business itself often performs as the initiator of the dialogue
with non-commercial organizations. The business society of Kazakhstan realizes that it is
necessary to make its own contribution to the development civil society and public
organizations. Because it creates a certain balance between the state, non-commercial sector and
business through this.
When the balance between authorities, business and society is achieved bureaucracies will
not be able to render such a pressure on business any more. On the other hand home
businessmen should understand that as a civil sector they create social supervisors the position
of which they will have to take into consideration. The constitutional reform and the succeeding
changes in the political system present new possibilities to promote the principals of social
responsibility of business in Kazakhstan. The new competence of the Parliament and the
increase of the role of political parties gave a new dynamics to Kazakhstan public policy. In this
situation there are additional capacities to attract attention of the state and different political
powers to the problems of home business-community. In the frame of legislative regulation of
social responsibility of business it is possible to confirm points of the obligatory treaty on social
responsibility between the state and large companies.
The accomplishment of the concept of the social responsibility of business in Kazakhstan
is very up-to-date as we have weak institutionalization of the local business, e.g. there is no
fully established civil society sector, the set of specialists, economic interest in the realization of
the principals of social investment. The reasons of slow development of the social
responsibility of business in Kazakhstan are high political influence and imperfect legislation,
the concept is not well-known and it is very difficult to understand the concept itself. The
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business-community of Kazakhstan treats the perspectives of introducing advanced principals
of running business and playing new social role. In this connection it is necessary to remember
that the responsibility of business can be effective only being voluntary. Business-community
should be free to choose the direction and volume of its social activity, independently define
priorities and look for the balance between their interests and the interests of society.
In Kazakhstan there are not yet laws confirming the scale of moral values as obligatory for
business. Here Kazakhstan is hardly can be called a socially responsible state. Moreover the
salary in the sphere of civil service is lower than that of large enterprises, there is no social
security of employees and they almost do not solve the problem of their accommodation. In
such conditions state can’t define the standards of social responsibility of business. It is
important to underline that the absence of social standards which indicate the level and quality
of life of middle class is profitable for entrepreneurs, particularly for owner of large companies
letting them make salary very low. By the way they didn’t start the work in this direction at all,
and the absence of such standards doesn’t let define the requirements of society to businessstructures. As it is well known social standards make business structures fix additional moral
orientations in practical economic activity. Namely in necessity or possibility of realization
other strategies of development directed not only to have profit but also to achieve other moral
goals what led to restricting mass distribution of socially responsible business and will
restricted till there is its own model.
According to “Davos manifest” adopted 1973 “General task of leaders of enterprises is to
serve for clients, employees, creditors and society, to find compromise in their contradicting
interests” [5].
Here one can count that the socially responsible business showed its effectiveness and in
the conditions of globalization there new demands connected with the achievement of
sustainable human development appear. In this connection, to our opinion, several issues which
make the discussion of social responsibility in our country up-to-date should be pointed out.
The regional problems became very acute with reduced role of the state in solving social
and territorial problems. However there is still Soviet mentality when enterprises took an active
part in solving social problems on the territory. And there is still a habit of shifting the solution
of these problems onto enterprises. On the other hand there’s no a clear understanding of
criteria and methods of evaluation the social responsibility of business. Here the solution of
problems of growth of social responsibility of the state itself, elaboration of criteria and
methods of evaluation of social responsibility, legislative fixation of which let reinforce social
responsibility of private sector of economy become very important. That is the elaboration of
the social standards is a demand of time which will permit to evaluate the level of realization of
state policy in the social sphere, and will create the conditions to overcome the poverty by
attracting business, the power and the society. In Kazakhstan there is a group which elaborates
such a standard, but it will have to conduct a full and many-sided examination of this problem
and start to solve them. To my opinion, the next step will be the elaboration of united joint
Social Code, which will show the solution of social problems together with business in the
country.
List of Used source
1. "Fashionable term" - is social responsibility of business .//"Каpital. kz", № 13 (100),
05.04.2007 e-mail: [email protected].
2. UNO Global agreement in Kazakhstan.// Егемен Казакстан, № 251 (24209)-252 (24209),
11.11.2005.
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3.Decree of President of Republic of Kazakhstan "On the contest on social responsibility of
business "Парыз"".//Аstаnа, Акоrdа, 23 january 2008 year, № 523.- www.akorda.kz.
4. Тоdоrоvа N. Social responsibility of business in Kazakhstan //"Kazakhstan truth", № 39, 15
march 2007 g.
5. Maxim Аzаrоv/ Back in USSR// "Business and power", 25 november 2008, Issue №22.
Resume
This is the present article, is conduct analysis of deciding the social questions, and in
particular social protection, through the participation of domestic business in realization of
actions of social policy. Eventually, taking over social responsibility, business of own accord
offers to the state and society its assistance in deciding the different problems. In Kazakhstan,
big part of businessman’s sees that responsibility of business, polyhedral notion, which consists
of several elements: responsibility before own employees, responsibility before consumers,
responsibility before partners, local community and country as a whole and note three
directions to responsibility a business: financial, ecological, social.
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