Kazakhstan Aims to Double Output of Existing Medium-Sized Enterprises – The Times Of Central Asia

Report on Kazakhstan’s SME Development Strategy and Alignment with Sustainable Development Goals

Executive Summary

The Republic of Kazakhstan, in collaboration with the European Bank for Reconstruction and Development (EBRD), has initiated a strategic program to enhance the production capacity of medium-sized enterprises. This initiative is directly aligned with the United Nations Sustainable Development Goals (SDGs), particularly SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 17 (Partnerships for the Goals). The program aims to address existing challenges and unlock the significant growth potential within the nation’s small and medium-sized enterprise (SME) sector to foster sustainable industrialization and inclusive economic development.

Strategic Objectives and Contribution to SDG 9: Industry, Innovation, and Infrastructure

The core objective of the “Improving the Investment Attractiveness of Medium-Sized Businesses” program is to increase the production capacity of existing medium-sized enterprises by a factor of two to three. This directly supports SDG 9 by promoting inclusive and sustainable industrialization. The government will provide targeted support through diagnostic assessments and customized development plans.

• Targeted Industrial Sectors: The initiative prioritizes key industries critical for sustainable industrial development, including:

1. Metallurgy
2. Light industry
3. Construction materials
4. Mechanical engineering
5. Chemicals

Economic Impact and Progress Towards SDG 8: Decent Work and Economic Growth

The SME sector is a fundamental driver of Kazakhstan’s economy, making substantial contributions to GDP and employment, which are key indicators for SDG 8. The program seeks to build on this foundation to ensure sustained, inclusive, and sustainable economic growth and productive employment for all.

• GDP Contribution: SMEs currently contribute 39.8% to the national GDP.
• Output Growth: In the first half of 2025, total SME output reached $82.6 billion, a 25% increase, demonstrating robust economic activity.
• Employment: The sector provides employment for 4.4 million people, an increase of 3.9%, highlighting its critical role in job creation. The highest employment growth is observed in trade, industry, construction, transport, and agriculture.

Challenges to Sustainable and Inclusive Growth

Despite positive trends, several barriers hinder the full realization of SDG 8 and SDG 9. Data from the “Atameken” National Chamber of Entrepreneurs indicates a challenging business climate that requires strategic intervention.

1. High Tax Burden: Cited by 28.1% of businesses as the most pressing concern, high taxation can stifle investment and inclusive growth.
2. Labor Shortages: A shortage of skilled labor, reported by 16.2% of enterprises, impedes productivity and the goal of decent work for all.
3. Inconsistent Local Support: A lack of consistent support from local authorities for investment initiatives undermines efforts to build resilient infrastructure and foster industrialization.
4. Market Volatility: Recent reports from autumn 2025 indicated a decline in orders and rising production costs, threatening the economic viability and sustainability of domestic manufacturers.

The Role of Partnerships in Achieving the Goals (SDG 17)

The strategic partnership between Kazakhstan’s Ministry of National Economy and the European Bank for Reconstruction and Development (EBRD) exemplifies the principles of SDG 17. This collaboration is essential for mobilizing financial resources, technical expertise, and technology to support the nation’s sustainable development agenda. By leveraging international cooperation, the program aims to create a more resilient and competitive SME sector capable of contributing effectively to the national and global goals.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 8: Decent Work and Economic Growth
   • The article focuses on boosting the economic contribution of small and medium-sized enterprises (SMEs), increasing their production capacity, and creating employment. It directly discusses economic growth metrics like the SME sector’s 39.8% contribution to GDP and the 3.9% rise in employment, which are central to SDG 8.
2. SDG 9: Industry, Innovation, and Infrastructure
   • The initiative specifically targets the manufacturing sector, including metallurgy, light industry, construction materials, mechanical engineering, and chemicals. The goal to increase production capacity two to threefold and raise the manufacturing sector’s output aligns with promoting inclusive and sustainable industrialization as outlined in SDG 9.
3. SDG 17: Partnerships for the Goals
   • The article explicitly states that the strategy is being developed by Kazakhstan’s Ministry of National Economy “in partnership with the European Bank for Reconstruction and Development (EBRD).” This collaboration between a national government and an international financial institution is a clear example of a multi-stakeholder partnership to achieve sustainable development, which is the core of SDG 17.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. SDG 8: Decent Work and Economic Growth

   • Target 8.2: “Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors.” The article addresses this by focusing on increasing the production capacity of medium-sized enterprises in specific high-potential sectors like manufacturing, metallurgy, and mechanical engineering.
   • Target 8.3: “Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises (MSMEs)…” The entire program, “Improving the Investment Attractiveness of Medium-Sized Businesses,” which provides state-backed support and customized development plans, is a direct implementation of this target.

2. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.2: “Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share of employment and gross domestic product, in line with national circumstances, and double its share in least developed countries.” The article highlights the current 12% contribution of the manufacturing sector to SME output and the government’s plan to prioritize these industries, aiming for significant growth.
   • Target 9.3: “Increase the access of small-scale industrial and other enterprises… to financial services… and their integration into value chains and markets.” The government’s initiative to provide “diagnostic assessments and customized development plans” represents a form of non-financial support aimed at improving the capacity and market integration of these enterprises.

3. SDG 17: Partnerships for the Goals

   • Target 17.17: “Encourage and promote effective public, public-private and civil society partnerships, building on the experience and resourcing strategies of partnerships.” The joint program between Kazakhstan’s Ministry of National Economy and the EBRD is a direct example of a public-international partnership aimed at fostering economic development.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Contribution of SMEs to GDP: The article states that SMEs now contribute 39.8% to Kazakhstan’s GDP. This is a direct indicator for measuring overall economic growth and the success of policies supporting SMEs (relevant to Target 8.3).
2. Growth in SME Output: The text mentions that in the first half of 2025, the sector’s total output reached $82.6 billion, a 25% increase. This serves as a key performance indicator for economic productivity (relevant to Target 8.2).
3. Employment in the SME Sector: The article reports a 3.9% rise in employment to 4.4 million people. This is a crucial indicator for measuring progress on decent job creation (relevant to Targets 8.3 and 9.2).
4. Share of Manufacturing in SME Output: The manufacturing sector’s current share is stated as 12% of total SME output. Tracking this figure would measure progress towards industrialization goals (relevant to Target 9.2).
5. Business Climate and Entrepreneurial Intent: The “Atameken” rating provides indicators such as the percentage of small businesses planning to expand (35.4%) versus those considering closures (6.2%), and the percentage requesting government support (18.8%). These metrics reflect the business environment and the effectiveness of support policies (relevant to Target 8.3).
6. Existence of Partnerships: The explicit mention of the “joint programs with the EBRD” is itself an indicator of the formation of multi-stakeholder partnerships for sustainable development (relevant to Target 17.17).

4. Table of SDGs, Targets, and Indicators

Source: timesca.com