According to the Regional Statistics Board, 23% of the economically active population of the Northern Kazakhstan Region is involved in small business. On the other hand, the private business sector is widely believed to be an easy target for local government officials and a host of inspecting bodies who often misuse their power to extort money. The Northern Kazakhstan Police Department reported that 29 cases of bribery were committed in 1999. In December, a group of senior civil servants were publicly accused of embezzling public money, abuse of power, and financial fraud. Nearly all of the accused, however, were given amnesty.

The Northern Kazakhstan Entrepreneurs’ Rights Protection Association (ERPA) was established in December 1999 to shield private business people from corrupt government employees. In fact, ERPA is the only NGO in the region investigating allegations of extortion and harassment of entrepreneurs. ERPA is currently carrying-out an independent legal evaluation of the decisions concerning private businesses. The purposeful activities of ERPA members have brought them recognition from government officials, who at first tried to browbeat them.

Recent surveys conducted by legal consultants of the association have revealed that 76% of the entrepreneurs and private farmers living in rural areas are not aware of their rights. This can be attributed to the fact that in the countryside, information sources are not available to a wide segment of the population. To remedy the situation, ERPA members travel to remote rural areas to conduct seminars on business law and conduct round-table sessions with local officials. Galina Ipatova, the director of the ERPA, believes that the law-making bodies are creating an environment hostile for entrepreneurs and favorable for corruption-prone officials. Disproportional high taxes and bureaucratic procedures for licensing business activities force entrepreneurs to either "grease the palms" of inspectors, or seek shelter in the shadow economy. In one instance, a private shop owner complained that he had to pay 20,000 Tenge ($142) to get his license renewed from the Fire Department. More than 20 government bodies have the power to inspect private businesses under current regulations.

At the end of March, the association advanced some proposals to the government that include upgrading the tax code, reducing the number of inspecting bodies, and raising the monthly salary of tax inspectors who currently make a monthly average of $39. The low salaries urge governmental employees to resort to extortion. Being short of funding, the ERPA is now active in only two of the 13 districts of the Northern Kazakhstan Region, but is planning to extend its activities to other areas later this year. In search of international contacts, the ERPA has turned to The Eurasia Foundation, which is widely known in the country for its active support of NGOs.

Marat Yermukanov