A.K Kanatchinova, Sh. Tuebekova, T. Ilyasov.
"System Transformations of the Organizational and Technological Structuralization of National Industry under a Mixed Economy."
Journal "Vestnik KazGU". Serial of Economic Siences. Almaty, Kazakhstan, 1999, 1.

The strategic line chosen by the Republic of Kazakhstan predetermines the development of systems transformations in industry, formations of the effective oligopolic structure of the market on the basis of a high technological level of enterprises, first and foremost, the creations of an efficient mechanizm of competitiveness among producers.

The non-consolidated economy of Kazakhstan, the deep crisis, spontaneous and uncontrolled structural deformations in industry and the national economy as a whole cause serious difficulties in solving the task of extricating, the country out of economic crisis and creating conditions for the stable economic growth.

Under the present conditions it is important to preserve the viability of the industrial potential of the country the core of the economy of Kazakhctan.

We are to speak, not about the revolutionary changes, but about the transformations of one system into another by the consecutive reorganizations of the existing system.

It envisages the creation of a constantly regulated purpose-oriented market environment, simultaneously carrying out structural transformations of the economy and modernizations of industry, and reorientation of production to satisfy internal ( domestic) export needs and wants.

All the undertakings on economic transformations of industry must follow the imperatives of three "re": reindustrialization, restructuralization and reorganization.The present developed "educated" market may be characterized by high and good organization and stability. It is much less subject to accidental and sporadic fluctuations and the occurring changes are of more smooth and predicable nature. It happens because of the tough structural organization of the market.

For instance, in industries of the USA, Western Europe and Japan oligopoly is the dominating form in the market. Incidentally, small and medinmsize enterprises are "framed" into the vertical and non-formal associations and groups headed by large concerns and corporations and are considered to be a part of an oligopolic structure.

The tape and main characteristics of the market whether it is high technological, well managed and undefended and underdeveloped, disunited and comprador, i. . completely depended of the wlim of big foreign monopolies and domestic tysoons- will depend on the scenario and models of the structural and institutional transformations. Thus, the comprador type of the market entirely corresponds to the si-called notion an outlying capitalism. And those countries that are under the domination of this type become the objects of the constant "civilized" plunder by wore developed countries and their transnational corporations.

The conceptual idea of forming the structure of a new type is a technological condition of any production process at all, the hierarchy, levels of a united system , ensuring of consecutive technological ties in order to preserve, stabilize and to expand already existing economic relations.

The characteristic feature of such formations is stability under a market economy, orientation to the definite segment of the market, the ability to "expand" the "narrow places", and to ensure the financial stability . In these structures there must be their own specific mechanism of privatization and share holding.

The main feature of the economic crisis is the production recession and inflation. This, recession might have becn predicted in advance. But unsuccessfully chosen measures in the field of property reforming, institutional changes, antimonopoly regulation and creation of a small number of large structures of a market types have considerable deepened, sharpened and prolonged this objective process and have complicated the ways of carrying out the reforms.

The privatization program and its main aims such as maintenance of "free manocuvring" and economic efficiency of the activity of enterprises, budget revenues growth, releasing of states from the burden of management and upkeep of non-profitable enterprises (except municipal ) and simplification of transition to liberalized and balanced market prices brought limited positive results only for small and medium-sized enterprises of a commercial type.

As for large industrial enterprises such kind of mechanism failed to work and did not give the expected effect. What is more, the situation will continue aggravating, because after privatization, enterprises will not get additional funds and will be deprived of an access to the centralized sources of financing that constantly supported them previously, and they will be forced to give a considerable part of their profits to pay dividends for their numerous owners. Such kind of approach utterly contradicts the world practice, as the joint stock companies in the world are created for fund raising and for allocating their capitals into different activities (industry investment realization and soon ), to gain profits but noth distribute "fairly" the products manufactured by the already functioning enterprises.

This has also to do with the investment privatization funds IPF operating in the sphere of mass privatization. In the course of a large- scaled privatization process based on cheques having no nominal value, much is spent for collecting and using them. As result, IPFs that have no their own reserves, will not be able to wake necessary investments even at minimum into the enterprises obtained by them in the course of cheque auctions.

The IPFs, nominally representing the interests of small shareholders, practically are managed by a limited circle of people who are not interested in modernization and restructuralization of enterprises.

As each IPF may possess not more than 20 percent of shares of the enterprises, we get additional organized fund-holders that will try to extract from enterprises everything what they can.

It is inadmissible in the sector of basic and capital intensive productions, because for ensuring of competitiveness of products it is necessary to invest capitals constantly and in huge amounts. In case if several IPFs, having a common founder, become the owners of the _____________ of large enterprises of the basic branch, then they will become a connecting link of management by this enterprises. Thats why the given structure controlling the IPFs may be detrimental to management or try to extract the greatest profit out of the enterprises under control. The inter relations of the concern "KRAMDS" and Pavlodar Aluminum Plant, of course, without intermediaries can serve a vivid example of such a situation. This tendency is very actual because it often happens when one founder and function form several IPFs jointly.

For example, five IPFs established by the kazakh Co-operative society (Kazpotrebsoyuz) became the joint owners of zhairem Mining Combine, one of the basic branches of industry.

In the privatization process it is necessary to enhance the role of the enterprises employees, technological core of industry, and to determine the role and level of the state involvement.

Such measures undertaken will help preserve the left amount of the qualified personnel and a high level of scientific, technical and educational potential of labor resources. It seems to be reasonable to reorientate all of them for solving the new tasks that occur in the course of the reorganization of production, and for ensuring competitiveness of the goods product. Besides, one of the required conditions for forming and developing of the sound market is the existence of a rather numerous mid-class, which is mainly composed from the above mentioned categories of the population.

In the process of demonopolization and privatization it is very important to take a more balanced and restrained stance towards the recommendations of the international Monetary Fund.

It can be substantiated in such a way that while handing over of an enterprises from one owner to another, the efficiency of it does not become higher, but only some conditions and prerequisites of success are created. On the other hand, for getting rid of monopolism of large enterprises the wisest course would be the elaboration of the decentralized management program and the economic regulations by creating mid-sized and large enterprises manufacturing the analogous products. The attempts to split up the functioning large enterprises into small and midsized ones may do great harm to the economy of Kazakhstan. The output growth of small and partially of midsized enterprises will not be able to compensate the recession of production as a whole.

Without forming large structures of different types (technological complexes, concerns, corporations, holdings, consortiums and soon), without the integration of industrial scientific, engineering, financial, trade and other activities the republic will be led to the destruction of already existing scientific and industrial associations, to the disintegration of the technological potential, and the loss of competitiveness and dynamism of response in the world market. What is more, the economy of the republic may be left aloof from the contemporary tendencies of integration and diversification of production.

But the world practice shows that the increase of the member of mid-sized enterprises with the grows of the physical productivity and accumulation of the real stocks do not lead to the concentration of production at the sectoral level.

Small and mid-sized enterprises that are placed on the basis of the corporative "pyramid", must create the flexibility and ensure the rapid adaptation to the technological innovations and increasing demands of the market of large high-tech industrial productions forming the frame of the economies of all the industrially developed states.

While giving reasons for such an approach, the specialization of the republic in international labor division and its geoeconomic peculiarities must be taken into account.

On the one hand, it is the raw materials specialization of industry and clumsy production structure. The recession in investment sectors leads to the decrease of the currency inflows from the export. On the other hand, large enterprises of the basic branches of industry are the city-forming units of small and mid-size towns of Kazakhstan. Thetas why there appear a lot of economic and social problems in case production are reduced. Besides, the collapse of large industrial enterprises causes and enhances the migration processes, depriving these cities, first of all, of active, highly qualified specialists, mainly of non-natives.

Thus, it may be stated that at the second stage of privatization the same niestakes and shortcomings of the first stage have been repeated. It was impossible to avoid the rupture of ties between the technologically dependent and homogenous productions; and in many cases demonopolization of enterprises was carried out without a preliminary appraisal of strategic plans and economic ties of the main companies and their subsidiaries. And it negatively effected both the state and development of these companies at the regional and republican levels.

There are some facts that the new owners of the privatized objects did not preserve the type of specialization that contradicts the legislation of Kazakhstan on demonopolization and privatization.

Besides, there were the cases when foreign investors, without any serious and objective substantivation, were involved in the process of mass and individual privatization as the co-owners of the privatized objects. One of the most serious shortcomings in the process of property transformations in the insufficient study of the procedural issues on forming companies and holdings. So, as a result of joining enterprises with different specialization under the auspices of the corporation "KRAMDS", there basic specification was washed away. But it did not stop production recession, on the contrary, accelerated it.

But the world practice shows that while manufacturing the heterogeneous products the profit rate is rather high and stable (under the developed market system), the capital returns become low. Thetas why such kind of transformations negatively influenced the volume and structure of the accumulation in Kazakhstan, which is in great need of capital investments, unlike the other republic of the former USSR. Under the present conditions it is impossible to carry, out the process of reindustrializing of production, without the sufficient amount of accumulation.

While creating the holding company "Kazakhstan" tosty metaldary (Kazakhstani ferrous metals0 there a appeared the problem of interacting between the enterprises of the SPA ( scientific production association) KazYORMASH and the SPA " VOSTOK Mash Zavod" which were the constituent purts of the united complex on production of the mining equipment.

A joint stock company " Kazstroipolimer" and Dzetygarinski Asbestos Mining Complex, producing asbestos cement and asbestos pipers joined different holding companies. They should have been joined into the holding "KurylysMaterialdary" ( Construction Materials) as technologically related productions.

One of the main shortcomings of the reorganizations is ignoring the production and technological principles. As a rule the structural links of newly formal enterprises are joined according to the organizational managerial and financial principles. Incidentally, the goals are not determined distinctly; there is no strategic line mechanism of its realization, i.e. the mechanism for "melling" the whole capital and their activity is oriented only to the short-term factors.

Relying only on the financial base and not to focus on the rational interaction and succession of the elements of the cycle " science-production-sale" it is impossible to ensure the full-bodied work of HUOKP, modernization of production and constant renewal and improvement of the goods produced.

All these factors hamper to maintain the competitiveness of products manufactured by the enterprises of the FPG and they will chronically lag behind and will have to resale the goods produces by others.

Besides, FPG is the common name used for veiling the specific features of production.

While forming the new structures in industry, it must be obligatory to point out:

Their optimal structure and size their strategically, integral scientifically substantiated investment, technical and personal policy; management and marketing of a high level are the main requirements of successful functioning of new formations.

The main principle of organizing some industrial structures is the industrial and technological one, and the financial maintenance plays a great role in this line. Enterprises must be joined into one structure beginning from the main decisive moment and then depending on the chosen strategic purposes and forms to start forming the infrastructural base. In other words, in order to form a new organism it is necessary to start with the skeleton and then only to add the muscular and vascular bulk.

In any industrial system there must be a "well- marked" structural nucleus connected with its affiliates, enterprises-satellites and also with financial and trade market establishments that are considered to be the infrastructure of the system.

The process of further institutional and structural changes that are going on in the course of reforms of large scale industrial production, has a specific nature and its own algorithm , the main distinctive features of which are succession, manageriability and precise shape.