SME DEVELOPMENT IN POST-SOVIET CENTRAL ASIA: THE CASE OF KAZAKHSTAN AND UZBEKISTAN

Abstract

This article examines the development of small and medium-sized enterprises (SMEs) in post-Soviet Central Asia, focusing on Kazakhstan and Uzbekistan. Contrary to the dominant interpretation promoted by international organizations, which emphasizes taxes, corruption, and bureaucratic inefficiencies as the main barriers to SMEs, this study uncovers a different set of underlying challenges. The aim of the study is to identify and analyze the key operational, institutional, and contextual factors shaping the development of small and medium-sized enterprises in post-Soviet Central Asia, with a focus on Kazakhstan and Uzbekistan, taking into account the specific characteristics of the local business environment and the everyday operating conditions of enterprises. Drawing on in-depth interviews and media content analysis, the research identifies key operational barriers that remain largely overlooked. These findings reveal that, beyond institutional and regulatory constraints, everyday operational realities significantly shape SME development in the region. The analysis is based on the Institutional Theory and Contextual Dependence Theory, which together explain how formal institutions, historical legacies, and local contextual factors shape SME operations in different environments. By presenting qualitative evidence from Kazakhstan and Uzbekistan, the study provides a deeper understanding of the structural and contextual factors influencing SMEs in post-Soviet economies. The obtained conclusions expand the scientific understanding of entrepreneurship in countries with a transition economy and can be used in the development of a state policy to support SMEs, taking into account regional specifics, real operational needs of business and the peculiarities of the institutional environment.