According to the Kazakhstan edition of PwC's 17th Annual Global CEO Survey, CEOs in Kazakhstan offered restrained forecasts on the prospects for growth in the world economy in 2014. Only 34% of them are confident in growth, 47% think that the situation will remain unchanged and 11% believe that the global economy will worsen in the next 12 months. The survey interviewed 36 Kazakhstan business leaders, as well as over 1300 CEOs around the world.
Last year, 96% of CEOs in Kazakhstan were confident about their companies’ prospects for revenue growth over the next 12 months, while this year only 81% demonstrated the same level of optimism.
This year 61% of Kazakhstan CEOs are considering cost reduction initiatives - the most popular form of restructuring since the previous year. The situation is similar for the global and Russian markets, where 64% and 49% of CEOs, respectively, will implement initiatives to reduce costs.
Strategic alliances or joint ventures remain the second most popular restructuring initiatives in Kazakhstan for 2014. Those considering alliances or joint ventures are mostly interested in Central and Eastern Europe and Central Asia.
“CEOs in Kazakhstan appear confident that their companies are more able to adapt to change. They also see short term business opportunities not only in terms of increasing market share in existing markets, but also through joint ventures and strategic alliances, as well as opening up new geographic markets. In the long run, they believe the shift in the balance of global economic power and the speed of technological advance will have a revolutionary effect not only on their own businesses, but also on their industries as a whole,” said Alper Akdeniz, Managing Partner of PwC Eurasia.
Accelerated business growth in most cases requires hiring staff. No less than 63% of Kazakhstan CEOs are considering an increase in headcount this year, which is 14% more than CEOs globally.
Attracting skilled personnel is becoming one of the most important factors for healthy development. Business leaders understand this very well. 70% of CEOs worldwide and 91% of CEOs in Kazakhstan are concerned about finding the right employees with the necessary qualifications.
Understandably, in the light of February’s devaluation of the Tenge against the US dollar, exchange rate volatility is widely seen as one of the most serious threats to business in Kazakhstan. CEOs interviewed this year indicated that they are extremely or partially worried about currency volatility.
In second place among the threats to business development in Kazakhstan, are bribery and corruption which concern 89% of respondents.
CEOs identified three main areas of activity which should, in their opinion, be high priorities for the government to encourage economic growth in Kazakhstan. The first is ensuring greater stability of the financial sector and better access to capital. This is seen as a priority by 78% of CEOs in Kazakhstan. Improvement of national infrastructure was cited as a priority by 72% and preparing better qualified labor resources was seen by 42% as the third key area for government action.
Some Kazakhstan CEOs also mentioned additional areas where government should do more to improve the business climate including more effective measures in anti-bribery and anti-corruption efforts, and the development of non-resource economic sectors.
Looking at future challenges, CEOs around the world note that over the coming five years they expect their businesses will be most affected by the impact of new technologies, demographic changes and shifts in relative power dynamics. The interplay of these three trends will play an increasingly important role in shaping the overall business environment.