Despite Lasting for the Last Decade Attempts and Reforms of Local Government Aiming At

Local Self Government in Kyrgyzstan – myth or reality?

Nuripa Mukanova[1]

Abstract

Despite lasting for the last decade attempts and reforms of local government aiming at decentralization and empowering local authorities, Kyrgyzstan is still regarded as pretty centralized country with the strong presidency power, but a weak central government and a weak local level. The term “local level” is subdivided between an intermediate level (oblast and rayon) and local government at the city and the village level . The intermediate level is actually a local state administration represented by the oblast governor (7 in total) and rayon akims appointed by the President (40 in total). The city local government is presented by 27 cities – 2 cities of the republican significance, 10 cities of oblast significance and 13 cities of rayon significance . The mayors are appointed by the President and confirmed by the local councils. Confirmation of the local council requires formal agreement of the governor and akims. The village government (aiyl-okmotu) is presented by 472 elected LSG heads and 6818 elected councilors.

In the administrative system of Kyrgyzstan the local (subnational) level has only powers specifically delegated by the central government. The local level is designed in a way to allow implementation of decisions made by the President Administration and the central government. Deliver of services for the direct benefit of local population is not the primary task of the local level; however it allows avoiding direct involvement of the central government into service provision, thus shifting focuses for non-provision to the local level. However, if elected body is not able, no matter what reasons are, to provide services, it can hardly be called local government.

Appointed mayors have dual personal loyalties, and typically are less responsive to local needs. Directly elected AO heads should have had the strongest degree of autonomy, derived form the personal electoral mandate. However, they also depend a lot on the LSA and report to it for execution of the President and government resolutions, resolution of ministries, and for functions shared with the state. This system resembles the old soviet management style, which cascades decision-making down the system. There are a lot of discussions about necessity of intermediate level. There is an opinion expressed by international community and LSG leadership that “existence of local state administration and a strong central government is a real obstacle for further development of LSG system in Kyrgyzstan that prevent LSG from being independent and autonomy”. Others think that such discussions are of no use because for our environment with ethnic division, “they might threaten the unity of a fragile state”.

Many people consider that the present system represented by ministries, oblast, rayon state administrations and LSGis not a true local government rather restoration of a state administration. To agree or disagree with this assumption it is necessary to look at other experiences and systems where LSG works perfectly well. This comparison with other countries - though it is a difficult task for number of reasons – will enable to revise the existing LSG system and find an answer to the following questions:

• What are the basis for development of LSG system?
• What system can be called LSG?
• Is it possible to compare different systems and what is the basis for comparison?
• What are major problems that create obstacles for developing LSG in its true sense?

Thus, this paper looks at the results and consequences of KR local self government development reforms compared to the same processes in other countries. Though the systems and ways of doing reforms are different, there possible to find some common principles – when the system can be called local government, and what are problems and issues other countries faced in their LSG development history.

Contemporary methods of research including comparative analysis, systemic and content analysis, desk research, expert evaluation are used as the key tools of the research.

Recently, the Danish government published a study comparing its performance in providing a range of public services to its citizens with 10 other European countries that have similar level of economic wealth. And this study outlines interesting phenomenon - how differently public services such as health, housing and education are provided in the various countries of the European Union despite their similarity. In some cases the state is dominant; in others - local government, churches or non-profit organizations have important roles; in some cases the private sector has a role.

This is because different countries have different values, which have been cultivated in different ways. This is because the history of European local government appeared and developed 50 years ago. Different societies have learned to trust different groups in very different ways. Some European countries trust their civil servants, some countries believe that vital public services should be provided by local government or non-profit organizations, some countries have an opinion that delivery of services should be contracted out to the private sector or NGO. Each country’s history has given different strengths to the power of the central government and the power of the local government. In the Swiss system the state has a limited role. Historically local government has more advantages than the state in Italy and Germany. In countries such as UK and France, the state is much stronger, and the constitutional position of local government weaker. If we look at the experience of the countries like Romania, Check and Slovak they are moving towards strong local government that co-exists with a strong local state administration.

The main conclusion is that LSG in the country needs more time as it is on its infant stage. The Kyrgyz LSG looks for its role, and the centre should help the local government to find its place and determine its role and functions. However without citizen’s participation LSG is meaningless. The question then - should LSG provide services to citizens or should it serve as intermediary liaison between the central government and civil society. At present the issue of a strong central government and a weak local government is a current Public Management Reform agenda that was articulated in the Kyrgyzstan Country Development Strategy for 2006-2020.

1. How to Measure LSG Success or Failure

1.1 Indicators for Comparison of LSG Systems across Countries

There are plenty of indicators that can be used for assessment of local self government success or failure. However the major problem is the problem of measurement. Not all the indicators can be measured, thus some of them are very judgmental. For example, does a constitutional system affect the local government development? Which constitutional system is better for LSG system occurrence and development? If we look at the countries with the similar to Kyrgyzstan number of population, their constitutional system varies from regionalized unitary (Scotland), decentralized unitary (Denmark, Finland) up to centralized unitary (Ireland, Estonia, Latvia, Lithuania) (Table One). Can we say that regionalized unitary is better for LSG than decentralized unitary?Or what is common between those various constitutional systems?

Local government systems which (a) employ a high percentage of public sector staff; (b) raise a significant percentage of their costs from local taxes; and (c) have a high voter turnout seem to demonstrate signs of success and therefore to constitute models to follow[2].

Scotland with 5.0 million populations that has one of the oldest LSG history, and is represented by a Scottish Executive and 26 municipalities. In Denmark (5.2 million citizens) there are 14 counties and 273 municipalities, where as in Finland with the same number of population the local government is represented by 19 regions and 446 municipalities. Estonia is divided into 15 counties and 241 municipalities, Latvia is divided into 26 districts and 535 municipalities, in Lithuania there are 60 municipalities and regions have been established recently. In Slovakia (5.0 million population) the local government system includes 2887 municipalities and 8 regions.

A common feature for all above-mentioned countries is that the LSG system has two-tiers – municipalities at a lower level and regions (counties) at a higher level. Finland, Denmark, if we look at theirranking,are considered as countries with strong local government system (Table Two). If we explore the number of staff employed and share of GDP, the share of municipal staff in overall public sector staff is high in Denmark (71%) and Finland (75%). Denmark covers 82% of their costs from local taxes, Finland covers 85% of their costs from local taxes, and Ireland, which employs 13% of all public staff, covers 26-54% of costs through local taxation.

On the other hand according to New Public Management Ideas neither central government nor local should be providing services directly – but rather contract them out to the private of NGO sector. Based on this argument, high percentage of municipal staff employment does not say about high quality performance. On the contrary it is a bad sign. A lot of staff means a large bureaucratic organization, and very often bureaucracy means lack of interest in new ideas and lack of attention to the customer!

Howeversmall municipalities do not have the capacity to perform some of their important functions. As it shown in Table Threeshare of local spending in GDP is low in Slovakia (4%) where the number of municipalities with less then 1000 people is high (over 50%). In Estonia where the number of population in municipalities is low (less than 10%) the share of local spending in GDP is higher (12%). In Latvia that has the municipalities with medium size (up to 50%) the local share is about 9%.

What about the citizens satisfaction or dissatisfaction? Is it measurable? What indicator can be used for that? Provision of services across municipalities and types of services may be a valid measure. However, comparative figuresare not easy to find on this.Some would say voter turnout is an important indicator of trust. Others argue that low voter turnout could signal that people are happy with things as they are.

1.2Indicators for Assessment of LSG in the KyrgyzRepublic

According to LGI indicators of Local Democracy “LSG is a system which allows local people (directly and /or indirectly) to run public services and to select their priorities for action. A system can be called local government only if[3]: –

• Those taking the decisions (mayors and councillors) have been (fairly) selected by local people
• They are accountable to the local people for “affairs of local significance”– and to central government only for those delegated functions for which they are adequately financed
• LSG is able to deliver some public services to their local citizens
• LSG has a transparent process for selecting priorities
• They decide their own local budget composition
• They have sufficient quantity and quality of staffing to perform their responsibilities legally and effectively
• They are allowed to get on with the job – unrestricted by constant interference from outside

If we apply those indicators to LSG system in KR, this system resembles the system of local state administration rather than local self government. Of course it is a strong advantage that LSG system is represented by 472 municipalities and 6818 local councilors.However researches[4]conducted show that currently they are kept (i) as practical tool for implementation of decisions of the central government as they report back to the central government about execution of tons of administrative and delegated functions that take 80% of their time. (ii) Local councilors are not involved in discussions of main documents about the future of local government because all those activities are concentrated in Bishkek. (iii) Local councilors’ agreement for adoption of vital for LSG laws are not anticipated by the formal procedure of adoption of such documents. (iv) In 2005 oblast and rayon councils were abolished as unnecessary. (vi) Mayors of cities are nominated by the President (similar to nomination of the oblast governor or akim of the rayon LSA) rather than elected; so they perform only those tasks that benefit the central government. (vii) Local councilors have little power to formulate and select priorities as they are instructed by the central government (the Ministry of Finance and the Treasury) how much they can spend (control figures). (viii) Town citizens elect their city councilors to perform the affairs of local significance, however few services can be delivered with so few staff (12 people maximum that are fully busy with tax collection only) and resources (only 20% of local taxes collected are allowed to keep at the municipality level). (ix) Local councilors have a symbolic role in the process of budget formation, they have legal mandate neither to introduce new local taxes nor abolish non-required taxes.

One of the paradoxes of local government in KR is that it can seem strong if measured by the number of staff it employs[5] or the percentage share of the public sector spending (up to 90%). However this happens due to numerous delegated functions[6] where the municipalities are simply doing what the legislation requires and what they are paid to do by the central government. On the other hand public sector spending is so high due to categorical grants that are transferred to LSG for execution of state function as shown in Table Four.

It should be taken into consideration that the structure and functions of the village LSG are different from rayon and city municipalities. Village LSG is represented by 8-10 municipal servants in average depending on number of population and size of the territory, and consequently can perform maximum 3-4 functions out 11 assigned. Other functions are performed from time to time when external resources are available through grants of international community (ARIS/ USAID, UNDP, WB Rural Investment Project) or charitable donation of citizens. Some functions such social protection, employment and migration program, public order are performed by regional subdivisions of the ministry and subsequently financed out of the budget of the ministry. Table Five shows the functions that are not executed due to lack of resources or poorly executed due to lack of capacity and low staff capability.

2. Experience of Central Europe in moving from LocalState Administration to LSG

Another important indicator to look at is the relationship both formal and informal between the central government and LSG. In Kyrgyzstan the centre assumes that :

• the local government can be created by a few central decisions to transfer authority and functions over resources, and that LSG should just wait for this to happen.
• local government does not have capacity to run the services due to low quality of staff and lack of experience
• absence of clear delineation of functions as the main obstacle for introduction new inter-budgetary relations.

On its turn the local government considers that:

• if properly financed, they can perform all those affairs of local significance plus delegated functions, thus expanding the role of LSG.
• Lack of capacity to run the services and low quality of staff is a minor problem in comparison with lack of finance.

Worldwide experience shows that this is not the way local government has developed historically. Historically local government led, and the central government followed. For example the case of Great Britain in 19th century when councils of cities like Birmingham enacted a range of progressive policies, which the central government then framed in law[7].

Let us look at the experience of Central Europe in moving from Local State Administration to Local Self-Government (Table Six).

• The Counties (regions) were viewed with great suspicion (particularly in Poland and Hungary) as the power base of the communist party

• In several countries the local population elect their local Mayors directly (Slovakia, Romania)
• Most countries have been reducing the power of the centrally nominated figures (Slovakia, Hungary)
• Most central European countries have a two-tier system (Scotland, CzechRepublic, Slovakia)
• Laws on local government finance have been passed – but slowly (Ireland)
• Central European countries have found it useful to use the Council of Europe’s Charter on Local Self-Governmentas a benchmark for their debate and reform.
• Poland and Hungary have gone furthest in moving from LSA to LSG, and the Czech Republicis somewhere in the middle.

3. Why is it so essential to be aware of the experience of other countries?

Nobody will argue that the system of governance reflects the history and values of the country. And we should admit that history and values vary from country to country. Then the issue is why we should be interested in how other countries organize their systems of local government in particular, and the state in general?

KyrgyzRepublic like about 20 other countries is building a new-found statehood after the collapse of the Soviet Union. Within short period of time the country went through drastic changes including an almost impossible task of creating new structures, systems and skills of statehood. As we didn’t have experience and time to work out systems the main effort was to look at all possible models and experiences that seemed to be working successfully in other countries, and adapt those models to the Kyrgyz context. Very often those models didn’t have any whatsoever similarities with our conditions. As the result the country experienced the American model of marketization and privatization (Price Water House Project), demonopolization and commercialization of state functions (WB PESAC project), UK and USA models of practical application of private sector rules in a public sector environment (model of fund holder, contractual based services), French model of how to run the government, and local government development in accordance with European Charter on Local Democracy.