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: / Strategies / National Poverty Reduction Strategy (2003-2005)




Kyrgyzstan Review, 10 years ago




E. Decentralization and Local Self-Government

121. Since declaring its commitment to democratic principles, Kyrgyzstan has been consistently empowering institutions of civil society that are capable of implementing certain state functions with greater efficiency than can government agencies and structures. Decentralization of public administration has been implemented in two main areas:
the economy (privatization, development of private property, promotion of corporate governance, formation of independent economic entities and so forth); and
administration of regional and local government that implies balanced local development through formation of the system of local government.
 
122. Radical institutional adjustments have ensured an overall successful decentralization in the economic sector. At present, over 85 percent of GDP is produced in the private sector, compared with 25.8 percent in 1991.
 
123. Decentralization of public administration, one of the most important areas of administrative reforms, has helped to develop a truly democratic institution, local government units elected and managed at the local sub-rayon level, called in Kyrgyzstan, local self-government (LSG). The consistent and targeted efforts in this direction included the following stages:
At the beginning of 2001, 11 aiyl okmotu (village governments) and the town of Isfana held pilot elections of leaders. These elections helped to test the mechanism of appointment by election for s and develop proposals on amendment of the Election Code of the Kyrgyz Republic.
In May 2001 all cities of regional subordination, Osh, Jalal-Abad, Talas, Balykchy, Suliukta, Kara-Kul, Kyzyl-Kiya, Mailuu-Suu, and Tash-Kumyr, adopted principles of LSG. In July 2001 these cities held alternative elections of leaders and mayors of cities, whose functions were previously performed by deputies of local councils.
The amendments to the election code approved in October 2001, laid the ground for alternative democratic elections of leaders that were held in December 2001 in all villages, town centers, and towns of district subordination. On average, there were four candidates running for each position. The first round of elections was monitored by 8,870 observers and 2,629 observed the second round.
The Law on LSG and local state administration (elements of national administration, operating at local levels), adopted early in 2002, outlined operational and legal foundations, state guarantees, the right of local communities for self-government, as well as interaction principles with local elements of national administration.
Thus in 2001, all localities of the Republic adopted principles of LSG. There are now 487 village governments, city administrations and councils, and the same number of local councils throughout the Republic. The core of LSGs is to be found in the local councils (keneshes) that coordinate activities of public administrations, territorial self-government and private structures. A total of 8,184 deputies of various levels were elected throughout the country. The Law on Local Councils and other LSG bodies has significantly raised their role in the conduct of democratic government administration.  
 
126. LSG has become an important aspect of the development of civil society and an important part of public administration. LSG bodies provide sizeable support to state agencies in stabilization of local political and social situations, resolution of social and economic issues, and reduction of poverty. These positive developments are largely the result of implementation of the LSG Development Concept for 1999-2001 and Programs of State Support to LSGs. International agencies, UNDP, World Bank, ADB, USAID, Soros Foundation and others have also rendered invaluable assistance with promotion of LSGs.
 
127. The legal framework for LSG presently includes 10 laws, 50 presidential decrees, over 30 government resolutions, and other legal documents. These documents regulate operational, legal, economic, and technical functioning of LSGs. The new state laws on LSG and Law on Communal Property adopted in 2002 gave additional impetus to development. These laws more accurately define the scope of competence of LSG agencies and set preconditions for further decentralization of public administration.
Several measures enhanced the status of peoples conventions (kurultai) as one of the traditional forms of national democracy and encouraged activities of LSG. The village and town heads and local representatives of national government administrations are now accountable to local communities. The newly adopted Law on the Courts of the Elderly (aksakalss courts) promotes their role, independence, and responsibility in addressing local issues. An important progressive step towards greater transparency of LSGs was the new practice of public hearings on development and implementation of local budgets.
 
128. Along with their growing capacity and responsibilities, LSG agencies are gaining more rights and authorities, and are even assigned some formerly national functions. For instance, rural councils are now responsible for the following functions and authorities previously performed by the Ministry of Labor and Social Protection:
establishing the social identity of each family and compiling poverty maps;
identifying the needs of the local community for targeted social protection;
studying the living conditions of the poor eligible for targeted social assistance;
collection of applications for receipt of state benefits; and
preparing lists of indigent residents eligible for humanitarian aid and control over its distribution.
 
129. LSG agencies have gained more power in budgeting and collection of taxes. Legislation has established the basic approaches to local budgeting, revenue and expenditures, and outlined rights of LSG agencies in economic and financial activities. The main sources of revenue of LSG bodies are taxes on land and property, rental payments and other earnings. However, the minimum budget of local communities is fixed through the system of transfers, specific grants to finance national services on the local level and equalization grants to level regional differences. The end of restrictions on purchase and sale of land was a step toward democratization of land tax. District councils are now allowed to vary the size of the land tax within 30 percent of the base rate. Besides, local councils have received the right to lease out land held by the Land Redistribution Fund at their discretion.
 
130. In accordance with the Constitution of the Kyrgyz Republic, local communities possess communal property in the form of land and other facilities. To strengthen the economic foundation of local communities the Government has transferred over 9,300 social facilities for the total amount of nearly 8 billion soms for communal property. Transfer of land from the Land Redistribution Fund has also contributed to financial and economic stability of LSGs. State registration of communal facilities has enhanced property rights in towns and villages. The Law on Communal Property has introduced order into the transfer and use of communal facilities.
 
131. Social mobilization and cooperation on the level of local communities has experienced significant growth in recent years. Social mobilization at the community level supported by rural councils has stimulated development of self-help units and initiatives, encouraged rational use of available resources, and concerted elimination of local problems. The most important decisions related to development of local communities are made at rural meetings and conventions. Social mobilization has played an invaluable role in implementation of many local development projects, such as construction and renovation of schools, bath houses, water systems, roads, bridges, etc. This, in turn, has contributed to formation of local social capital. The Decentralization Program implemented by the United Nations Development Program (UNDP) has played a significant role in promoting social mobilization on the community level. In towns self-organization has led to the formation of condominiums by property owners. Other forms of self-government and self-organizations have also appeared in Kyrgyzstan.
 
132. In the year 2000, a new post of Minister of Local Self-Government and Development was introduced in the Government. The move aimed to ensure close cooperation of LSG agencies with state administrations and representation and protection of LSG at the state level. An Association of Villages and an Association of Towns have been established and functioning. Together they make a sizeable input into development of the decentralization policy, protection of the interests of the towns and villages, capacity building in LSG, and monitoring and evaluation of development of LSG.
 
133. At the same time, there are number of problems that constrain decentralization of public administration and development of LSG. These include:
Weak legal framework
The existing legal documents do not fully provide the conditions for optimal decentralization of public administration. Effective management on the level of local authorities is yet to be developed. There are gaps in legislation in regard to municipal services and development of social mobilization.
Insufficient state support to LSG, limited decentralization of power
The functions and authorities, as well as responsibilities between the bodies of state government and LSG are not clearly delineated. Mechanisms for the transfer of power and responsibility need to be refined.
Ineffective financial budget regulation
Finances and local budget are still centralized and significantly constrained. Legal framework and other mechanisms of economic and financial decentralization are still limited. Transfer of appropriate financial resources does not accompany transfer of authority and functions.
Inadequate professional level of municipal employees
The Law on Municipal Service is to be developed. There is a need in the system for training, retraining, and qualification upgrading of municipal employees, their motivation and social protection. There is a lack of informational, technical, and methodological support to LSG staff.
Limited scope for social mobilization and development of human potential in the new conditions
Multiple resources need to be used to further various forms of social mobilization. People must actively participate in decision-making in local communities.
Weak partnership and interaction of government agencies with LSG and the private sector
There is a need for effective mechanisms for constructive cooperation, methodological recommendations for effective interaction system, supervision by local communities; community organizations still lack the skills and knowledge necessary for adequate partnership with the local authorities.
Ineffective management of communal property
There are still problems with property rights and privatization mechanisms.
Insufficient scientific, methodological and informational support to LSG
There is a need in development of a scientific framework for decentralization and development of LSG that would take into account international experience, historic and geographic conditions, modern status and the national statehood. The system of informational support in methods and advanced experience of managing budget, communal property, municipal farms, social and economic development of territories has not yet formed. Little attention is paid to informational and political support of LSGs in explaining to the population their constitutional foundation, the state policy, achievements and problems.
 
134. The decentralization of public administration will be actively continued with consideration of the issues and positive experience. The main objective of the forthcoming work is optimization of decentralization processes and development of the LSG; creation of effective management mechanisms on the level of local communities to help them independently address local problems, ensure gradual transition to economic self-sufficiency; provide to members of local communities necessary social and communal services; and assist with reduction of poverty and increase of well-being.
 
135. Policy for decentralization of public administration and development of LSGs will be oriented at the following main priorities:
formation of harmonious legislation on LSGs and decentralization;
continuation of political and administrative reforms in decentralization and state support of LSGs;
economic and financial decentralization, program-based development of local communities;
improving effectiveness of property management on community level;
developing municipal services and enhancing human potential of structures, their scientific, methodological and informational support;
increasing openness and accountability of agencies, building civil society partnership; and
human development and enhancement of social mobilization in local communities.
 
136. The following tasks will be addressed in the process of developing LSGs.
Harmonization of legislation on decentralization and LSGs implies:
the possibility of independent legal regulation of organizational, financial, and economic activity in LSG within their competence;
addressing contradictions and incompleteness of legislation on LSGs;
development of accountability mechanisms for inadequate implementation of legislation on self-government, and legal documents of LSG agencies.
Delineation of functions, authorities, and responsibilities among government agencies and LSGs implies:
clear separation of authorities and responsibilities among government agencies and LSGs on various self-government issues, including health, education, culture, social protection, order, ecological security, private enterprise and other;
elaboration of principles and order of delegating authorities and transferring managerial functions of ministries and administrative departments to agencies, and devising control mechanism over their implementation;
continuing improvement of government structures implementing state policy on development of LSGs;
transition from administrative management to normative regulation with the use of economic and political management tools and separation of authorities among all levels of power;
formation of a sustainable cooperation system, including wide use of agreement procedures in addressing issues that arise in the process of interaction among republican government agencies, regional government agencies, and LSGs.
Continuing economic and financial decentralization and transfer program development of LSGs envisages:
budget and tax regulations that would allow to form balanced program-based minimal local budgets, create conditions for optimization of the taxable base of local agencies;
bringing the level of local budget revenues to the level that will guarantee financial independence of LSGs and provide a ground for medium- and long-term social and economic forecasting and planning in municipal entities;
development and introduction of minimum state social standards, as well as normative minimum budget security;
development and introduction of inter-budgetary relations to stimulate socio-economic development of municipalities;
ensuring minimum level of local budget revenues to cover the expenditures of local communities necessary for execution of transferred authorities and implementation of minimum state social standards;
elaboration and adoption of the Law on Financial Economic Foundation of LSG agencies; and
co-financing and attraction of alternative financial resources for local development.
Improving management of communal property provisions:
adequate maintenance of basic social and technical infrastructure, stimulation of economic activity;
improved accounting of property, legal enforcement of property rights;
competitive procedures for provision of management rights and direct agreements with the communal property users;
optimization of communal property by 1) transfer of facilities not related to fulfillment of LSG functions and 2) receipt into municipal ownership or management state facilities necessary for fulfillment of LSG powers;
Development of municipal service and enhancement of human potential of LSGs; provision of scientific, methodological and informational support envisages:
raising the status of employees, measures on their legal and social protection, promotion; competitive filling of vacancies;
amendment of the state educational standard on requirements to the courses on Public and Municipal Management to bring them into concordance with new tasks and functions of municipal employees;
completing formation of the state system for training, retraining, and qualification upgrading of municipal employees, as well as the staff for LSGs; qualification upgrading of elected officials, training candidates and participants of election campaigns in election procedures;
introduction of the system for scientific and methodological support to LSG; development and introduction of innovative technologies of managing economic, social, and political development on local level; municipal property; budgeting; and comprehensive development of territories;
creation of the state information system, including establishment of public Internet-access centers and introduction of information technologies into municipal management;
dissemination of advanced experience; explaining to people the constitutional framework of LSG; disseminating information on progress and problems in LSG;
studies on various issues of decentralization and development of LSGs, formation of scientific and methodological ground for reforms.
Increasing openness and accountability of LSGs, promotion of their partnership with the civil society envisages:
the practice of open public hearings in local communities, public accountability of officials;
simple and clear operation regulations and procedures;
legal and organizational framework for interaction with the population to ensure peoples participation in LSG;
open public access to the information on activities: decisions, progress reports, condition of communal property and financial status.
Human development and enhancement of social mobilization in local communities provisions:
partnership with community organizations, local , and businesses;
capacity building of community organizations, local , business associations to ensure their active participation in elaboration and implementation of local policy, social mobilization;
joint elaboration and implementation of projects by LSG agencies, nongovernmental organizations, and businesses;
training and dissemination of best practice of social mobilization and partnership.
 
137. Specific actions on implementation of the provisioned policy measures will be reflected in the National Strategy for Further Decentralization and Development of LSG in the Kyrgyz Republic (2002-2010), which is currently being developed.