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Ukraine needs not to lose in confrontation with Moscow – expert

Decentralization brings the decision-making centers closer to people. Communities are becoming independent. When everyone is waiting for commands from the top, society does not develop, – says Ihor Koliushko, Head of the Board of the Center for Political and Legal Reforms

Decentralization was called one of the most successful reforms. State support to the regions has grown from half a billion UAH in 2014 to UAH 19.4 billion last year. What was the success and what wasn’t? 

– The reform was launched based on the right concept. It was developed by experts, unlike many others. Really embodied, not pretending.

There are about a thousand amalgamated territorial communities (ATC). An effective mechanism was found and citizens were convinced that the reform was necessary. Society believed in reform. But there were abuses. People realized that ATC are receiving more money. Therefore, some united haphazardly. The community could include two small villages in order to receive more to their budget. At first it was ignored. Now the issue has become acute. Up to a quarter of ATCs have problems with the performance of their functions.

According to the reform, most of the powers of the districts are given to communities. It is necessary to approve updated long-term plans for community amalgamation and communicate them to people. So that they continue to work until the communities meet the criteria: population of at least five thousand, preschoolers of at least a hundred, 250 schoolchildren. We need a tax index. Under these parameters, all communities should be adjusted. Then the reform will be successful.

What are the disadvantages of decentralization?

– Some problems are connected not with norms, but with the state of society. In many areas big businesses put pressure on local authorities. Turn regions into its own “patrimony”. Sometimes in such situations local authorities defend the interests of a “feudal lord”, and not a community. This is not regulated by law. A set of actions is needed. Consolidation of communities is one of the ways. A large community is more difficult to control for one person or several people.

It was not possible to ensure the logical connection of nearby villages to the cities. And it is important. The city should have space for development. A squeezed city is losing potential. It receives no investments, residents leave the city.

We began to amalgamated small villages. This should be the last link: villages that are connected to the city are amalgamated among themselves. Heads of local authorities did not want to join the city. In that case, they would lose power. In 2015 it was ignored, so that local elites would not be disappointed in the reform.

The revenue of local budgets increased by UAH 165 billion compared to 2014. What is this money spent on?

– The tax legislation for ATCs has changed. The community receives 60 percent of personal income taxes, not 10 percent as it was before; community also earns on excise taxes. The latter is a transitional situation. For example, it is in appropriate to assign excise taxes on a sale of fuel to rural budgets. This encourages them to build a gas station in every village, although there is no need in so many stations.

Local governments have to learn how to effectively use money. Since 2015, we have two parallel trends. Firstly, they quickly spent money on something that can be shown to people and put on their credit. For example, asphalting of sidewalks in villages, parks, squares, windows in schools. Landscape improvements are important. But this is only consumption.

The second trend: heads of villages were afraid to spend money. They massively put them on deposits in banks. It is definitely better than stealing. But this is a stomp on the spot.

It is necessary to invest part in what will bring profit: business initiatives, attracting investments. And the part is to spend on improvement. People will see positive, but there will be development, and not just consumption.

How did society accept reform?

– Sociology shows high support. Citizens believed in reform, felt its advantages.

However, not all territorial communities amalgamated. Who has not done this so far is unlikely to make it. Most often it rests on subjective factors. Since 2017, local businesses, large land tenants began to intervene in the reform. They imposed who should amalgamate with whom. They did not want to spray their lands across several communities. There was a conflict: people are used to dealing with one village, and the businessman insists that they unite with another.

You said that the decentralization concept that the Zelenskyy’s team offers is the concept of 2014. Is the new government ready to continue the reform?

– Zelenskyy’s team declared that it supports the reform. Next, you need to adopt a law on the principles of the administrative-territorial structure, to amend the Constitution. Approve communities (hromadas) and new subregional units.

Experts advocated the term “povit” (county) for subregional administrative-territorial units. This is in line with our historical tradition. But the “Servants of the People” want a “okruh” (district). The idea is unsuccessful. “District” is an ambiguous term. There are military, electoral, prosecutorial, hospital, educational districts. There will be confusion.

It is proposed to liquidate raions, and replace local administrations with prefectures. How in practice will this differ from what we have now?

– The raions will be liquidated, their powers will mainly be transferred to the communities. Instead of 490 raions that we have in Ukraine, there should be 120-130 povits or okruhs. They will be significantly larger than districts, but the functions will fundamentally change. First of all, they are necessary for the placement of executive bodies.

The prefecture will not be an executive body of local government. Regional and district councils will have their own executive committees. The prefect will carry out three functions: supervision of the legality of the actions of local authorities, coordination of the work of the territorial divisions of the central executive authorities and coordination of all public administration bodies in a state of emergency. The prefect will represent the government in this territory, will have direct ties with the Cabinet of Ministers and the President.

On July 10, 2019, the government of Volodymyr Groysman approved subventions to local budgets for UAH 2.5 billion. On 3 September, local budgets received 814 million – more than 32 percent of the allocated money. And on September 10, the territorial bodies of the State Treasury referring to the order of the Ministry of Finance blocked the funds. They contacted local authorities to return funds voluntarily. Why is the authority withdrawing this money?

– They explained that the funds were distributed irrationally. I share many complaints, while the distribution of funds was affected by the elections and their results. Therefore, the political decision may have been right.

Deep decentralization is the key to survival of Ukraine, according to your words. Why is this so important?

– Since the 1950s, economic and social thinking in the world has come to the conclusion that decentralized states are developing faster, have a greater potential. European centralized countries began to form regions. This dictates the current condition of societies, countries and technology.

Decentralization brings decision-making centers closer to citizens that directly affect their lives. Most people have no influence on a government or a president. But they can ask a mayor or a head of the village. This reinforces the likelihood that people in positions will serve the public interest.

Decentralization creates various options for development. Everyone gets the right to decide for themselves. Because when everyone is waiting for commands from the top, society does not develop.

We have studied the practice of decentralization in many countries. In particular, in Italy. There is much in common at the mental level, in particular attitudes toward laws, tax payments. But it’s impossible to copy someone’s experience. We need to adapt to our conditions, geography, laws, people.

What determines the success of territorial communities?

– There are two groups of factors. Objective factors are a set of geographical features, the size of the territory, population, history, economic development. All communities cannot be in equal conditions. However, the subjective factor is still decisive. When a society has a competent leader, who wants to make it successful, there is a chance to do this. A good leader is half of a success.

The transition to direct inter-budgetary relations is an important element of the full management of communities, says Viacheslav Nehoda, the First Deputy Minister of Regional Development. What will change?

– Communities are becoming independent. Operate with big money. There are no intermediaries. The villages previously depended on the raion budget, and raion budget – on the regional budget. Now communities can immediately approve their budgets. Therefore, ATCs were equated with the status of cities of regional significance. Financial independence should grow. The administrative-territorial structure with amendments that have to be made to the Constitution will be three-level: community, povit (or district) and region.

What changes should be made to the Constitution?

– The concept provided that amendments to the Constitution will be simultaneously adopted with the launch of voluntary community amalgamation. In 2015, there was a good version of the bill, which was prepared by the working group of the constitutional commission. Now the President introduced its amended version. The worst amendments are connected with promises within the framework of the Minsk process. Poroshenko combined two unrelated problems – the reform of local self-government and the implementation of the Minsk agreements. The Parliament did not accept this document through the clause on the special status of Donbass.

Now they are discussing a new bill. It is necessary to modernize the administrative-territorial structure, determine its units. Eliminate district and regional state administrations. Establish the prefecture. Improve the organization of local government.

However, the draft changes to the Constitution is being prepared behind the scenes, and this is worrying. There must be accuracy and precision. And there are phrases like “the state consists of communities” or “adjacent communities form a district.” The territory of Ukraine is an integral attribute of sovereignty. This is enshrined in international treaties. It cannot be said that it consists of something, because it denies sovereignty. If certain community refers to this clause and votes to leave Ukraine, then what?

What else worries you?

– The bill says that only adjacent communities form a district. If there are four communities, two of which do not border each other, then they cannot be in the same district.

Another problem is that prefects are not related to the executive branch. It repeats what Poroshenko did. He withdrew the heads of local state administrations from the civil service. Those existed almost like the president’s patronage service in the field. They obeyed only him. In particular, they campaigned in elections, headed election headquarters. Now they want to enshrine this norm in the Constitution. This is how the unlawful presidential vertical is built.

Under this bill, regional and district councils will be formed in an indirect way. They will not be chosen by people as community councils. And the latter will delegate their representatives to the district and regional levels. This approach has positive and negative sides.

The quota-based council brings together community representatives. It may be a platform to solve common problems. For district or povit level, this is acceptable. At the regional level it is more difficult. Local self-government provides for care for the citizen’s living space. Regional self-government takes care of the socio-economic development of the region, attracting investment. Weak, unconsolidated council will not be able to fulfill these functions. This will not work.

But politicians believe that there is a positive factor in the weakness of regional councils. The risks of separatism and other negative trends are reduced. A weak regional council will inhibit both constructive and destructive development. The question arises: what is more important for us at the present stage – socio-economic growth or protection from separatist tendencies?

What, besides decentralization, would you call as priority reforms?

– The government does not continue the reform of the Cabinet of Ministers and the public service. Achievement are being canceled. The reorganization of the ministries is on hold.

Judicial reform is the second most important reform. Something is changing, but the effect is likely to be the same as with the previous government. Whoever leads the country, he/she does not allow the courts to become independent. The new reform is again aimed at changing judges. Instead of 200, they will keep 100 in the Supreme Court. Judges will be overloaded. Then they will decide to increase the number, but they will start to invite their own people, as experience in the formation of the executive branch shows.

Important reforms: education, healthcare, transportation, economics. However, they will not succeed without the completion of institutional and judicial reforms.

How do you rate the half-year activities of President Volodymyr Zelenskyy?

– The feeling is disturbing. The President is responsible for foreign policy and defense. Nothing has been achieved there yet. The behavior of the head of the state is worrying. There is an impression that he, perhaps unconsciously, acts in the interests of Putin. For example, with the “Steinmeier formula”.

The President is the political leader of all authorities. “Servant of the People” has a majority in the Verkhovna Rada and can quickly make effective decisions. But the farther, the more bogged down. At the start, laws were adopted being partially prepared by previous MPs. The reserves lasted for two months only. The work on new bills does not show a system. There is no proper communication with scientists and public sector experts. There are only slogans and promises. Without explanation.

The government dismissed civil servants, and began the reorganization of structures. It is not clear whether there is enough potential to build something in return. The idea arises whether all this is a plan to prove that Ukraine is still a failed state, and Zelenskyy is a puppet?

There are concerns about populism, the constant attention to public opinion. Seven laws passed on August 29 to amend the Constitution aimed at weakening the Parliament and strengthening the President. Zelenskyy intimidates deputies by a threat of early elections. It looks like preparation for authoritarianism. It is unlikely that his rating will last long enough to have time to concentrate all power. But his team has such intentions.

How can you evaluate the work of the government?

– It was not formed as effective and programmed for the coordinated work. There should be a team of like-minded people who agreed on everything before they came to power. To fix these agreements in the program of activities of the Cabinet of Ministers. And then go to Parliament for the approval.

And the current government was created in the Office of the President. Almost at the last moment they were told who would be what minister. The Prime Minister is usually given two weeks for the formation of the Cabinet. In our case everything happened in 4 hours.

The government’s program of activity has come out “original.” They focused on specific goals. But there are few of them. Important areas were ignored. And when you ask the minister why this or that is not done, the answer is: not in the program. Dead end. Structural units in ministries are thrown away or reduced. We will face gaps in many fields.

What will be decisive for the state next year?

– Do not lose in the confrontation with Moscow, do not let the “trojan horse” into Ukraine. Achieve economic growth. Otherwise there will be big problems. Investors will not come to Ukraine without the judicial reform.