Violence broke out the last time decentralization was a major topic in Ukraine. In August 2015, when the amendments to the Constitution regarding decentralization were under the first reading, a rally against granting special status to the Russia-occupied territories in Donetsk and Luhansk oblasts took place near parliament. Fueled by tension and provocations, the rally subsequently grew into clashes that resulted in the tragic deaths of four National Guard officers and injuries of more than 140 persons.
However, the lesser-known story is that decentralization goes far beyond amending the main law – efforts to give power to local areas have been taking place voluntarily across the country since the beginning of 2015. The reason why communities paved the way for amalgamation is that powers, resources, and competences regarding decisions on everyday issues are delegated to the lowest possible level, allowing community members to become the real masters of their houses.
Decentralization is already making positive differences on the ground and here are very specific examples.
- In 2015-2016, 184 communities successfully amalgamated, and another 184 communities are preparing to elect their councils in December. By the end of 2016, there will be 368 newly created communities, accounting for 25 percent of all that are to be created under the long-term decentralization plans. The pace is one of the best among European countries that implemented similar reform and this is very encouraging, considering that decentralization reform is not obligatory without constitutional amendments.
- Before the reform, most taxes were redistributed through Kyiv, giving the national authorities an unreasonable political lever over the regions. Fiscal decentralization ensures that more taxes remain at the local level, enabling amalgamated communities to improve budget planning and to reach surpluses – only in the first nine months of 2016 the local budgets have already earned 99 percent of their planned income. In fact, the more communities earn – the more money remains in their budget.
- Self-government bodies of newly created communities gained wider autonomy in administering their development budgets – in particular, as of September, they kept approximately $400 million in deposits in state banks. These funds will later be used for the implementation of infrastructure projects, attraction of investments, and territory development.
- Decentralization significantly increased the efficiency of infrastructure projects: for example, in 2016 there was 2.5 times more bituminous surface laid down than in the previous two years. Moreover, on average, the amalgamated communities have their roads repaired 2-3 times cheaper compared to the costs incurred by the governmental agencies. The costs of road repairs are mostly covered by the local budget of the amalgamated community, as in the case of Tiachiv community.
- Some amalgamated communities, such as Pochaiv, spend their funds on public order and protection. With the assistance of the Ministry of Internal Affairs, but at their own expense, they established new law enforcement facilities – police stations.
- Apart from the outcome of fiscal decentralization, amalgamated communities get additional financial support from the national budget. Public funds are distributed between the regions through the State Fund for Regional Development using a transparent formula – funding is proportional to the size of the region’s population. In 2016, $120 million was allocated from the state budget to this Fund, so every region of Ukraine received an average of $4.4 million.
- The government also committed itself to financing education and healthcare sectors within separate educational and medical grants for local communities – funding for schools, hospitals, disease prevention centers, and other institutions is transferred from the state budget to the local ones. Using both state grants and their own funds, the communities are able to more effectively develop education and healthcare systems – e.g., Horokhiv community built a new school.
- In order to ensure better organization of administrative services provision, the government supports establishment of centers of administrative services. Shumska amalgamated territorial community (Ternopil region) implemented a series of reforms within one year of its amalgamation and opened a brand new center of administrative services. The local authorities allocated more than 40 thousand USD for the construction and opening of this center.
Center of administrative services in Shumska amalgamated territorial community (Ternopil region) (Courtesy)
- During 2016, relying on their own budgets and state funding, local communities implemented projects worth $226 million, which included energy efficiency measures, building of infrastructure objects, education and healthcare facilities etc.
- Decentralization brought significant changes in the organization of activity of local authorities, with best practices of good governance being systematically implemented: publication of information, free access of citizens to the activities of the local authorities, electronic petitions and appeals to the local self-government. The local authorities are required to consult with the community, especially during the approval of the local budget and urban planning. Thus, citizens have been granted real instruments of control over the activities of empowered local self-government bodies. In fact, the number of people, willing to take an active part in the life of their community is constantly increasing, which gives a boost to the development of civil society at the local level. Decentralization also creates opportunities for social growth – young and proactive people are elected to local councils, as mayors or heads of amalgamated communities. They are empowered to change the country from the bottom-up, and a new generation of political elites is being brought up.
Together with organizational and financial changes aimed at strengthening the role of amalgamated communities, it is crucially important to invest in human resources development. International donors play a key role here. These include the U.S. Agency for International Development project DOBRE, European Union project U-Lead with Europe, Swiss DESPRO, Council of Europe) and civil society organizations, including the Ukrainian Center for Independent Political Research, the Institute of Political Education, the Civil Society Institute, the RPR and others, and the associations of Ukrainian cities, towns and villages.
In general, it is hard not to recognize the success of decentralization reform, in the course of which amalgamated territorial communities have been given every opportunity for development, territory planning, and autonomous administration of their own funds. However, much more remains to be done, beginning with the adoption of a package of draft laws aimed at facilitating further decentralization (draft laws No 4772, No 4773 and No 4676). Additionally, it is equally important to ensure that those capable amalgamated communities that will elect their councils in December are included in the State Budget 2017 for inter-budget relations.
Further legislative work, effective implementation, active leadership and strategic vision – these are the pre-conditions for sustainable community development and a comfortable life for all of Ukraine’s citizens.
Ivan Lukerya is an expert of the Ukrainian Center for Independent Political Research and Olena Halushka is head of international relations department of the Reanimation Package of Reforms.
