Adylbek Sharshenbaev: Kyrgyz public has little influence on the budget planning process in state agencies
“The findings say that Kyrgyzstan is still among the countries whose governments provide “limited” budget information and “limited” opportunities for public participation in the budget planning process”, noted Adylbek Sharshenbayev, Director of the Representative Office of the Transparency International in Kyrgyzstan (Bishkek, Kyrgyzstan), in an article on the access of ordinary citizens to the discussion of budget, written exclusively for CABAR.asia.
Information, consultation and involvement of citizens in the budget planning process, which is a type of activity of the State to shape, review, approve and implement the budget, as well as to draw up and approve the report on its implementation, are of particular importance, because the state budget is the most important financial document of the country. It is a set of financial estimates of all government services, departments, government programs, and so on. It determines the needs to be satisfied at the expense of the government and indicates the sources and size of the expected revenue to the state treasury.
Since in 2006, the Open Budget Index reflects the degree of accessibility of budget information to the public, and whether the information contained in these documents is understandable, timely and useful for practical civil monitoring. The Open Budget Index was developed by an international non-profit organization “International Budget Partnership”, founded in 1997 to help civil society organizations in developing countries to influence the budget process, institutions and performance, by conducting analyses and monitoring in these countries.
Many countries, in the framework of the efforts to improve interaction with citizens, are attempting to develop mechanisms for active public participation in the budget process. However, as the International Budget Partnership noted in the Open Budget Survey in 2015, there are only a few countries that had developed innovative programs to engage the public in discussion of the national budget – Brazil, Kenya, the Philippines and South Korea.
What has been done in these countries?
In 1988, long before the advent of the Open Budget Index, the world’s first system of adopting participatory budgeting was applied in the city of Porto Alegre in Brazil – the budget plan was developed with the direct participation of citizens.
The city then was in a catastrophic financial situation: 98% of the budget was spent to operational costs, leaving no opportunity for investment. Civil society had high hopes for the new local administration, however, remained quite skeptical. Residents wanted to make sure that there was a significant difference between the old and the new administrations, which had given a lot of promises, but rarely implemented them.
Participatory budget, proposed by the new city administration, was based on very original and detailed parameters:
- territorial format (neighborhoods and districts) and thematic format (assemblies and councils dealing with youth, culture and so on, in accordance with the main theme of the activities of the municipal administration).
- Conducting meetings open to the public with the participation of the Mayor, preceded by intensive preparatory phases of the autonomous micro-meetings and discussions at the district level, in order to identify the priorities, needs and expectations of the population. It also involves the creation of councils of delegates at the level of districts and cities. District delegates are elected according to the scheme: a delegate from the ten participating in the meeting (the number varied over time). The forum of district delegates organizes discussion in the form of various meetings at the district level, in order to identify priority areas. City council on the development of participatory budget includes two delegates from a district (with two deputies) together with several representatives of local authorities, trade unions, municipal officials and neighborhood associations.
- The structure consists of three levels: neighborhood level (in most cases having informal character), district and city level.
- Clear rules of formation, which are developed and modified as part of the process of citizen participation in budgeting.
- Equitable distribution of resources with a focus on the poorest neighborhoods, taking into account the formal criteria by which these resources should be allocated.
- The focus is on investment.
- Participatory nature is important, not just consultative. Classic City Council, elected every four years, under the law, is responsible for the adoption of the budget, but the local government is obliged to follow the compromise reached between the administration and the council of civic participation, elected each year.
- This scheme operates in the year-round cycle.
These parameters are working to this day, despite the change of leadership. The city is divided into neighborhoods, representatives of which offer options for the use of funds. About 15% of the city budget is under the control of the public. The principle of participatory budgeting in Porto Alegre has helped to increase the investment attractiveness. He helped to greatly improve the living conditions of the poorest part of the population (improvement of infrastructure, transport, health, education and housing).
For this reason, the UN has recognized this process as an example of “best practice”, and the World Bank included a participatory budget in its proposed toolkit. Both organizations have come to the conclusion that all the funds have been used properly in the interests of residents. Currently, participatory budget is adopted in a number of cities in Brazil and around the world – in Peru, Argentina, Spain, Canada and others.
In Kenya, under the Constitution and other normative acts, there have been officially set up mechanisms for participation both during the budget planning and its adoption (with the executive and legislative branches, respectively). These mechanisms offer to citizens and civil society organizations two opportunities to influence the policies and priorities which will be reflected in the approved state budget.
First, in the early stages of budget development, these laws have established a mechanism for public participation in the provisional budget statement (in Kenya, it is called “Statement of budgetary policies”). The Ministry of Finance will organize a public hearing, mainly at the national level in such fields as health, education, social security and agriculture. Citizens have an opportunity (albeit limited) to contribute to the content of the Statement before it is presented to the Parliament. During these sector hearings, civil society and citizens are invited to ask questions and make suggestions and recommendations on the contents of the statement of budgetary policy. Thus, citizens have a real opportunity to influence policy and budget priorities before the Ministry of Finance develops a draft budget.
Some community organizations have developed innovative ways to use this opportunity to influence the priorities of the revenues and expenses. The Institute for Economic Affairs, for example, takes on public consultations across the country and prepares an alternative civilian budget. Then the budget is submitted to public hearings for the dissemination of information within the framework of the development of the Statement on budgetary policy.
The second opportunity for civil society organizations and citizens to influence policy and budget allocation appears when the legislative bodies and the Appropriations Committee consider the Budget proposal of the executive branch. The two-month period during which the Parliament discusses and makes changes to the draft budget proposal gives an opportunity for the public to influence the content of the budget. During this period, representatives of civil society organizations can submit their proposals to the committee during the public hearings in Nairobi by sending the explanatory notes, e-mail, or making presentations.
The central problem in the design of any mechanism of civil participation is figuring a stakeholder – the general public, civil society organizations, political experts – who is providing the input into the budget process. The Philippine Government has established a mixed approach to the social interaction in the budget process, which includes both a massive mechanism known as budgeting with public participation at the local level and national consultations with civil society organizations with the assistance of the Budget partnership agreements. These approaches allow the government to implement a broad-based feedback directly with citizens, as well as to conduct targeted consultations with civil society organizations, which can bring more technical knowledge to policy discussions.
Budgeting with public participation at the local level under the supervision of the national government implies the creation of Local working groups on poverty reduction, which are composed of an equal number of governmental and nongovernmental representatives. These groups conduct consultations to determine which public goods and social services are in demand among local residents. Priorities, identified during these consultations, then help to give substance to the budget of the relevant national bodies. During the development of the budget for 2014, budgeting with public participation of the local level covered more than 1 200 cities and municipalities, 12 national government agencies and one public corporation. In each participating city / municipality, the work was done with at least three public organizations. For the 2015 budget, the government made public participation in budgeting at the local level mandatory for all local authorities. With the help of budgeting process with public participation at the local level, projects totaling about 460 million US dollars were identified and included in the budget for 2015.
The government complements the public participation budgeting at the local level with Budgetary partnership agreements. Through these agreements, national government agencies invite public organizations with technical expertise to participate in the preparation of their budget proposals and to assist in making decisions on budget priorities. For example, in 2011, a network of non-governmental organizations joined the Budget partnership agreement with the National Housing Administration. Having identified a number of territories for the resettlement of poor people, the network used the agreement to successful lobby the increase of the budget of the National Housing Administration to support relocation projects in 2012 by about 28 million US dollars. As of April 2014, 15 agencies joined the Budget partnership agreements with community organizations, and three institutions completed consultations without formal partnership.
The South Korean government has created two innovative mechanisms allowing the civil society and the public to contribute to the implementation of government programs.
Firstly, the government created a two-stage process for monitoring and evaluation of government programs. At the first stage, the Ministries are working with a committee of experts in the field of politics and with members of non-governmental organizations to assess the programs of the Ministry and identify wasteful spending. At the second stage, the Strategy and Finance Ministry reviews the reports of sectoral Ministries. Programs that receive low ratings could face cutbacks on the budget.
Secondly, to obtain broader feedback from the public, Ministry of Strategy and Finance has created a website to collect information from the public on non-targeted expenditures and budget embezzlement. The public receives a financial reward for their contribution: as of 2015, an individual could receive up to 39 million won (about 34,000 US dollars) if the results of the information helped to increase budget revenues or savings. Between 1998 and 2013, citizens and government officials reported 1,922 cases of the waste or misappropriation, whereby revenues increased by 13.5 trillion won (about US $ 11 billion) and the cost savings of 2.3 trillion won (about US $ 2 billion). In turn, the government paid about 35 billion won (about 31 million US dollars) as reward.
Experience of Kyrgyzstan
Under the current legislation of the Kyrgyz Republic, the participation of citizens in public affairs and matters of local importance can take many forms: referendums, public hearings, meetings, gatherings and more. According to paragraph 3 of Article 52 of the Constitution of the Kyrgyz Republic, “citizens have the right to participate in shaping the national and local budgets, as well as receive information on the actual money spent from the budget”. General principles for the participation of citizens in decision-making on the formation and execution of the republican and local budgets are reflected in the Law “On Basic Principles of Budget Law” (1998), the Law “On financial and economic bases of local self-government” (2003), departmental regulations.
A necessary condition for the participation of citizens in decision-making processes is the possibility to gain access to information on a particular issue. The law “On access to information held by public bodies and local authorities of the Kyrgyz Republic” (2006) is the key document determining the rights of citizens to access information.
This law was drafted and adopted in the wake of the first Kyrgyz revolution, was very progressive and received high evaluation from the experts of the World Bank and the Organization for Security and Cooperation in Europe. Many CIS countries have used it as a model in terms of ensuring transparency in the activity of state bodies and local authorities.
Article 20 of this Law in detail and lists the specific types of information to be made public, including:
- information about national and local budgets;
- a list and description of services provided by state bodies and local self-government;
- any mechanisms or procedures, by which individuals and organizations may make their proposals or influence the formulation of policies or the exercise of these powers of the state bodies and local self-government;
- information on the plans and activities of the state body and the local government body;
- information on the budget performance of state bodies and local self-government;
- information on the performance of the technical assistance on projects and activities carried out with the participation of state bodies and local self-government.
The Law implies not only the right of access, but also the mechanisms of realization of this right in the form of: 1. provision of information upon request, 2. access to the materials through official information agencies, and 3. direct access to open meetings of government bodies and local authorities.
The law also establishes criminal, administrative, civil and disciplinary liability for failure or improper fulfillment of the current legislation.
Thus, the legal framework existing in the Kyrgyz Republic adequately provides for the realization of the rights of citizens and non-governmental organizations to obtain the necessary information, including on budgetary matters, and for the State’s obligation to provide it.
The question is whether the public and representatives of civil society are fully using their legal rights and how great is their desire to participate in the budget process. Another issue concerns the completeness of the implementation by public authorities of the requirements imposed by the rule of law and international standards.
Let us return to the Open Budget Index: in the survey in 2015, it was noted that the Kyrgyz Republic made significant progress in terms of ensuring transparency of the budget. We got 54 of 100 possible points, and the progress is rather impressive, if you take into account that in 2012, we received 20 points, and in 2008 – only 8 points.
The survey examines two aspects of the openness of the budget: provision of budget information and opportunities for public participation in the budget process.
In terms of the budget information, four main stages of the budget process are considered: budget preparation, review and approval of the budget, budget execution and control of budget execution. The criteria include accessibility of key budget documents, completeness of the budget proposal of the executive power, completeness of other key budget documents (approved budget, civilian budget, annual, semi-annual and periodic reports) and the impact of oversight institutions.
And if we have significant progress in the publication of the data, the question of the completeness of their reflection in the published budget documents remains open. This applies to data on actual outcomes, on the implementation of various specific programs, tax benefits, conditional liabilities (such as government loan guarantees or insurance programs), differences between the initial estimates and actual outcomes on various articles (extra-budgetary funds, nonfinancial information, macroeconomic forecast, government borrowing and debt, the budget for the political strategies), measures taken in response to audit recommendations, etc.
As for the possibility of public participation, there are still open questions of providing timely information on public hearings, the quality of such information, the publication of reports on public hearings by committees of the Parliament, the use of existing mechanisms to determine public opinion on budget priorities and budget execution, the interaction of the Audit Chamber with the public both in a part of the overall communication and feedback, and in the formation of the audit program, and participation in inspections, and finally, the issues of raising the level of knowledge of both the public and officers in respect of the budget process and budget information.
Thus, the findings say that Kyrgyzstan is still among the countries whose governments provide “limited” budget information and “limited” opportunities for public participation in the budget planning process. In addition, it should be noted that this study deals only with the national level and the activities of the central government, and it does not account for the role of regional and municipal authorities and does not assess the situation on the ground.
The situation in the regions of Kyrgyzstan
It would seem that at the regional and local budgets contain much less information than the national budget, and it should be easier to attend the meetings or hearings on the ground than at the national level, so the situation here should be even better.
Thus, according to the information of the organizations promoting fiscal transparency in the field, local authorities are increasingly using various methods of public access to budget information in their practice. Almost every local self-government body has information boards, which contain the information on local budgets. The Ministry of Finance of the Kyrgyz Republic requires the local authorities to hold public hearings on the budget on the stage of preparing the budget, before it is approved.
The state also attempts to use information and communication technologies to meet the challenges of improving access to information for citizens, in particular, to the budget information. For example, the State Enterprise “Info-Systema” provides an open access to the site www.portal.infosystema.kg under the Ministry of Finance of the Kyrgyz Republic, where every citizen or public organization can obtain real-time information, what expenses the ministries, departments, local government implemented for a given period of time.
However, the efficiency of interaction between the local community with local authorities is poor for several reasons.
First of all, this is the level of knowledge in the field, in terms of both community members and local officials. Public awareness about the possibilities of realization of their rights in terms of openness and transparency of the activities of state bodies and local self-government is very low. A high turnover and low qualification requirements when applying for a position (due to the low level of wages) is one of the reasons for the low level of knowledge of local officials.
This contributes, on the one hand, to the poor quality of information, and to the low public interest without having relevant knowledge. Often, there are only one or two people versed in the intricacies of the budget in the rural council. The civil budget, designed to bring the budget information to citizens in an accessible form, is being developed only at the national level and at the level of the largest municipalities – Bishkek and Osh. But even the one that is being developed is strongly criticized for complicated terms, which are difficult to understand by ordinary people.
Another important factor is whether the citizens need the budgetary information. Local budgets are more closely associated with the life of the citizens, because they used to finance the most pressing local problems, and a greater public participation in the local budget process is seemingly expected. But citizens are not sure if their participation is fruitful, which is explained, in particular, by the low trust in the government, and it significantly limits the number of those who interact with the local authorities.
But even if there are active and knowledgeable citizens in the community who wish to exercise their rights, unscrupulous local authorities are trying to create obstacles to their attempts to do it. For example, there have been cases when local authorities tried to limit the participation of citizens in local budget process by manipulating the dates of meetings and hearings.
The spread of the statistics of law enforcement agencies in the media on the number of criminal cases against the employees of local self-government, describing them as the most corrupt state representatives in the Kyrgyz Republic, also contributes to the reduction in confidence in the local authorities. But, as recognized by law enforcement officials themselves, the bulk of violations made by local officials are linked again with a very low level of knowledge.
Another indirect factor reducing the interest to participate in the local budgeting process is the fact that many rural councils are subsidized, and those subsidies are allocated for pre-determined targets. Replenishment of local budget, which increases the attractiveness of participation in the budget process, also largely depends on the degree of activity and the level of knowledge and awareness of the head of a local self-government body.
Summing up, it should be noted that, in order to improve the interaction between government and citizens in the budget process today, the most essential prerequisite is to improve the level of knowledge of both the officials and the public. Officials need more knowledge about transparency, accountability and completeness and clarity of the information provided, while ordinary citizens need knowledge about their rights and about how to participate in shaping the public policy. And it is very important to note the role of the media and the development of information and communication technologies for this purpose.
Author: Director of the Representative Office of the Transparency International in Kyrgyzstan
The views of the author may be different from the views of the editorial board of CABAR.asia