“Now the reform of local self-government has serious political restrictions, is superficial and is aimed more at creating the appearance of democratic transformations than at genuine decentralization of power,” political scientist Dimash Alzhanov (Almaty) notes in his article written specifically for the analytical platform CABAR.asia.
The first direct elections of rural akims were held on June 25, 2021 and are positioned by the authorities as part of the reform to strengthen the institution of local self-government (LSG). Despite the statement by President Kassym-Zhomart Tokayev about the democratic nature of the elections, they passed without the participation of the opposition[1]. As a result, the Nur Otan party, as expected, received most of the mandates. Immediately after the elections, the President approved the “Concept for the development of local self-government in the Republic of Kazakhstan until 2025” (hereinafter the Concept), which outlined the main tasks of the government in this direction[2].
This is not the first initiative of the authorities aimed at the development of local self-government bodies. However, it never came to significant changes. Lacking serious incentives for reform, the authorities, on the contrary, sought to maintain political control over the regions. A significant problem remains the unwillingness of the country’s leadership to go for a genuine decentralization of power, provide local self-government with adequate resources and allow citizens to form the composition of local government themselves through elections.
To understand better what constitutes government reform, this article will analyze the main obstacles to the development of LSG and assess recent government initiatives in the context of political, administrative and fiscal decentralization.
Administrative and political control
Perhaps the most obvious obstacle to the development of LSG is the highly centralized management system. In the formation of local government bodies, priority was given to a strong executive vertical of power. On the basis of a top-down principle, the president appoints and dismisses akims of regions and cities of republican significance. Those, in turn, appoint and dismiss subordinate akims (except for rural akims). The terms of reference and responsibilities of local government are determined by the central government. Decisions related to tax administration, budget approval, planning and development of regions are also made at the center and implemented by local executive bodies through a strict hierarchy of subordination of local authorities to a higher level. Excessive concentration of power and authority in the hands of the central government provides it with control over the economic and political life of the regions, but at the same time, completely narrows the space for the development of local self-government.
The administrative units of the third level (the municipal level, consisting of rural districts), within which self-government is being introduced, now elect their akims directly. Despite the fact that rural akims acquire the status of the head of local self-government administration, they, as before, remain part of a highly centralized management system. Rural akims do not gain independence in decision-making and are not endowed with sufficient powers to independently form the local budget and plan the development of their administrative unit together with the representative authorities. Against this background, the transfer to the level of the rural district of a part of communal property, as well as the authority to control the targeted use of land plots and landscaping is not sufficient to acquire the status of a self-governing unit.
In addition, the problem with the procedure for organizing elections has not been resolved. The electoral process is completely controlled by the authorities, and their results are falsified. As a mechanism, elections cannot ensure the representation of the interests of the population in government bodies and exclude the election of candidates independent of the government. Along with the election of rural akims, a rule was introduced on a managed (imperative) mandate. It connects akims elected from political parties with party membership, and the loss of the latter automatically leads to the loss of office. According to the results of the first stage of elections, 95.4% of rural akims (77.12% of Nur Otan party) represent government-controlled parties, and as deputies of maslikhats, they are dependent on the party leadership[3].
The government’s plans, however, mention the intention to formalize the work of the village assembly and create on its basis a representative body – the kenes. But even in this case, the question arises regarding the powers of such a fictitious body, which on key issues will depend on the higher administration.
The principle of local self-government defines a local government as an elective territorial unit with its own political dimension and its own powers[6]. Therefore, in order to form genuine LSG bodies, the reform must necessarily remove the existing political and administrative barriers that hinder the free participation of citizens in the management of regional and local authorities. For this, it is necessary to reform the electoral system, to clearly delineate the powers and responsibilities between the central and local governments. Create constitutional guarantees for the implementation of the self-governing nature of power at the local level and assign the status of a legal entity to LSG bodies. And after the full-fledged representative and executive bodies of power of municipalities are formed, move on to filling them through free elections.
Financial control
The centralized approach is also applied in tax administration and local budgeting. Thus, the bulk of significant tax revenues are channeled to the central or higher budget and only later are distributed among rural districts. The introduction of the fourth budget level since 2018 has allowed rural districts to replenish their budgets through six taxes (on land, transport, property, individual income tax, etc.), fees, fines and revenues from communal property. Nevertheless, a significant part of revenues still depends on transfers from the higher budget, while the share of own revenues in 2020 was only 13.4%[7].
Due to the centralized administration of taxes, municipal authorities are forced to transfer part of their funds to higher budgets, since they do not have the authority and representative body to independently manage them. In practice, this creates additional problems in planning and approving expenditure items of the local budget, since they must be made through the decisions of the district maslikhat (city of regional significance)[8]. As the study of local government budgets from Transparency Kazakhstan for 2019-2020 shows, not all maslikhats show the same interest in interacting with rural districts and in the timely approval of their budgets[9].
The problem is that district maslikhats are too far from the municipal level and are unable to quickly respond to the needs of the local population. It is possible to correct the existing situation only by creating their own maslikhats at the level of municipalities by transferring appropriate powers to them. Moreover, in order to successfully develop their administrative units, it is also necessary to revise the taxation system and provide LSG bodies with the opportunity not only to collect individual taxes, but also to independently determine their rate.
The Organization for Economic Cooperation and Development (OECD), which monitors Kazakhstan’s progress in the field of good governance, pointed out the ineffectiveness of the current centralized model of financial administration, and recommended that the government, along with political decentralization, must implement fiscal decentralization[10].
Administrative divisions
The cornerstone in building an effective LSG system is the administrative-territorial division of the country. It determines the number of levels of subnational government, affects the administrative and economic efficiency of local government, the costs of the state associated with the maintenance of the administrative apparatus, and also determines the dynamics of local democracy and the degree of responsiveness of local governments to the needs of citizens.
In this regard, the position of the government of Kazakhstan is extremely passive, which, after many years of studying the experience of economically developed countries, has not reorganized the command-administrative system that has been in place since Soviet times[11]. When creating administrative-territorial units of the third level (2345) based on small settlements (see graph 1), the Soviet system did not take into account the issue of economic efficiency, and even less did it see them as independent subjects of market relations.
Now, after 30 years, all these administrative-territorial units have significant differences among themselves in terms of population and size of the territory, which in turn creates large disparities in their economic development and income. For example, the smallest budget of a rural district is 2.8 million tenge (6,600 US dollars), and the largest is 2.5 billion (58 million US dollars)[12]. As we can see, due to the different tax base and economic potential, small rural districts have practically no chance to overcome their dependence on subsidies from the central budget.
From the point of view of the effectiveness of local self-government, small rural districts are unable to take on the whole range of tasks and competencies necessary for economic development, not to mention the provision of quality services to the population and business. The current model has proven to be ineffective, therefore it must be reorganized. In this regard, before proceeding to direct elections of rural akims, the government of Kazakhstan should have thoroughly studied the existing models in the world and found the best balance between effective governance, territorial division and the economic viability of administrative-territorial units.
Thus, the abolition of districts will allow: 1) to significantly reduce the costs of maintaining the administrative apparatus; 2) delegate the functions of districts to municipalities; 3) simplify the division of powers and responsibilities between the regional (oblast) and local levels.
Consolidation of rural districts and the formation on their basis of more or less equivalent in population and territory of municipalities will allow: 1) to increase the efficiency of local self-government; 2) create a more sustainable foundation for long-term economic development; 3) expand the sphere of self-government and democracy at the local level; 4) will reduce the distance between local communities and authorities.
Conclusion
In the conditions of Kazakhstan, the development of the institution of LSG is closely related to the decentralization of power and the democratization of the political system. For this, the authorities of Kazakhstan need to create a new regulatory framework that would help strengthen the institution of local self-government. Since the current constitutional architecture does not allow this to be fully implemented, the reform should include changes to the country’s fundamental law, including a revision of the electoral legislation and the law on political parties.
After the reorganization of the administrative-territorial division, it is necessary to form governing bodies of municipalities, delegate powers to them and, following the principle of subsidiarity, provide them with sufficient financial resources to fulfill their duties. The responsibility of LSGs should go to such areas as the management of land resources and public property, the collection of individual taxes (with the ability to determine their rates), urban planning, housing policy, local police, road construction and repair, waste collection and disposal, social security, licensing, entry-level health and education, cultural support and development.
Now the reform of LSG has serious political restrictions, is superficial and is aimed more at creating the appearance of democratic transformations than at genuine decentralization of power. It is quite possible that Kazakhstan will have to follow the paths of other CIS countries, where the incentives for reforms appeared only after the change of government.
[1] Commentary by President Kassym-Zhomart Tokayev.
[2] Decree of the President of the Republic of Kazakhstan dated August 18, 2021 No. 639 On approval of the Concept for the development of local self-government in the Republic of Kazakhstan until 2025.
[3] Venice Commission, Report on Mandatory Mandate and Similar Practice CDL-AD (2009) 027.
[4] “Exclusive” magazine. Nur Otan controls maslikhats, which elect akims.
[5] Source World Bank. The Local Government Index determines the extent to which local government is elected and whether it can operate without interference from designated bodies at the local level. The right to vote and accountability, an index on the degree of citizen participation in the choice of government, as well as on freedom of expression, freedom of association and free media.
[6] The relationship between central and local authorities. Report of the European Committee on Local and Regional Democracy (CDLR) 2007.
[7] Decree of the President of the Republic of Kazakhstan dated August 18, 2021 No. 639 On approval of the Concept for the development of local self-government in the Republic of Kazakhstan until 2025.
[8] Article 9-1.2 of the Budget Code of the Republic of Kazakhstan.
[9] Transparency Kazakhstan, Local Government Budget in Kazakhstan 2019-2020
[10] OECD 2017, Reforming Kazakhstan: Progress, Challenges and Opportunities.
[11] Concept for the development of local self-government in the Republic of Kazakhstan dated November 28, 2012 No. 438
[12] Decree of the President of the Republic of Kazakhstan dated August 18, 2021 No. 639 On approval of the Concept for the development of local self-government in the Republic of Kazakhstan until 2025.
[13] The Organization for Economic Co-operation and Development (OECD) is an international economic organization of developed countries that recognize the principles of representative democracy and a free market economy. OECD (2017), Multi-level Governance Reforms: Overview of OECD Country Experiences.