Local authorities: Stronger representative vertical and heavier economic responsibility

Dmitry Kukhlei

Summary

Along with a reduction in social guarantees, the Belarusian leadership demonstrates a readiness to increase the responsibility of local authorities for social and economic development and to expand their powers. The greatest transformations take place at the primary level of self-government–village councils. However, the political, personnel and economic influence of representative bodies on the executive branch at the local and regional levels remains insignificant. Local councils and executive committees are still deprived of the opportunity to fully determine local development policies. The national authorities thus seek to foster local initiative towards the development of regional economies.

The Belarusian leadership wants a greater integration of local councils of all levels into the vertical of representative power, and legislatively determines a new mechanism: regional assemblies of council members. This enables the government to improve the performance of local councils as an additional tool for shaping public opinion and carrying out public policy. On the other hand, horizontal ties between the councils get stronger by means of associations, which is, most likely, thanks to international cooperation and the search for extra funds for local budgets.

Trends:
Local councils as an element of the ‘party of power’

One of the main tasks assigned to the local councils is to win public support for government policy. For example, information and propaganda groups, which include members of local councils, hold the monthly nationwide event Universal Public Awareness Day. The main topics are always chosen by the national authorities. Sometimes, those groups are headed by chairs of the councils. Also, heads of the councils are included in task groups to monitor activities of enterprises and assess their performance with respect to the set targets. Council members are thus much less active in the media (local state-controlled newspapers and websites) than local executive bodies.

On the other hand, the councils perform the function of an additional tool to provide feedback from local communities so that the national leadership can monitor public sentiments. The government strives to improve these tools, among other things, through coopting local councilors in republican representative bodies. Twenty-three members of the new Council of the Republic are members of local councils of the 27th convocation, including 15 members of regional, nine of district and city, and four rural councils. 1

The parliament is trying to restructure the mechanisms of interaction with the councils to better hear the local representative bodies. It was suggested to include chairpersons of the regional councils, and representatives of one district and one village from each region in the council for interaction with local government administrations formed as far back as 2007. This is supposed to keep the Belarusian leadership updated on what the representative vertical and the population in the regions think about social and political developments in the country. Recommendations given by local governments will be taken into account to adjust regional policies and self-government legislation.

The government widely uses regional assemblies of local councilors, members of both chambers of the parliament, and representatives of executive bodies as an alternative to the associations of councils. Regional assemblies are not a new invention. Amendments to the legislation on local governments passed in early 2016 made them a formal institution for their further integration into the power vertical. 2 These regional assemblies are used to consolidate local political elites around the Belarusian leadership to give an extra impetus to the public outreach.

International cooperation: greater openness and transparency in exchange for financial assistance

The local councils are not considered a full-fledged governing institution capable of making local economic development decisions. Nevertheless, the role of the councils is increasing as they have a possibility to raise extra funds from international donors and cooperation programs. For example, the Grodno region alone reports around 200 project proposals for 2017 with a total budget of over EUR 50 million under the cross-border cooperation programs Latvia – Lithuania – Belarus and Poland – Belarus – Ukraine. 3 This cooperation helps to enhance the effectiveness of local administrations and adopt international practices, as well as to ensure transparency in the application of funds.

Senator Igor Zhuk (chairman of the Grodno regional council) proposed to set up a republican fund for supporting local projects, which would distribute financial resources among local self-government agencies on a competitive basis. According to the official, the fund could be generated not only from money allocated from public funds, but also from sponsor contributions. It looks like the Belarusian leadership would like to ‘localize’ some international assistance programs for Belarus in accordance with the traditional centralization of the Belarusian power system and distribute the funds without the intervention of external donors.

International cooperation and contacts between representative authorities of the countries where they have much broader powers lead to a certain increase in the role of the councils in the Belarusian power structure. The development of horizontal links and the strengthening of the position of councils for upholding common interests in Minsk are being observed through the establishment of regional associations of councils.

The formation and development of associations of local representative bodies is a regional initiative. The local administrations are thus encouraged to look for additional sources of funding, especially through cross-border cooperation projects. This initiative of the regional leadership does not always find a response among heads of the local councils. Anyway, the regional associations of representative bodies are a step towards the creation of a national association of local councils, which could fully represent the interests of local governments at the national and international levels.

Horizontal links between local councils are developing much more slowly than vertical ones. For example, it took five years to establish the first association of councils in Belarus (in the Grodno region) after legislation amendments. At the same time, the institution of regional assemblies of council members was legislated in just a few years of their convocation.

Local authorities are increasingly eager to participate in inter-municipality cooperation programs between Belarusian and European cities. The western regions of Belarus benefit the most from cross-border cooperation with the European Union. The eastern regions are trying to adopt European practices for the cooperation with Russian regions. In August 2016, Mogilev hosted a forum of the Mogilev and Bryansk regions.

The experience of cooperation between Belarusian and Russian regions is also used in the west of the country. In late 2016, Belarus and Poland signed an agreement to hold a forum of regions. 4 The traditional forum of regions of Belarus and Russia (already third) contributes to the economic decentralization of local administrations and an increase in their political role. However, the regions and cities are still isolated from interaction for the most part that makes it easier for the national authorities to impose their way of interaction and maintain a rigid vertical for the implementation of government policy and decisions.

Village councils: reforms under the pressure of the recession

The authorities continue to reduce social guarantees in rural areas from the point of view of economic feasibility. Village councils merge, enabling them to revise the standards for servicing the population and to cut expenses. It should be noted that social guarantees are being revised even in the settlements in which considerable public funds were invested in the second half of the 2000s under the village revival program, which was one of the front elements of the ideology of the ‘Belarusian development model.’ One of the two main directions of social policy was to improve the quality of life in rural areas. To this end, new types of settlements (so-called “agro towns”) were created. We see a reverse process today: the social infrastructure is consistently declining.

The authorities declare their intention to introduce direct elections of the leadership of primary level bodies. It looks like the Belarusian leadership thinks that it can disregard the small risk that direct elections of chairpersons of village councils may entail, because the local communities adhere to conservative views and usually support local administrations. Political parties have long abandoned the idea of reaching the rural population, and there is little or no information in the public domain about opposition activists in rural areas.

The Belarusian leadership will continue to gradually reform the administrative-territorial division and the local government system. The national authorities are probably also considering the possibility of a gradual transformation of today’s three-level division into two levels and the abolition of village councils.

Local finance: expanding tax autonomy and stimulating economic initiative

The rules for the distribution of tax revenues between budgets are changing. It allows planning actions for a longer period. The norms of tax deductions to local budgets are maintained for at least three years. At the same time, the Ministry of Finance seeks to push local authorities to a more transparent budget distribution.

There is a transformation of approaches of the central management to the assessment of local authorities’ performance. Minsk is increasingly paying attention to the economic efficiency of local administrations, attraction of investment and economic development, rather than just prevention of social tensions and efforts taken to ensure social and political stability. The attitude towards small business is changing, and local leaders are trying to create better conditions for the development of entrepreneurship in their regions.

In the composition of local budgets, local revenues constitute the biggest part, averaging around 79.3% (over the first nine months of 2016). 5 Subsidies to district budgets are unevenly distributed across the country, making up 35.8% in the Mogilev region, 32.0% in the Vitebsk region, 31.5% in the Gomel region, 29.5% in the Grodno region, 29.0% in the Grodno region, 29.0% in the Brest region, and 15.0% in the Minsk region. Minsk city manages almost without subsidies, only having 1.0%.

Every fifth budget of village councils is also non-subsidized; three out of five councils dispense with modest subsidies, and only one out of five is subsidized from higher budgets by 50.0% or over. Subsidies make up 70.0% and subventions up to 30.0% in the local budgets provided from the republican budget.

The councils began to massively use the opportunities to impose local taxes and dues to increase the proportion of local funds. In 2016, local administrations introduced a tax on dog owners, partly on procurers and a resort levy, and also received funds from tax introduced by decree No. 3 On the Prevention of Social Parasitism. 6 The national authorities, however, imposed restrictions on the rates of tax on dogs. At the same time, they declare the intention to increase the tax autonomy of local councils starting from the primary level budgets, and transfer to the basic level the administration of other taxes, such as the single tax on individual entrepreneurs, levy on craftsmanship, and, fully, the resort levy and levy on procurers.

Local authorities are seeking replenishment of local budgets through selling real estate and land parcels. By expanding tax autonomy, the national authorities are trying to motivate the local administrations for the more efficient development of the local economies.

The Belarusian leadership also devolved the power to exempt individuals from the ‘tax on social parasitism’ on local councils, although the latter most often delegate these responsibilities to executive bodies. It should be noted that members of local councils do not unanimously support decree No. 3, 7 which does not happen very often.

The financial responsibility of local authorities is different. If not regulated by the national authorities, it can lead to insolvency of some regions. For example, the Postavy, Kirov, Pinsk, Brest, and Malorita districts have debts equal to 60% to 79% of budget revenues. Regional authorities have different approaches to lending: in 2016, debt service expenses in the Brest region amounted to five million Belarusian rubles, while the Vitebsk region reported 55 million.

Conclusion

Most likely, the national authorities will push members of local councils to intensify community outreach to relieve social tension in the regions, especially shortly before local elections. The strengthening of the vertical of representative bodies and their outreach can become one of the compensatory mechanisms for possible staff cuts in the ideology branch (no less importantly, a much cheaper one).

Heads of some regions will strive to strengthen horizontal links and associations of local councils. The latter will increase the capacity of local authorities to participate in cross-border projects and raise extra funds for the regions.

In all likelihood, the lowest (primary) level of self-government, which, in the opinion of the Belarusian leadership, poses the least threat in terms of political destabilization, will continue to undergo the greatest transformation. The Belarusian state is no longer able to maintain earlier promised social guarantees in rural areas, and this requires measures to reform socio-economic relations in rural councils.