The issue of decentralization – the challenge for NGOs

Decentralization and local self-governance-related problems remain one of the most important challenges of Georgia’s new authorities.

A delegation of the Parliamentary Assembly of Council of Europe (PACE) was visiting Georgia July for a fact-finding mission and to monitor the current situation in the country. The delegation aimed to monitor implementation of the commitments undertaken by the Georgian authorities to join the Council of Europe (CoE) in 1999. Georgia signed the European Charter on Local Self-Governance; however the Parliament has not ratified it so far.   

Davit Losaberidze of the Caucasus Institute for Peace, Democracy and Development (CIPDD) thinks, three huge problems exist in the field of decentralization currently: absence of common vision, problems in legislation and budgetary system; no clear distribution of powers and functions between the central and local authorities; unsettled financial and property issues (for example, the municipality has no own property, as well as own revenues); un-skilled local officials.

For exercising the functions, which have been delegated from the central government, the local self-governance bodies shall enjoy with relevant resources and finances.

“However, unfortunately, only GEL 40 million is allocated per year for 495 self-governance units (with approximately 2,5 million population) to implement these functions. This means, that only GEL 40 million is spent on the entire territory of Georgia per year on adjustment of inner roads, drainage systems, illumination, etc.,” Tengo Shergelashvili of the Georgian Young Economists Association says. As a result the country’s infrastructure worsens from year to year.

One more problematic issue is related to the revenues of self-governance bodies, three sources of which exist: local taxes, i.e. the so-called shared taxes (this is a state tax by character, however, the center gives either an interest to self-governance or the entire tax), and transfers .

Under the law, the municipality has no right to attract own revenues from other sources (for example, private investor, etc.). Since the revenue from local taxes is extremely scarce, “local self-governance depends on funding received from the central government in a form of a transfer, which consists 90% of total revenues” Davit Losaberidze says.

In its turn, the Ministry of Finance defines the transfer rate through own calculations. However, the law does not envisage a uniform formula for definition of the transfer rate.

At the same time, local self-governance has two key functions: providing public service (adjustment of roads and water systems) and local legitimation, when the population sees that it has to appeal local Mayor or a Governor elected by locals. 

These two functions practically do not exist currently. The local self-governance has not enough funds and the population has often to apply to protest rallies to solve the existing problems.   

At the same time, the authorities have no common vision about what kind of territorial and administrative system should exist in the country. Accordingly, the legislation existing in this field is imperfect and unclear. Very often, the provisions of the particular laws contradict each other. For example, the amendments made to the organic law on self-governance in 2001 were not followed by relevant amendments to the law over capital city Tbilisi. Now, it practically contradicts with the organic law.

In particular, the posts of the mayors of Tbilisi and Poti are not elective, the both mayors have been appointed by the President, while in the rest of Georgia mayors are elected by the local population. 

In 2001 the Union for Self-Governance of Georgian Cities was set up. The Union unites over 30 Mayors and Chairmen of City Councils. The Union has already elaborated 6 draft laws (one draft law on the budgets of local self-governance entities and 5 draft laws on amendments to the current legislation). Last summer several conferences were held to lobby these draft laws, however due to the political turmoil of last November, no significant progress took place in this direction.    

New leadership of the country expresses willingness to reform the local self-governance system. By order of Prime Minister Zurab Zhvania a governmental commission was set up in May 2004, chaired by State Minister Zurab Melikishvili.

Recently, Mayor of Tbilisi Zurab Tchiaberashvili has asked the non-governmental organizations to define a model of a municipal structure, as well as to define necessary normative acts. Several Georgian non-governmental organizations were involved in this process.

The non-governmental organizations consider that the cooperation with the authorities is undoubtedly necessary, since neither the government nor the non-governmental sector will be able to settle the existing problems separately.

As Davit Losaberidze of CIPDD says, “we offer the authorities to set up a special group, which will elaborate a strategy on self-governance within the shortest period, as well as to create a concept, prepare alternative amendments to the legislative base and at the same time elaborate a plan of action.”

It should be noted that after the November revolution four Georgian organizations, including the Young Economists Association, the Caucasus Institute for Peace, Democracy and Development, the International Center for Civil Culture and Civitas Georgica set up a consortium. The group aims to prepare within a year a new, complete package, which will define the principles of the country’s administrative and territorial arrangement and provide fiscal decentralization and distribution of powers.

 “It depends on the experts to implement the initiative. The politicians may establish common vision, while the major business is to be done by international and local experts,” Tengo Shergelashvili said.