Local Self-Government in Belarus

Non-Governmental Organization «Lev Sapieha Foundation»

LOCAL SELF-GOVERNMENT IN BELARUS Research materials of the NGO «Lev Sapieha Foundation» within the framework of Programmatic Cooperation of the European Union and the Council of Europe

Minsk 2017 Local Self-Government in Belarus (Research materials of the NGO «Lev Sapie- ha Foundation» within the framework of Programmatic Cooperation of the European Union and the Council of Europe) /: М. Kоbаsа and other — The experts group of NGO «Lev Sapieha Foundation». — Minsk: 2017. −80 pages.

The publication is an overview of the materials of a number of studies in the field of public administration and local self-government in the Republic of Belarus, carried out by the expert group of NGO «Lev Sapieha Foundation» (Minsk, Belarus) during 2015−2016. These studies of Belarusian specialists are part of the international programme «Strengthening Institutional Frameworks for Local Governance in the Eastern Partner- ship Countries», in the framework of the Programmatic Cooperation of the European Union and the Council of Europe. The publication is addressed to a wide range of readers — deputies of local Councils and specialists of government bodies, activists of public associations and citizen initia- tives, teachers of social sciences and students, as well as to all who are interested in local self-government and citizen’s participation at the local level. NGO «Lev Sapieha Foundation» thanks the European Union for helping to publish this brochure. The content of this publication is the responsibility of its authors. The content of this publication does not reflect the position of the European Union. Distributed free of charge as internal documentation.

Local self-government, in accordance with the European Charter of Local Self-Government, is understood as the right and the real capacity of local communities (local self-government bodies elected by them) within the law and under their responsibility in the interests of the local population to manage a significant part of public affairs. Local self-government, as a special kind of public authority, providing everyday life of citizens, has become increasingly important all over the world and has attracted increasing attention from politicians, public figures, researchers and various groups of interested citizens. The experience of European countries demonstrates that the ways of development and improvement of local self-government are closely connected with the processes of democracy and civil society development, strengthening the role of citizens in preparation and decision-making at the local level and, con- sequently, improving the quality of decisions and achieved results of activities. This brochure presents the results of a series of studies in the field of -lo cal self-government of the Republic of Belarus, carried out by experts from the NGO “Lev Sapieha Foundation” during 2015−2016 years as part of the framework of the Programmatic Cooperation of the European Union and the Council of Europe. Thus, Chapter 1 includes results of the study: «Reform of State Governance on Regional and Local Levels in the Repub- lic of Belarus», which was carried out as part of the programme «Short-term Studies of the Quality of Activities of Local Authorities and Support of Their Activities as Part of Eastern Partnership»; Chapters 2 and 3 include specialized studies carried out as part of the programme «Strengthening Institutional Foundations of Local Self Governance in Eastern Partnership Countries»: «Financial Comparisons: Spheres and Options for Assessing Local Financial Resources and Local Financial Management in the Republic of Belarus» (2015); «Structuring of Factors Hindering Inter-Municipal Cooperation in Belarus» (2015). NGO «Lev Sapieha Foundation» thanks the Committee of the Regions of the European Union and the Congress of Local and Regional Authorities of the Council of Europe, as well as the government bodies of the Republic of Belar- us — the National Statistical Committee, the Ministry of Finance and the State Committee for the Management of State Property for their cooperation and assistance in the preparation of research materials.

Eastern Partnerships Programme STRENGTHENING INSTITUTIONAL FRAMEWORKS FOR LOCAL GOVERNANCE within the Programmatic Cooperation of the European Union and the Council of Europe

Chapter 1 ANALYSIS OF THE STATE OF LOCAL SELF-GOVERNMENT IN THE REPUBLIC OF BELARUS Contents Brief Historical Reference...... 7 Legal Basis of Local Government...... 8 Administrative and Territorial Structure...... 10 Structure of the Local Authorities System...... 12 The General and Exclusive Competence of Primary, Base and Regional Councils of Deputies ...... 14 Regimes of Control and Supervision of Local Authorities...... 15 State of Local Self-Government in The Republic of Belarus in Relation to the Corresponding Articles of the European Charter of Local Self-Government ...... 16 Fiscal Decentralization...... 18 Local Budgets...... 18 Communal Property...... 20 Development of Local Authority Capacity in The Sphere of Human Resources...... 22 General Analysis of Staff and Staff Members Local Authorities...... 22 Analysis of Number and Distribution of Deputies of Local Councils by Territorial Levels...... 23 Analysis of Number and Distribution of Local Civil Servants by Education and Sex ...... 26 The General Recommendations on the Results of the Study...... 27 Brief Historical Reference

The course of events, starting from 1990, both during the time of the USSR and after its disintegration, was replete with optimism and sense of inevitability of reforms. These feelings applied to local self-government in full measure as well. The law “On the Basics of Local Government and Local Economy in the BSSR”, adopted in 1991, passed power at the local level from party bodies and executive committees to the Soviets and created real prerequisites for the development of local self-government. However, in 1994, the process of formation and development of local self-government in Belarus has ceased. In 1995, the “vertical” of the executive and administrative bodies (executive committees) began to be built up. Through the “delegation” of the powers of the Soviets to the executive committees the competence of the latter was increased, while the political, economic and personnel influence of the Soviets on the executive committees was reduced; The Constitution and legislation were subject to amends, as a result of which the executive committees were removed from the subordination of the Soviets and re-subordinated to the President and the Government. As a result, by 1999, a state “vertical” of local government was built in Be- larus and a model of “state local self-government” was established, in which the interests of the state openly dominate the interests of local communities. Existing norms of the legislation reproduce, in reality, morally outdated schemes and templates of the Soviet period on the basis of the “theory of state self-government” that was “put into service” decades ago. This model is fun- damentally different from the theory of “dualism” used in most developed democratic countries, which suggests a clear delineation of the tasks, functions and responsibilities of central and local authorities, as well as a flexible combination of their interests in solving state and local problems at the local territorial level. Since the time the Republic of Belarus acquired independence and state sovereignty in 1991, and up to the present, the state authorities have not taken any significant steps to bring the legislation on local self-government closer to Euro- pean standards, and to reform the existing system at the local level: • The authorities could not offer the society the Concept of formation and development of local self-government in Belarus; • The model of “state local self-government” has not undergone major changes; • The European Charter of Local Self-Government has not yet been signed and ratified; 7 • The recommendations of European institutions (including the 2012 recommendations sent to Belarus within the framework of the Eastern Part- nership Programme) were in fact not implemented; The existing norms of the legislation largely reproduce in practice the ob- solete schemes and templates of the Soviet period, when local self-government was viewed as a phenomenon that is “alien to the Soviet people” and destroys unified state power.

Legal Basis of Local Government Constitution of the Republic of Belarus of March 15 1994. (incl. amendments and alterations introduced at Republican referendums on November 24, 1996 and October 17, 2004) defines in Section V (Articles 117−124) principles of public government at the local level, providing for the existence of two types of local authorities, namely: • Local government; • Local self-government. Local government refers to local executive and administrative authorities directly subordinate and accountable to the President of the Republic of Belarus. Local self-government refers to local Councils of Deputies elected by citizens every four years. The Constitution provides for vertical hierarchical structure for both executive authorities and Councils as it introduces such concepts as superior executive and administrative authorities and superior representative bodies (art. 122). The highest level of power for executive and administrative authorities is the President of the Republic of Belarus, and the highest level of power for representative bodies is the Council of the Republic of the National Assembly of the Republic of Belarus. This organization model at the local level is further reflected in other laws and regulations, namely: • The Law “On Local Government and Self-government in the Republic of Belarus” as in force on January 4, 2010 establishes the concepts and norms of local governance and self-governance, the status and the competence of local Deputy councils, local Executive Committees and administration and their officers, as well as the guarantees of their activity. The Law establishes the basis and forms of relations between government and local authorities and interlevel relations of local authorities. The law establishes the forms of direct participation of citizens in local self-governance implementation, incl. via the bodies of territorial public self-governance, defining their status, procedure of their formation and operations. 8 The concepts, which are normally used in practice by many states, such as “municipality”, community” and “local community” are entirely missing from the law. In the global practice it is the community that has the right to organize local communities, delegating part of its rights to the elected Council. In the Republic of Belar- us, there is no community as an entity, being the subject of local self-governance. It is replaced by the term “administrative-territorial unit”; • The Law «On Administrative and Territorial Structure of the Re- public of Belarus» of May 5, 1998 defines the targets and principles of administrative and territorial division, as well as of the structure of the state and its parts. It establishes the status of separate administrative and territorial units, incl. settlements and spatial objects. The law defines the scope of reference of each of the territorial levels in the issues of administrative and territorial structure and form of their interaction in this sphere. • Law «On the Status of a Deputy of a Local Council of Deputies of the Republic of Belarus» of March 27, 1992 establishes the status of deputy of local Council, legal restriction of acquisitions or implementation of the mentioned status, procedure and form of activity of a deputy in the local Council and in the district, the list of his powers and authorities, other rights and obligations, as well as guarantees of deputy activity implementation and responsibility. • Electoral Code of the Republic of Belarus of February 11, 2000 establishes the regulatory norms ref. the principles of creation and the procedure of formation of local representative authorities, the procedure of preparation and conduction of elections of local deputies at all levels, as well as the definition of their results. There is a separate section of the Code dedicated to the basis and the procedure of recall of Local Councils of deputies. Along with that, the Code contains the principles and the procedure of preparation and conduction of local referendums as well as of their results definition. • Budgetary Code of the Republic of Belarus of June 16, 2008 establishes the principles, the procedure and practices of formation, approval and implementation of local budgets at all levels, as well as the competence of local authorities within the budgeting process. It also establishes the principles and the procedure of inter-government fiscal relations via instruments of dotations, subventions and subsidies. • Tax Code of the Republic of Belarus (general part of December 19, 2002 and special part of December 29, 2009) establishes the types of Repub- lican regulatory and local taxes and duties, the procedure of their establishment, collection and transfer to the budget and extra-budgetary funds. It also specifies the scope of reference of republican and local authorities in taxation issues. 9 Administrative and Territorial Structure

On January 07, 2012 the Law of the Republic of Belarus No. 346 — З (as amended and supplemented of 31.12.2014) “On Administrative and Territorial Structure of the Republic of Belarus” was adopted in the new edition. At the same time the Presidential Decree No. 128 of 17 March 2014 «On Some Issues Related to the Change in the Administrative and Territorial Struc- ture of the Republic of Belarus» contains provisions which define the order of formation, reorganization, liquidation of local Councils of deputies, local and administrative bodies and solutions of other issues related to the change in the administrative-territorial structure of the Republic of Belarus. Article 1 of the same Law defines “administrative-territorial unit” as part of the Republic of Belarus (region, district, rural Council, city, urban-type settlement), within which local Councils of deputies and local executive and administrative bodies are formed and operate in accordance with the procedure established by the legislation. For each administrative-territorial unit a name and boundaries are set. Each district, region and village Council have an administrative center on top of that. It should be noted that the administrative-territorial division of the Re- public of Belarus in 6 regions and the city of republican subordination Minsk has remained unchanged since 1960. The division of regions in districts has been the same since 1966 (except Dribin district, created in 1989.). Over the years of state sovereignty of the Republic of Belarus, there has been a change only in the number of cities of regional and district subordination, township and rural Councils. The period from 2010 to 2014 witnessed a considerable change in the number of administrative-territorial units, mostly at the primary territorial level. 128 rural Councils and 128 rural executive committees (9.9% of the total), 37 urban-type settlement Councils and 37 urban-type settlement executive committees (66.1% of the total) were phased out. At the basic territorial level, 2 city Councils and 2 municipal executive committees (16.7% of the total) were eliminated. During the period from 2012 to 2014, the total number of administrative-territorial units decreased by 167 units (11.2%) — from 1495 to 1328. Intra-regions (regions, or “oblasts” and Minsk) significantly vary in size, environmental and demographic conditions, production and socioeconomic potential, as well as the established settlement system. Districts (“rayons”) and rural Councils in each region vary considerably both in terms of population and area. With the average size of one district being 1.76 thousand km2, 10 region cover the territory of up to 1 thousand km2, and 15 — more than 2.5 thousand km2. 10 Table 1. Minimum and maximum areas of ATU of three territorial levels

Territorial Type of Parameter of Name of АТU Higher АТU Area levels АТU territory area Region min Grodno region 25.1 th. km2 * Regional (oblast) max Gomel region 40.4 th. km2 * District min Zhabinka district Brest region 684.2 km2 * Basic (rayon) max Stolin district Brest region 3342.1 km2 * Osipovichy Tatarkovski rural min district, Mogilev 2.5 km2 * Rural Council Primary region Council Kirovski rural Narovlia district, max 793.4 km2 * Council Gomel region * Data of the State Committee for the Management of State Property on 01.01.2017

Table 2. Minimum and maximum population of ATU of three territorial levels

Parameter Territorial Type of АТU of territory Name of АТU Higher АТU Population levels population 1,047.4 th. min Grodno region Region people* (oblast) 1,423.1 th. Regional max Minsk region people* 1,974.8 th. Capital Minsk people* min Rossony district Vitebsk region 9.4 th. people* District Basic 208.8 th. (rayon) max Minsk district Minsk region people* Oniskovski rural Kobrin district, min Council (Abolished 475 people** Rural Brest region Primary in 2012.) Council Olshanski rural Stolin district, max 7.9 th. people** Council Brest region. * Data of the National Statistics Committee on 01.01.2017 ** Data of the State Committee for the Management of State Property based on population census 2009 The current system of administrative-territorial units of base (districts and cities of regional subordination) and primary level (rural Councils) does not correspond to the optimal size determined by the formation of market relations, enhancement of social focus on governance, increasing role of scientific and technical progress and the educational level of the population, as well as the development of democratic processes at the local level. There remains the issue of the organization of local government, in particular the transition from a three-tier to a two-tier governance system (by merging basic and primary levels). 11 At expert level, there are several options for the reform of the ATD, but they are not of any official status. One of them is represented in the “Nation- al Human Development Report” (UNDP, 2015, Summary, page 21), and is shown below: The existing administrative and territorial structure in Belarus should be im- proved by stages to ensure a relatively equitable level of socioeconomic development in the district and rural Councils. At the first stage of the improvement of the administrative and territorial structure, it seems reasonable to: • finalize the merging of the regional subordination cities (Baranovichi, Pinsk, Bobruisk) with their district and consolidate the municipal executive committees of the regional capitals with the executive committees of the respective district; • consolidate the district with populations below 20,000 people with neigh- boring and larger district and reduce the total number of district to 95−100, taking into account the transport accessibility of the district capitals, existing industrial and socio-cultural ties and public opinion; • establish a separate administrative and territorial jurisdiction — the Minsk Capital city district. The second stage of reform should include the change of the administrative and territorial structure, based on evolving regional and local settlement patterns, and the creation of the resources and financial capacities needed for comprehensive development and improvement of competitiveness in every region. One of the reform options may be a transition from a three-level local government and self-government system to a two-level system with respective changes in the administrative and territorial structure.’

Structure of the Local Authorities System In the Republic of Belarus, there are two co-existing independent systems of local government in each administrative-territorial unit: local self-government system and the system of local governance. Elected local representative bodies (local Councils of deputies) are accountable to the citizens and responsible to them. Councils of deputies don’t have their own executive bodies. Bodies of local government (executive and administrative bodies) are formed by higher government bodies, they are accountable to them and under their control. Both representative and executive local authorities are included in the system of state bodies. Below is the information about local Councils of deputies and executive and administrative bodies: 12 Local and Regional Self-Governance Local Councils of Deputies The Council of Deputies is a representative state body on the territory of the relevant administrative-territorial unit (region, city, district, urban-type settlement, rural Council) and the main link in the local self-governance system. Local Councils do not have their own executive structures. The structure of local self-governance in Belarus includes regional, basic and primary territorial levels with corresponding local Councils that exercise control over the activities of lower level self-governments accountable to them. • Regional (‘oblast’) territorial level — 7 units: 6 regional Councils, Minsk city Council — local Councils at regional level are superior to local Councils at basic and primary levels. • Basic territorial level — 128 units: 118 district Councils, 10 city Coun- cils under region subordination — local Councils at basic level are superior to local Councils at primary level. The Minsk city Council, along with the rights of the regional level self-government body, also has the rights of a basic level self-government body. • Primary territorial level — 1193 units: 1160 rural Councils, 19 urban-type settlement Councils, 14 city Councils under district subordination. * * Data of the Central Election Commission on 23.03.2014

Local and Regional Governance Executive and Administrative Bodies Local executive committees are not part of the system of local self-government, they are unaccountable to citizens and are a structure of public administration at the local level. The structure of local governance in Belarus includes regional, basic and primary territorial levels with corresponding local executive committees that exercise control over the activities of lower level governments accountable to them. • Regional (‘oblast’) territorial level — 7 units: 6 regional executive committees, Minsk city executive committee) — local executive committees at regional level are superior to local executive committees at basic and primary levels; • Basic territorial level — 128 units: 118 district executive committees, 10 city executive committees under region subordination) — local executive committees at basic level are superior to local executive committees at primary level. The Minsk city executive committee, along with the rights of a regional level government body, also has the rights of a basic level government body; 13 • Primary territorial level — 1193 units: 1160 rural executive committees, 19 urban-type settlement executive committees, 14 city executive committees under district subordination. * Additionally, 24 local administrations operate at the primary level of local government in the cities of regional subordination, which have a district division, (in Minsk — 9, Gomel — 4, Vitebsk — 3, Mogilev, Brest, Grodno and Bobruisk — 2 local administrations). * Data of the National Statistics Committee on 01.07.2015

The General and Exclusive Competence of Primary, Base and Regional Councils of Deputies The Law ‘On Local Government and Self-Government in the Republic of Belarus’ assigns general and exclusive competence over issues to local and general councils. It also contains a description of features of the competence of local Councils at various territorial levels. The boundaries between the competences of local Councils and executive committees is demarcated. In accordance with the legislation and the Constitution, local Councils of deputies within the limits of their competence approve local budgets and performance reports, approve socio-economic development programs of the territory under their jurisdiction, determine the procedure governing the management and disposal of municipal property, impose local taxes and fees (tax on the ownership of dogs, resort fee and a charge from purveyors), call local referenda. These powers are enshrined in the Constitution and are within the exclusive competence of the Council. However, in practice, these powers become a formality, since the major role in addressing the above mentioned issues is played by local executive committees. Local Councils of deputies do not have the authority to influence the appointment of employees of the executive committees, and have very limited supervisory powers in relation to the activities of local executive committees. 31 powers lie within the scope of the competence of Councils of deputies, 24 of them can be realized exclusively at the Council session. 12 powers refer to internal organization of the work of the Council (adoption of the rules and structure of the Council, election of the Chair and Deputy Chair of the Council, approval of the Chair of the executive committee, the establishment of committees and the Presidium of the Council, reports of officials of the Council, the Council’s membership in associations, etc.). 14 Councils also have some powers in addressing administrative-territorial issues (change of borders of rural councils, townships, villages and their names, as well as names of streets, squares, etc.). Councils have the right to establish mass media, determine the rates of payment for hunting lands, fishing areas and bodies of water, maintain international cooperation. The Law ‘On Local Government and Self-Government in the Republic of Belarus’ also describes features of competence of local Councils at various territorial levels. It includes 19 powers (7 at the district level, 6 at the basic level and 6 at the primary level), 10 of which refer to internal organization of the work of the Council and territorial public self-government bodies). In quantitative terms, the total number of powers of Councils equals 50, with 22 powers focused on the internal organization of the Council and territorial self-government bodies. For comparison, the total number of the powers of executive committees is 30, and all the powers are related to providing everyday normal life of citizens. Living standards of citizens are directly dependent on the work of executive committees. At the same time executive committees in their work are accountable to citizens. Executive committees are accountable to the respective Councils in issues within the competence of local Councils. The size of the Council is determined by the President of the Republic of Belarus. Councils may delegate some of their powers to Councils of other territorial levels, executive committees, their Chairs, territorial self-government bodies (with their consent and availability of the necessary financial resources). In practice, this provision of the law is not implemented. There are problems in de- marcating competence between different levels of local government, there is no real economic basis for the activities of local Councils and their independence is severely limited in the fiscal sphere.

Regimes of Control and Supervision of Local Authorities Supervision of local authority bodies is enshrined in Article 59 of the Law ‘On Local Government and Self-Government in the Republic o f B e l a r u s’. In accordance with this Article, the higher representative and executive bodies of both local (Councils and executive committees), and central government (the National Assembly and the Government) have the right to cancel decisions, and the President can cancel (in reference to Councils) and suspend decisions of lower-level local governments. The same practice is applied to orders of heads of representative and executive local authorities. 15 In accordance with the Law (Part 2, Article 59), bills and regulations adopted by the local authorities are subject to legal review. However, this procedure is carried out by structural units of these same local authorities or their parent bodies. The Prior and subsequent judicial review of decisions of local authorities in terms of their legal expertise is not provided in the Law. Protection of violated or disputed rights, or interests of Councils of deputies protected by law, that is connected with the cancellation (change) of the legal act with regard to its non-compliance with the legislation, is legally provided (Part 7 Article 59), but not procedurally defined. Since the Act came into force (15 July 2010) it has not found practical application. Judicial protection of citizens whose rights, freedoms and legitimate interests have been restricted or violated by decisions of Councils, executive and administrative bodies (Part 6 Article 59), can not be realized in full, because in accordance with the Resolution of the Plenum of the Supreme Court (Decem- ber 24, 2009), citizens can seek judicial review only of decisions of individual character made by executive committees and local administration. Therefore, any decisions of Councils of deputies, both of regulatory and individual character, as well as regulations of the local executive and administrative bodies are not subject to judicial review by the citizens. Supervision over the activities of local government and self-government is carried out by the prosecution authorities (national, regional, district and city levels).

State of Local Self-Government in The Republic of Belarus in Relation to the Corresponding Articles of the European Charter of Local Self-Government a) The Republic of Belarus is the only European state that isn’t a member of the Council of Europe and hasn’t acceded to the European Charter of local Self-Government. Certain norms of the Belarusian Constitution and legislation don’t comply any more with modern European views on local self-government. Neither Belarus state organizations nor foreign experts have carried out any official judicial analysis of Belarusian constitutional and legislative norms for the purpose of evaluating their compliance with the norms and principles of the European Charter of Local Self-Government. b) Unofficial analysis of norms and provisions of the current legislation of the Republic of Belarus was conducted by the NGO “Lev Sapieha Foundation” experts. According to the analysis, 30% of cases (10 Charter principles) show non-compliance of the norms of the Belarusian legislature with the standards and provisions of the European Charter of Local Self-Government. 16 This non-compliance with the provisions of the Charter, in particular, relates to the concept of local self-government (Clause 1 of Article 3), the scope of its competence (PP. 2, 4 and 5 of Article 4), compliance of administrative structures and resources with the tasks of SNGs (paragraph. 1 Article 6), administrative supervision over their activities (paragraph 3 of Article 8) and the sources of their financing (PP. 2, 5 and 7, Article 9), as well as the right of local authorities to association (p. 2 Article 10). Addressing the identified discrepancies requires changes in legislation, and in some cases — in the Constitution of the Republic of Belarus. Based on the findings of the survey, we can conclude that the actual compliance of the norms of the Belarusian legislation and their law enforcement practices with the European Charter of Local Self-Government is observed in no more than 25 percent of cases (7−8 principles of the Charter). c) In addition to that, in a significant number of cases (12−13 principles of the Charter, or more than 40 percent) there is formal and relative compliance of the norms of the Belarusian legislation with the principles and provisions of the European Charter. For example: • the principle of local self-government, though enshrined at the constitutional and legislative level, doesn’t refer to the fundamentals of the constitutional system of Belarus. • local Councils don’t exercise any power in forming executive committees and controlling their activities, taking direct participation in local budgeting, designing programs promoting socio-economic development in catchment areas, as well as administering municipal property. • all decisions made by citizens in the framework of forms of direct democracy are only advisory in nature and do not involve legally significant consequences; • the procedure for hearing the views of local authorities and taking into account these views when deciding on financial issues, incl. reallocation of budgetary funds, is not procedurally developed and provided by guarantees. Provision of real rather than formal compliance of the norms of the Belar- usian legislation with the European Charter requires changes to the existing legislation. In case of meeting the conditions above, there is an opportunity to provide the compliance of the Belarusian legislature with at least 20 principles (incl. not fewer than 10 obligatory principles) out of 30 of the European Charter of Self-Government. This will allow to approach the issue of Belarus integration in the European Charter of Local Self-Government. 17 Fiscal Decentralization

Public finance management is still one of the most closed and conservative spheres in Belarus. During the period of 2012−2015, no significant action was taken regarding fiscal decentralization. The principle of subsidiarity is still not implemented at regional and local levels. The fiscal capacity and autonomy of local authorities in decision-making remain rather limited. Local budgets are perceived as vertical components of the state budget system and are strongly subordinate to the central budget. The degree of centralization in the local financial management has remained very high. The consequences of such a policy are a low level of the tax authorities, lack of local fiscal autonomy, chronic shortage of own incomes against local expenditures. Belarus is still far off from achieving successful financial decentralization regarding the assignment of revenues and expenditures, financial equalization, municipal loans, asset management, local financial autonomy and tax authorities. Budget Code of the Republic of Belarus is largely based on the idea of strict state regulation in the financial and budgetary areas at all levels of state and local authorities. The Code leaves little freedom to the local authorities in -fi nancial and budget planning and uses a regulatory approach in the assessment of budgetary needs of municipalities. In this case the cost of public utilities is determined by the state on a centralized basis and additional funds received by municipalities in excess of the income amount are forfeited in favor of the central government. The State renders financial assistance in this case only to those municipalities, the income of which is insufficient for covering the expenses planned by the government. On the one hand, such a system deprives successful municipalities of the incentives to increase budget revenues, on the other — it generates dependency among financially weak municipalities. The State exercises control not only over the legitimacy of budget spending, but also over reasonableness of expenses of the local authorities. Almost all transfers from higher levels of the budget system are targeted and can’t be used by local authorities for any other purposes, even when due to the effective work of the local authorities the target has been achieved through lower costs than initially planned.

Local Budgets The Budget Code pays little attention to local budgets, which indicates at least two things.

18 The first is that the concept of subordination of all levels of the government, used in the Republic of Belarus includes local authorities in the system of central government. In this regard, all the rules that determine the order of the central government in the financial and fiscal areas apply to local self-governments, and this eliminates the need for special regulation of these entities under the Budget Code. Secondly, on the basis of the Budget Code norms, one can make a conclusion on underestimation of the role of the local self-government: whatever budget decisions are made by local self-governments, no matter what action is taken by them, the result will be approximately the same. All additional funds received in excess of the income amount determined in accordance with the state standards, will be forfeited in favor of the central government, all the missing funds will be reimbursed by the central government. In fact, the logic of the Budget Code is that financial resources of the local authorities, referred to as ‘local budgets’ in the Code, are in practice cost estimates approved by the central government through strict regulation of utility costs.

Expenditure Assignment Expansion of Local Authority Today expenditure functions of the local authorities of the primary level are extremely limited, and the main expenditure assignments are concentrated at the higher levels of management. The vast majority of local government expenditures is concentrated in oblasts (regional level) −50%, 48% at basic level, and less than 2% belong to local authorities at the primary level, which make up 90% of all municipalities of different levels. Moreover, expenditure assignment system in Belarus is not formed, differentiation of assignments is not fully developed and fixed in the legislation.

Revenue Assignment Expansion of Local Authority Independence of local authorities in receiving revenues providing selection of the most suitable tax revenues and non-tax ones for the local governments is absent. It is necessary to assign those taxes which don’t depend on an economic environment and on which local authorities can have impact to local authorities are suggested. It is suggested to select also for local authorities those taxes which don’t go beyond jurisdiction of municipalities and which are connected with a living standard of taxpayers.

Tax Power Expansion of Local Authority Over the last 10−15 years the number of local taxes and fees in local budgets was significantly reduced. The share of these taxes was reduced from 10 per cent to 3 per cent in combined local budgets.

19 Local authorities can’t regulate tax rates and determine tax base independently.

Collection of Personal Income Tax (Pit) in a Residence of Inhabitance Currently, collection of personal income tax (PIT) is performed in a place of inhabitants’ job according to pay-sheets. However, the residence of individuals and place of their job is very frequent can’t coincide, and PIT cannot participate in financing of public expenditures in their residence. As a rule, it is a shortcoming little appreciable in big cities and it is strongly appreciable in small municipalities. Therefore in small municipalities the instability of local budgets is amplified and the forecast of its future incomes is complicated.

Perspective Financial Sources for Local Budget Nowadays in structure of local budgets the mobile taxes are dominating. They are profit tax (PT), personal income tax (PIT), tax on incomes and other taxes which depend upon an economic environment in the region. It creates big budgetary risks and doesn’t create stability for local budgets’ formation.

Transparency, Accountability and Justice of Financial Equalization Among the post-soviet countries Belarus strongly lags behind the countries with advanced tools and methods of financial equalization. It is looked through that in Belarus still there is no transparent formula for horizontal equalization which would allow to measure transfers for local government objectively and formalized.

Expansion of Local Governments Access to Financial Markets for Borrowing There is no reason that local governments should not borrow. In practice, however, local governments do not have the full access to financial markets that would make borrowing possible. On the one hand, Belarus banks are not ready to grant credits to local government for investment purposes, because they do not yet have long-term financial resources in the face of rather high inflation rates. Moreover, the banks must accept huge credit risks to lend to local governments. On the other hand, sub national governments are not yet ready to make loans due to the absence of legislatively defined borrowing procedures

Communal Property Communal property is a subtype of state property. It can be confiscated and redis- tributed by the central and higher-level authorities in the administrative procedure. In accordance with Article 13 of the Constitution, “Mineral resources, waters 20 and forests are the exclusive property of the state. Agricultural land is owned by the state.” Over the period 2012−2015 there has been little progress in financial (budgeting) decentralization in the Republic of Belarus. World Bank in the ’Public Financial Management Performance Report’ points out that sub-national governments (SNGs) derive revenue from three main sources1: • Shared national taxes are the largest financing item and contribute roughly 60% of sub-national revenue; • Transfers from the central government, including both block and ear- marked grants, make up another 35%; • The remaining 5% come from own-source taxes and non-tax revenue. All significant tax bases, including VAT, personal income tax, property taxes and CIT, remain under the control of the national government, but the revenue is shared with oblast governments, who in turn share these revenues with rural districts and rayon subordinate towns. The system of intergovernmental transfers equalizes fiscal capacity and finances specific SNG expenditures. Over 75% of intergovernmental transfers are accounted for by general purpose block grants and another 11% by capital grants. The rest are special purpose grants that are set each year in the annual budget law. The general purpose of transfers from the central government to oblast governments is designed to equalize fiscal capacity across SNGs. The Budget Code foresees the formula for allocating transfers. However, it is not implemented in practice due to its complexity and high demands to data. The formula was simplified but it is still at the trial stage and used together with the coexisting system. The existing state financial management system remains centralized, very conservative and closed from the general public. The analysis of independent experts shows that the Republic of Belarus hasn’t met any of the recommendations put forward in 2012 in the sphere of fiscal decentralization.

1 Report No. 89737-BY / Republic of Belarus: Public expenditure and financial countability (PEFA) / Public Financial Management Performance Report / June 2014 / Europe and Central Asia Region / THE WORLD BANK

21 Development of Local Authority Capacity in the Sphere of Human Resources General Analysis of Staff and Staff Members Local Authorities In accordance with the legislature of the Republic of Belarus, local governing bodies together with local Councils of deputies and local executive and representative bodies make up a system of state government. The staff of the local government is the staff of the state government. At the end of 2011, in accordance with the official statistics reports, there were 70,612 civil servants engaged in the state government system, 29,670 of them represented by local government servants, or 42% of all state government servants. The total number of civil servants in state government system was 56,232 at the end of 2011, 22,785 of them worked in local government system, which is 40.5% of all civil servants. The overwhelming majority of local civil servants — 22,512 people, or 98.8% of all local civil servants — worked in local executive committees. At that time, the share of civil servants of local Councils of deputies was only 1.2%, or 273 people. Such an insignificant proportion of civil servants (employees) of local Coun- cils of deputies in the total number of all civil servants in the local government is explained by the fact that there are only 2 and 3 staff positions respectively in every Council at the regional and basic level. At the primary level, there are no staff positions in the Council at all. Staff positions of local Councils are represented by Chair of the local Council and a Council specialist. One more position refers to an employee who is not a civil servant: driver of the Chair’s official car. The issue of increasing the number of staff units of the local Council at any level is outside its purview and decided centrally and uniformly throughout the country on the basis of the decree of the President of the Republic of Belarus. In some cases, the actual number of staff units is reduced to 1 and 2 units of civil servant employees. In the course of 2012−2015, there was significant downsizing in the system of local government. Thus, the total number of people working in local Councils and executive committees fell from 29,670 to 24,646. In other words the number decreased by 5,024, or by 16.9%. The number of civil servants of local authorities also fell by 3,565, or by 15.6% reaching 19,220 (22,785 before). However, this downsizing didn’t influence the above mentioned ratio of the number of employees and civil servants, as well as the ratio of the number of civil servants in the local Councils of Deputies and servants in local executive committees. 22 Thus, at the end of 2013, the number of local government employees was 25,401 including the number of civil servants — 19,211 people. However, the decrease in the number of employees and civil servants by 5,269 and 3,574 respectively compared with the data of the end of 2011 resulted in a slight shift in percentage of civil servants among employees, from 76.8% to 75.6%. Consider- ing the above mentioned data for 2015, it should be stated that this indicator has slightly gone up reaching 78%. A similar pattern is observed in the ratio of the number of local Council and executive committee employees. With the nominal change in the number of employees and civil servants in local Councils and executive committees as of the end of 2013 and mid 2015 compared with the end of 2011, the percentage of civil servants, in particular, changed from 1.2% to 1.4% in Councils and from 98.8% to 98.6% in executive committees.

Analysis of Number and Distribution of Deputies of Local Councils by Territorial Levels The Constitution and Election Code of the Republic of Belarus determine that the local Councils of deputies shall be elected for the period of four years at three territorial levels: primary (rural Councils, township Councils and Councils of cities district subordination), basic (district Councils and Councils of cities regional subordination), regional (regional Councils and Minsk city Council). The Electoral Code specifies minimal and maximum numbers for the deputies in Councils at each territorial level. At the primary level: • in the rural Council — from 11 to 15 deputies; • in the township Council and city Council — from 15 to 25 deputies; At the basic level: • in the district Council and city Council — from 25 to 40 deputies; At the regional level: • in the regional Council and Minsk city Council — from 40 to 60 deputies. The exact number of deputies for each Council is determined by decision of the Council adopted at the session, held in accordance with the law, within a period not later than 4 months before the date of the next election. Decision of the Council sets the number of electoral districts within the territory under the jurisdiction of the Council. Due to the fact that the Belarusian elections to local Councils are held by the majority system in single member constituencies, the number of districts on the territory of the Council corresponds to the future number of deputies in the Council. The total number of deputies in local Councils is steadily declining from election to election. In accordance with the official data of the Central 23 Commission of the Republic of Belarus on Elections and Holding Republican Referenda, the following deputies were elected: • March 2, 2003 — 23,469 people in 1,672 local Councils; • January 14, 2007 — 22,639 people in 1,581 local Councils; • April 25, 2010 — 21,288 people in 1,495 local Councils; • March 23, 2014 — 18,809 people in 1,325 local Councils. Including according to the latest election: • 14,118 deputies — in 1,190 Councils of the primary level; • 4,279 deputies — in 128 Councils of the basic level; • 412 deputies — in 7 Councils of the regional level. Thus, the overall number of deputies of local Councils in 2014 decreased by 11.6% compared with 2010 and by 19.9% compared with 2003. The above mentioned change in the number of deputies is connected with considerable decrease in local Councils of deputies. Therefore, in relation to 2010 the number of local Councils of deputies in 2014 fell by 167, or 11.2%. On the whole, during the period of 2003−2014 there was a decline by 344 local Councils, or 20.6%. The main reduction in the number of Councils of deputies is observed at the primary territorial level. Thus, during the period from 2010 to 2014, 167 Councils were eliminated, incl. 128 rural and 37 township Councils of deputies. In total, 344 Councils were eliminated during the period from 2003 to 2014, among them were 280 rural and 58 township Councils of deputies. Accordingly, the primary territorial level witnessed the most considerable reduction in the number of deputies. From 2010 to 2014, their number fell from 16,338 to 14,118, i. e. by 2,220 deputies, or 13.6%. On the whole, over the years 2003−2014 the number of deputies went down by 4,234, or 23.1%. A less significant change in the number of deputies affected the basic territorial level. From 2010 to 2014, their number declined by 256 people, or 5.6%. On the whole, from 2003 to 2014 the number fell by 440 people or by 9.3%. This shift is mostly due to the disappearance of 10 Councils out of 20 that existed in cities of regional subordination. Together with that, from 2003 to 2014 despite the unchanging number of Coun- cils at the regional territorial level, slight growth in the number of deputies was still observed. The figure increased from 398 to 415 deputies, or by 3.5%. Such an increase in the number of deputies can be explained by an increase in the number of residents and, accordingly, the number of voters in Minsk and regional centers. This led to the need to create new constituencies in Minsk and regional centers. In a situation when the results of elections are not recognized free, transparent and democratic; when the powerful structures use administrative resource in an unlimited manner and many numerous violations are recorded at 24 all stages of the election process, the analysis of the composition of local Coun- cils of deputies is of even greater interest. It’s interesting to see which deputies were supported by the existing state structures representing executive power, provided with electoral votes and ‘formally’ elected, rather than simply know who was elected to the local Council. Firstly, the proportion of the current deputies re-elected to the local council is relatively high. From the number of newly elected they were: • in 2003 — 52.0% • in 2007 — 51.2% • in 2010 — 52.5% • in 2014 — 54.7%. This suggests continuity in the activities of local Сouncils of deputies, which on the one hand, is a positive factor and speaks about the process of accumula- tion of experience of deputy work. On the other hand, it indicates that power structures count on those who are loyal to the existing authorities and accept the rules of the game, in which the Council of deputies is nothing but a resemblance of popular representation and serves as a cover for the activities of central and local executive authorities. Secondly, the proportion of women elected to local Council of deputies is always high. So in the deputy housing the women were: • in 2003 — 44.4% • in 2007 — 45.7% • in 2010 — 45.5% • in 2014 — 46.3%. On the one hand, these figures are very positive because they comply with the existing UN recommendations on gender balance and the highest international levels of women’s representation in local elected bodies. On the other hand, one can start wondering about the objectivity of the results in the electoral process, which is fully controlled by the existing authorities. Such questions are accumulated in the analysis of women’s representation in Councils at different territorial levels. So the women deputies were: Statistics show that women’s representation in the Councils of the basic level is, on average, 20 percent lower than in the primary level councils. In turn, in the regional level councils, women’s representation was 5−10 percent lower than at the basic level. Therefore, while approximately every second deputy is a woman at the primary level, this indicator decreases to every third deputy at the basic level and falls to every fifth of the local Council at the regional level. These statistics may, on the one hand, indicate a decreasing degree of confidence towards women by the current government in the formation of local representative power of each higher level. 25 Table 3. Share (percentage) of women representation in the Councils on territorial levels

Years of elections to local Councils of deputies Level of Councils 2003 2010 2014 Primary 48.7% 50.8% 51.3% Basic 29.2% 29.1% 32.1% Regional 24.9% 18.6% 21.1%

On the other hand, considering the fact that the composition of deputies in Belarus is formed primarily by people holding managerial positions, it may reflect the decrease in the proportion of female managers at the basic, and especially at the regional level as compared to their share at the primary level. Thirdly, analysis of the composition of the elected deputies demonstrates consistently low representation of political parties in the local Councils. So representatives of parties in the deputy housing were: • in 2003 — 257 people from 23,469 deputies (1.1%) • in 2007 — 339 people from 22,639 deputies (1.5%) • in 2010 — 306 people from 21,288 deputies (1.4%) • in 2014 — 248 people from 18,809 deputies (1.3%). Taking into account the non-democratic character of the elections, it may show, on the one hand, almost complete detachment of more than a dozen parties from political activity at the local level. On the other hand, it may be a sign that authorities are not interested in political representation in local Councils. More- over, it also reflects the weakness of political parties and their minor role in the life of the society. It should be noted that the deputies of local Councils combine the performance of their parliamentary duties with professional activities at the primary place of employment. The Chairs of local Councils and Council specialists are civil servants and perform their duties on a regular basis.

Analysis of Number and Distribution of Local Civil Servants by Education and Sex Statistical data point to the high educational (and possibly high professional) level of local government employees. Moreover, during the study period (end of 2011 — mid 2015) the educational level of local civil servants continued to grow. So, higher education had: • at the end of 2011 — 86.4% of employees; • at the end of 2013 — 89.5% of employees; • in the middle of 2015 — 91.6% of employees. At the same time the number of civil servants decreased from 19,697 to 17,609 people for the given period. 26 However, it should be noted that this growth rate is not only the reflection of an improving educational level of the employees. It is also connected with partial reduction of the personnel in local governing bodies, including those servants who had no higher education. For example, the share of employees with vocational secondary education declined from the end of 2011 to mid−2015 from 12.0% to 7.6% with an absolute change in their number from 2,736 to 1,460 people. The share of employees who did not have either higher or vocational secondary education dropped from 1.5% to 0.8%, or in absolute numbers from 352 to 151 people. However, figures about the high educational level of servants taken alone say little about their professionalism in the local government, their knowledge of specific subjects of local importance and methods of solving various issues, their style and quality of work, work ethic, proactiveness and their adherence to principles. Belarus currently lacks coherent and comprehensive educational training of citizens who chose work in local and national government bodies for their professional occupation. The Ministry of Education has excluded the subject ‘Municipal Law’ from the curricula of universities. One may choose to major in ‘State Administration’ in some higher educational establishments. However, the needs of the management system at central and local levels, are far from being satisfied, and the system is starving for young professionally trained staff whose level of education is equivalent to contemporary foreign level. As a result, local authorities are replenished to a vast extent with ‘random’ people with University diplomas who have no major in Public Administration and very often are not able to professionally solve problems related to the activity of local authorities. The Academy of Public Administration under the President of the Republic of Belarus is trying to fill this gap by offering development programs in the framework of periodic training sessions with the staff of local authorities. How- ever, the scope of the problem and the lack of modern approaches to the organization of the educational process do not always lead to the desired outcome.

The General Recommendations on the Results of the Study The system of local government now existing in Belarus is not able to realize the goals of self-government and does not allow local authorities to fully comply with the definition of “self-government”. The basis for this conclusion is that: 1. the analysis of the existing legal and institutional framework of local democracy indicates a significant deviation from the principles and norms of the European Charter of Local Self-Government (the national legislation on local 27 self-government ignores the principle of subsidiarity; local councils are included in the system of state bodies, there is no concept of “community” as a source of self-government and his main subject; there is lack of the financial and economic basis of local self-government, etc.). 2. local Councils do not have their executive and administrative bodies. 3. any progress in the sphere of financial decentralization of power (such as taxes and budget) is not tangible as yet and the recommendations made by the Sub-group on the reform of local self-government and public administration of the Eastern Partnership’s Civil Society Forum have been practically ignored. 4. the ongoing optimization of administrative and territorial unit (ATU) does not dispose of any legally binding conceptual approaches and, as a result, its ultimate objective of the problem are not transparent and understandable. 5. the evaluation and investigation of the capacity of local authorities in the field of human resources (personnel characteristics of local self-government bodies and the existing system of training / retraining) proves its failure and inefficiency. 6. the analysis of the forms and procedures of citizen participation in the preparation, adoption and execution of decisions of local authorities indicates a great imperfection of the direct democracy instruments as well as the absence of appropriate conditions required for its application and the excessive complexity of the proposed legal arrangements. In this situation, in our view, the recommendations for the individual (even very important!) components of the system of local self-government (fiscal decentralization, the ATU arrangement, human resources, etc.) appear to be un- founded and inappropriate. To create a real local self-government the organization and concrete activities of local authorities in the Republic of Belarus should be subjected to systemic reform based on the provisions and principles of the European Charter of Local Self-Government. As the recommendations for the reform of local self-government in the Re- public of Belarus the following activities could be made:

1. Preparation and adoption of the Concept of Development of Local Self-government in the Republic of Belarus: 1.1. preparation of the Concept of local self-government in the Republic of Belarus in accordance with the principles and norms of the European Charter and the development of a program for its implementation; 1.2. organization of public debates on the Concept of local self-government and on its program of implementation with the participation of specialists

28 representing authorities and management at central and local level, employees, scientific and educational institutions as well as representatives of political parties, public associations, trade unions and citizens; 1.3. preparation of the final version of the Concept with proposals, comments and amendments received in the course of its discussions; 1.4. approval of the Concept of local self-government in the Republic of Be- larus and implementation of the program of its development at the highest state level, through the adoption of appropriate legislative acts.

2. Improving the legislation of the Republic of Belarus in accordance with the principles and norms of the European Charter of Local Self- Government: 2.1. establishing working groups to prepare proposals for amendments and additions to the Law on local self-government based on its analysis of Council of Europe experts and the Concept of development of local self-government; 2.2. organization of public discussions on the proposals for amendments and supplements to the Law on local self-government with the participation of specialists representing authorities and management at central and local level, employees, scientific and educational institutions as well as representatives of political parties, public associations, trade unions and citizens; 2.3. preparation of the final version of the proposals, comments and amendments to improve the legislation on local self-government, as a result of the discussions; 2.4. improvement of legislation in the sphere of local self-government based on the principles and norms of the European Charter and the Concept of development of local self-government (including decentralization of power, the implementation of the legislation the principle of subsidiarity, the improvement of the electoral system and the ATU, a fiscal decentralization, fixing the concept of “community” in the national legislation and etc.) through appropriate legislative acts.

3. The signing and ratification of the European Charter of Local Self- Government by the Republic of Belarus: 3.1. an official invitation to the experts of the Congress of Local and Region- al Authorities of the Council of Europe to analyze the legislation of the Republic of Belarus on local self-government and its compliance with the principles and norms of the European Charter of Local Self-Government; 3.2. presentation and discussion on the results of the analysis at the national and community level;

29 3.3. preparation of the official translation of the text of the European Charter of Local Self-Government into Belarusian; 3.4. holding in the Republic of Belarus series of seminars and conferences aimed at the study and discussion on the principles and norms of the European Charter with the participation of experts from the Council of Europe and the European Union; 3.5. definition of concrete articles and specific principles of the European Charter by the Republic of Belarus for which the country intends to commit itself to their implementation; 3.6. signing and ratification of the European Charter of Local Self-Government.

4. Implementation of measures to ensure the stability of the local self- government in the Republic of Belarus: 4.1. organization and holding of democratic local elections; 4.2. establishment of the National Association of Local Councils; 4.3. development of international cooperation of local Councils; 4.4. development and implementation of educational practice in university programs on local self-government, as well as of training programs for professionals in this branch; 4.5. development and implementation of criteria for evaluating the effective- ness of local Councils; 4.6. implementation of the principle of transparency and openness in the work of local authorities; 4.7. de-bureaucratization of the forms of direct democracy and the establishment of communication platforms for dialogue between local authorities, NGOs and citizens.

30 Eastern Partnerships Programme STRENGTHENING INSTITUTIONAL FRAMEWORKS FOR LOCAL GOVERNANCE within the Programmatic Cooperation of the European Union and the Council of Europe

Chapter 2 FINANCIAL COMPARISONS: SPHERES AND EVALUATIONS OF LOCAL FINANCIAL RESOURCES AND LOCAL FINANCIAL MANAGEMENT IN THE REPUBLIC OF BELARUS Contents Political and Administrative Structure...... 33 Forms and types of elected local governments...... 33 Local Government Functions...... 35 Local Government Own and Shared Revenues...... 38 Scope and types of local own source revenues: taxes, user charges, fees.....38 Local autonomy in tax policy design: setting base, rate, exemptions...... 38 Capital revenues (asset sale, rent, profits, etc.)...... 40 Tax sharing: origin or formula based; set ratio or arbitrary allocation rules...41 Local tariffs, user charges...... 42 Local property management...... 42 Information sources, public and available databases on collected local and shared taxes ...... 43 Intergovernmental Transfers, Fiscal Equalization...... 43 Equalization of revenues and spending needs...... 46 Capital investment...... 47 Local Borrowing...... 47 Local Financial Management...... 48 Separation of current and capital budget, balancing local budgets...... 48 Strategic planning, multiyear budgeting...... 48 Annual fiscal planning, budgeting...... 49 Budget implementation...... 50 Fiscal information, accounting and audit...... 51 Local management capacities...... 52 Implementation of LFB Program Comparative Analysis of Local Finances Comparative Analysis of Local Finances...... 53 Information, datasets for comparison...... 53 Problems and obstacles in LFB implementation...... 53 Guidance and program for adapting the (national and local) lfb toolkit....54 References, Further Readings, Websites...... 55 On local governments, intergovernmental finances, local public financial management...... 55 Political and Administrative Structure Forms and types of elected local governments In Belarus there is one form/type of the elected local authority only. It is the Local Council as representative body of the power. The Executive Com- mittee or executive local power is not elected. The Chairman of the Executive Committee is appointed by the President of Belarus. However, local executive committees have supremacy in local government and overwrite the elected Councils’ powers. On the territory of the Republic of Belarus (as of 01.01.2014), there are 1,328 administrative territorial units (ATU), in which local Councils and Exec- utive Committees have been established and are functioning, incl. 6 regions, the capital — Minsk, 118 districts and 1,160 rural Councils. All of them are ATU. Of the 113 cities in Belarus, 90 urban-type settlements and 23,251 villages, only 10 cities under the jurisdiction of region, 14 cities under the jurisdiction of district and 19 urban-type settlements have ATU status. The rest of the settlements are territorial units (TU) only and do not have their own local Councils and Executive Committees. This is illustrated in Tables 1 and 2 (page 34). In recent years the quantity of administrative and territorial units is reduced due to reduction of rural Councils, which are integrated with other rural Coun- cils of this level. For the period from 2007 to 2014 the number of rural Councils decreased from 1363 to 1160 units. The Belarusian local authorities is structured on three governmental levels. On the first level (regional) are six units of regional authorities (Brest, Vitebsk, Gomel, Grodno, Minsk, Mogilev) and Minsk (capital of Belarus) city authorities. The second level (basic) comprises of 128 units, including 118 districts and 10 cities under the jurisdiction of region and finally, the third level (primary) consists of 1,193 units, including 14 cities under the jurisdiction of district, as well as 19 urban-type settlements and 1,160 rural Councils.

Central government agencies, responsible for local governments, are: Min- istry of Economy, Ministry of Finance, Ministry of Industry, Ministry of Agriculture and Ministry of Forestry. Line and branch ministries actively participate in local government development. For example, the budgetary process for local budgets begins with the Ministry of Economy (MoE) and the Ministry of Finance (MoF). MoE develops macroeconomic indicators for regions and then transfers them to MoF for the total regional budget planning or the combined local budgets. The MoF sends target figures to regional finance departments, which are subordinated to MoF 33 Table 1. Administrative and territorial units’ structure

Administrative territorial and (territorial) units2

Regions Cities Urban-type rural Districts Total Villages jurisdiction of jurisdiction settlements Councils region of district Brest reg. 16 8 (13) 3 5 (13) 4 (4) 191 (2,161) Vitebsk reg. 21 5 (14) 2 3 (14) 5 (19) 192 (6,262) Gomel reg. 21 3 (15) 1 2 (15) 2 (14) 242 (4,314) Grodno reg. 17 3 (12) 1 2 (12) 2 (14) 163 (2,296) Minsk reg. 22 3 (21) 1 2 (21) 6 (12) 217 (5,203) Mogilev reg. 21 2 (13) 2 (13) (8) 155 (3,015) Minsk city -- 1 ------(capital) -- Total: 118 25 (88) 10 14 (88) 19 (71) 1,160 (23,251) Source: Compiled by expert on the basis of the State Committee of property of the Republic of Belarus as of 1 January 2014 Table 2. Population size of elected local government units (fragmentation)

Population size in local government units Belarus (number of local government units) regions Less than 1 001−5 5 001−20 20 001−50 More than 501−1000 Total 500 000 000 000 50 000 Brest reg. 1 11 208 4 12 3 239 Vitebsk reg. 2 17 180 20 3 5 227 Gomel reg. 4 53 204 6 10 5 282 Grodno reg. - 7 183 6 9 3 208 Minsk reg. 2 28 263 15 3 4 315 Mogilev reg. 1 24 162 10 9 2 208 Minsk city - - - - - 1 1 (capital) Total: 10 140 1200 61 46 23 1480 The share in units 0.7 9.5 81.1 41.1 3.1 1.6 100.0 (percent) total Source: Compiled by authors on the basis of oblasts executive committees by the data of the population census of 2009

2 Settlements (cities, urban-type settlements and villages), which are not administrative- territorial units, are indicated in parentheses. 34 for regions budget planning. After that, regional financial departments establish target figures for district local budgets planning and the cities of regional status. In turn, district executive committees, together with the district financial department, establish parameters for local budgets of rural Council and urban-type settlements. MoF also participates in municipalities’ control. In its structure there are control — auditing divisions, which provide audits and inspections of budgetary funds used by municipalities. Besides, oblast’s financial departments can perform checks on different local finance issues and local financial management. Besides MoF and its division’s inspections regarding local government finance, inspections and audits can be made by the Committee of state control. They generally are performed on all issues connected with the local government development. The Ministry of Hous- ing, Utilities and Communal Services establishes the indicators for local budgets expenditures in the sphere of housing, utilities and communal services and then transfers them to regional associations of housing and communal services. In turn, regional associations of housing and communal services together with regional financial departments are planning expenditures on housing, utilities and communal services. The Ministry of Industry, the Ministry of Agriculture and the Ministry of Forestry are similarly planning expenditures on industry and agriculture purposes with the regional financial department.

Local Government Functions Local government functions and responsibilities are presented below in Table 3 (page 36). All Local government functions indicated here correspond to local budget expenditures. Delegation of public functions from the central government to local authorities isn’t stated in the Belarusian legislation. So, in local government legislation there is no concept of delegated functions in local government practice. All local service management belongs to the State and is regulated by organizations of the Ministry of Housing, Utilities and Communal Services. In Be- larus, there are no contract forms, leasing, and concession ones. Exceptions are some condominiums in houses as the non-governmental activity for communal service provision. Services devolved to elected municipalities are absent. The Belarusian public sector is showing high indicators, quite compara- ble with ones in the EU countries. For example, in 2014 the share of local government expenditures in GDP reached 18.2% and in total (consolidated) public expenditures — 62.0%. The share of local government revenues in total 35 Table 3. Local government functions/ responsibilities in Belarus:

Local government levels Functions

Executive Committee of cities under the jurisdiction of district, State and local administration in settlements and cities; rural Council and urban-type Accomplishments (Improvement in settlements and villages); settlement (local governments of Social protection: social assistance primary territorial level)

State and local administration in districts; Transport (within district borders) Agricultural production, fishing, and processing of agricultural production development: maintenance of inter-district veterinary laboratories; maintenance of regional veterinary stations; maintenance of technical supervision bodies. Maintenance of fuel and energy in the district; Maintenance of other economic branches and sectors; Housing, utilities and communal services: street lighting; water supply; sewerage; waste removal; garbage collection; maintenance of treatment facilities; gasification (maintenance Executive Committee of districts of gas pipeline networks within district); cleaning of streets, and cities under the jurisdiction accomplishment in the district cities; maintenance and repair of region (local governments of of housing stock; service of heating networks, capital repairs of base territorial level) infrastructure objects. Health care: out-patient clinics; policlinics in district centres (district cities); inter-district hospitals. Physical culture, sport, culture and mass media: physical culture and sport development; cultural and art development; mass media; cinema. Education: pre — school education (kindergartens); elementary (basic) schools; secondary schools; secondary schools for children who need social assistance; boarding schools Social policy: social protection; youth policy; Protection against emergency situations (fire protection); Public safety (within the district); National defense (functioning of military commissaries in district for recruiting)

36 Local government levels Functions

State and local administration in regions; Transport (all types within the region borders); Roads maintenance of region submission; Agricultural production, fishing, and processing of agricultural production development; melioration; processing of agricultural production. Industry, energy, construction, architecture: development of fuel and energy in the region; maintenance of other economic branches and sectors of the national economy Housing, utilities and communal services (inter region utilities): construction of new objects for utilities and communal services (equipment procurement); construction of treatment facilities; gasification (main gas pipelines withinregion ); electrification (main power supply networks within region) Executive Committee of Health care: regions hospitals; medical centres Physical culture and regions (local governments sport development in regions; of regional territorial level) Cultural and art development in regions; Mass media; Accomplishment in cities; Environmental Education: professional education (professional colleges); medium vocational education (colleges); production — technical schools; special educational institutions; cadet schools; lyceums; hospices; out- of-school education; Social protection: employment assistance; assistance in the provision of housing Protection against emergency situations (fire protection); Public safety; National defense (functioning of military commissaries in oblasts for recruiting); Environmental

Source: Expert’s list produced from the Law on Local Government and Self-Government and Minsk oblast financial department.

37 (consolidated) budget revenues reached 63.2%. In comparison with some Central and Eastern European and Baltic countries these indicators look higher in Belarus.

Local Government Own and Shared Revenues

Scope and types of local own source revenues: taxes, user charges, fees In accordance with the Budget Code local revenues are divided in two parts: tax revenues and non-tax revenues, which contain own and ceded revenues, as well. This is shown in Table below. By the assessment of local budgets in 2014, the main part of own revenues is tax revenues — 90 percent, non-tax revenues is 10 percent. An essential part of own tax revenues is PIT — about 70 percent, taxes from sales — 11.3 percent, real estate tax and land tax — about 6.5 percent. The share of other own taxes occupies 12.2 percent from own tax revenues. Among the own non-tax revenues the essential ones are interests and dividends — 41 percent, revenues from land sale and rental, property sale and rental — 22.8 percent, and from expenditure compensations made by the State — 19.5 percent; The share of own revenues in regional budget and regional consolidated local budgets for 2011−2013 is shown in the following Table 5 (page 40). As Table 5 shows, the share of own and ceded taxes and fees in the analyzed period has risen from 29.39% to 40.54 and the share of transfers and shared taxes has totally decreased from 70.61% to 59.47%. Among oblast budgets the same tendency was observed as well.

Local autonomy in tax policy design: setting base, rate, exemptions Our researches on decentralization development in Belarus allowed making a conclusion about the absence of local financial autonomy and the existence of an essential restriction in the fiscal capacity of local authorities. As an example may be the situation in the Minsk region, where the regional authorities use the practice to restrict some own revenues for subordinate budgets of district and budgets of cities with regional status. For example, in 2013, the assignment for personal income tax in budgets of region and the cities of regional status was limited by the regional authorities for local budgets of the Minsk district, the Soligorsk district, Soligorsk city, in size of 50 percent from their collection in the respective territory, while for other district budgets and city budgets with the regional status this normative remained at a rate of 100 percent, i. e. this tax was completely included in the local budget. Fis- cal capacities of local authorities regarding a tax on real estate, which should

38 Table 4. Types of own and ceded revenues of local governments 3

Own and ceded revenues: Own non — tax revenues: Local budgets Types of taxes and Local budgets Types of taxes and fees OLB RLB SLB fees OLB RLB SLB Bank deposit Personal income tax (PIT) X X X X X interests Land tax X X Dividends X X Revenues from Real estate tax X X X X land sale Real estate tax on incomplete Revenues from X X X construction objects land rental Revenues from Taxes on revenues: other property X X sale and rental Expenditure – tax on lottery activity X X compensations X X X from the State – tax on revenues of foreign X User charges X X X organizations Revenues from Other taxes from sales (except VAT): X X property sale – uniform tax from entrepreneurs X X X Advertising fee X X and other individuals – uniform tax from agricultural X X X Penalties X X X producers – tax on simplified system of Voluntary X X X X X taxation for businessmen contributions Taxes and fees from separate activity: – tax on royalty X – collection from suppliers X X – uniform trade collection X – unify imputed income tax X – charges for use of goods X X X Tax for possession of dogs X X Ecological tax X Tax on production of natural resources X X Resort duty X State fee X X X Contributions to innovative funds X Source: Compiled by expert based on the Budget Code

3 The table shows taxes and fees that are directed in local budgets: OLB — oblast budget; RLB — rayon budgets+ budgets of cities with oblast submission; SLB — rural budgets + urban budgets + budgets of cities with rayon submission. 39 Table 5. Local budget financial sources’ structure (in percentage)

2011 2012 2013 Own Own and Own and and Consolidated Trans- Trans- Trans- ceded Shared ceded Shared ceded Shared regional budgets fers, fers, fers, taxes taxes taxes and taxes taxes taxes grants grants grants and fees and fees fees Total consolidated regio-nal 29,39 35,19 35,42 30,89 37,61 31,50 40,54 29,02 30,45 budgets from which budgets of: Brest reg. 29,07 24,86 46,07 31,62 25,32 43,06 34,46 22,55 42,99 Vitebsk reg. 23,12 29,49 47,39 31,71 28,15 41,14 35,52 24,59 39,89 Gomel reg. 32,29 27,61 40,10 32,62 25,99 41,39 32,88 25,12 41,99 Grodno reg. 28,17 22,45 49,38 31,95 22,49 45,56 34,05 21,47 44,48 Minsk reg. 30,16 33,20 36,64 38,66 33,88 27,46 45,47 30,22 24,30 Mogilev reg. 28,45 21,32 50,23 32,40 21,51 47,09 32,97 20,15 46,88 Minsk city 52,52 44,97 1,51 52,40 46,18 1,42 54,84 43,92 1,25 Source: Own expert’s calculations based on reports of the Ministry of Finance of the Republic of Belarus. remain in local budgets (districts and the cities of regional status), were similarly limited. So, assignments from tax on real estate in the budget of the Minsk district, Zhodino city and Soligorsk city were at a rate of 40 percent, and in budgets of Borisov city, Zaslavl city, Molodechno city, Slutsk district, Soligorsk district — at a rate of 50 percent 4. Restrictions of fiscal capacities took place on target charges, which should completely (100 percent) be enlisted in local budgets of districts and budgets of the cities with regional status. In fact, assignments to local budgets of districts and budgets of the cities with regional status were limited up to 40 percent for Soligorsk city and Zhodino city, 50 percent for Minsk district and Nesvizh district, 75 percent for Borisov city.

Capital revenues (asset sale, rent, profits, etc.) In the Belarusian local budgeting practice there is no division in current budget and capital one. Capital revenues and expenditures and current ones are reflected in one budget. However, land sale and land lease, property sales, sale

4 Data on the cities under the jurisdiction of region are given by the author as of the period prior to their association with the districts into one administrative-territorial unit. 40 of the rights for rent and other capital operations take place in one budget. The capital revenues are illustrated in Table 6. Table 6. Revenues of Belarus sub-national budgets from land sale, land rental and sale of other property in 2013 (in percentages)

Indicators: 2013 г. Revenues from leasing of land plots 0,21% Revenues from leasing of other property 0,06% Revenues from property sale, property rights on objects of intellectual 0,37% property Revenues from sale of land plots in private ownership, non- governmental legal entities and in ownership of foreign international 0,07% organizations The share of capital revenues in the Belarusian sub-national budgets 0,71% Source: Own expert calculations based on reports of the Ministry of Finance of the Republic of Belarus. As Table 6 shows, the share of capital revenues is less than 1 percent into the Belarusian sub-national budgets. Tax sharing: origin or formula based; set ratio or arbitrary allocation rules In the structure of financial sources of local budgets there are shared taxes. Their existence in local financial management is inherited from the former So- viet financial system. Existence of the shared taxes is connected with the depen- dence of local taxes from economic conjuncture and degrees of unevenness of tax base placement of local own taxes on territories. Now, the shared taxes are used for regulating vertical and horizontal imbalances. The shared taxes are national taxes, which share the central budget and sub- national ones in portions determined by the Law on the Republican Budget. According to the Budget Code the shared taxes are: value added tax (VAT) and income tax (PT). Standards of contributions from these taxes to sub-national budgets are determined by the annual Laws on the Republican Budget. So, for 2013 the following standards of assignments from PT and VAT were established: PT: 50% go to regional budgets (Brest region, Vitebsk region, Gomel region, Grodno region, Minsk region, Mogilev region). The other 50% go to the Central (Republican) Budget. VAT: 30% go to regional budgets, from which in the budget of Brest region — 4.41%, in the budget of Vitebsk region — 3.84%, in the budget of Gomel region — 4.53%, in the budget of Grodno region — 3.36%, in the budget of Minsk region — 4.47%, in the budget of Mogilev region — 3.42%). The other 70% go to the Central (Republican) Budget. The portions / normatives of sharing are established as stable on the long term. The shared taxes (PT and VAT) received from the 41 central budget to the region budgets may be distributed to the middle local budgets (district budgets and budgets of cities under the jurisdiction of region). In Belarus tax sharing is determined by the Budget Law annually. The sharing normatives for PT and VAT prescribed by the Budget Law are used by the regional government in the local budget process. The shared taxes concentrate in regional budgets and then they are sent to the district budgets as transfers from regional government.

Local tariffs, user charges All local tariffs are established by the central government. Communal tariffs for the local governments are developed and established by the Ministry of Housing, Utilities and Communal Services and the Ministry of Economy. Local authorities have no independent rights in the establishment and regulation of communal / municipal tariffs.

Local property management An important underlying notion, which is basic in the process of assets management, is that a communal ownership is fixed in the Belarusian legislation. However, its only type is State ownership. In Belarus, therefore, municipalities are functioning within the framework of a State ownership. For the local government it means that municipalities are subordinated to a so-called rigid “presidential” vertical hierarchy and function far from being within the framework of fiscal decentralization. So, it is worth to imagine that municipalities have no their own assets and the State has transferred to municipalities their property for operative management and economic conduct. The Belarusian Constitution (Article 13) states that ownership can be both state and private. On the other hand, the Constitution (Article 121) also states that the competence of Local Council of deputies is to manage and conduct the communal ownership in limits defined by the Law. So the concepts of state, private and communal ownership are stated in the Constitution. The Belarus Civil Code (Article 215), however, classifies communal ownership as a state one. It very seriously confuses the situation in the regulation of fundamental relations. However, the aspiration to reduce the number of independent patterns of ownership up to the state and private ones into the Belarus Civil Code can be recognized as a contradiction of common sense. Thus the local governments have no municipal/communal ownership by the nature and use the state ownership transferred to them for operative management 5.

5 Operative management means that the state assets or property are ceded by the central government to local governments for use on the free of charge base. Operative management or administration is the way of management (legal regime of using) of municipal ownership. It should be understood, however, that transferred property isn’t fixed to municipal ownership by Law. 42 In Belarus the so-called municipal ownership or state ownership transferred for operative management to municipalities may include: state property structures of a corresponding administrative and territorial unit, local budget’s financial sources, available housing and communal services of subordinated territory, and also the industrial, building, agricultural enterprises, trading enterprises, transport and public consumer services, other enterprises, organizations, establishments of public health services, culture, physical training and sports, social protection and other property necessary for functioning and developing the territory. Besides, the property transferred to the municipal ownership gratu- itously by the state, other proprietors, and also the property created by Local Councils, other local governments, executive committees and local administrations, can be attached to the municipal ownership.

Information sources, public and available databases on collected local and shared taxes Information resources and publicly available databases on collected local and shared taxes are very poor, limited and need special permission for their receiving from officials. The existing statistical yearbooks give very brief information about the dynamics of revenues and expenditures of the consolidated local budget (regional budget.) Financial reports on the local governmental bodies of local levels aren’t published; there are no suitable information bases on local finance in Internet. For receiving information sources according to local budget revenues it is necessary to get a special office access to the Ministry of Finance and its structures. Information sources received aren’t transparent.

Intergovernmental Transfers, Fiscal Equalization The transfer and grant system in Belarus is designed to equalize the financial conditions for local governments and additionally to fund public sector expenditures. In other words, it is designed to equalize budgetary security (expenditures on welfare sphere) and balance local budget revenues and expenditures. The full set of transfers used in the local government financial system of Belarus is presented below in Table 7 (page 44). The share of central government transfers and grants in regional government budgets fluctuated from 30.45% to 35.5% in 2011−2013. In some regional budgets this indicator has fluctuated from 39.89% to 50.23% (see Table 5). This is explained by shortages of own taxes and fees collected and the subsidized nature of these regions. All central government transfers and grants are strictly programmed as established in the annual Budget Law adopted by the Belarusian Parliament.

43 Table 7. Central government transfers for regional level in Belarus, fiscal year 2009−2013

Years Types of transfers assigned from the Central (Republican) budget 2009 2010 2011 2012 2013 Donations to the welfare branches (donations to the (non-productive 59.8 72.65 75.7 82.53 83.5 sphere) for equalization) Subventions for funding of agricultural 8.6 5.8 4.2 1.56 2.66 and fishing expenditures Subventions for funding the expenditures to overcome the 13.1 6.65 6.2 7.7 8.3 Chernobyl catastrophe Funds received from the State off- budget fund of social protection of the 1.9 1.1 0.7 0. 7 0.77 population to provide the funding of employment Subventions to covering vouchers for 1.9 1.7 1.1 0.9 0.57 housing

Other inter-budgetary transfers 4.3 0.8 0.6 0.01 -

Capital transfers from other budgets of the fiscal system of the Republic of 10.4 11.3 11.5 6.6 4.2 Belarus Total: 100.0 100.0 100.0 100.0 100.0 Source: Author’s own calculations based on the Ministry of Finance reports It is worth mentioning that the grants and transfers of the regional level governments are not applied. Instead, the method of shared taxation is used. The shared and ceded taxes — including the value added tax, the profit tax, the shared portion of the personal income tax and the real estate tax — are balanced in the budgets of the districts, cities under the jurisdiction of region, cities under the jurisdiction of district, the urban-type settlements and rural Council. The most important central government transfers targeted at the welfare sectors include expenditures for education, public health, culture, fitness and sport, mass media and social care, payments of communal services, and purchases of stock and equipment. Such transfers may be granted in the event of shortfall of own taxes, shared taxes, and of local taxes, fees and duties, which lead to the inability to cover the planned expenditures. These transfers are implemented from the special fund for financial support of administrative-territorial units (FFSATU) into the Central (Republican) Bud- get. This size fluctuates within 23−25% of the Central Budget expenditures. The equalization of local government budgets is made on the expenditure side of 44 local budgets through the simple method of vertical equalization. In other words, transfers based on equalizing according to the expenditure needs and not taking into account the revenue possibilities. In Belarus the equalization scheme is based on discretion approach or calculations, which include the following components: a normative of per capita budgetary security as specified in the annual Republican Budget Law; the number of inhabitants in the region or city; a correction coefficient taking into account the non-uniformity of welfare sector organizations and units located in the regions. They are established for each social-cultural/welfare sphere. For example, in the capital, Minsk city, and in regional cities it is higher than in the countryside. By multiplying these components, the size of expenditure needs on welfare programs are determined. If revenue shortages occur with respect to the size of expenditures calculated, the central government is to draw from the fund for financial support of the administrative-territorial units for that purpose. Since 2002 the Belarus Ministry of Finance has introduced some corrective elements into the equalization procedure, which are now incorporated into the Budget Laws. Now for the calculation of expenditure needs both separate normatives and social standards in the welfare sphere are used. There are two separate normatives in health care and in education used in calculations: the normative per inhabitant for health care and the normative per inhabitant for education. Both normatives and norms are differentiated for the regions and Minsk city. Social standards for expenditure needs’ calculation in other welfare sectors (culture, fitness, sport, mass media) are used as well. The budgets of districts and cities under the jurisdiction of region as base local budgets are balanced after the equalization procedure is finished, with grants (subventions) provided from the Central Budget for funding of expenditures to overcome the Chernobyl catastrophe, for covering housing construction cheques, funding of agricultural and fishing expenditures in regions, capital expenditures. It should be mentioned that in practice the methods of equalizing and balancing local budgets create unequal conditions for districts and cities which use their own revenues to help fund their own needs and those which do not, but which receive significant grants from the central budget. It should be apparent that this allocation of Central budget funds does not motivate local government bodies of regional level to perform the necessary tasks to increase their own financial sources and reserves. The main problem is that the bulk of grants allocated does not take into account the tax efforts of local authorities. As a result, the tax efforts of local authorities do not correlate with the level of social and economic development of their communities. The following principle of transfer allocations should, therefore, be realized: more effective local tax efforts should result in greater financial support from the Center. 45 The size of transfer allocation is performed by the old Soviet approaches based on funding of protected expenditure items of municipal enterprises, which under the Budget Law are: expenditures on salary, charges on salary, food, medicines, various transfers to the population, reimbursement of housing and communal services’ costs to the population. It would be important to note that the process of transfer passing is performed not directly to the concrete local (district) budget and through the higher (regional) budgets, which doesn’t provide efficiency and creates opportunities for further redistribution of funds based on subjective approaches.

Equalization of revenues and spending needs In Belarus the equalization process is performed based on expenditure needs of districts and cities under the jurisdiction of region only. Expenditure needs are determined by standards or normatives of the budgetary security per inhabitant by the items: health care, education and culture. By multiplication of these standards or normatives with the number of inhabitants in districts and cities, the sum of expenditure needs is defined. It should be noted that budgets of primary levels (rural Councils, urban-type settlements, cities under the jurisdiction of district) do not participate in the equalization process. Equalizing the revenue possibilities isn’t applied. Instead of revenue possibilities the revenue basket is used 6. The revenue basket for equalization is defined proceeding from the taxes which are administered by the municipality. As a rule, it is all planned taxes which can be collected by the local authorities except for the shared and ceded taxes and fees. So, the revenue basket should be equal to own taxes, fees and shared taxes to be collected in the district budget. It should be noted that all equalization procedures are not transparent also any of them isn’t registered in the Budget Code and in other legislative acts.

Capital investment Capital expenditures occupy more than 20 per cent of total consolidated local budget expenditures, which are distributed: on capital investments in fixed assets; land purchase and intangible assets and capital transfers. It is illustrated in Table 8. Capital investments are funded by the regional budgets and covered main- ly by the shared taxes and Central government transfers. Capital investments in local governments are planned on the basis of general plans of social and economic development of regions and should be coordinated with the central government. The line ministries might play an important role, as well.

6 The revenue basket is used as an alternative to revenue capacity. 46 Table 8. Capital expenditures in consolidated regional budgets in 2014 (in percentage)

Capital Expenditure of which: Consolidated Total Capital of which: regional Capital Land Investments Capital budgets Expendi- Capital Purcha- in Fixed Purchases of Capital Transfers ture Construc- ses Assets Equipment Repairing tion Brest reg. 22,85 20,75 1,37 17,16 2,22 - 2,1 Vitebsk reg. 15,02 13,19 0,55 9,93 2,71 - 1,83 Gomel reg. 20,24 18,2 0,62 14,43 3,15 - 2,04 Grodno reg. 21,21 18,95 1,35 13,95 3,65 - 2,16 Minsk reg. 20,3 17,85 1,04 14,42 2,39 - 2,44 Mogilev reg. 17,54 15,84 0,86 11,26 3,72 - 1,7 Minsk city 29,35 25,44 0,49 22,86 2,10 0,002 2,51 Total consolidated 21,94 19,43 0,84 15,85 2,74 0,002 2,51 regional budgets Source: Author’s own calculations based on the Ministry of Finance reports Local Borrowing The significance of debt rising is connected with the global financial crisis of 2008−2010, which touched Belarus as the other European countries. In the conditions of the financial crisis, municipal borrowing, as a new form of the local governments’ financial support, has been found in Belarus. Since July 2009 local executive bodies and administrative ones have acquired the right to issue their bonds. Thereby local authorities had a tool to attract additional financial resources. By this time some local executive bodies and administrative ones have already taken advantage of this tool and issued the bonds. The State bank of SB “Belarusbank” has become buyer of these bonds. Local executive committees were authorized to issue their bonds without security as the borrower has been the State in this case. Bond issues of the local executive bodies and administrative ones were carried out within the size of a debt defined in the local budgets for the next fiscal year. Thus, for the purpose of attractiveness of these bonds, the income received at bond repayment by local authorities was released of profit taxation. According to data at the beginning of August 2009, a portfolio of redeemed SB “Belarusbank” of bonds of legal bodies has reached 327 bn. non-denominated Belarusian rubles (BYR), or 0.24% of GDP and 1.42% of total sub-national 47 expenditures. 90% of the portfolio (more than 290 bn. non-denominated Belar- usian rubles (BYR) belonged to the local authority securities. The time of bond circulation has not exceeded one year, i. e. debt repayment was made no later than one year after the bond circulation. The first bonds issu- ers among local authorities were the Brest and Minsk regional executive committees, Pruzhany and Kamenets district executive committees, the Brest city executive committee. By this time the local authorities listed above have been issued their own bonds until their closed sale to SB “Belarusbank”. For the regulation of borrowing process, for the first time a debt limit indicator of the guarantees and guarantees provided by local authorities on loans issued by banks to legal entities of Belarus 7 has been introduced by the Budget Law on 2006 and later it entered into the Budget Code. Now this indicator can’t exceed 20% of the total amount of expenditures of oblast budgets, rayon ones and city budgets except for the credits issued for development of housing construction in villages and the investment projects implementation which passed the state complex examination 8. Another restriction for local governments is the limit of debt services, which should not exceed 15% of local budget revenues. In other words, local government borrowings aren’t allowed if the sum of the planned payments on debt services in the current year exceeds 15% of the budget revenues gained without taking into account transfers and grants.

Local Financial Management

Separation of current and capital budget, balancing local budgets In the Belarusian local budgeting practice, there is no division of local budget in current budget and capital one. Capital revenues and expenditures and current ones are reflected in one budget.

Strategic planning, multiyear budgeting Strategic planning of local budgets by local authorities in Belarus isn’t applied. Multiyear budgeting is also not formed due to economic instability and high inflation in the country. In the best case, the planning of sub-national budgets is made only for one year ahead.

7 Local authorities can issue guarantees for legal entities which are in the boundaries of their jurisdiction. But in fact it isn’t used in practice. 8 Guarantees on housing construction in rural areas aren’t taken into account for this indicator 48 Annual fiscal planning, budgeting Annual fiscal planning and budgeting is carried out by finance departments in executive committee. Responsibility for fiscal planning and budgeting is born by the head of the finance department and the Chairman of the executive committee. Planning methods are based on old Soviet techniques to form the local budget, i. e. a method based on summation of all budget expenditures. Program budgeting isn’t applied. A prominent feature of the budget process in local financial administration is that the formation of local budgets occurs within the framework of a uniform State budget process. It imposes certain specificity in local budget formation. First, local budgets are included in the system of the State budget. Second, local budgets should be corrected on the basis of the macroeconomic parameters and indicators of Belarus economy by the Ministry of Economy and the Ministry of Finance. Budget planning example: The local budget planning procedures start in September and finish in the mid of December. A starting point in rayon local budget planning is GRP growth indicator (Growth Regional Product, an anal- ogy of GDP indicator for regions), which oblast committee of economy brings to rayon finance department for budget planning. This indicator then is used to determine the local budget size for the next year. By multiplication of the total budget sum on current year with GRP growth coefficient / indicator on next year, the size of planning local budget on next year is defined. After that the expenditure side of budget is defined. The local government- ex ecutive committee gives an assignment for all organizations funded by the local budget to present all calculations for expenditure side projection. Allocations on expenditure items should be calculated from network and volume indicators and calculations for the forms enclosed for formation of the budget draft. Allocations should take into account the planned growth or reduction in next year, as well. Calculations for all other indicators should be made from real requirements and concrete expenditure features, namely: equipment of establishments by stock and equipment, need of current and capital repairs, number of vehicles, telephone numbers, plans of the direction for advanced training courses and other. Calculations are formed on separate funded organization with granting the arch according to the paragraph, subsection, the section of the budgetary classification. Together with expenditure, written explanations are submitted. After that the revenue side of the budget is defined. Revenue items of the budget are generally defined in proportion to coefficient / indicator of GDP growth. The financial department is defining the opportunities to collect own revenues to supplement the shared taxes. Then the expenditure side of the budget for standard items is defined. Priority to determination of expenditure sums on concrete items can be given. 49 The planned revenues and expenditures are submitted to the higher financial body — the regional financial department. At this stage, the amounts of central transfers and grants (donations, subventions and subsidies) to be included into the local budget are clarified and updated. Later the regional financial department determines the sums of shared taxes to be directed for local budget balancing. The planned local budget is adopted and approved by the local deputies at the plenary session. Then the budget approved by local deputies is transferred to the regional financial department for consolidation and reporting. After that the central and regional budgets are considered by the National Government and the President of Belarus in the preparation process to adopt the State Budget. The local budget approved on the next year is published in local mass media without any comments. The local population isn’t allowed to participate in the discussion of budget items at the plenary session. At hearings of the budget in a session, local citizens are not accepted, as a rule. Inhabitants aren’t interested in drawing up the local budget as their opinion will not to be considered. Allocations according to items of expenditure have to pay off proceeding from network, volume indicators and to calculations for the enclosed forms for the formation of the draft budget. Allocations according to items of expenditure calculate proceeding from the existing network indicators taking into account the planned gain (reduction).

Budget implementation Budget implementation of local budgets is carried out by the following bodies: executive committees, local financial departments, tax collections departments. Local budget implementation is made through the automated state system of treasury within the actual existence of budgetary funds. The report on budget implementation is formed in accordance with the budgetary classification during the year following the reporting. The report is discussed at the Local Council session by the local deputies. Budget implementation is monitored by the head of the executive committee of municipality and the financial department of municipality quarterly. Monitoring is also exercised by local tax administration, which supplies reports on taxes and fees collected quarterly. As a rule, the sums on revenue side and expenditure one are equal in local budgeting and deficit or surplus doesn’t hap- pen. In case of budget revenue decrease to the level which can lead to reduction of expenditure funding from the budget compared with the planned volume for a year more than 10%, the local financial department should urgently inform about it the local executive bodies. Local executive bodies should present the draft decision on reduction or blocking of budget expenditures on the current fiscal year to local Councils of deputies for its consideration in urgent manner. 50 Intervention rules in emergency cases may be applied by the following bodies: Committee of the State control of the Republic of Belarus, Ministry of Fi- nance, Ministry of Taxes and Levies, local Councils of deputies. They can apply the following measures: stopping or restriction of expenditure funding from budgetary funds; collecting budgetary funds; stopping bank transactions for treasury; imposing a fine, charge and collecting penalty fees. Agreements with service organizations are signed by the local executive committee. All service organizations are the state-owned enterprises of housing, utility and communal services. The private public utilities aren’t used in practice. Contracts, leasing and concessions aren’t applied, as well. All public (state) utilities with contracts signed are strongly subordinated to the center — the Ministry of Housing and Public Utilities. All utilities are located in districts, but they belong to the Ministry of Housing, Utilities and Communal Services, which has a representative body in region — regional association of housing, utility and communal services.

Fiscal information, accounting and audit The fiscal information system is very poor. The general information on the fiscal system can be received from the statistical yearbook published by the National Committee of Statistics and from the website of the Ministry of Taxes and Levies. To obtain fiscal information on local budgets the special permission from the Ministry of Finance and the Ministry of Taxes and Levies is required. In Belarus there are no specific rules of book-keeping for executive committees of regional and basic levels. Local authorities use the common rules of accounting applied in all government levels. Local authorities do not draw up and publish accounting balances (reports) by these standards. It should be noted however, that there is a special plan of accounts for organizations funded from budgets. The bodies exercising control over the local budgets: Committee of the State Control of the Republic of Belarus, Ministry of Finance, Ministry of Taxes and Levies, local Councils of deputies. The supervision and control system over the activity of regional and basic executive committees is basically implemented by external and internal control bodies. The external control bodies are implemented by the Committee of State Control bodies, the Ministry of Finance’s bodies, the Tax administrations of all levels, and the Committee of Economic Control in the regions. The basic internal body for controlling and supervising local government is the commission on budget and finance of the local Council, which oversees the implementation of the local budget for a fiscal year. 51 Independent audit organizations are not admitted to the process of control and supervision of the financial activities of local governments. Because state power is omnipresent in local governments, external State control is dominating in the Belarus system of local financial management. The process of financial management of local government is very complicated and non-transparent. The complexity of local financial management is connected with the fact that local finance is subordinated to state finance, and local budgets are branches of the Central Budget in localities. The central power, however, wishes to show that in Belarus there is a fiscal decentralization, but actually provides a fiscal centralization policy, submission of local finance to State finances. In reality, the Central Government wishes to keep all financial flows of sub-national level under the State control. That’s why many topics of local financial management (expenditure functions and responsibilities, formation of own revenue base, tax sharing, equalization procedures) remain non-transparent and closed subjects for discussion by the population.

Local management capacities In Belarus there is a good potential for local financial management. First of all, there are financial experts and specialists with higher education, practical experience and skills in local finance departments. An experience of local financial management legislation is saved up as well. In Belarus there is high degree of tax collection and high tax culture. There is an experience of many methodical documents development according to standards of tax sharing, borrowing and tax administration. The Belarusian local financial management is characterized by the high organization of control over the financial processes at all levels. An essential part of experts and specialists is able to be retrained in the direction of fiscal decentralization. Thus, Belarus has big abilities in local financial management. Only the political will of the top management of Belarus is necessary. Financial administration staff, especially young financial specialists and experts, is ready to perceive the new in local financial management, get trainings and have abilities in financial development. The Belarusian financial experts will be able quickly to adapt to the demanded standards of local financial management if the political decision on transition to real local government and decentralization at the highest level of the power will be accepted.

52 Implementation of LFB Program Comparative Analysis of Local Finances Information, datasets for comparison Database of the Ministry of Finance and regional finance departments: Dynamics of local budgets by the sub-national governmental levels; local budget’s revenue sources by the regional governmental levels; local budget’s expenditures by the regional governmental levels; expenditures by the functional and economic classification; Intergovernmental transfers (structure of transfers); funds allocated for equalization (the equalizing transfers); dynamics and sizes of municipal loans by the sub-national governmental levels; Database of the Ministry of Taxes and Levies: data on the actual sums of taxation and payments in the local budgets by the region and district; Data of district executive committees, district finance departments and district tax administrations: total revenues (current and capital); local own source current revenues; local own capital revenues; shared revenues; grants, transfers, donations, subventions, etc.; annual net borrowing; data of district’s executive committees and district finance departments; data on implementation of the revenue plan (on quarters); sheet of the revenue movement; data on receipt of revenues in budgets of rural and urban councils and cities with rayon status; data on shortages in the budget; classification of local governments: (administrative status (district, city, urban-type settlement, rural Council; regional position; population number; area, etc.).

Problems and obstacles in LFB implementation Practically, local authorities have no incentives for comparison and competition because there is no local financial autonomy and financial competition between municipalities. A fiscal capacity and expenditure abilities of the local governments are limited by the higher governmental authorities. In this case there is no competition between municipalities for public goods and services. So, it is very difficult to show the existence of local incentives for competition. With all probability, local authorities’ participation in future LFB program is extremely small, though their experience, skills and knowledge potential are not bad, they are well prepared and could participate in this program. But there are some reasons. As local authorities are strictly subordinated to the central government and they are central government’s representatives at the local levels, there is no need to perform LFB as local budgets completely enter into the state budget. Thus, there is no sense for local authority’s representatives to participate in this program. In addition, there is no political will and political decision on

53 the issue of power decentralization and local government development in Belar- us. Recently the President of Belarus, Alexander Lukashenko, said in the mass media that decentralization and self-government will ruin Belarus. It is the reply to challenges of local government development in Belarus. Therefore both the central and local authorities won’t be able to become allies and participants in a future LFB program. LFB program allies and participants can become independent bodies: civil organizations and institutions, public and non-government organizations (NGO) and others. For example, NGO “Lev Sapieha Foundation”, whose experts are scientists and specialists in the field of local government and local finance, can become participant of the benchmarking program. Availability of information on participation in a future LFB program is limited to special permissions for obtaining information. If we want to get any information from ministries and local government bodies we should apply for what information we need. Very often we are getting negative response with the motivation “it is closed information” and it requires a special permission. It can be received, however, by the channels of personal contacts and communications. For example, I am receiving information by my own channels, based on personal contacts and reference on university studies in field of public finance. Publicity of and access to local documents require the allowing procedures. For receiving information on the studied object one needs to provide: the purpose of obtaining information, what kind of organization you represent and where information will be used. Even if a positive permission will be obtained, local authorities try to provide as little as possible information on the required subject (audit report, budget figures, etc). Nevertheless, there are good technical capabilities to operate an external assessment of local finance. First of all, the Internet is well developed in Belarus, there is software and there are possibilities to create special websites for a future LFB program. Experts and specialists are able to use well the software products. The election years for central and local authorities and President are the following: Parliament elections: every 4 year (were held in 2000, 2004, 2008, 2012, 2016, next elections in 2020); Local elections: every 4 year (were held in 2003, 2007, 2010, 2014, next elections in 2018); Presidential elections: every 5 year (were held in 2001, 2006, 2010, 2015, next elections in 2020).

Guidance and program for adapting the (national and local) LFB toolkit Opportunities for rising public interest in the central and local governments consist in the creation of prerequisites for maximum approach of inhabitants to local finance management. It is necessary to show more advantages in the 54 approach of local management of local finance from the experience and practice of the European countries. It is necessary to bring in the consciousness of people that the benefits of decentralized management are more than of the centralized one. The main difficulty in an explanation of decentralization advantages is the following argument of official authorities: “Look at the Belarus public administration. Here everything works well. Public transport works well, there is light on the streets, there are no problems in water supply and the sewerage, streets are purely cleaned, there is no crime, good safety, high employment and isn’t present unemployment. What still you need? If we introduce decentralization, we will lose everything that we have now”. Decentralization, as official authorities say, it is chaos, a disorder and ruin. Therefore, the strong counterargument in favor of decentralization and local government development has to be found in Belarus. Only then it will be possible to find allies, represented by the central and local governments, for a rise of public interest in LFB. A specific argument of authorities is the reply to the question why in Belarus the public sector reforms aren’t carried out. Instead of public reforms implementation, some cosmetic measures and imitation of reforms are performed to get the next loan from the international financial organizations. Modernization programs don’t concern fiscal and budgetary reforming, and they are directed to attract foreign investments only. The international financial organizations (IMF, World Bank), the European Union structures (Council of Europe, European Commission), the European foundations, NGOs and other non-governmental organization can be potential partners for rendering hospitality of a future LFB program. Potential local sources for funding the LFB program in Belarus are absolutely absent.

References, Further Readings, Websites On local governments, intergovernmental finances, local public financial management 1. Bird, R., R. Ebeland C. I. Wallich, eds. (1995), Decentralisation of the Socialist State, Washington, DC: The World Bank. 2. Budzhetnyj Kodeks Respubliki Belarus [The Budget Code of the Republic of Belarus] etalonline. by/? type=text® — num=hk0800412#load_text_none_1_ 3. Davey, K., eds. (2002), Fiscal Autonomy and Efficiency. Reforms in the Former Soviet Union, Budapest: Local Government and Public Services Reform Initiative. 4. Dunn, J and D. Wetzel, (2000), Fiscal Decentralisation in Former Socialist Economies: Progress and Prospects, Washington DC: The World Bank. 5. European Charter of Local Self-Government (1985), Strasbourg: Council of Europe.

55 6. Grazhdanski Kodeks Respubliki Belarus (1998) [Civil Code of Republic of Belarus], 7 December 1998, № 218−3. Natsio nalny registerzakonnyh aktov Respubliki Belarus 20.03.2001 № 2/744. 7. Kandeva, E., eds. (2001), Stabilisation of Local Governments, Vol. 2, Budapest: Local Government and Public Services Reform Initiative. 8. Kennett P., (eds). (2008), A Handbook of Comparative Social Policy. School for Policy Studies, University of Bristol, UK. Edward Elgar. Cheltenham, UK. Northampton, MA, USA. 9. Konstitutsia Respubliki Belarus 1994 goda (2004) s izmeneniami i dopolneniami. Prinaytna na respublikanskom referendume 24 Nojbraj 1996, [Constitution of Belarus of 1994 (with changes and additions, as accepted at the Republican referendum of 24 November 1996)], Minsk: Almafeya. 10. Krivorotko, Y (2003). Kontsepcia fiskalnoj detsentralizatsii: poidet li Belarus po puti ee realizatsii?, [Conception of fiscal decentralisation: will Belarus go by the way of it realisation?], Munitsipalnay ekonomika 14 (2), pp. 44−51. 11. Sevic, Z., eds. (2008) Local public finance in Central and Eastern Europe, University of Greenwich Business School, UK. Edward Elgar. Cheltenham, UK. Northampton, MA, USA. 12. Sidorchuk I, eds. (2007), Mestnoe samoupravlenie v Belarusi, [Local Government in Belarus], Minsk: Tonpick. 13. Sorokina, T. (2000), Budzhetny protsess v Belarusi, [Budget process in Belarus], Minsk: Belorusskij gosudarstvennyj ekonomicheskij universitet. 14. Statisticheskij ezhegodnik Respubliki Belarus, 2013 [Statistical yearbook of the Republic of Belarus, 2013] http:// belstat. gov. by/bgd/public_ compilation/index_105/ 15. Statisticheskij ezhegodnik Respubliki Belarus, 2014 [Statistical yearbook of the Republic of Belarus, 2014] http:// belstat. gov. by/bgd/public_ compilation/index_528/ 16. Zakon Respubliki Belarus o mestnom upravlenii I samoupravlenii v Respublike Belarus [Law of the Republic of Belarus on Local government and self-government in the Republic of Belarus] http://www. pravo. by/ main. aspx —? guid=3871&p0=H11000108&p2={NRPA} 17. Zakon Respubliki Belarus o respublikanskom budzhete na 2013 god [Law of the Republic of Belarus on Republican budget for 2013] http://minfin. gov. by/ru/budgetary_policy/budgetary_legislation/da8 d2 db88 c99 a337. html 18. Zakon Respubliki Belarus o respublikanskom budzhete na 2014 god [Law of the Republic of Belarus on Republican budget for 2014] http://minfin. gov. by/ru/budgetary_policy/budgetary_legislation/da8 d2 db88 c99 a337. html 19. Zakon Respubliki Belarus o respublikanskom budzhete na 2015 god [Law of the Republic of Belarus on Republican budget for 2015] http://www. minfin. gov. by/upload/bp/act/zakon_301214_225 z. pdf

56 Eastern Partnerships Programme STRENGTHENING INSTITUTIONAL FRAMEWORKS FOR LOCAL GOVERNANCE within the Programmatic Cooperation of the European Union and the Council of Europe

Chapter 3 MAPPING THE OBSTACLES TO INTERMUNICIPAL COOPERATION IN BELARUS Contents

Introduction...... 59 The System of Local Government in the Republic of Belarus...... 60 General information...... 60 The constitutional model of public administration...... 64 Main competences of local government and self-government...... 66 Bodies, election, main powers...... 69 Administration and human resources (status of employees)...... 71 General financing: structure of resources...... 72 The Law on Imc in Belarus...... 74 Municipal Reform in Belarus...... 76 Main conditions for reformation...... 77 Assessing IMC in Belarus...... 77 Cross-border IMC...... 78 Bibliography...... 79 Introduction

This report was prepared as part of the project CoE + EU programme. The thematic programme “Strengthening Institutional Frameworks for Local Gov- ernance” is part of a regional programme implemented by the Centre of Ex- pertise for Local Government Reform, the Council of Europe and the Direc- torate General of Democracy of the European Commission, under the CoE/ EU Eastern Partnership Programmatic Co-operation Framework in the period 2015−2017. The main objective of this programme is to support the ongoing process of local government reform in six participating EaP countries by focusing on the benefits of the inter-municipal cooperation. IMC in Belarus looks like a very new phenomenon that is beyond the scope of actual public administration model. The rigid “presidents’ vertical” provides transparent and manageable hierarchy of responsibilities. Of course, these characteristics could explain the efficiency of the administration mechanism and in some way the Belarusian economic miracle. At the same time it totally ex- cludes the local and regional authorities as active actors of public administration. Moreover any activities they would like to show to the community will be considered as a fuss or even contradiction to the central authority. So, it makes weak background for projects aimed on real acting of local and regional self-government. On the other side, we could define the significant gap in the economic and social development planning tradition that leaves space for more intensive cooperation at local level. Regarding the loyal attitude of the Belarusian officials to any technical assistance, we could pretend a good start of IMC in the development of local and regional infrastructures (roads, electricity, including green energy, waste management, etc.). Those start-ups will not be needed in special reformation of legislation, but will be fully dependent on fiscal decentralization. In some ways the problems of financial dependency at inter-municipal level could be resolved through the realization of projects with international partners’ participation. As a kind of best practices in this way we could address to the projects of Euroregions enacted in Belarus since 2010.

59 The System of Local Government in the Republic of Belarus General information The Republic of Belarus is located in Central Europe and has an area of 207,6 thousand square km. It borders with Poland, Lithuania, Latvia, Russia and Ukraine. 43% of the Belarusian territory is agricultural land, 39% is occupied by forests, 2% — lakes and rivers, 16% — other lands. • 6 regions • 118 districts • 113 towns (14 cities with population over 100,000 people) • 90 urban-type villages • 23,229 rural-type settlements (as of January 1, 2015) • Population: 9,480.9 thousand people • Density of population: 46 people/km2 • Largest region — Gomel Region (1,424.0 thousand people) • Largest district — Borisov District of the Minsk Region (185.3 thousand people) • Smallest town — Disna of the Vitebsk Region (1724 people) According to the “State Program of Development and Revival of the Village”, approximately one third of agro-towns is located in settlements which are not administrative centers of the Village Councils. In separate areas it is carried out (Vitebsk oblast), and in some it is planned some work on optimization of the administrative-territorial structure (Mogilyov oblast), but there is no uniform, officially approved approach to the solution of this task. The method of association of the cities, areas and village councils reduces the administrative and territorial units. Thus there were situations when representative bodies (Coun- cils) were abolished, and executive and administrative (executive committees) bodies continued to work (Borisov, Zaslavl). The process of merger of village councils gathers dynamics.As a result, since 18.05.2006 until 25.04.2010 the number of village councils decreased by 97 units! As there is this process, what criteria thus whether some scientific organizational and economic researches are considered, carried out, whether this process in scales of the state is unified, whether there are any recommendations or provisions prepared and adopted by appropriate authorities — these and many other questions remain open. 60 At the same time, on 29.09.2000 the congress of deputies in the Councils of deputies of the Republic of Belarus adopted the Resolution which provides in item 3: “It is considered necessary, relying on scientific researches on problems of local government and self-government, to provide the development of the Concept of reforming the local government and self-government in the Repub- lic of Belarus …”. The administrative-territorial structure of the Republic of Belarus consists of the capital — the city of Minsk — and 6 areas. In the republic there are 1328 administrative territorial units that include 6 oblast and the Minsk city, 10 cities of oblast submission, 14 cities of rayon submission, 19 settlement councils, 1160 village councils. The population density in the areas of Belarus is characterized by significant territorial asymmetry: the smallest level is noted in the northeast areas of the republic (30 people per sq. km in Vitebsk area) and the greatest — in the western areas (42 persons in the Brest and Grodno areas). Thus the largest density on area is in the Gomel, Vitebsk and Minsk areas, 19.2−19.3% of the territory of the country, whereas the specific weight of the Grodno region — 12.1% — falls into the share of each of them. Besides, low birth rate, which does not ensure simple reproduction of the population, and also leads to high death rate and to absolute reduction of population. The demographic landscape of Belarus is very diverse, which is brightly shown at the level of regions. The greatest rates of reduction of the population are noted in rural areas. The specific weight of country people since 2005 was reduced from 27.8% to 22.7% in 2015. The greatest demographic changes occurred in the Grodno and Brest areas — reduction of country people by 6.9 and 5.7 items respectively. As a result of the urbanization process, the number of urban population increased and reached nearly 7 million 275 thousand people, i. e. three quarters of the population of Belarus. The least urbanized region is the Minsk region (56.7%) as it has no regional center. The greatest specific weight of urban population is observed in the Mogilyov, Vitebsk and Gomel areas. The growth of population in the regional centers and, generally in the cities of regional submission and large industrial centers is noted (Baranovichi, Pinsk, Polotsk, Bobruisk, Zhod- ino, Lida, Mozyr, Novopolotsk, Soligorsk). Other city settlements having less than 50 thousand persons are in a stage of demographic stagnation. The system is very fragmented and could be considered as a lead driver for IMC development or reformation of administrative territorial structure by amalgamation. Since 1990 (during and after USSR disintegration), the mood was full of optimism and feelings of inevitability of reforms. The law “On the Bases of Local Self-government and Local Government in BSSR” adopted in 1991 delegated the 61 Table 1. Belarusian Local Authorities in administrative territorial units (01.01.2015)

Levels of Local Kind of Administrative Number of Kind of Executive Body Authorities Territorial Units Local Councils Oblast 6 Executive committee Regional Minsk 1 Executive committee Total 7 Regional Councils District 118 Executive committee Basic City of oblast submission 10 Executive committee Total 128 Basic Councils City of rayon submission 14 Executive committee Settlement 19 Executive committee Primary Rural council 1160 Executive committee Total 1193 Primary Councils Totally 1328 Councils

Table 2. Territory and population density in Belarus (01.01.2015)

Population, Territory, Population density, per./ Region th. people th. km2 km2

Brest oblast 1 388.9 32.8 42 Vitebsk oblast 1 198.5 40.1 30 Gomel oblast 1 424.0 40.4 35 Grodno oblast 1 052.6 25.1 42 Minsk oblast 1 407.9 39.8 35 Mogilev oblast 1 070.8 29.1 37 Minsk 1 938.2 0.307 5570 Republic of Belarus 9408.9 207.6 46 Table 3. Settlements According to Population (01.02.2010)

The number of Inhabitants Settlement % % settlements (thousand people) < 1000 23638 99.13 2267 23.9 1000−2000 27 0.11 38 0.4 2000−5000 41 0.18 126 1.3 5000−10000 55 0.23 379 4.0 10000−20000 45 0.19 610 6.4 20000−50000 15 0.06 505 5.3 50000−100000 10 0.04 706 7.4 100000−500000 13 0.05 3011 31.9 > 1000000 1 0.01 1835 19.4 TOTAL 23845 100.0 9477 100.0

62 power at the local level from party bodies and executive committees to Councils and created real prerequisites for the development of local government. Howev- er, since 1994, in Belarus the process of formation and development of LSG at first stopped, and then went back at all. In 1995 the so-called “Presidents’ vertical” of executive administrative bodies (executive committees) has been established through “delegation” of powers of Councils to executive committees. The competence of the committees significantly increased, otherwise the influence of Councils on executive committees was reduced in political, economic and HR issues. There were made special amendments to the Constitution and laws for reallocation of executive committee’s subordination from Councils to the President and the Government. As a result of such reformation, by 1999 it was built and empowered in the next years the “Presidents verticality” of local governing bodies.

Figure 1. Mechanisms of public administration Thus, in the Republic of Belarus the system of the local and regional government is based on the principles of the state theory of local government. This theory appeared in the works of the German scientists Rudolf Gneyst and 63 Lorenz Stein in the middle of the 19 th century. Those principles could be presented as follows: • the local government is a continuation of the state, and its bodies are local branches of the central authorities in fact; • the competence areas of local government are national objectives, they cannot have other purpose of activity besides those formulated by the state; • any public deals are encompassed by central authorities, therefore the real sense of local government existence is subordination to the interests and goals of the government, rather than the promotion of local interests.

The constitutional model of public administration The bases of the legal status of local authorities and self-government prescribed in the Constitution of the Republic of Belarus 9 and in the Law of the Republic of Belarus of January 4, 2010 “On local government and self- government in the Republic of Belarus” 10. The concept of the Constitution of the Republic of Belarus concerning local democracy assumes the existence of two types of local government (Section 5, article 117−124)1: • “Local government” is understood as the activity of the local executive administrative bodies of authority subordinated and accountable directly to the President of the Republic of Belarus (article 119 of the Constitution of RB). • “Local self-government” is understood as the activity of the local Coun- cils of deputies elected by citizens for the term of 4 years (article 118 of the Constitution of RB). The Constitution directly establishes top-down hierarchy both for the executive administrative bodies and for Councils, entering the concepts “higher executive administrative body” and “higher representative body” (article 122). Thus the highest level of power for executive administrative bodies is the Pres- ident of the Republic of Belarus, for representative bodies — the Parliament — the National Assembly of the Republic of Belarus. Thus, the model of power consisting of two coordinated verticals — the representative and the executive power (see Pic. 1) is constitutionally fixed in

9 Constitution of the Republic of Belarus of 1994(with changes and additions adopted at the republican referenda of November 24, 1996* and of October 17, 2004): http://law. by/main. aspx? guid=3871&p0=V19402875 e 10 Law of Republic of Belarus of January 4, 2010 “About local government and self-government in Republic of Belarus”: http://www. pravo. by/main. aspx? guid=3871&p0=H11000108&p2={NR PA} 64 the Republic of Belarus. This model on the external signs is close to the Soviet model of organization of local government behind one essential exception. Ac- cording to the Constitution of the USSR of 1977 (article 149 of the Constitution of the USSR) local executive bodies of the power were formed and controlled by local Councils of People’s Deputies, as well as accountable to them. According to the Constitution of the Republic of Belarus, the President of the Republic establishes local executive bodies by appointing heads of appropriate authorities or settling the order of such appointment. In this part, it is possible to draw a par- adoxical conclusion that the Soviet system of organization of local authorities corresponded more to the spirit of the European Charter of local government, than the system that nowadays exists in the Republic of Belarus. The principles and legal framework of local government and self-government activity are settled by Section V “Local government and self-government” of the Constitution of the Republic of Belarus. But it is necessary to empha- size, that neither the main legislative document of the country, nor the standard legal base of local government activity in Belarus does not correspond fully to the definitionself -government. There is no chance for them to realize the self-government purposes recognized in the world according to the formulation “self-government”. It should be noted that, despite the powers declared by the Law “On local government and self-government in the Republic of Belarus” these bodies are almost deprived of opportunities to pursue independent regional development policy 11. Local government or self-government is considered as a form of organization and activity of population living on the territory for the settlement of state interests and interests of citizens taking into account the features of administrative and territorial units’ development. This definition insufficiently, but functionally coincides with a perspective of regional development according to the Charter 12. The concepts “local community” and “community” are legally enshrined in all countries of Europe 13. In world practice the community has the prime right to organize local communities, and delegates part of the rights to the elected Council 14. In the Belarusian legal practice these terms are not used. Actually, in Belarus there is no community, on which the local government is oriented.

11 Law of Republic of Belarus of January 4, 2010 “About local government and self-government in Republic of Belarus” / http://www. pravo. by/main. aspx? guid=3871&p0=H11000108&p2={NR PA} 12 European Charter of Local Self-Government 1985: http://conventions. coe. int/Treaty/EN/ Treaties/Html/122. htm 13 See: Jörby, Sofie (2002). ««Local Agenda 21 in four Swedish municipalities: an instrument of progress towards sustainability». Journal of Environmental Planning and Management.. 14 See: The Swedish Law on Local Self-Government. Competence of local authorities in Europe, https://wcd. coe. int/ViewDoc. jsp? id=1377639 65 Belarus appeared to be the only country of Europe, which was not ratifying the European Charter of local self-government. At the same time we can find in the Belarusian legislation the term “property of the territory” that according to the international law is recognized as nonsense because the territory cannot be owned. It is observed a steady tendency of excessive centralization, mutual imposing of administrative functions of local government at different levels, constant shortage of funds to solve local problems. All those processes are aggra- vated by the low level of competence, “know-how” and inertness of many local administrations. The existing weak bodies of territorial self-government are not able to solve key problems of regional development, and their inadequate or in general the non-existent establishments are incapable to carry out properly the often duplicated functions, despite many laws and decrees adopted by the central authority to increase efficiency 15.

Main competences of local government and self-government According to article 117 of the Constitution of the Republic of Belarus local government and self-government are carried out by citizens through: • local Councils of deputies; • executive and administrative bodies; • bodies of territorial public self-government; • local referendum; • meetings; • other forms of direct participation in the public affairs. The united system of local authorities in the territory of the Republic of Belarus consists from: • oblast, • rayon, • city, • settlement, • rural executive committees, • local administrations. The local government is spread in the borders of administrative-territorial and territorial units.

15 Decree No. 432 «On some measures to improve the organization of work with citizens in state bodies, other state organizations.» Decree 220 on September 13, 2005 «On some measures to simplify the procedure for the implementation of regulatory actions» on May 12, 2005, Directive 2, «On measures for the further de-bureaucratization of the state apparatus on December 27, 2007. 66 The article 17 of the Law “On Local Government and Self-government” provides 30 own competences of local Councils of deputies, as local governments. Moreover, 24 competences (twelve of them are intra organizational) are exclusive, i. e. solved only at sessions of local Councils of deputies, including 4 special competences which are directly specified in the Constitution of the Republic of Belarus. The exclusive competences of local Councils of deputies are: • approval of programs of economic and social development, local budgets and reports on their execution; • establishment according to the law of local taxes and fees; • definition (in the limits set by the law) of the management order and administration of municipal property; • assignment of local referendum. Three territorial levels of Councils: • primary; • rural; • settlement; • city (cities under district subordination); • basic; • city (cities under region subordination); • rayon (district); • oblast (regional). Six oblast Councils complete oblast territorial level. The Minsk city council has both rights of basic and oblast Council. The executive and administrative body on the territory of oblast, city, settlement, village Council is the executive committee with the rights of legal entity (executive committee). The executive committee within the competence makes decisions. Decisions of executive committee are accepted by simple majority of established structure of executive committee, and signed by the chairman and the chartered secretary (executive officer) of executive committee. Thecompetence of executive committee: • development and introduction for the statement into Council of the scheme of management of local economy and municipal property, and also offers on the organization of protection of public order; • development and introduction for the statement into Council of drafts of programs of economic and social development, the local budget, submission to Council of reports on their performance; • ensuring the observance in the respective territory of: • the Constitution of the Republic of Belarus; • the laws of the Republic of Belarus; 67 • acts of the President of the Republic of Belarus; • the decisions of Council and higher government bodies accepted within their competence; • the organization of obtaining the income in the local budget and its use on the purpose; • making decision on issue of local securities and carrying out auctions; • the order on municipal property of an administrative and territorial unit in the order established by the Council; • making decisions on creation, reorganization and liquidation of the enterprises, organizations, establishments and associations of municipal property; • a consent to placement in the territory of the enterprises subordinated to it, organizations, institutions and associations which are not in municipal property of the corresponding administrative and territorial unit; • implementation in the order established by the legislation of the Re- public of Belarus, control in the subordinated territory of the use of municipal property; • decision according to the legislation of the Republic of Belarus on questions of land management and land use. Local Councils of deputies, executive and administrative organs within their competence make the decisions having binding force in the respective territory. The solutions of local executive and administrative bodies that are not corresponding to the legislation are cancelled by: • relevant Councils of deputies; • higher executive and administrative bodies; • the President of the Republic of Belarus. The decisions of local Councils of deputies, executive and administrative organs limiting or violating the rights, freedoms and legitimate interests of citizens and also in other cases provided by the legislation, can be appealed in a judicial proceeding (article 122 of the Constitution of the Republic of Belarus). On a number of questions, carried to competence of Councils, in regions executive committees are accountable to the relevant Councils. Higher executive and administrative bodies carry out the coordination of activity of subordinate executive and administrative bodies, give them necessary help, including organizational and methodical, material, technical, information. It is necessary to recognize that the system of local government is created, but its role in adoption of significant administrative decisions is extremely small. So, in particular, since 1991 in Belarus it was not held any local referendum. The power on delegation of separate competences to Councils of other territorial levels, executive committees, their chairmen, bodies of territorial public 68 self-government” belongs to special competence of Council. Part 3 of article 61 of the Law — “Councils have the right unless not provided by acts … by a mutual consent of Councils of various territorial levels to delegate each other separate powers along with resources necessary for their implementation”. Unfortunately, among the competences of local Councils there is no number on the basic precepts of law connected with the formation of executive committees and effective control of their activity, with direct participation in the formation of local budgets, in the development of programs of social and economic development of the subordinated territory, and also in the management of the municipal property. Moreover, there is not fixed in the legislation the right of territorial communities of citizens on direct implementation of local government at all. The law defines only their rights and duties. However, all decisions made by citizens or their actions in realization of forms of direct democracy have only advisory nature and are not followed by obligatory legally significant consequences. Nowadays both main and exclusive competences of local governments are fixed as in the Constitution, so in special legislation. It is also prescribed that the circle of these competences can be expanded, including due to their delegation to other territorial levels by Councils. Thus the law directly does not define such concepts as “own” and “delegated” competence of local government bodies.

Bodies, election, main powers The structure of state bodies of Belarus was formed in conditions when after the disintegration of the Soviet Union many institutes maintaining stability of the society were destroyed. The lose of economic communications existing within the USSR predetermined the degradation of economy and social life. In such conditions the President of the Republic of Belarus A. G. Lukashenko took emergency measures on the restoration of controllability on economy, ensuring social support needed by it, creation of a control system which in fast terms is capable to take measures for development in all spheres of country’s life. The distinctive feature of the structures working in the conditions of emergency is their vertical organization, strong subordination to the uniform center, orientation to command management style at the solution of the tasks set by the central control link. Planning of regions development in such situation differs by existence of rigid command on economic growth, finishing plan targets from “top–down”, and also increasing the role of control bodies tracing efficiency of investments. The role of regional governing bodies in the existing system is reduced, as a rule to direct realization of the state social and economic policy developed by the center. Besides they solve the separate own social and economic problems connected with the territories. 69 The Parliament of the Republic of Belarus — National Assembly — is the representative and legislative body and consists of two chambers: the House of Representatives and the Council of the Republic. The Council of the Republic — chamber of territorial representation. The Council of the Republic has the right of legislative initiative. Accord- ing to the Constitution of the Republic of Belarus, the Council of the Republic approves or rejects the drafts of laws on introduction of changes and additions, about interpretation, and also drafts of other laws adopted by the House of Representatives. As a chamber of territorial representation, the Council of the Republic was granted the right to cancel the decisions of local Councils of deputies which do not correspond to the legislation; to make the decision on dissolution of local Council of deputies in case of their systematic or gross violation of requirements of the legislation and in other cases provided by the law. The role of the Council of the Republic in the formation and changing of the specified direction of state policy is small in comparison with the role of executive authorities. There is a Council for interaction of local self-governments bodies in the framework of the Council of the Republic of National Assembly of the Re- public of Belarus. It is formed to ensure the unity of actions of republican state bodies and local governments. The activity of this structure has consul- tative, advisory character. The main objectives of this Council are: an explanation and promotion of a state policy in the field of local government, development of recommendations and offers on its realization; coordination of interaction between the Council of the Republic, local governments and state bodies. It is obvious that this structure is not the spokesman of interests of regions. It only helps with promotion of the central bodies’ decisions. It is actually one more body for promoting the central made decisions “from top to down”. There is no National association of local Councils of deputies that could represent the interests of local governments both at national and international levels in the Republic of Belarus. The new Law “On Local Government and Self-government” of January 4, 2010 for the first time in the legislative practice of Belarus assigned such opportunity to local Councils of deputies. Belarusian law is limited only to ascertaining the fact of possibility to establish national and other associations of local Councils of deputies, without providing neither the procedures of their creation, nor the content of their activity. Thus it is necessary to point to the lack of standard fixed procedure of their creation and activity, and standards on their legal status and competences. But at the same time we could observe the experiment on the creation of 70 regional authorities association in regions Grodno and Mogilev (2 regions among 6). The only principle grounded in the creation of those associations was administrative territorial division that contradicts the idea of freewill association and makes them a pale copy of administrative hierarchy. This experiment was started in May 2015 and unfortunately the only reference in the media on it was the official opening statement. There is no any other information about it in open access over the past six months. This situation demands additional legal regulation, which would approve the relevant provisions on creation and activity of associations, and also an order and the principles for their interaction with bodies of authority and government of republican and local levels. This could be a driver for IMC development.

Administration and human resources (status of employees) One more very actual problem for the Republic of Belarus is training in the sphere of local government. Due to many reasons, the Belarusian experts have no sufficient analytical information on the contents, the essence, the principles and the norms of the European Charter and on other international documents in the sphere of local government, and also about the relevant legislation of foreign countries. Courses on professional development of local governments, and also other educational events which are held both in Minsk from time to time, and in regions, are practically always directed on explanation or discussion of the current legislation standards or the new acts issued by the President. Drafts of laws or regulations in the sphere of local government, and most often — the current, daily problems of local value are discussed sometimes. Anyway, practically all training actions are limited to the existing national legislation. Therefore experts at the local level (with rare exceptions) have very unilateral and limited only to the national legislation knowledge. As a result, experts have no uniform with all-European conceptual framework and uniform terminology. There is no system and actual information on reforms, passed and still proceeding in the countries of the Central and East- ern Europe (including the CIS countries), about results of reforms, about their progress and failures. The topic of local government is not popular among scientific publications of the Belarusian academicians. Much leaves to be desired both from the methodological base of the Be- larusian universities, and the level of preparation of the faculty in the specialty “Public administration”, and the discipline “Municipal Law” is excluded from the training curricula of universities. The specialty “Public administration” is not prestigious since young specialists graduating of universities have problems with employment. There are no 71 more postgraduate works on local government issues since in the Republic of Belarus this topic is considered unpromising. Such situation can create very serious problems in the near future. Especially they will be felt during the modernization of the existing system of local government and its bringing in compliance with the basic requirements of the Eu- ropean Charter of local government. Therefore the relevance of professional community preparation and development in the sphere of local government on the basis of modern knowledge is highest and demands special attention and amendments.

General financing: structure of resources The current legislation provides local government with own resources and the possibility of their management in the fulfillment of their competences. According to part 1 of article 1 of the Law “On Local Government and Self-government” the local government carries out the independent decision on “… social, economic and political affairs of local value … on the basis of own material and financial resources and the raised funds”. The concept of own material and financial base of local government is provided in article 54 of the Law — “The economic basis of local government and self-government is made by municipal property, the income from the use of natural resources and other sources obtaining the income of local government and self-government according to the legislation on environmental protection and rational use of natural resources, the civil, tax, budgetary law”. According to part 1 of article 55 of the Law “The municipal property consists of treasury of an administrative and territorial unit and the property assigned to municipal legal entities according to acts of the legislation”. The Law understands as treasury of administrative and territorial unit “means of the local budget and other municipal property which is not assigned to municipal legal entities”. In more detail, the financial and economic questions of the budgetary and tax character at the local level are regulated according to the Budgetary Code and the Tax Code of the Republic of Belarus. Article 27 of the the Budgetary Code understands as own income of local budgets: • the tax income enlisted in the budget according to the legislation on a constant basis; • the non-tax income enlisted in the budget according to the legislation on a constant basis; • grants, except of the inter-budgetary transfers. According to articles 32 and 34 of the Code, the tax income of local budgets for shared taxes is: 72 1. income tax from natural persons; 2. income tax; 3. real estate tax; 4. value added tax; 5. ecological tax; 6. land tax; 7. uniform tax on individual entrepreneurs and other persons; 8. charge for implementation of activities for rendering services in the sphere of agro-ecotourism; 9. tax on gaming; 10. local taxes and fees, and also other tax income established by the Budget- ary Code, the President of the Republic of Belarus and (or) laws. According to articles 33 and 35 of the Code the non-tax income of local budgets for shared non-tax income received in the subordinated territory is: 1. income from the placement of monetary budgetary funds; 2. income from the leasing of land plots; 3. income from the leasing of municipal property; 4. the means coming to the account of a compensation for expenses of the state; 5. the income from the property confiscated and otherwise the state turned into the income; 6. payment from the sale of land plots to a private property; 7. penalties; 8. indemnification, caused to municipal property; 9. payment for the placement of outdoor advertising; 10. means of self-taxation of citizens, and also other non-tax income established by the legislation. Unfortunately, it is necessary to recognize that own tax and non-tax income of the majority of administrative and territorial units do not allow to create deficit-free budget and covers expenses of local budgets in each case at the level of 20−50 percent. Missing means for the elimination of budget deficit arrive as the inter-budgetary transfers from budgets of higher levels that can be an additional tool of administrative pressure on local authorities and self-government. Local taxes and fees by the legal nature are urged to provide efficiency of use of local tax base by identification of their specific opportunities to obtain additional own income in the local budget. Especially it is actual in the case of budget deficit in the absence of sufficient own budgetary income gained from republican taxes and non-tax financial activity. According to article 9 of the Tax Code the local taxes and fees are: 73 • tax on dogs; • fees on resort; • fees from suppliers. Unfortunately, the constitutional norm of part 3 of article 121 on the possibility of establishment of local taxes and fees by local Councils of deputies, extends only on Councils of a regional and basic level. Councils of primary level as the most numerous link of local Councils of deputies, according to part 1 of article 12 of the Tax code, are deprived of the right to establish independently local taxes and fees, and according to point 2.8 of article 34 of the Budgetary Code they are deprived of the rights to establish independently norms of transfers of local taxes and fees in the budgets of primary level. Thus, currently in the Belarusian legislation, despite numerous actual restrictions, the norms provide the existence in the tax system of state and local taxes and fees, prescribed list of them, the order of introduction and transfer to local budgets.

The Law on IMC in Belarus The legislation of the Republic of Belarus does not refer directly or indirectly to IMC. The only sense of amalgamation mentioned in the law is about the right to create associations of local self-governments. There are no any precise ways to organize IMC prescribed in the Belarusian law. The only specific institutions that provide services on inter municipal level are created and work as institutions of central (or upper level) government. The contracting practice in the Republic of Belarus is also very weak and does not cover long-term services (public transport, garbage collection, etc.). The well-developed legal framework could be observed in sphere of procurement. The most popular issue discussed is corruption in holding of tenders by central and local governments. At the same time, based on regulations about planning of development, there were developed and adopted some programs of republican level, more than 100 programs of oblast level and more than 700 programs of rayon level. These programs aimed on systematic development of various branches of economy of the republic, social sphere of the region. The selective analysis of such programs show that the achievements of the international practice of planning are not used. The system approach to regional development is also absent. Two large programs of development of regions present an example of state programs of development in Belarus: • The State program on revival and development of the village for 2005−2010 • The State complex program on development of regions, small and medium settlements for 2007−2010. 74 The main objective of these programs is: 1. creation of conditions for priority social and economic development of the village, increase of overall performance of agro-industrial complex 2. creation of conditions for priority social and economic development of regions, small and average city settlements. In 2011, there appeared the Decree of the President of the Republic of Be- larus No. 342 “On the state program of sustainable development of settlements for 2011−2015”. Its purpose is ensuring stability of social and economic development of the village and improvement of demographic situation on the basis of increase of economic efficiency of agro-industrial complex, development of enterprise initiative, ensuring balance of the domestic food market, building the export potential, increase of income of country people, the level of social and engineering arrangement of rural settlements, preservations and improvements of ecology, attraction and rational use of investments in them. Thus, despite the name of the program, it is about efficiency of developmentof economy of the village, but not sustainable development of the village. The development programs at the level of regions and cities also have social and economic focus. For example, “The program on the development of dairy branch of Vitebsk area for 2012−2015”, adopted by decision of Vitebsk oblast Council of deputies #163, 19.01.2012; The Decision of the Mogilyov city Council of deputies #25, 15.03.2013 — “On the approval of the program of the state support and development for small and medium enterprises in the city of Mogilev for 2013−2015” and many others. The majority of programs do not focus on sustainable development, but the economic component of development dominates. Example of priority of economic development over sustainable development is the Decision of the Minsk city Council of deputies #31, 23.06.2010 “On the approval of the program on the main directions and priorities of sustainable development of Minsk in 2010−2014”. The program logically developed ideas of the country’s first regional strategy of sustainable development, which was developed for the capital of Belarus. Nevertheless, this decision lose its validity after one year and half, after the adoption of the new decision of the Minsk city Council of deputies #187, 23.12.2011 “On the approval of the program on social and economic development of the city of Minsk for 2011−2015”. It is also worth noting that the adoption of the program for 2011, one week prior to it, could be considered as a sign of imperfection of organizational procedures and/or methodologies of development, consideration and approval of programs. As shown in the analysis, programs connected with regional development in Belarus are developed on the basis of an outdated methodology. It does not focus regions on system planning of activity taking into account priority 75 of stability of development, and is concentrated on achievement of social and economic development of regions. The inter regional or inter municipal cooperation issues is also out of current agenda. Actually, these programs are only the tool of the rigid vertical of administrative decisions execution. Its orientation “from top to down” makes easy to track the features connected with rigid vertical position of planning system in Belarus. Before the new forecast period the special Decree of the President of the Republic of Belarus is issued. For 2014 this is the Decree of the President of the Republic of Belarus #585, 31.122013 “On the most important parameters of the forecast of social and economic development of the Republic of Belarus for 2014”. In the document approved by the Head of state concrete parameters of growth are established. So, it defines the reference points of development of certain regions and all country for one year. By the resolution it is claimed that the heads of the republican state bodies and other state organizations subordinated to the Government of the Republic of Belarus, oblast executive committees and the Minsk Executive Committee, and also heads of subordinates bear personal responsibility for the performance of the indicators of the forecast of social and economic development of the Re- public of Belarus. The performance of indicators is the main criterion at evaluation of the work of the above listed heads. They have to consider quarterly the questions of extension (cancellation) of contracts with the heads of subordinates taking into account the performance of the finished indicators of the forecast of social and economic development for 2014. Apparently, the “down-top” approach is not used. There is only a speci- fication of the tasks set by the central body. The population of regions who very well know the situation in the field is not considered as actors of planning. Subordinate heads of vertical in such conditions can only assume the raised obligations for the performance of the Decree signed by the President and also have some degree of freedom in the tactical decisions directed on the achievement of forecast parameters.

Municipal Reform in Belarus Definitely, IMC is out of agenda in Belarus nowadays and nearest perspective of it is also cloudy. The list of IMC actors is very short. We could take into account national experts, international experts and institutions. There are no clear pro and contra actors’ community in these issues in Belarus. Mostly the problems appeared on local level related to dysfunction of local authority through depopulation of rural settlements. This problem officially is considered as a technical problem that is resolved accordingly to the particular 76 situation in the concrete village and rayon. Despite of significant degradation of rural units there is no project or approach to the administrative territorial division reform in Belarus. The predominant approach in resolving this problem is amalgamation. Cooperation on inter-municipal levels is considered as a complicated approach that brings more problems, less transparency and hidden agenda of local communities. All this contradicts to the public administration concept of “presidents’ vertical”.

Main conditions for reformation There are four major factors for successful reformation: 1. political will of leaders, i. e. resolute desire to carry out changes; 2. experts community capable to define the purposes of reform and the ways of its achievement; 3. public support or, at least, public loyalty to reform; 4. professionals prepared for practical introduction of reforms into life. From the optimistic point of view, Belarus is now close to keep only the second factor. All other are absent. So, the question is — Should we really start reform nowadays, or have to wait when people and society will be ready for it? Yes, people and society are not ready, but they cannot learn democracy by books. The maturation of the society is an ongoing process that includes all institutions of public administration, but not only the central government. Postponement of reforms “for later (better) times” means refusal of reforms. The key to success is not in choosing the right moment for the reforms to begin, but in acceleration of evolution of public consciousness and adaptation to the new system.

Assessing IMC in Belarus Generally, the level of basic public services in Belarus is evaluated by experts for citizens very high. The only exclusion is the primary level where financial resources (local budget) and municipal infrastructure are not sufficient to be serviced on the level of urban area. As the sharing of administrative tasks looks impossible in the Belarusian public administration model, the most reliable sphere for implementation of IMC could be economic development. With regard to loyal attitude of officials to any technical assistance, we could pretend on a good start of IMC in the development of local and regional infrastructures (roads, electricity, including green energy, waste management, etc.). Such kind of projects could be realized on a regular basis under the actual legal framework.

77 Cross-border IMC This point despite of specific aspect in IMC issue appeared very prospec- tive for the Belarusian circumstances. It is crucial from the point of Eurore- gions 16 that work in Belarus. Euroregion «Dnepr» Euroregion «Dnepr» unites from the Belarusian side Gomel region, from the Ukrainian side — Chernigov region, from the Russian side Briansk region.

Euroregion «Ozerny Kraj» Euroregion includes: Braslav district, Verkhnedvinsk district, Miory district, Postavy district and Glubokaye district (Be- larus); Daugavpils district, Kraslava district, Preyli district, Rezekne district, including Daugavpils and Resekne cities (Latvia); Zara- say district, Ignalina district, Utena district and Shvenchenis district, including Visaginas city (Lithuania).

Euroregion «Neman» Euroregion “Neman” unites from the Belarusian side — Grodno region, from the Polish side (since 1998) — Podliaska voevod- ship, from the Lithuanian side — Mariampole, Alitus and Vilnius regions (poviety), from the Russian side (since 2002) — Cherniakhovsk, Krasnoznamensk, Ozersk, Gusev and Nest- erov districts of Kaliningrad region.

Euroregion «Belovezhskaya Puscha» Euroregion “Belovezhskaya Puscha” unites: from the Belarusian side — Kamenets, Pruzhany, Svisloch districts, from the Polish side — Haynuvka poviet. 16 http://beleuroregion. by/index. php? option=com_content&view=category&layout=blog&id=48 &Itemid=55&lang=e 78 Euroregion «Bug» Members of cross-border Euroregion “Bug”: Brest region (Belarus), Lublin vo- evodship (Poland), Volyn region (Ukraine).

BIBLIOGRAPHY 1. The Constitution of the Republic of Belarus of 1994 (with changes and additions adopted at the republican referenda of November 24, 1996* and of October 17, 2004) / http://law. by/main. aspx? guid=3871&p0=V19402875 e 2. The Law of the Republic of Belarus of January 4, 2010 “On local government and self-government in the Republic of Belarus” / http://www. pravo. by/ main. aspx? guid=3871&p0=H11000108&p2={NRPA} 3. Euroregions of The Republic of Belarus / http://beleuroregion. by/index. php? option=com_content&view=category&layout=blog&id=48&Itemid= 55&lang=en

79 Popular science publication

Non-Governmental Organization «Lev Sapieha Foundation»

Miroslav Kobasa and other — the experts group of NGO «Lev Sapieha Foundation»

LOCAL SELF-GOVERNMENT IN BELARUS

Research materials of the NGO «Lev Sapieha Foundation» within the framework of Programmatic Cooperation of the European Union and the Council of Europe

Edition 50 copy