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Project Progress Report 2 Project Progress Report Context DEVELOPMENT INITIATIVE FOR ADVOCATING LOCAL ASSOCIATION OF GOVERNANCE IN UKRAINE (DIALOGUE PROJECT) UKRAINIAN CITIES BY JOINT EFFORTS D I A L O G U E PROJECT PROGRESS REPORT 2 PROJECT PROGRESS REPORT CONTEXT The technical proposal for the DIALOGUE Project was being prepared in late 2009 in the full swing of the pre-election campaign for the 2010 presidential elections. The then Tymoshenko Government raised great hopes for the implementation of the long-overdue local government reform. With the active support of the then Prime Minister of Ukraine, the Cabinet of Ministers approved the Concept of the Local Government Reform and the work to prepare the legislation to promote the reform implementation started. The DIALOGUE Project was originally prepared to support the Government of Ukraine in its aspirations towards the implementation of the local government reform and was aimed at promoting the environment and development of the toolkit to plan and roll out this reform with the active participation of local governments and opportunities for them to provide their input. The March 2010 presidential elections dramatically changed the situation in the country. V. Yanukovych who was elected the President of Ukraine quickly reinstated the Soviet one-party traditions, and built up a central government vertical line of command right a er the local elections (autumn of 2010) and parliamentary elections (autumn of 2012). The Ukrainian parliament whose membership consisted of numerous political parties who ran the elections race quickly turned into the machine well manipulated by the Administration of President Yanukovych to make decision in his favour. The return to the majoritarian system of elections gave rise to a new class of parliamentarians – so-called “Tushkas” (MPs who change their aff iliation in the parliament in their own favour). And the Tushkas quickly joined party led by the current government. The Azarov Government overturned the decision of its predecessors to approve the Concept for the development of local self-governance and gave clear signals that this Concept had no chances for further development. Moreover, the mere existence of the system of local self-governance was very questionable. The centralisation policy pursued by the President was successfully refl ected in the decisions made by the Cabinet of Ministers and approved by the “Tushka” parliament. It led to stealing the resource related powers from local governments and depriving them of resources, thus making communities grow poorer and poorer. The political pressure exercised towards the mayors who did not belong to pro-presidential parties forced more than a hundred of mayors of Ukrainian cities leave their off ices. This is the environment the DIALOGUE Project worked for more than four years. But the Project actually did work testing and modelling instruments for local governments to eff ectively interact with central government agencies. By doing so, the Project introduced in the AUC activities the practice of holding Dialogue Days with the Cabinet of Ministers. By the way, the Azarov Government could be noted with one of the best local government representation in such Cabinet of Ministers meetings. President Yanukovych issued a decree, which helped to immediately institutionalise the institute of Local Government Regional Advisory Boards as a platform to resolve issues of local importance through the joined work of local agencies of the state executive and local governments represented by oblast, rayon and city councils. It should be worthwhile mentioning that the President Yanukovych tried to use its electoral slogan “I will hear everyone”, though his vertical line of command while not refusing to listen to actually did not want to hear. The DIALOGUE Project discovered yet another important area of activities, which was not envisioned and not well addressed in the original vision of the Project activities, namely: developing sectoral analytical materials. DIALOGUE Project experts clearly realised the fact that only having a clear understanding about the sectoral problem issues and broad sectoral representation one can eff ectively formulate, represent and advocate for the local government position in the dialogue. This gave rise to the idea of preparing sectoral technical area profi les and preparation of targeted (not explicitly stated) amendments to the sectoral legislation, which had good changes to become approved and would off er new opportunities for local governments. DIALOGUE 3 The Revolution of Dignity raised some hopes for changes for the be er. The events were developing rapidly and required the immediate reaction. The AUC came up with a recommendation to nominate V. Groisman, City Mayor of Vinnytsya to the position of the Vice Prime Minister in the so-called ‘kamikaze’ government. Having become the Vice Prime Minister, V. Groisman immediately plunges into the decentralisation reform. This was the stage where the materials and deliverables of the DIALOGUE Project became particularly useful, namely: the government now was in the position to engage the eff ective policy dialogue instruments, sectoral expert materials and research, as well as the ability of Project experts to quickly prepare the needed legislative amendments. A li le more than a months through its activities since its establishment in April of 2014 the Yatsenyuk Government approved the Concept of the local government reform and reform of the territorial arrangement of government institutions in Ukraine. This document served as the road map for the decentralisation reforms. The government made use of the topic of decentralisation as the main key to resolve the confl ict in the east of Ukraine and a good opportunity to restore stability and a chance for the further development of the country. The local self-governance in Ukraine maybe for the fi rst time in its history received a unique situation to have the window of opportunity to build up a truly eff ective, responsive and accountable system of governance. However, almost a year passed since the approval of the Concept and the beginning of its real implementation. This was a very long time for the country whose citizens got tired of waiting for changes for the be er. Therefore, the President had to dissolve the parliament, because the Tushka type National Deputy in their majority remained faithful to their patrons and continued to block the work of the parliament. Following the October parliamentary elections on the last days of 2014, the Verkhovna Rada of Ukraine under the active pressure fi rst of the Vice Prime Minister and then of V. Groisman, Chairman of the Verkhovna Rada of Ukraine approved the amendments to the budget and tax legislation initiated by the AUC. By doing so, the parliament made the fi rst step towards the fi scal decentralisation. Local governments received more autonomy in managing their own resources and increased amount of such resources. For example, the discretionary local government resources increased almost 2.5 times in 2015. However, the budget autonomy raised the issue of capacity of c0mmunities to earn their own revenues, provide services and manage the increased resources for the new authority in an eff ective manner. The establishment of capable territorial communities was the next step towards decentralisation. To make this happen, in February of 2015 the parliament approved the Law of Ukraine “On Voluntary Consolidation of Territorial Communities”, while in April of 2015, the Cabinet of Ministers approved the Methodology for the formation of capable territorial communities. Both documents were prepared and approved with the active participation of the DIALOGUE Project. These documents also had good chances to remain on the shelf without being implemented if not for the network of Off ices for Reform Implementation Support (ORIS) established by the DIALOGUE Project in all oblasts of Ukraine. The ORISes were designed to assist oblast state administrations (OSA) to plan and implement the decentralisation reform. It was these off ices that became the actual promoters of the reform: now oblasts had the experts whose task was to encourage communities to embark on consolidation. And this very “fi rst hundred of consolidators” managed to prepare long-term perspective plan for the formation of community territories in all 24 oblasts in Ukraine, conduct the fi rs local elections in these 159 pioneer communities on October 25, 2015, regulate issues inherent for their transitional period and let them start working starting of January of 2016. Yet, in the new communities and within the framework of the new project ... 4 PROJECT PROGRESS REPORT CHAPTER 1: TASKS The purpose of the DIALOGUE Project was to promote the decentralisation process in Ukraine. The Project activities were focused on establishing and expanding the environment conducive for the local government reform and to ensure the broad based support for the decentralisation process from public servants, civil society organisations, and the public at large. The implementation of eh DIALOGUE Project was focused in the accomplishment of the following tasks: • Establishing the proper legal environment for the eff ective and transparent local self-governance. • Introducing the practice of the eff ective policy dialogue between local governments with their partners at the national and regional levels. • Increasing the public support for the reforms in the local government system. • Increasing the level of legal culture and eff ectiveness of local self-governance.
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