Decentralization Reform in Ukraine

One of the sources of the ongoing, and deepening, political and economic crisis in Ukraine is the excessive concentration of power in Kyiv’s hands. It is a key issue underlying the civil war in the east of the country.

Kyiv has always maintained a policy of ‘one nation, one language’ for Ukraine. Even two Russian-speaking presidents of Ukraine from the Russian-speaking southeast of the country–Leonid Kuchma and Viktor Yanukovych–remained loyal to that mantra, betraying electoral promises they had made to grant the Russian language a status as a second, official language of Ukraine.

In the realm of the economy, Kyiv has always kept the lion’s share of taxation revenues, denying a fare share to the regions. According to Tatiana Muntian, a lawyer and activist defending the interests of ordinary Ukrainians, under Yanukovych, this share constituted 80 per cent of revenue, with only 20 per cent remaining in the regions. The new, “democratic” regime in Kyiv is today taking 82%.

The delegation of powers to different levels of government is a feature of Western democracies, more pronounced in some than in others. Local autonomy is particularly important in countries composed of diverse regions with different histories, languages and cultures. It provides regions with the opportunity to manage their own finances and define their own social, educational, economic, and health policies and preserve distinctive cultural or regional identities.

One of the main reasons for the current civil war in Ukraine is the refusal of Kyiv to grant such autonomy to the regions of the country. The people of the Donbas region (Donetsk and Lugansk) rebelled because they did not approve of the extreme-nationalist ideology and interpretation of history being imposed on the whole country by the pro-Western regime which came to power in Kyiv as a result of the coup d’état of February 2014 (or call it the “Revolution of Dignity”, if you will). If Donbas and other regions of Ukraine had more autonomy in deciding how to spend the money they raise through taxation and which languages receive official status, the present war would not have happened. Kyiv refused to grant the autonomy, so Donbas had no choice but to fight for it.

Russia, in turn, provided political support to Donbas’ grievances by repeatedly requesting of the Kyiv government that it respects Donetsk and Lugansk and negotiates with them as equals and by getting involved in working on a peaceful solution of the conflict through Minsk agreements. Russia also supports the rebel region by sending its own humanitarian aid convoys, facilitating others, and declining to follow Western diktats that it block the movement and activities of Russian volunteers supporting the insurgency.

Europe hints that it understands the situation. European Union leaders encourage Ukraine’s leadership, which aspires so desperately to join Europe, to decentralize power. Ukraine is required under the terms of the Minsk-2 ceasefire agreement of February 12, 2015 to write and approve a much-talked about legislation on decentralization. This is not only crystal clear in the agreement, but it is also very much needed for a variety of compelling reasons internal to the country. Clause number 11 of Minsk-2 stipulates that Ukraine must adopt and apply by the end of 2015 a new constitution that has as a key element a decentralization which takes into consideration the “particularities” of “certain districts” of Donetsk and Lugansk oblasts, agreed upon with the representatives of these districts.

Ukraine has pledged to adopt by the end of 2015 permanent legislation on the special status of “certain districts” of Donetsk and Lugansk oblasts. Note 1 of the agreement spells out detailed measures that must be included in the legislation. (The Russian original of Minsk-2 can be found on the website of the OSCE; the English version can be found on UNIAN news agency).

The evasive formula of “certain districts of Donetsk and Lugansk” is a compromise between Russia and Europe, the latter as represented by France and Germany. The presidents of these countries plus Ukraine’s president Petro Poroshenko and Russian president Vladimir Putin negotiated these agreements during unprecedented several-hours talks in Minsk in February of this year. It is clear from this phrasing, and confirmed by Russia’s own declarations, that Russia had no intention of recognizing the rebellious Donbas regions as independent political entities or accepting them into membership of the Russian Federation. Otherwise, the “certain districts” would be called by their self-identification names – Donetsk People’s Republic (DPR) and Lugansk People’s Republic (LPR). For its part, the leaders of Europe, who refused to see DNR and LPR as legitimate formations, recognized in Minsk the distinctive character of this region of Ukraine.

Footnote 1 of the Minsk agreements is a clear and simple roadmap for the creation of an autonomous entity of Donbas as part of the Ukrainian state: in addition to guaranteeing the exemption from punishment, persecution and discrimination of individuals “involved in the events that took place in certain districts of Donetsk and Lugansk Regions”, Ukraine pledged to assure that:

– these regions would have linguistic self-determination;

– local government would participate in the appointment of the heads of the Prosecutor’s office and courts;

– local executive power organs would be able to sign agreements with the central organs of the executive power (the Cabinet of Ministers) regarding the economic, social, and cultural development of “certain districts”;

– the Ukrainian state would support the socio-economic development of the districts; central executive bodies would assist the districts in their cross-border cooperation with regions of the Russian Federation;

– local councils would have the authority to create people’s militia units in order to maintain public order;

– the powers of local council deputies and officials, elected in early elections, called by the Verkhovna Rada according to this law, could not be prematurely terminated.

All of these provisions are already written and adopted as a law of Ukraine “On a special local government order in certain districts of Donetsk and Luhansk regions”, which came into effect on September 16, 2014. However, this “special order”, according to the law, will be temporary – only for three years. Ukraine avoided granting autonomy to Donbas on a permanent basis.

The bill on decentralization, which was proposed to the Verkhovna Rada by President Poroshenko on July 1, 2015, had the same flaw – it stipulated only in the “transitional provisions” in its concluding section that the local self government in certain regions of Donetsk and Luhansk regions are determined in a separate law. This has provoked criticism by representatives of Donetsk and Lugansk people’s republics that the provision for their autonomy is not included in the main body of the Constitution of Ukraine. The representative of the DPR Denis Pushilin, stated also that Ukraine did not send its proposed amendments to the Constitution of Ukraine to the Lugansk and Donetsk working groups of Minsk-2 which are supposed to work on implementing the agreement. This failure by Ukraine is in violation of clause 11, according to which constitutional reform should be “agreed with representatives of these “districts of Donetsk and Lugansk”.

The official proposals of Donetsk and Lugansk on decentralization, sent in May of 2015, were completely ignored by Kyiv, stated Pushilin. He said that the republics will insist on a detailed formulation of their special status in the main body of the Constitution of Ukraine, not just an interim passim in the “transitional provisions”. The Kremlin, through the words of Dmitri Peskov ,the press-secretary of President Putin, reiterated the criticism formulated by the DPR and LPR. Volodymyr Hroysman, the speaker of the Verkhovna Rada, stated on May 2015 that the constitutional commission of Ukraine did not receive any “official” proposal on behalf of the DPR and LPR. So, Kyiv still refuses to treat DPR and LPR representatives as partners in negotiations, ignoring their legitimate requests, based on Minsk-2 agreements.

Criticism by Donetsk, Lugansk and Russia of the Ukraine’s bill was duly noted by the West. Leaders in Europe and the United States covertly put pressure on Kyiv to amend the bill. The vice-speaker of the Verkhovna Rada, Oksana Syroid, stated recently that on July 14, Angela Merkel and Francois Hollande telephoned the speaker of the Rada, Volodymyr Hroysman, urging him to ensure that the bill is voted for .

On July 15, one day before the bill was scheduled for a vote in the Rada, Victoria “f*** the EU” Nuland flew to Kyiv to assist her disciples in the science of democracy and vote correctly. On the same day, Poroshenko tabled a new, revised draft of the bill, in which the provision that the local governments in certain regions of Donetsk and Luhansk regions are determined in a separate law was moved from “transitional provisions” to chapter XV “Transitional provisions” of the main body of the Constitution. No elaborate formulation of this “local government”, no permanent status, neither. On the day of the vote on July 16, three high officials from the West were present in the Rada to make sure that their Ukrainian disciples do the right thing and vote for the bill. These officials were the Assistant Secretary of State Victoria Nuland, the US Ambassador to Ukraine Geoffrey Payette, and the Head of the EU delegation to Ukraine Jan Tombinski.

Having voted for the revised bill, the Rada sent it to the Constitutional Court, which verified the bill for the validity of statute and on July 30 delivered the verdict that the bill conforms to the Constitution of Ukraine. Now the bill is to be voted for the second time in the current session, which will expire on August 31. It will be voted for the third time in a new session due to open on September 1. At the second and third reading, the bill must receive the support of 300 deputies. It received 288 votes at the first reading. Two factions in the Rada, the Radical Party of Oleh Liashko and Samopomich (Self-reliance), voted against.

The bill has been criticized in several points by the Radicals and Samopovich. Liashko, who is known for highly emotional speeches in the Rada and for reciting poems and signing of the national anthem, stated that his party will never vote for a constitution which contains a clause providing special status of Donbas. “Our volunteers did not fight for the country so that Motorola, Givi [military leaders of the Donbas rebellion] and other terrorists obtain a special status”, stated Liashko, although Poroshenko himself acknowledged from the podium of the Rada, that the proposed changes to the Constitution “only admit the possibility of a specific order of the realization of the local (stress by Poroshenko) government in certain administrative and territorial units of Lugansk and Donetsk regions, which is determined by a separate law”. So here we go: no special status, no autonomy, only a “temporary”, special local government.

The bill on decentralization has been criticized by the Radical Party and by many others, including the former leader of the Socialist Party, Olexandr Moroz, and the Samopomich party, for centralizing power instead of delegating it to the regions. The bill provides for the introduction of the institution of prefects, which will replace current heads of regional state administrations. Prefects would exercise executive power on a local level and would be appointed directly by the President of Ukraine on the proposal of the Cabinet of Ministers, being accountable before both. They would supervise local governments to ensure the compliance of their actions with the constitution and laws of Ukraine, as well as the compliance of the “territorial organs of the central organs of the executive power”. (This latter formula is vague and hard to understand, as are many passages of the bill on decentralization).

A prefect will have the power to decree acts which will be mandatory for the respective territory (article 110) and to block the acts of local governments if a prefect deems them anti-constitutional (article 144). In cases where a local government or its head adopts an “act” which does not respect the Constitution of Ukraine or threatens state sovereignty, territorial integrity or the national security of Ukraine, the president of the country is empowered to veto this act, suspend the offending local government (councils) and appoint an interim “state representative” who will “direct and organize” the work of the local executive organs of power. The president would concomitantly send a request to the Constitutional Court to examine the act in question and determine whether it violates the constitution. In cases where the Constitutional Court decides that a local act does violate the constitution, the Rada, upon the proposal of the president, would terminate the powers of the head of the local government or of the entire local council and call early elections (article 144).

The current regional and district administrations do not have the power to dismiss local councils and cannot stop or suspend the decision of local governments, as Liashko rightly remarks. Moreover, local councils can dismiss the head of the state administration if two thirds of the deputies of local councils express non confidence. In such a case, the President of Ukraine is required to decree the dismissal of the head of the local administration ( ).

The head of the parliamentarian fraction of Samopomich party, Oleh Bereziuk, criticizes the institution of prefects because it introduces a dual executive power on the local level – both prefects and regional or city councils will have it. However, the prefects also have control and coordination functions, which imply a possibility of punishment – prefects can intimidate local councils by threatening to dissolve them, since the president has the power to dissolve the council upon prefect’s suggestion.
The member of the Opposition Bloc fraction in the Rada, Mikhail Papiev, also voiced cautions of his party regarding the decentralization bill. He believes that prefects should only effectuate a state supervision, not to be the head of the executive power; the executive local organs should have the full executive power. Papiev also cautioned that imprecise wording of the clause would allow, or open the door to, the president to suspend (or, in the literal translation from Ukrainian, temporarily halt) activities of a local council. The Constitutional Court would then examine immediately whether the decisions of the council are anti-constitutional, threatening a situation where in territories out of favor with the central power, there would be no councils and state commissioners would perpetually rule the region. Papiev also reminded that the proposed bill was not discussed and agreed upon with the representatives of Donetsk and Lugansk and that the special statute of Donbas is not written explicitly as an article in the Constitution. A special law, which is mentioned instead in the proposed bill, could be declared as anti-constitutional and revoked.

The representative of the Batkivshchyna [Fatherland] Party, Ihor Lutsenko, noted that there is no provision for the revocation of the right of a prefect to suspend legal acts adopted by a local government. Nobody can hold him accountable on the local level. Under such circumstances, a prefect can become a sole source of power in the region, an autocrat who watches over the local government. It can be interpreted as the interference of the state power into the local governance. The right of the president to suspend local governments and to appoint an interim state commissioner means that the Rada could allow the president in peacetime to halt the functioning of local authorities on some far-fetched pretext and introduce direct rule. For instance, under the current legislation, even corruption is considered a threat to national security of Ukraine. Lutsenko qualified this provision as a “legal perversion”.

The former head of the Socialist Party of Ukraine, Olexandr Moroz, stressed that the prefect will be the “the man in charge” in the region, which goes against the affirmation that the power in the region is controlled by the population. It is not clear, according to the proposed changes to the Constitution, what exact powers a prefect will have, what his status will be or what he/she will do, outlined Moroz.

I have already mentioned that the bill on decentralization suffers from many vague formulations. For instance, in the chapter on the prefect’s powers, it is stipulated that he/she “coordinates the activities of the territorial organs of the central organs of the executive power”. What are these territorial organs? The central organs of executive power in Ukraine are the Cabinet of Ministers and various ministries, state agencies and services. There is no such thing as “territorial organs” in the current political-administrative system of Ukraine. Probably, they will be created as part of the planned reform in Ukraine.

According to the proposed article 133, the new administrative-territorial division (ATD) of Ukraine will consist of communities (hromady), districts (rayony), and regions. The community is the primary, the smallest unit. It is called “a territorial community”. Communities form a district, and several districts form a region. In the current administrative-territorial system in Ukraine, a village is the smallest unit. A district is a formation of many villages and towns, with a city as an administrative centre of a district. An oblast is a regional formation, regrouping several districts. The planned reform of the ATD in Ukraine was outlined, prior to the proposed bill on decentralization, in the law of Ukraine “On the voluntary merging of territorial communities”, adopted by the Rada on February 5, 2015. The goal of this law was to solve a chronic problem of the Ukrainian state: shortages of funds for the financing of schools, hospitals or first-aid centres, other elements of social infrastructure, and the bureaucratic apparatus of village and city councils. The goal was to reduce the number of villages and districts, thus reducing the costs of administration and of services.

The voluntary merging, according to the law, is initiated by the head of a village or a city, deputies of the village or city council (at least one third of them), or members of a “self-organization” of the population (again, they have to represent the interests of at least one third of the members of the local community). The question has to be publicly debated, and after that the local council adopts a decision on the voluntary merger. The decision is then directed to the regional state administration which approves it.

The territorial communities of neighboring villages, towns, and cities are the subjects of the voluntary merging. An administrative centre of a newly formed territorial community should be a locality that has a developed infrastructure and is situated close to the geographical centre of the community. The name of that locality becomes the name of the territorial community.

Territorial communities will form districts (raions), which will be much bigger than the existing ones. Currently there are dozens of raions within an oblast. In the new system, these dozens will be amalgamated into 4-7 larger raions, with the population of each to be between 150,000 to 400,000 residents. In total, around 120-130 enlarged raions will be created in Ukraine. The geographical borders of oblasts will remain the same, but instead of oblasts they will be called rehiony (regions).

In regions and raions both, there will be local governments as well as organs of state power, similar to current state administrations. The central power will be represented by prefects. The executive power will be given to the executive committees of raion and region councils.

At the lowest level of governance,–a territorial community–there will be no representative of the central power. A community will take over the major part of services to the population, which currently are provided by raion centers. A universal centre of administrative services will be created in each community (ibid).
The bill stipulates that heads of communities, as well as deputies of the councils of communities, raions, and oblasts, are elected in a free election, by exercising a general, equal and direct right to vote through a secret ballot. What “oblast councils”, if no such administrative unit will exist anymore?

In general, the terminology of the administrative division of Ukraine is a weird patchwork of various historical terms. To start with, hromada is an old Ukrainian word which denotes more than a type of settlement—it denotes a collectivity of people, united by common life, interests and a territory. Therefore, to use it in the sense of an administrative unit is not appropriate. Raion comes from the former Soviet administrative system, while the word “region” has been employed in Ukrainian in the sense of a geographical entity which is larger than an oblast and has its own cultural, historical, and natural particularities, such as the Donbas region, Carpathian region, Southern Ukraine region etc. The new proposed terminology is awkward and confusing.

The bill on decentralization states that the territorial community directly or through the community council will manage the communal property, form a budget and control its implementation, adopt programs of social-economic and cultural development and control its implementation; establish local taxes and fees and other local matters in its competencies (article 143). However, the proposed article 142 significantly reduces the competencies of the communities because it stipulates that the state “ensures the commensurability of financial resources and the scope of competencies of organs of local governance” and that “a change in the competency of the organ of local self-governance is made concomitantly with the respective changes in the repartition of financial resources”. What does that mean? According to the Ukrainian philosopher and blogger Serhiy Datsiuk, it means that the state determines the scope of formal competencies of the local governments by equating it with the finances available, and the state itself determines the scope of finances. That is, the state continues to distribute resources to regions “in a manual mode”, without strict rules and principles. Again, it means that the budgets will be formed not from the bottom up but from the top down, which goes against the logic of decentralization.

The bill also stipulates that the raion and oblast councils adopt raion and oblast budgets and “resolves other issues in its competency, determined by the law”. The oblast councils also adopt a regional program of the social-economic and cultural development of the oblast. So, again, what we are talking about here – a region or an oblast? And why is the raion council not involved in the adoption of these programs, only the community and oblast councils?

One paragraph later, the bill stipulates that the law (which law?) delimits powers of local governments on the three levels of self-governance “on the principle of subsidiarity” (art. 143), without explaining what exactly this principle means.

And speaking about elections on the local level, following the old schedule they will take place in October of this year. The elected officials will then carry out the major part of their administrative duties while the central power organs will carry out the reform. New local elections will then take place in October of 2017, and the new local governments, provided for in the bill, will start functioning fully. The question that I have, given the dire economic situation in the country is, why not start implementing the reform now, keeping the current local self-governance organs in place, and then, once the transitional period is over and a new power structure is in place, to call local elections then? I guess an answer to this question, at least partly, maybe that the power holders in Kyiv need to assure the presence of their fellow party members on the local level, especially in the “non-reliable” regions of Southern and Eastern Ukraine, where many of the former Party of Region members (the party, of sorts, of President Yanukovych) work in local councils.

My conclusions, after a long analysis of the proposed bill on decentralization, are that it is not really decentralization but, rather, a reinforcement of the presidential “vertical” power. It is a document written hastily and without clear formulations. It is a document that was pushed through the Verkhovna Rada by President Poroshenko and Prime-Minister Yatsenyuk in order to please their Western allies and to pretend that the current regime in Kyiv is fulfilling its obligations under the Minsk-2 agreement. This document has not been discussed with the representatives of Donetsk and Lugansk, which undermines negotiations which are already practically non-existent and it undermines a possible political solution between Kyiv and Donbas.

As to the roadmap of real decentralization, which Ukraine desperately needs, this bill will need to be significantly improved to remove vague formulations and make the clauses more precise and clear. As it is, the bill is but a variation of the existing administrative-territorial division of Ukraine and a reshuffling of the current legislation. The old adage “the more things change, the more they remain the same” holds true in Ukraine.

Halyna Mokrushyna, Ph.D., is an independent researcher and journalist. Her research interests include the challenges of the post-Soviet transition in Ukraine; social and economic inequality in the post-Soviet context; historical and cultural divisions within Ukraine; social memory and politics of memory; relations between Russia and Canada and the broader context of the post-cold war world and relations between the East and the West. Her articles on these subjects were published on Counterpunch, Truthdig, and Truthout websites.