Todays Date
November 15, 2019

Decentralization

Writes: Trifun Kostovski

 

One of the key features of every democratic society is decentralization. According to the degree of decentralization, in fact, the extent of the democratic capacities of that society is measured.

That is why, dear readers, today I want to address this important topic. Decentralization, in fact, means transferring competencies, power, and financial implications from central to local level.

I suppose that many remember that I was the Mayor of Skopje in the period from 2005 to 2009, and with all my experience gained, I can consider myself competent to talk about the place and role of the local self-government, as well as the importance of the very process of decentralization. On this occasion, I would not like to go deeper into the issues regarding the implementation of the territorial division in municipalities in the Republic of Macedonia, which took place in 2004, and I was against the way in which it was taking place, and to this day I have not changed my opinion. My opinion is that there are certain rules about the way the local self-government and municipalities should be organized effectively. It is more than clear that needs and problems are not the same in urban and rural areas.

Unfortunately, the compromises that have been made are not to meet the needs of all citizens according to their civil rights, but because of certain ethnic priorities. We have been feeling the consequences of territorial division, which were carried out not according to civil, but according to ethnic principles, and in some way they block the essential process of decentralization.

In modern democracies there are serious strategies for the distribution of power, competencies, and hence the allocation of budgets from central to local level. All this is implemented through a constant and open dialogue.

Decentralization in Macedonia began in 2005. In that period, local self-government got great powers. But, paradoxically, fiscal decentralization has never effectively happened, because the central government has never given up on the power by which it controls the funds it grants to the local government. We are talking about absurdities.

For example, mayors have the authority to organize education and receive the funds with block grants by the central government.

It is exhausting and harmful to play such hide-and-seek, claiming that only at the level of empty phrases we started the process of decentralization, although, viewed more thoroughly and critically in the functioning of the central and local government, we will undoubtedly conclude that in the essence of the matter lies the party’s eligibility of the mayors, rather than the desire for decentralization and democratization of society and local self-government.

I want to remind the citizens of the city of Skopje and you, my dear readers, that in my mayoral mandate the revenues from the main items, in the spirit of the ways in which the local self-government is financed in progressive developed countries, from the personal tax the city had 0, 03% and 0,02% from VAT. We are talking about total revenues that collected by the central government for these two items in the City of Skopje.

But we must have an insight that in developed countries personal tax is poured into the local treasury with a minimum of 90%, and VAT is poured into the amount of 50% realized on the territory of the municipality. That is, personal tax must be allocated for the construction of infrastructure goods in the places where the taxpayer lives and works.

What are the benefits of fully implemented decentralization?

Above all, citizens will have easier insight into the revenues of their municipality and their spending, which meets the basic democratic principle of civic participation. Secondly, the citizen can initiate certain priorities that should be built in the municipality itself. And thirdly, perhaps the most important thing, it is high time the taxpayer to ask who and how spends and uses my money. Only in that way can there be responsibility and accountability.

Unfortunately, the reality in Macedonia is very bad. There is almost no municipality that is not over-indebted. In this context, of course, dominant dilemma is – whether the local government, that is, the municipalities, copies the central government, or whether they are its shadow. As I remember, since the period of the independence of Macedonia, we have been constantly lacking funds and constantly borrowing on a central level.

Dear readers, we must be aware that decentralization is one of the key issues that will arise during the negotiations with the European Union. I wonder how long the developed democratic society will have patience to teach us, instead of being wise and effective ourselves and using their experiences for our welfare. I do not believe that we, the citizens in the Republic of Macedonia, are naughty, and I am deeply convinced that we can, especially those who are in the political elites, very skillfully use the social means for lucrative purposes and particular interests.

I am asking, how long like this?

I will give you an example that may sound absurd to you, but it is true. In my mayoral mandate, I was the only one who inherited debt in the city’s cash register at a rate of 60% of the annual budget. For two years I managed to repay the debt, and this is precisely why the city managed to get its first BB credit rating of stability by the distinguished agency Standard and Poor’s. I left the mayor’s office with repaired public companies, serious projects started which unfortunately could not be completed because one mandate is a very short period for realization of capital investments, such as the introduction of a tram line.

I left the office with about 8 million Euros in the account of the City of Skopje, and with obligations paid to contractors, external partners, and to public enterprises that were in the authority of the City of Skopje.

From all of the above, I would like to make a clear message. Dear mayors, cut your coat according to your cloth and act according to the budget of the municipality just as you deal with your household budget.

I expect the incumbent government to accelerate the decentralization process, as the incumbent prime minister was previously mayor in three terms, I am convinced that it is very clear what he should do, how he would help himself first and even more to the citizens of the Republic of Macedonia.

 

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