Landmark Forum Shows Legislative Path Forward for Decentralization in Ukraine

February 02, 2022

Ukraine has fully embraced the concept of decentralization and understands that an array of activities, policies, and procedures are needed to support the reorganization of financial, political, administrative, and service delivery systems. Most critically, Ukraine also understands that decentralization needs to be addressed in law.

The U.S. Agency for International Development (USAID)-funded Governance and Local Accountability (HOVERLA) activity continues the U.S. Government’s consistent support of this vision and journey. On January 31, with the support of USAID HOVERLA, the Ukrainian government and local representatives met in a historic forum with more than 300 participants to set the legislative agenda for 2022.

In his opening remarks, Marc Ellingstad, Director of the Office of Democracy and Governance at USAID’s Ukraine Mission, said, “USAID, in partnership with Ukraine and its citizens, has invested in Ukraine’s democracy for almost 30 years now. And we firmly believe that the widespread decentralization that has been achieved in recent years is the culmination of this partnership and is one of Ukraine’s most significant and successful reforms.”

From left, Vitaliy Bezgin, Head of subcommittee of the Local Governance Committee; Olena Shuliak, Deputy Chairman of the Local Governance Committee; Andriy Klochko, Chairman of the Local Governance Committee; Viacheslav Nehoda, Deputy Minister of Communities and Territories Development; Gabriel Abraham; Roman Proskurenko, translator; Oleksandr Kornienko, First Deputy Chairman of the Verkhovna Rada of Ukraine (participating online). Photo: USAID HOVERLA.

Since 2014, the Verkhovna Rada (parliament) of Ukraine has been working on various laws that will shape decentralization and the deconcentration of sectoral services. These laws will also pave the way for private sector participation, regional development, accessibility, political stability, trust, and improved service delivery. However, what distinguishes the 2022 spring and fall session is that now the Verkhovna Rada will prioritize the laws in line with the expressed wishes of the citizens, as represented by local mayors, local government associations, and other non-state actors. The forum acknowledges that the mayors and local government associations as advocates are best able to make the connection between central and local governments.

Prior to the forum, a HOVERLA survey of local communities identified the following priorities for legislative revisions in 2022:

• Consolidate decentralization through amendments to the Constitution.
• Establish clear divisions of power.
• Strengthen the financial base of local self-governments.
• Improve mechanisms for collecting and keeping a higher portion of personal income tax.
• Adopt and implement the law on local state administrations.
• Institutionalize tools for citizen participation through the law on local referendums.
• Establish clear guidelines for administrative-territorial structures.
• Eliminate the shortcomings of the current legislation on communal property.
• Develop laws in conformance with European standards.

“The historic significance of this event should not be underestimated as it represents a first in Ukraine’s history,” said HOVERLA Chief of Party Gabriel Abraham. “The forum represents a mechanism for the government’s accessibility to the people. HOVERLA will make this an annual event which can lead to the institutionalization of the practice of prioritizing laws in the open.”

Recognizing that centralized institutions need to also find a balance between providing crucial functions and supporting nascent local government institutions, Oleksandr Kornienko, First Deputy Chairman of the Verkhovna Rada, said, “In the coming years, we must work to ensure that 100 percent of communities are fully empowered. The Ukrainian Parliament must focus on: increasing the resource base in public tax reforms; providing equitable distribution of resources; creating conditions for filling budgets; creating political conditions that do not hinder the communities’ work; and increasing the competence of communities and their governing bodies.”

Ultimately, the forum demonstrated that Ukraine has the ability to meet several conditions for true and meaningful transfer of authorities to local government: 1) It linked finance and fiscal authority to service provision; 2) local governments demonstrated their knowledge of the costs of service provision and collectively identified their priorities; and 3) the discussion demonstrated that transparency and accountability can be an integral part of decentralization.