22:20, Thursday, 19.04.2018
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5 counterarguments why the self-governing cities and towns should not be abolished


Recently, it has been actually publicly announced that the government is going to abolish 7 self-governing cities and towns and reunite the municipalities separated back in 2014.

The Ministry of Regional Development and Infrastructure of Georgia has promulgated several arguments over the reasons why it is planning to impose the abovementioned amendments and revert to 2006, when the number of self-governing units in Georgia was narrowed down. 

The prime argument proposed by the ministry is that the reduction of self-governing cities will save GEL 40-50 million in the budget and consequently, the reserved funds will be spent on the development of infrastructure in the regions.

A simple calculation reveals that announcement made the Ministry is far from the actual situation.

Based on the data of 2015, the administrational expenditure equals 5 million and 466 thousand GEL per annum, after the municipal separation. It therefore means, that only 5 million and 466 thousand GEL will be saved after the abolition of 7 self-governing cities (towns) and their reintegration into communal municipalities and it will happen only in case if no one from the dismissed public servants is reemployed and if the attorneys of local governors are not appointed and the apparatus is not restored. These institutions will definitely need certain administrational funds to properly function. 

As for the infrastructural projects, the full-scale implementation of which is hampered (as it is proposed) by the existence of self-governing cities:  
  1. Separation of the cities from the communal municipalities has been actually beneficial for both the cities and the villages. So far, 80% of the budget of so called inseparable municipalities is spent on cities and the remaining 20% on the villages. After the cities were separated from the communal municipalities, the villages obtained an opportunity to have their own budget and to carry out proper infrastructural projects. 
  2. The same may be said about the fund distribution in the projects to be implemented in the regions – today, separated cities, towns and villages equally share the funds appropriated for extensive infrastructure. It was not possible in terms of inseparable municipalities, as the largest part of the funds were spend on cities and towns, as their infrastructure was considered to be a priority.
  3. If the government’s prime argument is to improve the infrastructure in villages owing to administrational expenditure reduction, it seems interesting, why the government abrogated the Village Support Program in 2017, which was the most significant program due to improve rural infrastructure and moreover, it promoted the participation of local community in exercising self-governance. 

The Ministry also states that “the confidence of the citizens of separated municipalities towards self-governments and their engagement in exercising self-governance has not essentially changed."

As it seems, the central government authorities are not aware that, for instance, the budget in the town of Gori in 2017 was formed with the active participation of local citizens and this town is one of the few municipalities, where the participatory budget principle is working. Besides, Civil Consulting Councils were formed in seven self-governing cities (towns) and both citizens and civil servants are gradually learning, what benefits citizens’ participation may bring to exercising self-governance. The chapter concerning citizens’ participation in the “Self-government Code” was enacted in the second half of 2015. It is interesting what the government’s expectations were – what should be the level of citizens’ participation only after a year and a half, or what distinguishes the level of citizens’ participation in mentioned cities and other communal municipalities. 

For instance, the latest research carried out by NDI clearly shows that the lowest rate of confidence to government and the citizens’ participation is revealed in Tbilisi and Kutaisi. If the Ministry’s argument has to be taken into account, the central government will have to abolish self-governments primarily in these two cities -the capital and the second largest city in Georgia. 

The Ministry also states that “municipal separation did not enhance the revenues on the local level, as the separation did not promote economic activities.” It also notes that budgets of municipalities did not grow due to the local revenue increase, but due to additional transfers from the central state budget. This is not true. 
The data presented below proves that the local revenues in self-governing cities (towns) have substantially increased since 2013 now: 
The local revenues of united municipality of Telavi in 2013 increased by 28.9% in the Town of Telavi and Telavi municipality in 2015, and by 52.5% in 2016 (without the equalization transfers received from the central budget);
  • The local revenues of united municipality of Zugdidi in 2013 increased by 45.5% in the Town of Zugdidi and Zugdidi municipality in 2015, and by 61.6 % in 2016 (without the equalization transfers received from the central budget);
  • The local revenues of united municipality of Gori in 2013 increased by 8 % in the Town of Gori and Gori municipality in 2015, and by 7.2 % in 2016 (without the equalization transfers received from the central budget);
  • The local revenues of united municipality of Ozurgeti in 2013 increased by 83.3 % in the Town of Ozurgeti and Ozurgeti municipality in 2015, and by 73.37 % in 2016 (without the equalization transfers received from the central budget);
  • The local revenues of united municipality of Akhaltsikhe in 2013 increased by 46.6 % in the Town of Akhaltsikhe and Akhaltsikhe municipality in 2015, and by 71 % in 2016 (without the equalization transfers received from the central budget);
  • The local revenues of united municipality of Mtskheta in 2013 increased by 17.2 % in the Town of Mtskheta and Mtskheta municipality in 2015, and it dropped by  1.6 % in 2016 (without the equalization transfers received from the central budget);
  • The local revenues of united municipality of Ambrolauri in 2013 increased by 81 % in the Town of Ambrolauri and Ambrolauri municipality in 2015, and by  7.3 % in 2016 (without the equalization transfers received from the central budget);
Despite this data, it seems strange that the government was expecting to enhance local revenues by territorial alteration only, while the process of fiscal decentralization has not yet started. It is illogical to expect dutiable goods and economic activities to enhance within 3 years on the local level. Furthermore, the government will have to prove in figures, what the level of increase of communal municipality revenues was in inseparable municipalities and what mechanisms will be imposed to increase the total income after having municipalities reunited.

The Ministry states that "the quality of services and their accessibility have not improved, but on contrary, in some cases, they have deteriorated due to inefficient distribution of resources in the self-governing cities”. An official statement made by a state official body must be at least based on the results of a competent research. Such research, as far as we are concerned, has never been carried out in Georgia and the European examples and researches done there show quite the opposite. For example, the researches done in Denmark revealed that the efficiency level of municipal services was higher in the municipalities with the population under 15 000, to be compared with those with the population fluctuating from 30 000 to 50 000. 

If the reform is aimed to increase the accessibility of self-governance, it cannot be reached by municipal consolidation. If the government is actually going to reach this goal, then not only these 7 self-governing cities (towns) must not be abolished, but other large cities and towns must also enjoy the status of self-governing units and new administrative centers must be formed for communal municipalities. 

The statement made by the Ministry also notes that there is an increasing tendency of consolidation of the municipal units in many European countries. It seems that the Ministry is not familiar with the extant researches about the territorial arrangement of the municipalities in European countries and the fact that the mentioned tendency concerns only very little entities and not as large territorial units as in Georgia. Apparently, the Ministry is not informed either that Georgia, actually, ranks 2nd in terms of the size of the municipalities and the number of the municipal population in Europe. The average number of the municipal population in Europe is 7-10 thousand. For instance, 3300 citizens live in local municipalities in Czech Republic on average, while this number exceeds 50 000 in Georgia. After consolidation, the number in Czech Republic will ascend only to 4-5 thousand, which still will be ten times less than in Georgia. Between 2012 and 2016, the number of self-governing units in Estonia, which has the total population of only 1 315 000, has reduced by 13 units – from 226 to 213. In Lithuania, with the population of 2 million, the number of self-governing units is 119, while in Georgian, with the population of 3 720 000, we have only 71 self-governing entities. 

In those European states, which were presented as role-models by the Ministry, such irrelevant number of municipalities will definitely be reduced due to service improvement, promotion of economic activities and citizens’ participation and other many reasons. 

Finally: since the Ministry of Regional Development and Infrastructure of Georgia confirms that it has already commenced working on the issue of abolition of 7 self-governing cities (towns), proposing its own arguments, and, meanwhile, saying that it will not make a decision without having consulted with the civil society, we appeal to it for holding a meeting and discussion around this issue, especially, when we have been informed that the Ministry has already began closed consultations with the representatives of these so-called separated municipalities.

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