UNDP supports Kazakhstan's reform of local self-governance
August 31, 2023
Kazakhstan is reshaping local governance by strengthening fiscal independence. Galymzhan Baimaganbetov, akim of Borankul village, Mangistau region concisely summarizes this shift:
“The importance of local self-governance lies in having our own budget, and the utilization of funds becomes a matter decided by members of our community. What is deemed most crucial for the village will be resolved there.”
Since 2018, Kazakhstan has embarked on reforming its local self-governance, in alignment with the nation's strategic vision for modernization outlined in the Government's developmental strategy until 2050. The significance of this reform is evident in the adoption of the 'Concept on the development of local self-governance in the Republic of Kazakhstan until 2025' in August 2021. Moreover, the President's commitment to enacting a separate law on local self-governance, as announced during the State of the Nation Address on March 16, 2022, underscores the importance of this change.
Between 2018 and 2022, Kazakhstan introduced the fourth level of the budget system in all rural districts, allowing them to manage their own budgets and communal property, shifting from relying solely on subventions from higher-level budgets to incorporating diverse sources such as taxes, fees, fines, voluntary contributions, and income from communal property.
The United Nations Development Programme (UNDP), in collaboration with the Ministry of National Economy of the Republic of Kazakhstan, organized training modules for akims from all over the country. Around 2,500 participants engaged in the trainings, which included akims from cities of regional significance, as well as villages, settlements, and rural districts, spanning all 17 regions of Kazakhstan and involving attendees from all districts with rural settlements (166 districts in total).
Ainur Baimyrza, Head of the Governance Unit at UNDP Kazakhstan, elaborates on the aim of this initiative:
“One of the key objectives of this initiative was to increase the awareness and understanding of rural district akims regarding the expanded functions of local governments, with a focus on exploring the mechanisms for direct financing of local budgets. The idea is to empower rural districts by granting them the authority to establish communal enterprises for the maintenance and improvement of their rural areas.”
These enterprises offer various services, and the fees collected contribute to the financial resources of the rural district. This setup significantly boosts the local authorities' capacity to address community issues.
Qassymkhan Mazhikov, Chief Expert of the Department for Analysis of Regions and Development of Local Self-Governmentof the Ministry of National Economy of the Republic of Kazakhstan, explains:
“Our intention is to grant rural districts the right to establish communal enterprises to maintain their own rural areas. For example, they can take care of landscaping, road cleaning, winter road maintenance, and other similar tasks, as well as offer paid services to the population. In this case, the akim can hire appropriate workers or enter contracts with organizations to provide these services on behalf of the akim’s office. Consequently, the fees for these services will contribute to the budget of the rural district. There are numerous advantages to this approach. It helps bring activities out of the shadow economy and protects the rights of service providers.”
With a focus on effective bottom-up engagement, the project also aimed to ensure equitable representation of diverse interests, including those of women and men from vulnerable groups, youth, and residents of remote areas, fostering equal participation in policymaking and monitoring processes.
“Development of local self-governance means involving the population in addressing local issues. Residents collectively decide on pressing needs and determine essential facilities for their village. This entails the direct participation of residents in shaping the fate of their community,”underlines Qassymkhan Mazhikov.
UNDP's involvement extends to refining the existing local self-governance concept with insights gathered from training and Q&A sessions. This collaborative effort advances the decentralization process, promoting inclusive governance and bridging the gap between policy-makers and implementers for effective reforms.
“At the moment, we are collecting proposals from the regions, and we want to consider them in the new concept. Currently, we are trying to make changes to other laws, particularly in areas such as state procurement and simplifying procedures for the fourth level of the budget. We aim to transfer certain taxes and fees to the rural level to increase the tax base of rural areas. By transferring these to the rural level, we intend to augment their budget with additional tax revenues. Additionally, we seek to ensure that communal property of rural districts generates income for the villages. This, in turn, would create opportunities, for instance, for the construction of public facilities,”notes Qassymkhan Mazhikov.
Kazakhstan is empowering rural communities through local self-governance. This is part of the country's efforts to achieve balanced progress, and sustainable development. As these reforms take root, they will lay the foundation for a more resilient Kazakhstan, united under the collective aspirations of its citizens.
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