Local Authorities: Covid decentralisation and the election test

Summary

In 2020, local authorities faced two challenges that were significant factors in their activities: COVID-19 and the presidential election. Regarding the spread of the coronavirus infection, local authorities received more powers from the center. Decisions on the introduction of quarantine and other measures for COVID-19 (including support for the public sector and entrepreneurs) were significantly decentralized. These measures were taken by local officials under their own responsibility and were more consistent with the development of the epidemiological situation in the regions than the reaction of the top leadership of the state.

Local authorities testified loyalty to Alexander Lukashenka during the political crisis that unfolded after the presidential election. After the first days of disorientation and shock from the mass protests, the leaders of the protest cities turned to the tactics of negotiations with the demonstrators, and then, with a slowing momentum of the street protests, to repressions against the opponents of the current leadership.

The launch of dialogue platforms in the autumn demonstrated the popularity of the reform agenda among the local vertical and the deputy corps in terms of decentralization, the redistribution of powers to local authorities and the development of self-government.

Trends:

• Decentralizing economic and epidemiological decision-making as a result of COVID-19;
• Spreading reformist expectations among the local executive and representative vertical;
• The cautious development of lower-level self-government and the expansion of public influence due to budget cuts.

COVID-19: Decentralization of responsibility and financial support for businesses

Together with the growth of COVID-19 cases, the responsibility of local authorities for the sanitary and epidemiological situation in the subordinate territories is expanding. The district and regional authorities were allowed to make their own decisions on the introduction of measures against the coronavirus, which they did depending on the situation in their regions.

Unlike Alexander Lukashenka, the local authorities have taken a more responsible approach to countering COVID-19. Most likely, this is due to the greater feedback that the local leadership has from the population compared to the top person of the state. In some districts and village councils, the implementation of quarantine measures in case of self-isolation, including after returning from abroad, was strictly monitored.

At the end of 2019, the legislative powers of the councils of deputies and local executive committees for the preparation and approval of investment projects were expanded.

Along with the development of negative consequences of the pandemic, the republican leadership transferred greater powers to local authorities to support business. According to decree No. 143 “On support of the economy”, local authorities were given the authority to change the terms of payment of taxes, which are fully included in local budgets, as well as to reduce property taxes and rent for land plots (for the second and third quarters).1 As a result, the regional councils and Minsk City Council reduced the single tax rate for individual entrepreneurs by half for the second and third quarters of 2020.

Basic-level councils (district and city) have reduced property tax, land tax, and land rents by using decreasing coefficients depending on the type of activity. The size of the reduction coefficients was determined by the local authorities independently and differed depending on the district or city. So, in Minsk, the real estate tax and land tax for the second and third quarters of 2020 were reduced by half.

As a result of the quarantine measures and the economic consequences of the pandemic, local budget revenues decreased by 4.4% in real terms compared to 2019, although they nominally increased by 5.3%. As a result, the ratio of personal income of local budgets and revenues from the republican budget decreased to the lowest level in the last five-year period and amounted to 75.7% (Table 1). The republican authorities were forced to increase subsidies to local budgets to compensate for losses.

At the same time, the public sector received the most support, deferrals and installments. In 2020, local authorities were forced to provide guarantees for loans to state-owned companies in the amount of BYN 313.5 million.3

Regions continue to reduce budget spending on certain types of utilities. This is possible due to state programs for infrastructure modernization, often in cooperation with international credit institutions, such as the program “Clean Water of the Viciebsk region” with the involvement of the resources of the European Bank for Reconstruction and Development.

However, at the end of the year, in the search for additional sources to replenish local budgets, the regional council was allowed to introduce local fees when leaving the country. Regional councils and Minsk City Council were able to increase the single tax rates for individual entrepreneurs by 2 and 4 times, respectively. Most likely, local authorities will use the opportunity to introduce fees and increase the tax rate to compensate for the losses of budgets in 2020 due to COVID benefits, as well as to increase the level of their own revenues of local budgets in 2021.

At the same time, agro-business lobbyists from some regions of the country continue to have significant influence in the leadership of Belarus. Despite the statements of Alexander Lukashenka about the need for full repayment of loans by agricultural enterprises, some agricultural organizations of Viciebsk region still seek to write off millions of debts.

The pandemic has prompted local authorities to increase the use of new information and communication technologies in their activities. The Councils of Deputies begin to hold their sessions via videoconference. At the same time, while ratings of state-owned media are falling, the local leadership began to actively develop alternative media. In July, the head of Brest City Executive Committee Alexander Rahachuk created his official Telegram channel, which became a quite popular regional medium with more than 7.0 thousand subscribers.

Elections and the political crisis: maintaining the loyalty of the heads of the protest cities

With the start of the presidential election, local authorities and deputies at all levels joined the campaign to criticize the opponents of the current leadership and support state policy. During the first week of the post-election protests, the local authorities were in a state of shock from the unexpected mass nature of the protests, but they remained loyal to the top leadership.

Across the country, only a few cases are known where individual deputies of local councils (as in Minsk and in Vaŭkavysk) publicly condemned the violence and supported the demands of the demonstrators. At the same time, despite the continued loyalty of Lukashenka among the leadership of the local authorities, the position of the first president of Belarus was significantly shaken among officials, according to his own testimony.4

After a failed attempt to violently clear the streets of protest cities of demonstrators on the day of the vote and the next few days, local authorities eased the repression, and in many places went to protesters in an attempt to establish a dialogue. In the most protesting cities, the leadership made concessions to the demonstrators. Hrodna City Executive Committee fulfilled all the demands of the opposition, although the agreement was valid for only a few days: the Council of Public Consent was established, places for mass events were expanded, arrests were suspended, proceedings were initiated against the harsh actions of the security forces, etc.

The leadership of the local vertical in the protest cities actively participated in negotiations with labor collectives. In cooperation with the managers of state-owned companies, the local authorities were able to quite successfully relieve tension at enterprises and avoid mass strikes in the public sector.

The loyalty of the deputy corps, the regional and local vertical did not go unnoticed by Alexander Lukashenka, who entrusted the deputy corps with the duty to determine candidates for the All-Belarusian People's Assembly, which was held in February 2021. It should be noted that the deputy corps consists of a directorate of organizations and institutions of various fields of activity, including loyal private businesses.

Personnel rotations: slowing down during a political crisis

In 2020, most personnel changes occured during the first quarter, and with the beginning of the election campaign and the acute phase of the political crisis, it was put on hold. Usually, during the year, the head of state changes about 20–25% of the heads of districts and cities. However, in 2020, the personnel cycle was slowing down, which is most likely due to Alexander Lukashenka’s attempt to consolidate the vertical and strengthen its loyalty during the crisis. Of the 128 basic level managers (district and city executive committees), 22 managers (17%) were replaced, and the vast majority (15 people) even before the start of the presidential campaign.

In August, after one of the most massive demonstrations in the country on the streets of Hrodna, negotiations of the protesters with the local authorities and concessions from the latter, the chairman of the Hrodna Regional Executive Committee was replaced. The former Minister of Health Uladzimir Karanik, who had an extremely negative image in society because of the approaches to fight the spread of the coronavirus during the spring wave of the epidemic, was appointed to this position. During the peak of the protests in Minsk in early September, a new head of the Minsk City Executive Committee was also appointed.

The top leadership tightened security forces' control over the country's most protesting regions during the acute political crisis in the second half of the year. Thus, former Interior Minister Yury Karajeŭ was appointed inspector for Hrodna region, and former KGB chairman and former State Secretary of the Security Council Valery Vakulchyk was appointed inspector for Brest region. Former deputy head of the Ministry of Internal Affairs A. Barsukoŭ became an inspector for Minsk.

Local authorities: dialogue platforms and reform rhetoric

Among the regional and local leadership, there is support for the reform of the power system and changes in regional policy. At the beginning of 2020, a cautious discussion of possible adjustments began with the participation of officials and independent experts. In the autumn, at closed dialogue platforms, representatives of local authorities sounded bolder arguments about the need for reforms.

At the beginning of the year, a round table was organized to discuss and update regional policy. Independent experts and representatives of the management elite considered the possibility of concentrating resources on the development of industrial centers with 11 cities as drivers that should economically pull up the adjacent territories. The state no longer has the funds for large-scale programs for the development of rural areas and infrastructure.

In the autumn, the discussion of possible constitutional changes showed that there is support for reforms among the local elites, although there is certainly no consensus on the circumstances. While the chairman of Hrodna Regional Council of Deputies Ihar Zhuk supported the idea of electing mayors of cities and the heads of districts, in Viciebsk there was support for appointing the leadership of the local government.

The ideas of reforming the system of local government and self-government, as well as the administrative and territorial structure, are popular on dialogue platforms. Among local managers, there is broad support for the idea of abolishing the primary level of self-government and refusing to elect deputies to village councils. This may include the creation of a village administration instead of village councils with executive committees. The Central Election Commission has long voiced, and local officials support complaints about the difficulties that one has to face when searching for candidates for village councils. It is worth noting that among 18,111 deputies of local councils, the village councils account for the vast majority – 13,225 seats. At the same time, only about 22.4% live in rural areas, and the urbanization of the population continues to increase along with the decline in the number of villagers.

With the abolition of village councils, it is proposed to increase the powers and the role of territorial public self-government heads or heads in rural areas, as well as to improve the self-taxation mechanism, which allows village councils to attract additional funds from residents, for example, for landscaping. It should be noted that the budgets of the village councils are limited by the costs of workers’ salaries and lighting. In the total expenditures of local budgets, the share of the primary level is only about 1.0%.

During the first half of 2020, local authorities in some regions showed interest in the development of territorial public self-government, especially in rural areas. Village heads allow the authorities to engage with active citizens, partially compensate for the passivity of village council deputies, and attract additional funds in a situation of budget cuts.

At the same time, local authorities promote the expansion of public participation in landscaping, as well as attracting additional funds from residents for the development of territories. It should be noted that budget support and competitions for territorial public self-government are significantly expanding. And most often, resources are allocated on the basis of co-financing of improvement activities and taking into account the activity of citizens: part of the funds is made by residents, and the rest is allocated from local budgets.

In some regions, the authorities are positive about increasing public participation in the distribution of budget funds. For example, Hrodna Regional Council publicly supports the idea of a budget for civic participation, which is popularized by independent experts, such as the Leŭ Sapieha Foundation.

A positive factor in expanding the influence of citizens and self-government is the cooperation of local authorities with the European Union in the framework of international technical assistance programs. Foreign aid has a positive impact on the exchange of experience and the improvement of the quality of governance in the regions. Five districts of Hrodna region planned to create a partner group for sustainable development. At the same time, with the financial support of the European Union, local authorities are beginning to adopt the European experience in developing water supply and sanitation safety plans.

At the same time, local councils are increasingly engaged in the distribution of funds within the framework of international aid projects, most often through established regional associations of local councils. These associations operate in Hrodna, Mahilioŭ and Viciebsk regions, and the experience of their creation was planned to be expanded to other regions. However, the process of developing associations was put on hold in 2020, first in connection with the preparation for the presidential elections, and then due to the political crisis.

The development of cooperation between local authorities and the creation of a network of local governments takes place not only with Western partners, but also with Russian regions within the framework of the Eurasian Economic Union. The EAEU plans to create an Association of Youth Self-Government Bodies.

Most likely, the creation of new local councils and the development of effective associations of local councils will be frozen in the coming year due to Western sanctions, the reduction of international aid, and the wariness of such initiatives on the part of the top leadership of the state.

Conclusion

The competition for a deputy seat in the next local elections, which must be held no later than January 2022, may significantly increase. However, it is likely that the authorities will restrict the participation of potential independent candidates through the registration procedure, and will also try to depoliticize society with repressions.

Constitutional changes, if they are carried out, may affect the primary level of local self-government, the probability of cancellation of which is very high and has support among local authorities and part of the top management. Village councils with executive committees can be replaced by village administrations with the choice of the leadership of these entities.

The powers of local authorities may be expanded in relation to the economic development of their territories, the introduction of new taxes, the amount of taxes and benefits for businesses, and the sale of property.