In the Euro-Mediterranean Region

Innovation in Public Administration

in the Euro-Mediterranean Region

THE PRIORITIES IN INNOVATING GOVERNANCE

AND PUBLIC ADMINISTRATION IN REPUBLIC OF MACEDONIA

By

Albert Musliu

July 2004

I. /

BACKGROUND

/

3

II. / PUBLIC ADMINISTRATION REFORM IN THE REPUBLIC OF MACEDONIA / 4
III. / PRIORITIES IN INNOVATING GOVERNANCE ON LOCAL SELF GOVERNMENT SYSTEM / 5
IV. / THE POLITICAL CONTEXT OF THE REFORM ON LOCAL SELF GOVERNMENT SYSTEM / 8
1. Constitutional Framework / 8
2. Legal Framework / 9
3. Structure of local authorities / 10
4. Competencies of the municipalities / 11
5. Organs of local authorities / 11
6. Financing of the Municipalities / 12
7. Supervision over the operation of the municipal organs / 13
V
/ THE ADMINISTRATIVE CONTEXT OF THE REFORM ON LOCAL SELF GOVERNMENT SYSTEM / 14
1. Municipal Administration Organizing / 14
2. Status of the Employees in the Municipal Administration / 15
3. Human resources development / 16

VI

/ THE DEVELOPMENT CONTEXT OF THE REFORM ON LOCAL SELF GOVERNMENT SYSTEM / 17
1. Transparency and access to information’s / 17
2. Citizens’ participation in the decision-making process in the municipalities / 18
3. Mechanisms for cooperation between the Municipalities and the Government / 18
4. e-Government / 19
VI. / CONCLUDING REMARKS / 20
1. Realization / 20
2. Forthcoming steps / 21

Table of Contents

I. BACKGROUND

On the referendum held on September 8th 1991, citizens of Republic of Macedonia decided to constitute Republic of Macedonia as an independent and sovereign country.

In November the same year the first Constitution of Macedonia since its independence was passed, establishing the foundations of a state which is ruled by the principle of rule of law and which guarantees human rights, citizen’s freedoms, peace, coexistence, social justice, economic welfare and promotion of personal and common life of all its citizens. This concept is conceived as a multi-dimensional process of democratization, decentralization, de-etatisation and comprehensive modernization of public administrations of state. The fundamental changes started influencing political, judicial, administrative and economic system, which were due to make possible the transformation of the Macedonian state.

Process which followed upon Macedonia’s independence and drastic economic problems[1] and political crises in the Balkan region—including strongly expressed nationalistic tendencies— result the country’s political system to moved from extreme decentralization to extreme centralization. The position of the central government was reinforced, while the local authorities lost their functions and financial resources. Thereby, all functions and property of the former local bodies of authority were transferred to the central bodies of authority. As a consequence the system of state administration led towards unity and centralization of the Macedonian state administration. Given the general circumstances prevailing at that time, and given the weakness and low capacity of institutions within the new Republic, this centralization process was a predictable scenario.

In the years of 1991 to 1999 efforts were focused on the pressing needs for political recognition of the state and macroeconomic stabilization of the economy.

Considering the above, there was a need to give public administration reforms a priority, and to implement this long, complex and comprehensive process within a framework of a strategic vision for the development of the Macedonian administrative system.

II. PUBLIC ADMINISTRATION REFORM

IN THE REPUBLIC OF MACEDONIA

In May 1999, the Government adopted the Public Administration Reform Strategy as a fundamental strategic document. The Strategy defines the objectives of the reform, the approach to be taken, as well as the priority areas that will be covered by the reforms, in particular:

§  the state administration system;

§  the system of public administration in a broader sense;

§  the local-self-government system;

§  redefinition of the state’s role;

§  implementation and protection of rights and freedoms of citizens;

§  public finances restructuring;

§  institutional building and

§  IT development.

The basic strategic objectives of the public sector reform is to build a small, relevant, professional, depoliticized and well organized public administration which will be legitimate, democratically accountable, transparent, service oriented and well organized, deconcentrated, professional and capable of supporting the transitional processes in the Republic of Macedonia.

The implementation of these targets is strongly connected to the strategic objective of EU accession and involvement in European integration processes. Considering Macedonia’s long-term objective to join the EU, and having in mind the transition processes that have been going on in Macedonia for the past 12 years, the reform of the public sector and its functioning in a system of several levels of governance is indispensable.

Having defined the priority areas, in July 2000 the Government adopted the PAR Action Plan aimed at direct implementation of the Strategy, by means of defining short-term and medium-term objectives, activities and expected results (16 project plans were adopted).

Because of the priority of the Strategy to create a small and efficient public administration, it has proven necessary to re-evaluate the total number of employees in the individual budget users. Macedonia used several mechanisms to achieve this goal, such as: banning or limiting new employment, early retirement, privatization (divestment) in some parts of the public administration, decentralization of responsibilities from central to local government (by reassigning state administration employees to municipal offices), etc.

In order to intensify the reform and to provide professional and logistic support to everyone involved in the implementation of the Strategy (which concerns all ministries), a PAR Sector has been established in the General Secretariat of the Government, through which the activities in this important process will be directed and coordinated most consistently. This actually introduces a main coordination system within the “centre” of the Government, which can ensure that the Government’s decisions in this process have a reform dimension.

To the end of the 2003 Macedonia:

§  Adopted the Law on Civil Servants

§  Established an Agency for Civil Servants as an independent state body. Amongst other functions, the Agency has the responsibility to coordinate activities related to professional development and training of civil servants and as part of that responsibility to develop a national training strategy for civil servants.

§  Strengthen the “center of government”, recognizing the importance to European Integration of a strong strategic planning and policy coordination capacity.

§  Approved an Action Plan to achieve Equitable Representation in the public service.

§  Started with preparation of the National Strategy for the Training of Civil Servants, which will provide an overall framework for the development of training courses, including the training of civil servants employed in municipalities is in phase of preparation;

§  Continued with the evaluation of functions;

§  Imposed a reduction of 4% in expenditure on the wage-bill and has required all ministries to produce plans for the implementation of this measure;

§  Founded an Commission on Information Technologies as a central point for communication and coordination of the process of development of the information society.

III. PRIORITIES IN INNOVATING GOVERNANCE

ON LOCAL SELF GOVERNMENT SYSTEM

One of the most important and fundamental part of public sector reform is establishing a new, democratic system of local self-government and new relations between the two levels of government (the state and the municipality), by having as a final goal building of a system of local self-government based on European standards, adequate and appropriate to the needs of the country and its citizens.

Macedonia has extensive experience of local government. Much of this experience was gained while the Republic was part of the former state of the Socialist Federative Republic of Yugoslavia (SFRY). In contrast to the centralizing tendencies of many states in the 1970s, the SFRY was characterized by an unusually high degree of decentralization within a unique model of intersected fiscal federalism. This was true of all the constituent republics of the former SFRY and has continued to be the case in the Republic of Macedonia almost since the dissolution of the SFRY. Until 1990, a large number of activities—including education, healthcare and urban planning—were managed and financed by local authorities using their own sizeable revenues.

The new Constitution (Article 8 paragraph 1. 9) defines local self-government as one of the fundamental values of the constitutional system and it guarantees the right to local self-government (Article 114 paragraph 1). The provisions of the Constitution guarantee the political, administrative and financial independence of the units of local self-government. Such conceptualised position of the local self-government was not implemented until 1995 due to the fact that basic laws for establishing the new system were not enacted. This undefined situation was additionally made even more complex by passing the Resolution of the Government, at the beginning of 1991, which resulted with former municipal bodies of administration being transformed into regional units of the Ministries, i.e. of the central bodies of the authority.

With the enactment of the Law on Local Self-Government in 1995 and the Law on the City of Skopje, dated 1996, as well as the Law on Territorial Division of the Republic of Macedonia enacted in 1996, the first stage of development of local self-government started.

In 1997 the European Charter on Local Self-Government was ratified, with no reservations, meaning that Republic of Macedonia was completely bound to implement and comply with these provisions rising from the Charter in its legal system.

At the beginning of 1999 an analysis was prepared. The outcome of the analysis, as well as the positive experiences of the local self-government in developed European countries identified many inadequacies, irregularities and imperfections in the current legislation and clearly implied that there is an urgent need to reestablish the interrupted transitional process of the local self-government.
The facts evidenced very unfavourable conditions in the local self-government in Macedonia. It was concluded that the new system of local self-government, as one of the key elements of a modern democratic society, has been introduced very slowly and hesitantly leading to incomplete local self-government. Considering that the municipalities and the City of Skopje had very limited and un-clearly defined competencies and, being financially subordinated to the state, were unable to provide services and represent the interests of the citizens in the real sense of the word. Many of the competencies that are usually performed by local authorities (urban planning, public utilities, pre-school education, primary and secondary education, primary health care, social and child welfare, culture, sport, etc.) were still competencies of the central government. Additional difficulties that make the situation even more complex are the lack of adequate financing system of the local self-government units leading to their subordination to the central government; the incomplete assets distribution balance; the undefined ownership; the system of financial unification of the local self government units having no transparency or impartiality practices and other problems. The reform processes should focus on amendment of the existing legislation; decentralization, which is delegation of specific state functions to the local authorities; review of the need for 123 municipalities, etc.

The conclusions of the analysis, as well as the fact that the reforms on the system of local self-government were confirmed to be one of the prioritized fields in which the reform activities for adjustment of public administration were going to be conducted, represent the basis according to which in November 2001 the Strategy for reforms on the system of local self-government is adopted. The main goals of the Strategy are:

-  Redefinition of the territorial, functional and institutional organization of local self-government;

-  Ensuring legal protection to the political, administrative and financial independence of local authorities;

-  Improving reciprocal relations of units of local self-government and relations with government authorities;

-  Affirming democratic procedures and mechanisms that guarantee the right to direct participation in bringing decisions in regard to their every day life.

The main goal of the reform is to build a local self government based on the principles of democracy and decentralization, having the right and capacity to regulate and manage local public services accountably and in the interest of the local population, that is, develop an environment in which local authorities, through the democratically elected bodies and the efficient and accountable administration, will bring the government closer to the citizens and, supported by their funds, will autonomously and efficiently resolve their every-day problems.

In November 2001 the Plan of activities for the implementation of reforms on local self-government (2002-2004), defining seven main groups of activities, was adopted.

The political consensus and expressed political will resulted with two Amendments to the Constitution adopted in November 2001, significantly expanding the area in which local self-government units have the right to decide. In addition, the consensual method of decision-making while passing laws, which establish the system of local self-government was introduced.

In January 2002 the new Law on Local Self-government was passed, establishing the basis of the system of local self-government and realization of an intensive process of decentralization of power. Due to this, in January 2003 the Government adopted an Operative Program for decentralization of power for the period 2003-2004, which specifies activities for establishing a stable legal framework, within which more than forty laws connected to the transfer of competencies are foreseen to be changed and enacted by 2004.

In order to ensure efficient managing and coordination of the decentralization process and comply with the dynamics determined in the Program, a special mechanism was established to follow the process leaded by the vice-president of the Government responsible for the decentralization process, who in cooperation with the Minister of local self-government introduces opinions to the Government.

On June 2003 the Government adopted the following strategic objectives for 2004:

1. Implementation of the Framework Agreement;[2]

2. Overcoming of unemployment and reducing poverty;

3.  Defence and safety situation in the state and NATO membership;

4.  Full membership in the European Union;

5.  Fight against organized crime and corruption and strengthening of the rule of law;

6.  Optimization of the public sector.

The inclusion of // Implementation of the Framework Agreement// in this list of strategic priorities represents an clear political will that reforms in local self-government and the decentralization process, as basic elements of the Framework Agreement, are the highest strategic goals which will facilitate a stable political and economic system and democratization of the social and political life as a whole and timely accession to the European Union.

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