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Gabriela Miranda
The document summarizes an OECD project to support decentralization and regional development in Ukraine from 2021-2022. It discusses how the OECD has worked with Ukraine since 1991 on governance and economic reforms, and outlines a 2014 memorandum of understanding and action plan between the two organizations focusing on anti-corruption, governance, and business climate. The project will build on previous OECD analysis of Ukraine's territorial reforms and decentralization efforts to strengthen local governance and foster regional growth outside the capital region.
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Gabriela Miranda
- 1. 1 1 Supporting Decentralisationand Regional Development in Ukraine 2021-2022 Gabriela Miranda 12 November 2020
- 2. 2 The Organisation forEconomic Co-operation and Development Since 1991, the OECD and Ukraine have been working in partnership to improve governance and economic development. In March 2014 OECD members decided to respond positively to Ukraine's request to benefit from OECD's expertise to shape the reform.OECD Establishment of international standards in various spheres Data analysis & comparison to predict future trends Forum for inter- governmental co-operation 37 members countries + the European Union
- 3. 3 OECD-Ukraine MoU andAction Plan for Strengthening Co-operation The Action Plan identifies priority areas for reform and is structured around three pillars: Pillar I: Anti-Corruption Pillar II: Governance and Rule of Law Pillar III: Investment and Business Climate The OECD-Ukraine Memorandum of Understanding was signed in 2014 and is being prolonged with the Cabinet of Ministers until 2025 The OECD project Supporting Decentralisation in Ukraine falls under Pillar II: Governance and Rule of Law of the Action Plan.
- 4. 4 The project willbuild on previous OECD work on decentralisation and regional development in Ukraine • In 2018, the OECD updated and extended the analysis conducted in the OECD Territorial Review of Ukraine (2014), exploring regional development trends in Ukraine in the aftermath of the Donbas conflict. • The 2018 report Maintaining the Momentum of Decentralisation in Ukraine provides insight into Ukraine’s territorial reform and approach to decentralisation, outlining strategies to advance municipal mergers and ensure an enabling environment for decentralisation and better public governance. • It explores the impact of current fiscal decentralisation measures on local financial autonomy, and how to further advance the fiscal and human capacities of united territorial communities. • It illustrates what multi-level governance means in practice, using Ukraine's transport sector as a case study.
- 5. 5 Growth remains highlyconcentrated 0% 5% 10% 15% 20% 25% 30% Kyivcity Dnipropetrovsk Kharkiv Kyiv Lviv Poltava Odesa Zaporizhzhya Donetsk Vinnytsya Cherkasy Zhytomyr Mykolayiv Khmelnytskiy Chernihiv Ivano-Frankivsk Sumy Volyn Kirovohrad Kherson Zakarpattya Rivne Ternopil Chernivtsi Luhansk Crimea Sevastopolcity Regional contribution to national GDP growth 2014-18 2004-13
- 6. 6 • Promote regionalgrowth − More efficient labour markets − Better transport infrastructure − Greater citizen engagement • Strengthen agglomeration economies − Urban agglomerations are driving aggregate growth, which is increasingly concentrated in Kyiv and the west • Adjust urban planning systems − Adapt service delivery and infrastructure to an ageing and declining population − Rapidly undertake the next population census − Reform the residence registration system Regional development policies need to foster new sources of growth outside the capital region
- 7. 7 In Ukraine, advancesin territorial and multi-level governance reform since 2014 are helping to foster regional development • Voluntary municipal amalgamations are the cornerstone of Ukraine’s decentralisation reform – Results: more empowered local authorities, with higher budgets and positive change in the quality and type of services provided in amalgamated communities • Maintain momentum of municipal amalgamation – Maintain momentum of municipal amalgamations to avoid a “patchwork” of community types • Address remaining problems of insufficient local capacity – Clearer frameworks for amalgamation, including extension to larger cities – Reinforce inter-municipal co-operation • Address issue of parallel administrations and disparities in service delivery – Reform the rayon level – OECD’s ten guidelines for effective decentralisation conducive to regional development OECD guidelines for effective decentralisation in support of local and regional development 1. Clarify the sector responsibilities assigned to each government level 2. Clarify the functions assigned to each government level 3. Ensure coherence in the degree of decentralisation across sectors 4. Align responsibilities and revenues, and enhance subnational fiscal autonomy 5. Actively support capacity building for subnational governments with resources from the national government 6. Build adequate co-ordination mechanisms across levels of government 7. Support cross-jurisdictional co-operation through specific incentives 8. Allow for pilot experiences and asymmetric arrangements 9. Make room for complementary reforms 10. Improve transparency, enhance data collection and strengthen performance monitoring Source: Allain-Dupre, D. (forthcoming), “Assigning Responsibilities across Levels of Government: Challenges and Guiding Principles”, OECD Regional Development Policy Working Paper, OECD Publishing, Paris.
- 8. 8 The decentralisation reformin Ukraine has contributed to strengthening local decision making powers and increased flexibility in investment decisions locally 114 117.4 109.9 73.8 0 20 40 60 80 100 120 140 January 2020/2019 February 2020/2019 March 2020/2019 April 2020/2019 Revenue from national budget of the Zakarpattia region in 2020 (y/y) Source: Association of Cities of Ukraine, https://www.auc.org.ua/ Example: Zakarpattia Region’s budget in 2020 • Since March, quarantine and Covid-19 related measures affected budget income from local sources. • In April, the national Fund to Counter COVID-19 was created and the government cut regional budgets. • Zakarpattia received 26.2% less budget in April 2020 as compared to 2019 following the amendments budget. Despite the significant reduction of local budgets, local authorities are actively involved in investing in counteracting COVID-19. 681.6 473 376.6 1761.5 1273.3 1286.3 457.5 303 0 500 1000 1500 2000 Medicines, medical products Medical equipment Masks, antiseptic, disinfectants, tests, etc. Transportation of Covid-19 patients and and medical staff Millions,UAH Total expenditure for the fight against COVID-19 (01.03.2020 - 01.10.2020) National Budget Local Budget Source: Association of Cities of Ukraine, https://www.auc.org.ua/
- 9. 9 2021-22 OECD Projectfor Ukraine In line with the Recommendation of the OECD Council on Effective Public Investment across Levels of Government review and provide advice to improve multi-level governance and coordination mechanisms Identify success factors resulting in improved service delivery and investment practices at subnational level since amalgamation Share OECD experience on assigning responsibilities across levels of government (among other OECD’s guidelines for effective decentralisation conducive to regional development) Analyse sub-national development trends (including socio-economic performance and local governance) to measure regional development outcomes in Ukraine and progress over time since the 2018 assessment
- 10. 10 OECD Eurasia CompetitivenessProgramme 10 Contact details: Ms. Gabriela Miranda Country Manager for Ukraine OECD Global Relations Gabriela.miranda@oecd.org Дякую за увагу !