People of the older generation remember a time when the successes of the Soviet economy and the well-being of citizens were attempted to be built during five-year periods. The people were given a top-down centralized state plan for five years ‒ and go ahead! Zealous enthusiasts picked up the slogan “Five-Year Plan ‒ in four years!” But with liberal approaches, a planned economy is not welcome, and centralization is considered archaism. In Ukraine, decentralization has been going on for five years.

There are one thousand communities, but we need one and a half

The decree of the Cabinet of Ministers from April 1, 2014 “On approval of the Concept of local self-governance and territorial power reforming in Ukraine” is considered the start of decentralization. The Ministry of Regional Development, Construction, Housing and Communal Services of Ukraine is responsible for implementing the reform. Recently Opinion was talking about the first five years of decentralization with the First Deputy Minister Vyacheslav Nehoda. The official of the unit noted successes, high rates of positive transformations, which can be envied even in Europe.

And how do experts and those, who embody it in places, perceive decentralization? As it turned out, specialists generally also approve the changes, but they also point out problems, in particular, the passivity of representatives of local authorities and a significant part of citizens, loopholes in legislation, and indifference of individual People’s Deputies.

“If we take this segment ‒ 5 years, back then the expectations were much higher, but in some areas, we did more than any other European state,” Ivan Lukerya, the expert of the Reanimation package of reforms, told to Opinion. “For example, a voluntary association of communities — we have actually united 9 million people.”

At the initial stage of the implementation of local government reform, according to Mr. Lukerya, financial decentralization, inter-municipal consolidation or the voluntary unification of territorial communities were key principles. At the start, attention was paid to health, education, security, and infrastructure. Now there are 1 thousand of competent communities (more than eight and a half hundred UTC plus almost one hundred and fifty cities of regional significance). The number of people living in these communities will soon reach 70% of the population.

“I would like us to have completed administrative and territorial reform in an administrative manner,” Ivan Lukerya continued. “There are some flaws, but the Government approved a new plan of measures for the implementation of the reform. We call it the final stage. It just stipulates that we will be able to create administratively competent communities throughout the country. There should be 1,400 of them, 1,500 at the most, and not more than 100 new competent districts. If we manage to do this by next spring, we can say that we have completed the fundamentals ‒ local government reform.”

“Now Ukraine is one of the most decentralized states of Europe in terms of the budget system,” Anatolii Tkachuk, the Director of Science and Development at the Institute of Civil Society, said. “The amount of local budgets is almost 16% of the country’s GDP. This is a very high figure, higher only in Northern Europe. Even Poland, which we try to follow, has an indicator somewhat lower. It is a pity that we were unable to complete the process, although we still have some time because the 2020 elections should take place on a new basis. Until 2020, the process of bringing together communities and creating new ones should be completed. If we do not, then there will be big problems.”


According to the information provided to Opinion by the First Deputy Minister Vyacheslav Nehoda:

– Local budgets have grown 3.5 times ‒ from 68,6 billion UAH in 2014 to 234 billion UAH in 2018;

– Since 2016, 778 support schools have been established, about 1,300 branches, 331 support schools have been established in UTC;

– according to the program of the President of Ukraine on the development of rural medicine, a total of 4,223 clinics have been planned for a network of primary health care in villages, and more than 500 of them are new ones; about 30 such clinics have already been put into operation; 382 more will be opened by June of this year;

– 125 UTC centers have been created for the provision of administrative services, in 2019 not less than a hundred ASPC (Administrative Services Provision Centers) are planned.

What do the regions say?

The numbers are probably impressive, but behind the dry statistics, there are quite real people with their own vision, needs, and problems. And how the changes take place is better seen on the ground, and not from Kyiv. So, how well is the decentralization reform progressing?

“Quite successful,” Serhii Romanovych, the adviser on the decentralization of the Zhytomyr Center for Local Government Development, assured Opinion. “According to my experience in Vinnytsya and Zhytomyr regions, I rarely encountered cases of using administrative resources and coercion. That is, communities unite voluntarily. Finally, there comes an understanding that we want to become masters, to receive powers, means, and opportunities for the development of territories. This is significantly more than reform. This changes the received wealth of the Soviet Union ‒ paternalism, in the consciousness of the Ukrainian people. Expectations that the President, the Prime Minister, or People’s Deputy will come and screw the light bulb in a street lantern or remove garbage. This is the key difference between the non-united communities that are waiting for some “Messiah”, and those that have united and independently run the economy on their territories.”

In non-united communities, not everything is going well: there are no powers and means, the number of unemployed is growing, and people are forced to travel abroad in search of a better life. Against this background, in the minds of many, the idea was impressed that unification is evil, something like collective farms.

“It is hard to convince people of a respectable age, they are not inclined to change their opinion,” Serhii Romanovych says. “It is much easier to work with people of young and middle age, who understand that they need to take responsibility, change the system, and not talk about changes and do nothing, without even making a decision to merge. Everyone wants change for the better, but not everyone is ready to take at least a step so that they take place. What does decentralization reform actually do? It brings opportunities. And they can be used in different ways.”


Worst of all, decentralization is progressing in Transcarpathia, where there are not even promising plans. Kirovoрrad, Kyiv, Odesa, Kharkiv regions are lagging behind. Good work in Khmelnytsky, Ternopil, Zhytomyr, Volyn, Rivne, Sumy, Chernihiv regions. Recently, the leaders were joined by Zaporizhia region.

Who needs pet UTC?

Not only the lack of understanding of the need for change on the part of citizens is on the way to implementing reform. Therefore, local landowners create pet UTC, appointing their own people as the heads. And the officials from the RSA, who “draw” long-term plans without taking into account the interests of society, but with an eye on private benefits, also harm. Yurii Bublyk, the Chairman of the Subcommittee on Local Self-Government of the Verkhovna Rada Committee on State-Building, Regional Policy, and Local Self-Government, told Opinion about the problems of the village of Kovalivka in Poltava region:

“A vivid example is our former head of the regional state administration, who was accused by NABU and who is now under investigation for corrupt practices (this is Valerii Holovko, dismissed by the President of Ukraine from the post of the head of the Poltava Regional State Administration in March 2019 on suspicion of participating in corruption schemes, probably damage to the state budget ‒ editor’s note). He created the UTC, where there are less than 2 thousand people. That is, the united society does not meet any standards of the Cabinet. And the goal is the same ‒ he has a house and 6 hectares of a forest there, and he wants to multiply this forest. If he had created a big UTC, he would not have had his own puppet leader there.”

NABU only opened a number of criminal proceedings against the former leaders of the Poltava Regional State Administration, but the issue still needs to be solved, the court must put the end to it. In the course of the reform, the question of the proper use of finance is acute.

“The created territorial communities received a huge replenishment of the budget, and very often they cannot use the funds, so the money remains on some deposit accounts,” Oleksandr Serhiyenko, the director of the City Research Institute, told to Opinion. “The problem is to be able to repair clubs, hospitals, schools, and begin a certain strategic development. For the communities to find their way and grow.”

The legislative framework for decentralization also cannot be considered satisfactory. Over the past six months, not a single law has been passed that would apply to this reform, except for the document on the State Budget, which dealt with its financial component. The work of the Parliament has become less effective due to the Presidential Election. But there is a hope that before the Parliamentary Elections, it will be able to vote for the necessary bills. Two key bills were pointed out by Ivan Lukerya:

“The first is the ‘Draft Law on the Basics of the Administrative-Territorial Structure of Ukraine’, which will actually open the possibility for the administrative completion of the reform. And the second is the ‘Draft Law on Amendments to the Law of Ukraine “On Local Self-Government in Ukraine’,” it provides that the community territories are approved by the Cabinet, not the Parliament. And this is right because administrative services are the powers of the executive branch. And new districts should be approved by Verkhovna Rada, these are its constitutional powers.”

Post-election life

There were 13 Soviet five-year plans. More precisely, on the ill-fated number 13, the USSR ceased to exist. And what future awaits Ukrainian decentralization? Is it an irreversible course of the state or the whims of certain leaders, which will change after the next elections? This year there are both Presidential and Parliamentary Elections, after the last, a new parliamentary structure will create new coalitions, a new government will be formed. If individual politicians seek to change the Constitution, it is possible that they will try to stop or alter the course of decentralization.

“The further process of decentralization depends on who will become the President, what kind of coalition we will have in the 9th convocation, what Government will form a coalition,” Yurii Bublyk, the People’s Deputy, confirmed. “Will we go to the polls in 2020 with administrative structure, or, I do not exclude, there will be a desire to return everything back, to cancel. Of course, I would like development to continue, voluntariness to end, experts should finally work, and communities should be balanced and competent.”

Anatolii Tkachuk does not exclude the fact that the process of decentralization can flow in another direction:

“When Mrs. Yulia (Tymoshenkoeditor’s note) was the Prime Minister, they accepted the first concept of local government reform, but it was not published. It was 2009. Therefore, there are fears that they will start to turn everything back. Not to mention the other candidates, who do not understand this, but want to make everyone happy. And for this, you need to have a budget resource in the hands. Where to get it, if not to take from the local government? So it was with Yanukovych. This unpleasant story can seriously hit the reform, although this is a big political risk for those, who want to do it.”

By Viktor Tsvilikhovsky

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