ASSESSMENT OF
INTERGOVERNMENTAL
RELATIONS AND LOCAL
GOVERNANCE IN THE
REPUBLIC OF
UZBEKISTAN
Prepared for
Prepared by
Peter Epstein
Matthew Winter
With
Central Asian Republics Local Government Initiative Phase II
United States Agency for International Development
Contract No. EEU-I-00-99-00015-00, Task Order No. 811
Munira Aminova
Andrei Makarikhin
Clare Romanik
The Urban Institute
February 2004
UI Project 06901-017
THE URBAN INSTITUTE
2100 M Street, NW
Washington, DC 20037
(202) 833-7200
www.urban.org
ACKNOWLEDGEMENTS
Preparation of this report has drawn on a variety of primary and secondary
sources. It could not have been completed without the patient, often surprisingly
frank assistance of many experienced Uzbekistanis working both inside and
outside of government to whom we are most grateful for their time, information,
and insights. Indeed, most information provided in this assessment has been
gleaned from interviews with these local observers, though in most cases the
authors endeavored to verify each fact at more than one interview. In the body of
the assessment, the authors have indicated where specific information is based on
interviews with a small number of people.
In respect to secondary sources, the chapter on Uzbekistan written by Kuatbay
Bektemirov and Eduard Rahimov as a contribution to the Open Society Institute’s
Local Governments in Eastern Europe, in the Caucasus and Central Asia:
Developing New Rules in the Old Environment served as a valuable point of
departure for understanding the complexities of local government in Uzbekistan,
which we have sought to elaborate further in this assessment. The present authors’
understanding of the structure of intergovernmental finance in the country
benefits from Alex MacNevin’s July and October 2003 reports for Bearing Point
on building oblast level revenue capacity and a draft works in progress by the
Center for Economic Research in Tashkent. A complete list of secondary sources
consulted is appended as Annex A to this report.
TABLE OF CONTENTS
ACKNOWLEDGEMENTS ..............................................................................................................i
NOTE ON TERMINOLOGY ..........................................................................................................v
ABBREVIATIONS ........................................................................................................................vi
I.
INTRODUCTION AND SUMMARY ................................................................................... 1
Assessment Scope and Purpose .................................................................................................. 1
Uzbekistan Local Governance in a CAR Perspective................................................................. 2
Some Distinctive Features of Local Governance in Uzbekistan ................................................ 4
Implications for USAID and Other International Donor Assistance .......................................... 8
II.
A VIEW THROUGH THE PRISM OF THE EUROPEAN CHARTER ........................ 11
III.
LEGAL FRAMEWORK: COMPOSITION AND STATUS ........................................... 29
IV.
TERRITORIAL STRUCTURE AND STATE ADMINISTRATION ............................. 34
Territoria l Administration: Three Tiers Plus One ..................................................................... 34
Dual Subordination and Functional Assignments..................................................................... 35
Other Examples Of Dual Subordination In The State Government Structure .......................... 39
The Court System and Judicial Oversight of Local Government Administrative Practices..... 40
The Status of Karakalpakstan ................................................................................................... 41
Tashkent City............................................................................................................................ 42
Conclusions ............................................................................................................................... 43
V.
LOCAL GOVERNMENT COUNCILS, CITIZEN’S SELF-GOVERNMENT BODIES,
AND RELATED GOVERNMENT-NGO HYBRIDS ................................................................. 47
Local Councils of People’s Deputies and State Executive Encroachment ............................... 47
Local Council Elections ............................................................................................................ 49
Legislating the Mahalla: Modernization of an Indigenous Institution or State Cooptation? ... 51
Town and Village Mahalla Coordination Councils .................................................................. 53
The Modern Day Mahalla as an Instrument of State Administration ...................................... 55
Mahalla Finances ...................................................................................................................... 57
The Problematic Relationship between Mahallas and Housing Association (TSJs)................ 59
The Mahalla Foundation and Hierarchy of Mahalla Coordinating Councils........................... 59
The Shirkat in Modern Uzbekistan........................................................................................... 61
Conclusions Regarding Local Councils of Deputies ................................................................ 62
Conclusions Regarding Mahallas ............................................................................................. 63
Implications for Technical Assistance ...................................................................................... 63
VI.
INTERGOVERNMENTAL FINANCE ........................................................................... 69
Macroeconomic Context for Local Government ...................................................................... 69
Transfers And Mutual Settlements ........................................................................................... 70
Shared National Taxes and “Local” Taxes ............................................................................... 70
Revenue Structure Of Provinces, Districts And Cities ............................................................. 73
Own revenues............................................................................................................................ 74
Reform Efforts in the Tax System ............................................................................................ 75
Expenditure Responsibilities .................................................................................................... 76
Conclusions ................................................................................................................................ 77
VII.
LOCAL BUDGETS AND FINANCIAL MANAGEMENT............................................ 79
The Budget Process................................................................................................................... 79
Budget Implementation............................................................................................................. 82
Discretionary Spending by Local Executives: The Reserve Fund, Privatization Proceeds and
Extra Resources......................................................................................................................... 84
Budgetary Entities’ Development Funds .................................................................................. 85
Treasury Functions .................................................................................................................... 86
Audits and Monitoring .............................................................................................................. 87
Conclusions ............................................................................................................................... 87
VIII.
URBAN SERVICE DELIVERY AND RELATED FUNCTIONS.................................. 89
Reorganization of the Communal Service Sectors ................................................................... 89
Rate-Setting In The Communal Service Sector ........................................................................ 90
Billing, Collections, and Financial Reporting........................................................................... 94
An Additional Note on the Water Sector.................................................................................. 95
An Additional Note on Solid Waste Management ................................................................... 96
An Additional Note on District Heating / Hot Water ............................................................... 97
An Additional Note on Housing Management and Maintenance ............................................. 98
Recap of Organizational and Budgetary Status of Communal Service Companies ................. 99
The Urban Transportation Sector.............................................................................................. 99
Local Governments and Social Protection.............................................................................. 101
Urban Property, Development Permitting, and Cadastral Records ........................................ 103
Conclusions ............................................................................................................................. 104
IX.
RELATED PUBLIC ADMINISTRATION TRAINING CAPACITY .......................... 108
The Presidential Academy ...................................................................................................... 108
Other Training Organizations ................................................................................................. 109
A Note on the Absence of Municipal Associations ................................................................ 109
X. RELATED INTERNATIONAL DONOR INITIATIVES ................................................. 111
Exhibit 1. Characteristics for Effective Decentralization and Local Self- Government………….12
Exhibit 2. Summary Listing of Key Documents Shaping the Legal Framework for
Intergovernmental Relations and Local Governance in Uzbekistan……………………………..30
Exhibit 3. Central Asian Republics: Number and Size of Second-Tier Jurisdictions…………...34
Exhibit 4. Uzbekistan Structure of Territorial Administration…………………………………..36
Exhibit 5. The Demographics of Territorial Structure in Uzbekistan……………………………45
Exhibit 6. Macroeconomic Context for Local Government (mln. so’ms)……………………….69
Exhibit 7. Local Government Revenue Sources…………………………………………………72
Exhibit 8. Distribution of VAT and PIT Tax Shares Among Provinces, District and Cities ....... 74
Exhibit 9. Revenue Structure of Provinces, Districts and Cities (% share of actual 2002
revenues)…………………………………………………………………………………………74
Exhibit 10. Local Government Expenditures by Sectors (percentage) ......................................... 76
Exhibit 11. Expenditure Structure by Type of Administrative-territorial Subnational Jurisdiction
(% share of actual 2002 expenditures)…………………………………………………………...77
Exhibit 12. Cost and Rates for Communal Services to Residential Customers, Tashkent City…94
ANNEXES
A. Bibliography of Relevant Articles and Reports
B. Legal Log of Legislation, Decrees, and Resolutions : Selected Acts, By Date
C. Abstracts of Selected Laws and Legal Documents: Related to Local Governance in
Uzbekistan, Prepared by Andrei Makarikhin
D. Summary of Related International Donor Programs
E. Legal Authority For Urban Transport Management In The Republic Of Uzbekistan (two
charts, one on law; one on functions)
F. Excepts from The Principle of Separation of Powers in the Organization of the Activities
of Local Government Institutions by Dr. X.I. Ruzmetov,
G. Communal Service Tariffs: Tashkent City, January 2004
H. Organizational Structures for Communal Services
I. Tashkent City and Tashkent Province Local Councils: Late February, 2004
NOTE ON TERMINOLOGY
In the interests of clarity and political correctness, the authors of this report decided to refrain from using
Russian-language names for administrative units, though these are still common in oral usage in
Uzbekistan. The Russian oblast, thus, is translated as “province” or rendered using its official Uzbek term,
viloyat. The Russian administrative unit, rayon, has two translations in Uzbek, nohiya and tuman; the
authors have translated it as “district”.
Terminology for self-government organs also deserves attention. Citizens’ assemblies, the basic unit of
self-government, can exist in mahallas (neighborhoods), villages, or even towns. Often, where a village is
made up of more than one mahalla, residents will belong to more than one citizens’ assembly.
(Alternatively, there may be no citizens’ assembly for the village level, just a mahalla coordination council;
or a village may not be formally divided into mahallas at all). The terms [local] self-government and
citizens’ assembly, therefore, are interchangeable. Additionally, mahalla is commonly used in local
parlance, even at the official level, to refer to citizens’ assemblies in general, rather than citizens’
assemblies only of the mahalla type; the authors have also adopted this convention (except where
otherwise specified).
Similarly, the mahalla committee and the kengash of the citizens’ assembly are one and the same, as are
the oqsoqol and the chairman (kengash) of the citizens’ assembly.
Hokims exist at the second- and third-tiers of administration; where clarification is needed, provincial
(second-tier) or district/city (third-tier) hokim is specified.
Local councils of people’s deputies, or simply local councils, are also referred to as kengash, but the
authors have endeavored to avoid using the Uzbek term here, so as to avoid confusion with kengashes of
citizens’ assemblies. They exist on both the provincial and the district/city level.
ABBREVIATIONS
Abbreviations used in the text of report:
ABA/CEELI
ADB
BTI
CAIP
CAR
CASP
CEE
CIP
CoM
CoP
EBRD
FSU
GAK
HITS
IRI
KEU
KRAVS
LGI
LGU
MoF
MoJ
NDI
NGO
NIS
OSCE
OSI
PIT
PO
RK
RUz
SME
TA
TKEO
TSJ
UI
UNDP
USAID
VAT
ZhEK
American Bar Association/Central European and Eurasian Law Initiative
Asian Development Bank ()
Bureau of Technical Inventory
USAID Community Action Investment Program
Central Asian Republics
Civic Advocacy Support Program
Central and Eastern Europe
Capital Improvement Plan
Cabinet of Ministers
?
European Bank for Reconstruction and Development
Former Soviet Union
State Stock Company (Russian- language acronym)
Partnership for Provision of Heating Services (Uzbek- language acronym)
International Republican Institute
Communal Services Operation Administration (Russian- language
acronym)
Local Maintenance Enterprise (Russian- language acronym)
Local Government Initiative
Local Governmental Unit
Ministry of Finance
Ministry of Justice
National Democratic Institute
Non-Governmental Organization
Newly Independent States of the FSU
Organization for Security and Cooperation in Europe
Open Society Institute
Personal Income Tax
Producers’ Union (Russian- language acronym)
Republic of Karakalpakstan
Republic of Uzbekistan
Small and Medium Enterprises
Training Activity
Territorial Communal Services Operation Union (Russian- language
acronym)
Housing Association (Russian- language acronym)
Urban Institute
United Nations Development Program
US Agency for International Development
Value-Added Tax
Housing Maintenance Office (Russian- language acronym)
GLOSSARY: INTERGOVERNMENTAL ORGANIZATION IN UZBEKISTAN
Note on Transliterations and Pronunciation:
In this assessment, the Urban Institute has used official Uzbek latinization for all proper nouns, place names and other transliterated terms, in accordance with the 1993 law “On
introduction of an Uzbek alphabet, based on Latin characters.” Only three place names, O’zbekiston, Toshkent, and Farg’ona, were rendered according to more widely recognizable
transliterations of the Russian, as Uzbekistan, Tashkent, and Fergana.
Several Uzbek Latin characters are pronounced differently than the corresponding English letters. Notably, x is pronounced as a hard, fricative h and is rendered as kh in
transliterations from Russian; likewise, the q is spoken as a thicker, more fricative k. O’ is pronounced approximately in the same way as the Turkish or German o with an umlaut.
The g’, or “soft g,” is considerably harder than its Turkish equivalent; treating it as a standard g will produce a pronunciation that is understandable. In other transliterations, g’ is
sometimes rendered as gh.
Aul
Guzar
Hokim
Hokimiyat
Kengash
Kotib
Mahalla
Mahalla kengashi
Nohiya
Oliy Majlis
Oqsoqol
O’zkommunxizmat
O’zuyjoyjamg’armabank
O’zsanoatqurilishbank
Posbon
Qishloq
Rais
Shirkat xo'jaligi (shirkat)
Tarbiyachi; tarbiya ishlar bo'yicha maslahatchi
TIF Milliy Bank
Tuman
Uy-joy mulkdorlari shirkati (shirkat)
Viloyat
Xalq Banki
??????? (? ????????????????)
????????, ?????????? ????? ?????? ??? ???????????? ??????
???; ??????????
?????; ???? ???????????
?????
????????? ????????????? ?????
???????; ????? ?????????? ????????? ? ?????????
???????????? ???????
?????
????????? ?????
???????????? ????????????? ?????
?????????????
???????????????
??????; ???????????? ?????
???????, ??????
???????????? ???????
??????
???????-???????????
???????????? ???? ???????????
?????
???????????? ????????????? ????? (??? )
???????
???????? ????
village (Karakalpak)
meeting house (where food is also served)
governor, mayor
governor's office, mayor's office
council
secretary of mahalla assembly
mahalla; neighborhood
mahalla committee
district
parliament
chairman of mahalla assembly
Uzbekistani Agency for Communal Services
Uzbek Real Estate Savings Bank
Uzbek Industrial Construction Bank
posbon; neighborhood guardian
village
Collective farm chairman
collective farm
education advisor
National Bank of Uzbekistan
district
housing association (TSJ)
province
The People's Bank
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
I.
1
INTRODUCTION AND SUMMARY
Assessment Scope and Purpose
This assessment addresses the basic legal institutional framework for sub national government in
Uzbekistan. It also describes how the central and respective local government tiers interact in
practice and, how, at the municipal level, government is organized and operates, most
importantly in respect to budgeting and the delivery of basic urban services. The assessment has
been prepared as part of USAID’s Local Government Initiative-Phase II (LGI-II), which operates
in four of the five Central Asian Republics, or CAR (Kazakhstan, Kyrgyzstan, Tajikistan, and
Uzbekistan), and which is now in the second year of its two- year term. In the other three
republics, LGI-II addresses a relatively broad agenda aimed at advancing a legal framework for
decentralization and at municipal capacity building. In Uzbekistan, the program focuses more
narrowly on the strengthening of housing associations (TSJs), which USAID identified as the
most promising initial window for demonstrating concepts of community-based governance and
transparency in this highly centralized political culture.
The scope of work for LGI-II called for this assessment during the second program year, “in
order to prepare for the possible expansion of the program activities into the area of local
government training and technical assistance…” The study’s primary purpose is to provide
background and analysis on existing realities in Uzbekistan as input into USAID’s thinking in
respect to the timeliness of such assistance, not to contribute directly to the design of any such
assistance itself. The authors hope that the report will also serve as an informational resource for
other parties interested in improving the effectiveness and responsiveness of local government in
Uzbekistan. Although the assessment does contain findings on specific weaknesses in the current
legal framework, institutional arrangements, and governmental practices, it does not aspire to
develop comprehensive and detailed recommendations for reform.
For the purposes of researching local government organization and operations in practice,
members of the study team met with informed national level observers (both inside and outside
government) and, in the field, with counterparts in the city of Olmaliq (Tashkent Province) and
in three LGUs in Andijon Province: the city of Andijon, the district of Xo’jaobod, and the district
of Buloqbashi. Interviews were also administered in Qirg’uli (Fergana Province) and Samarqand
City. Budgetary and financial information was collected during these field trips to provide
illustrative, city-specific data in more detail than was available from central government sources
in comparative form for all localities. The choice of LGUs for fieldwork was made, in part, to
include at least one from a poorer province (Andijon) heavily dependent on transfers from the
center and one from a province (Tashkent) that serves as a net donor of tax revenues to other
provinces. Given the limited number of jurisdictions visited, this assessment may not capture
variations that may occur in practice from one region of the country to another.
2
Central Asian Republics Local Government Initiative Phase II
Uzbekistan Local Governance in a CAR Perspective
Uzbekistan, in respect to both its governmental institutions and political culture, shares many
features that reflect their common legacy from years of Soviet rule in common with its Central
Asian neighbors. That said, in Uzbekistan, now well over a decade since independence, these
features still persist in a more unreconstructed form than in the adjoining republics.
Freedom House, in its most recent Nations in Transit annual compilations, places Uzbekistan
behind Kazakhstan, Kyrgyzstan, and Tajikistan in its numerical ratings for progress in respect to
Democratization, Rule of Law, and Economic Liberalization. It groups Uzbekistan alone with
Belarus and Turkmenistan as Consolidated Autocracies/Statist Economies, in contrast to the
other Central and Eastern Europe (CEE) and former Soviet Union (FSU) republics (including the
other CAR countries), which it characterizes as Transitional Governments and Economies and
selected CEE nations which it qualifies as Consolidated Democracies and Economies. 1 As will
be apparent from this assessment, a ranking on decentralization and movement towards more
accountable, democratic local governance would, by most measures, place Uzbekistan in the
same position relative to other CAR nations.
Some major features of intergovernmental arrangements and local governance in Uzbekistan that
would be familiar to students of other political systems in the region include the following:
1
•
Virtually all governmental authority resides in a highly centralized state administration,
which operates through several tiers of sub national executives (known as hokims).
Hokims are appointed from above, based on loyalty to the president, and are judged, in
large part, on their compliance with policy directives handed down from Tashkent. As
such, they operate, in practice, with no direct accountability to local constituencies or
their elected representatives.
•
The legislative and judicial branches within this territorial system remain passive and
largely irrelevant to the day-to-day functioning of local government. Local councils,
though freely elected in theory, rarely, if ever, exercise what limited independent
discretion they have been granted in law. For example, no one interviewed for this
assessment could recall a council refusing to ratify the appointment of a hokim. Councils
convene infrequently for brief sessions (as a rule, only those legislatively mandated,
twice a year)—too seldom to exercise any real oversight over the executive or to act as
true deliberative or even consultative bodies.
•
Despite some progress in delimiting functional responsibilities, the ambiguous and
pervasive dual subordination of functions between central ministries and local
administrations persists in a variety of forms, some legislated and some de facto. Distinct
centralized hierarchies, such as the territorial administrations (hokimiyats), the Tax
Inspectorate, the Ministry of the Interior and the Office of the Procurator, both compete
and collaborate for influence in crucial local sectors.
Karatnycky, Adrian. Nations in Transit 2002 and Nations in Transit 2003, Freedom House
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
•
3
At the local level, the boundary between public and private remains murky. (For
example, the major responsibility of hokims in many cotton-growing regions is
mobilizing labor for the annual harvest.) Moreover, as in most former Soviet republics,
basic urban services (water, gas, and solid waste removal) have been entrusted to public
enterprises—but without the clear delineation of regulatory, operational, and investment
responsibilities among enterprise itself, local government, and national line ministries
that would allow these services to be delivered on a businesslike and accountable basis.
The Semantics of “Local Self-Government”: Some Distinctions among the CAR
In the legal and political parlance of Central Asia, “local government” refers to all subnational levels of
government. Counterparts in each of the CAR perceive “local self-government” or “citizens’ selfgovernment” as operative legal concepts and institutional realities in their respective countries—and
distinguish it from “state administration or power”. As detailed in Chapter Two, in none of the CAR would
these concepts/realities, when viewed as a whole, satisfy even minimal threshold criteria for “local selfgovernment” as the term is understood in the West. Moreover, there are also some subtle distinctions in
respect to how the term is used among the CAR themselves.
Kazakhstan
Executive entities (akimiats) and councils at city, rayon, and oblast levels are all “state power” and are
governed by the local state power legislation.
Designated akims in rural jurisdictions and rayon-subordinate cities are viewed as extensions or agents of
the local state administration in rayons.
Some block committees remain (as a hold-over from Soviet times), which are considered “local selfgovernment” or “territorial self-government”.
Kyrgyzstan
Councils of all subnational levels are considered “local self-government”. (Note: a change in status of
rayon and oblast councils is in the early stages of consideration.)
State administrations exist at the rayon and oblast levels. “Mayor's Offices” are executive entities for
republican and oblast significant cities. They are considered “local self-government” but with some state
administration functions
Administrations in rural jurisdictions and rayon significant cities are termed “local self-government”.
The term “territorial local self-government” refers to block (mahalla in the south) committees, housing
committees, and other community-based organizations.
Tajikistan
Councils and executive entities in all cities, rayons, and oblasts are “local state power”.
Rural village governments (jamoats) are considered local self-government, though the chairperson is
appointed by the rayons and the councils are relatively ad hoc bodies chosen by a show of hands at
village assemblies.
Tajikistan is currently grappling with the legislative definition of mahallas (block committees).
4
Central Asian Republics Local Government Initiative Phase II
Uzbekistan
Councils and executive entities in all provinces, districts and major cities are “local state administrations”.
Citizens’ assemblies (mahallas) are considered “local self-government”.
Some Distinctive Features of Local Governance in Uzbekistan
In relation to adjoining republics, several features of local government structure and functioning
that are relatively distinctive to Uzbekistan merit highlighting:
Relatively Little Attention to the Legal Framework and Few, Even Rhetorical Expressions of
Interest in Decentralization.
The basic framework for local governance in Uzbekistan was set in the 1992 Constitution and
elaborated shortly thereafter in three pieces of legislation: a law on local state administration
(1993), a law on the election of local councils (1994), and a 1993 law on citizens’ selfgovernment institutions (for towns, villages, and mahallas). Since then, there has been relatively
little attention paid to this framework, and, at present, no active interest within high government
circles in re-examining in any fundamental way the laws that govern intergovernmental relations.
(One exception worth noting: In 1999, the law on citizen’s self- government was replaced by a
new version that augmented the role of mahallas as agents of the state, part of an ongoing postindependence tendency towards legislation of the mahalla so as to increase its formal role in
governance.) By contrast, Kyrgyzstan has made some significant steps in the direction of
decentralization (direct election of some mayors; a local government finance law); in Tajikistan a
presidential working group with USAID and other donor assistance is actively considering some
measures to strengthen self- government at the lowest tier of village (jamoat) governance; and in
Kazakhstan, in the past year there have at least been parliamentary hearings on “local
government concepts” prepared by various interested parties, including oblast akims and at least
one independent think tank—albeit, with no likely prospect of any real decentralizatio n initiative
emerging from this effort.
Note should be made that President Karimov, in at least one major address to the Oliy Majlis, has
made a commitment to continued deconcentration within the state administration and some
further empowerment of “self- government institutions”. However, as of yet, there is no
indication of any organized effort to translate this intent into a concrete strategy for
deconcentration (not to mention, movement towards actual decentralization of any kind). 2
2
Deconcentration refers to the transfer of functions to lower levels within the national government. By contrast,
decentralization connotes a transfer of power and functions (“devolution”) to units of subnational government that
are democratically elected and truly autonomous from the central government.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
5
Excerpt from President Karimov’s Address to the Ninth Session of the Oliy Majlis, August
29, 2002
“It is necessary to provide for a gradual, phased transfer of central powers and functions from
higher state organs to lower state bodies and citizens’ self- government institutions.
In essence, we have already set off on this journey. Local budgets today already make up 56
percent of the revenue side of our country’s budget and 52 percent of its expenditure side. Thus,
the majority of revenues and expenditures are under local control—and all issues of governance
are determined by finances. And it is crucial that this process develops and takes root, acquiring
specific, efficient manifestations and set procedures.
We must always remain focused on issues of development and strengthening citizens’ selfgovernment institutions—the mahalla, various social organizations and citizens’ bodies.
It is, therefore, imperative that we amend the Law on Social Organizations and work towards
passage of laws on social funds, on unions and associations of non- government, non-commercial
organizations, and on charitable activities.”
At present, efforts are underway to introduce a modern treasury system and rationalize the tax
system. While these initiatives may contribute to the smoother functioning of the
intergovernmental finance system in some constructive ways, they do not aim at increasing local
fiscal discretion and self- sufficiency.
The Demise of District -Subordinated Cities and Urban Districts: Re-concentration within the
State Territorial Administration.
The formal state structure consists of three distinct levels or tiers: the republican level (first tier),
the viloyat-, or province- level (second tier), and the nohiya/tuman-, or district- level (third tier).
In addition to Uzbekistan’s twelve provinces, the second tier viloyat-level encompasses Tashkent
City, the capital and only city of republican subordination, as well as the autonomous Republic
of Karakalpakstan. The third tier district- level also includes citie s of provincial subordination
and Tashkent City’s own urban districts. Below the third tier exists a weak, de facto “fourth tier”:
cities of district-subordination (under caretaker deputy district hokims), plus towns and villages
(for which the main governing structures are citizens’ assemblies and their mahalla coordination
bodies, as well as, in some places, appointed executive branch administrative representatives).
In a move in the direction of re-concentration, a 1996 presidential decree abolished the
administrations of cities of district subordination, absorbing them into third-tier administrative
units. Uzbekistan’s 203 urban settlements, along with nearly 1,500 rural settlements (some of
them quite sizable) have no hokim, council of deputies, or budget of their own. In December of
2003, another presidential decree provided for the integration of fourth-tier urban districts into
their respective city hokimiyats, eliminating the last remaining formally fourth-tier state
structures in the Republic.
6
Central Asian Republics Local Government Initiative Phase II
Some De-concentration in the Urban Services Sector.
In recent years, within the state administrative structure, there has been some meaningful deconcentration, particularly in respect to the delivery of communal services and urban transport.
This has not translated into any significant increase in transparency or introduction of a more
consumer-service-oriented ethic in the provision of basic public services. It does mean, however,
that decisions on tariff policy, investment, and operations are being made within the hokimiyats
at the provincial and, in some instances, city level, with some lessening of the dual subordination
to national level ministries. Within the sub- national tiers, any meaningful deconcentrated
authority resides, for the most part, in the second-tier, provincial level hokimiyat, still at quite a
distance removed from the citizens who look to government for reliable and affordable services
to be delivered within their respective communities. All capital expenditures and budget transfers
to urban utilities are programmed at the provincial level.
Virtually all multi- unit housing has been privatized and organized into housing associations
(TSJs), with the intent of transferring housing management and maintenance responsibilities
from local government to owner-occupants. However, these TSJs are unwieldy in size (as a rule,
consisting of many buildings), far too large to allow, in practical terms, for democratic
management. Moreover, government communal service entities tend to dictate fees for
management and maintenance, and provide maintenance and repair services on a monopoly
basis. Efforts to redress these problems are the focus of the present USAID LGI-II program in
Uzbekistan, alluded to above.
Transformation of the Mahalla into a Governmental Entity.
As in other historically non-nomadic regions of Central Asia [Tajikistan; southern Kyrgyzstan] the mahalla
persists as a form of social organization at the neighborhood level with roots in traditional family and
Islamic culture.
Uzbekistan is unique in Central Asia in the extent to which the government has acted to co-opt
the mahalla as an agent of state administration and control—including a role in the collection of
some communal service fees, in maintaining community order, in issuing various documents and
collecting statistics, in allocating family assistance, and in implementing other aspects of social
policy. This phenomenon has recently attracted attention and some critical comment from the
international community. Though the Law on Citizen Self-Government provides for the selection
of mahalla leadership through periodic meetings of citizens’ assemblies, by all reports it is the
local hokims who recruit the mahalla chairmen (oqsoqols). Truly democratic meetings of
citizens’ assemblies play little real role in the process.
At the same time, it should be noted that a number of USAID and other donor programs have, in
recent years, worked directly with selected mahallas to introduce concepts of community-based
development and advocacy. Managers of several of these donor projects, who were interviewed
for this assessment, indicate that they have found individual oqsoqols and mahalla committees
who are constructively engaged with and quite responsive to their respective mahalla
constituencies.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
7
LGUs Account for More than Half of Consolidated Government Revenues and Expenditures;
Subsidized LGUs Retain All Revenue Collections from Significant National Taxes.
Local governments in Uzbekistan find that their budgetary resources are meager in relation to the
need to maintain basic services, not to mention the challenges of upgrading infrastructure after
years of neglect. That said, local governments receive a significant and growing share of
government revenues from taxes and fees. LGU expenditures as a percentage of consolidated
government expenditures rose from 51 percent in 2000 to 63 percent in forecasts for 2003. This
suggests that local governments hoping to augment their resources must hope for some improved
ability to increase their own revenue-raising capacity and/or some improvement in overall
macroeconomic conditions, rather than looking to increasing their share in government revenues.
(Note: The central government finances its own operations in large part through its control of the
sale of cotton, natural gas, metals, and other commodities.)
Eight of the country’s 14 province- level LGUs receive general budgetary support in the form of
transfers, with the others, most notably Tashkent City, serving as reve nue donors. A strikingly
large percentage of important national taxes are retained at the local level—100 percent of the
VAT, personal income tax, and enterprise profit tax for the eight subsidized provinces alluded to
above.
The Current System Does Not Promote Good Financial Management
The current intergovernmental finance system (which combines differential tax shares set in the
annual budget law, general fiscal-gap closing transfers, temporary loans among tiers, and behind
the scenes mutual settlements) is undesirable from the perspective of efficient, transparent and
equitable public financial management. Although the Tax Code distinguishes between “national”
and “local taxes”, both the rate and base for all important taxes is set by the Cabinet of Ministers
(CoM), with little discretion to build revenue capacity at the local level or to consult with
taxpayers themselves in balancing tax burden with service quality. Countrywide, provinces and
districts depend on national taxes and budgetary transfers fo r approximately two-thirds of their
revenues, with the balance from local taxes and fees. By contrast, cities obtain roughly twothirds of their resources from own-revenues. 3
Overall, the budget preparation and implementation process is a rigid and hierarchical one, with
the size of the budget and line items largely determined by applying coefficients to historical
expenditure data (rather than through any thoughtful process that allows for setting priorities in a
strategic manner). A small provincial hokim’s reserve fund, extra-budgetary resources, and nontax income (e.g., from fees or rent) allow local executives some, albeit quite modest,
discretionary spending. Perhaps the most important source of discretionary funds comes from an
LGU “over-fulfilling the revenue side of the budget”, which creates a perverse incentive to
underestimate revenues.
Little Clarity in Functional Assignments, Especially Below the Province Level.
3
For the purposes of these comparisons, Tashkent City has been grouped with other cities rather than with provinces
and districts.
8
Central Asian Republics Local Government Initiative Phase II
Some assignment of functions between central and local governments in the aggregate can be
found in the 2000 Law on the Budget System and other legislation, but no law spells out
functional delineations among province, district, city, and local self- government institutions.
Below the province level, the available budget data suggest that health and education dominate
the expenditure side of the ledger.
Special Institutions of Note: The Mahalla Foundation and the Presidential Academy.
Mention should be made of two special institutions that could be further assessed as prospective
partners in any international donor initiative in the local governance arena. The Mahalla
Foundation has the appearance of an NGO but is officially sanctioned by the government. It
presides over a republic-wide hierarchy of offices or affiliates that extends down to the
neighborhood level. The Presidential Academy is a prestigious institution that offers mid-career
training for senior officials. The Andijon Hokimiyat is unique (according to interviews) in
maintaining its own training academy for local government personnel. At the present time, there
is no form of municipal association in the country.
Reorganization of Agricultural Sector Adds to Local Government Responsibility for Services
to Rural Populations.
In rural areas, the Soviet-era collective farms (kolkhoz) have been reconstituted as shirkat
xo’jaligi. As part of this transformation, social infrastructure and related services (e.g., schools,
medical facilities) once maintained by the collective farms have been transferred to local
governments, ge nerally at the district level.
Implications for USAID and Other International Donor Assistance
As can be surmised from the above, present-day Uzbekistan does not represent a hospitable
political environment for promoting decentralization (and its concomitant values of transparency,
responsiveness, and accountability). At the same time, international advisers to the Ministry of
Finance report some high- level recognition that the system of intergovernmental budgetary
relations is flawed, some likely receptivity to looking at new local revenue sources, and some
increased transparency in fiscal relations between the central and local levels. Moreover, one
can, no doubt, find individual local executives willing to take some initiative on their own and to
experiment with new methods of local service delivery—if only because, in the absence of clear
guidance and sufficient resources, they at times find they have no choice other than to act using
whatever means they find available. Note should also be made that there are respected academics
and professionals that have publicly advocated for decentralization and think tanks that are
studying aspects of intergovernmental finance with an eye to improving the current system. (See
box on next page.)
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
Dr. X.I. Ruzmetov writing in Law, the legal journal of the Ministry of the Interior
9
4
Thus, there is a rigid hierarchy, which restrains the initiative of the population’s local institutions in
development of local self-governance. The approval of hokims by local representative institutions is
ineffective. With an undeveloped civil society, weak political parties, and an imperfect electoral system (in
which the link between deputies and the electorate is inconsequential), representative bodies cannot
embody true representation of the people, cannot take their crucial place in the system of separation of
powers.
Should USAID or another donor conclude that a more broadly conceived program for local
government reform in Uzbekistan would be timely, one option would be to incorporate elements
of the current LGI-II program as it has operated in other CAR republics. Assuming that
responsive local hokims could be identified as partners, such a program would combine training
and TA for pilot projects on selected municipal governance topics, with some efforts to
encourage and demonstrate the ability of mahallas and local NGOs to advocate community
interests with local authorities, and support for think tanks and other NGOs which might have
some ability to at least initiate a policy dialogue on approaches to making government work
better at the local level.
However, in the near term, it might make more sense to look for more narrowly defined program
opportunities that would build upon the current LGI work in Uzbekistan with housing
associations and to take advantage of other donor investments already being made to the
communal service sector. Three such opportunities are briefly described in the body of this
assessment.
1. Explore options for using better targeted social protection subsidies
[[AUTHOR: Is this “better-targeted social protection subsidies” or “better targetedsocial-protection subsidies? ]]
to increase the political feasibility of putting urban utility services on a more
financially self-sustaining basis. Such an initiative could also be combined with
technical assistance in terms of improved cost accounting, rate setting, and other
management practices for selected urban services. Here there might be opportunities to
link up with one or more of the other donor projects (ASB, World Bank, EBRD, or the
Swiss government) that are providing capital resources for water/wastewater, district
heating, and urban transportation infrastructure improvements. (See conclusions section
of Chapter VIII.)
4 Ruzmetov, Xayrulla Ibadullayevich. “Printsip Razdeleniia Vlastei v Organizatsii Deiatel’nosti Mestnykh Organov
Gosudarstvennoi Vlasti.” Huquq. #2, 2003. Academy of the Ministry of Internal Affairs of the Republic of
Uzbekistan.
10
Central Asian Republics Local Government Initiative Phase II
2. Promote improved interrelations between local self-government institutions (mahallas)
and housing associations (TSJs). This initiative would look to provide legislative and
practical clarity to the relationship (now a quite troubled one) between these, the two
most important truly local institutions within the cities of Uzbekistan. (See conclusions
sections of Chapter V.)
3. Promote more democratic and accountable governance practices within mahallas, the
one existing level of self- government that is recognized as such in legislation. Given that
the mahalla has become a somewhat compromised institution in the eyes of the
international community, the merits of any such initiative would have to be assessed with
a degree of skepticism. Perhaps a first step would be survey work to see if one could
identify a subset of mahallas, no matter how small, that appear to be functioning, in some
important respects, as genuinely representative bodies. A particular focus of such a
survey might be the conduct of the recent (November-December, 2003) mahalla
elections. (Also see conclusions section of Chapter V.)
Among the three options above, the first would require the largest commitment of resources
in order to mount an effective new initiative. The second option would require the least and
could easily build on existing LGI-II activities in Uzbekistan.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
II.
11
A VIEW THROUGH THE PRISM OF THE EUROPEAN CHARTER
Nine of the fifteen former Soviet Republics are formal signatories of the European Charter of
Local Self-Government, perhaps the most widely cited embodiment of decentralization
principles, but none from among the five CAR. Exhibit 1 below compares Uzbekistan with four
other transitional countries (Kyrgyzstan, Tajikistan, Albania, and Slovakia) in respect to “Basic
Characteristics of Effective Decentralization and Local Self- Government” drawn largely from
the Charter itself. The chart (without an Uzbekistan column) was initially prepared about a year
ago by one of the authors for a similar assessment in Tajikistan. 5 Tajikistan is of interest for
comparative purposes based on several similarities alluded to above (a traditionally settled as
opposed to nomadic culture, the common socio-cultural phenomenon of the mahalla, and
reliance on a government controlled cotton monoculture as a mainstay of public finance).
Kyrgyzstan was included because, among the five CAR, it has perhaps progressed the furthest in
respect to attaining a measure of genuine municipal autonomy in terms of at least a few key
measures (e.g., direct election of most local chief executives; a nascent, relatively independent
municipal association). Albania and Slovakia are two relatively small countries that, for several
years already, have undertaken relatively well-organized multi- year processes, first, to develop a
decentralization strategy with stakeholder participation; second, to translate this strategy into
legislation, implementing regulations and related initiatives.
The chart itself groups sixteen basic characteristics under broader five categories:
—
—
—
—
—
Independence of Local Government Formation
Local Government Functions
Local Government Financial Resources and Management
Relations with Central Government
Other External Relations
In respect to the sixteen basic characteristics listed, it is clear that, with a few exceptions,
Uzbekistan does not comply in law or practice; even in respect to the exceptions, the situation is
at best ambiguous. Taken as a whole, the findings summarized in Exhibit 1 confirm Uzbekistan
has yet to take any steps down the road towards developing effective local government
institutions and practices that conform to the norms of modern democratic, market-oriented
government (as embodied in the European Charter). Progress in this direction would require a
commitment to thoroughgoing legislative reform, capacity building, and public education over a
number of years.
5
Marilynne Davis, et. al., Assessment of Intergovernmental Relations and Local Governance in the Republic of
Tajikistan, The Urban Institute, 2003.
12
Central Asian Republics Local Government Initiative Phase II
Exhibit 1. Characteristics for Effective Decentralization and Local Self-Government 6
The Current Situation In:
Characteristic
Uzbekistan
Tajikistan
Kyrgyzstan
7
Slovakia
Albania
YES. Const. § 69.2 The
municipality’s
inhabitants permanently
residing therein elect
their municipal
representatives for a
four-year term. Elections
of the representatives
are performed on the
basis of universal,
equal, and direct
suffrage by secret ballot.
YES. LG Law, Chapter 2—
Local Government Units,
Article 6, Paragraph 4:
“The representative organs
in communes and
municipalities shall be
elected through general,
direct election and secret
voting” and paragraph 5:
“The members of Regional
Councils shall be selected
from the councils of the
municipalities that
8
comprise the region.”
(That is, regional councils
are indirectly elected, as
per the Constitution.)
INDEPENDENCE OF LOCAL GOVERNMENT FORMATION
Local councils are
democratically
elected.
Elections are free;
conducted by secret
ballot; and based on
direct, equal, and
universal suffrage.
[ECLSG Article 3.2].
Note: In practice, the
nomination of council
candidates based on
party lists tends to result
in de facto selection of
the council members by
central government
officials or party
leaders. Nomination by
local petition, with
council members
elected at-large and/or
NOT FULLY. According
to the September 2003
version of the Law “on
Elections to the
provincial, district and
city councils (kengash)
of people’s deputies”,
local council elections
are free, direct, and
conducted through
secret ballot; suffrage is
universal (Article 1).
The law itself, however,
contains provisions that
seriously undermine
these tenets, giving
electoral commissions
and the deputies
themselves ample
opportunity to collude
and manipulate
NOT FULLY. Elections
to regional and district
councils are free;,
conducted by secret
ballot; and based on
direct, equal, and
universal suffrage. (The
Law “On Elections of
Deputies to the Local
Council”). Deputies are
elected directly by their
citizens [territorially
based]. Ninety percent
of current council
members ran as
independents, but the
local executive
executed some
influence over the
registration/selection of
candidates.
YES. Elections are held
to councils at all tiers of
government. Neither
party lists nor significant
role of parties. [[…is
evident?]]Elections to
councils are contested,
but not very heavily,
due to the perception of
lack of influence.
The position of head of
administration and
chairperson of councils
in rural municipalities
and rayon [[significant
?]]are combined. Open,
direct elections are held
for this position.
Councils of all other
subnational jurisdictions
have a chairperson who
LG Law 346/1990 about
election to local selfgovernment:
§ 1 Elections into the
Bodies of Local SelfGovernment are
performed on the basis
of universal, equal, and
6 Jaroslava Zapletalova, Institut Byvania, provided input for the Slovakia column. Information for the other country columns was prepared with assistance from
Urban Institute staff working on local government in those countries.
7
The Law on Organization and Functioning of Local Government (No. 8652, dated July 31, 2000) will be referred to as LG Law.
8
In Albania, communes and municipalities comprise the basic level of local government. Regions comprise the second level of local government.
13
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
on a neighborhood
district basis is
preferable.
The local chief
executive is selected
at the local level.
The chief executive is
either elected directly by
the citizens or is
appointed by the local
council. With the
exception of conviction
for criminal wrongdoing,
the body that selected
him/her can only
remove the executive:
by a recall vote in the
elections. (Article 41)
The electoral districts
they create can include
as few as 20 people
(Article 8), and councils
can vote to remove their
own deputies (Article
44). Anecdotal evidence
indicates that, not only
are elections
manipulated at every
stage, but the electorate
tends to not even know
of the existence of local
councils. These factors
result in the packing of
local councils with de
jure or de facto state
appointees, which
serves only to
underscore the unitary
power structure.
Members of jamoat
councils (local selfgovernment bodies) are
not formally elected, but
delegated by village
communities (usually by
voice vote), and they
may change from
session to session.
NO. According to the
1993 Law “On local
state government”,
second-tier hokims are
appointed and
dismissed by the
president and lower-tier
hokims by the hokim
directly above them
(Article 2; see also
Article 102 of the
Constitution). Local
councils may reject a
candidate in theory, but
NO. In accordance with
the Constitution,
Chapters 4 and 6,
Articles 69 and 78, the
local chief executive is
designated and
dismissed by the
president, who submits
the candidatures for
approval to the relevant
councils of people’s
deputies. Councils have
a right to refuse a
candidate and the right
is separate from the
head of the
corresponding
administration.
On all levels, chiefs of
the executive branches
are at the same time
chairmen of the
representative
assemblies.
direct suffrage by secret
ballot.
§ 16.1: Candidates’ list
for the elections to the
local government are
submitted by the
political parties,
separately for each
election district and
independent candidates.
§ 16.9 The independent
candidate must submit a
petition signed by
citizens supporting his
participation in the
process.
YES. Chief executive in
467 village governments
and 12 city governments
directly elected. Ten
cities have chief
executives elected by
council from multiple
candidates proposed by
president. Direct
elections were held in
December 2001, which
were sharply contested
in many cases, basically
free and fair, and led to
YES. Const § 69.3 The
mayor of a municipality
shall be elected by the
municipality’s
inhabitants residing
permanently therein on
the basis of a universal,
equal, and direct
suffrage by secret ballot
for a four-year term. The
municipality’s mayor
shall be the executive
authority of the
municipality; the mayor
YES. LG Law, Chapter 2—
Local Government Units,
Article 6, Paragraph 4:
“The executive organs in
communes and
municipalities shall be
elected through general,
direct election and secret
voting” and Paragraph 6:
“The Chairman and Board
of the Regional Council
shall be elected by the
members of its Regional
Council.” (Also see Article
14
Central Asian Republics Local Government Initiative Phase II
case of an elected
executive or by vote of
the council when
appointed.
this does not occur.
to request dismissal;
however anecdotal data
says that it has never
happened.
Local self-government
authorities should “be
able to determine their
own internal
administrative
structures in order to
adapt them to local
needs and ensure
effective management”.
[ECLSG Article 6.1] In
particular, local
government decisions
on the numbers and
type of local employees
and their salaries should
not be subject to central
government mandates.
NO. Staffing structures,
levels, and wages are
set by resolutions of the
Cof M and underscored
by the highly-centralized
budget structure.
NO. Staffing levels and
wages of oblast, rayon,
and city governments
are set by the national
government. Staffing
levels of jamoats are set
by the council or council
chairperson from the
next higher tier of
subnational
government. Oblast
department heads have
a dual subordination to
the local executive and
to the central
government agency
responsible for that
sector or service.
Rayon and city
department heads have
Any flexibility achieved
in practice occurs only
in spite of rigid centrally
imposed frameworks,
often by cannibalizing
subordinate structures
and diverting human
resources earmarked for
one sphere of activity to
another.
a high (44 percent)
turnover of local heads
of government.
However, many local
service delivery
functions are
undertaken by local
state administrations,
the heads of which are
part of a ”vertical of
power”’ up to the
president and his
appointed prime
minister. The heads of
local state
administrations are not
accountable to the local
population in any
meaningful way.
NO. Staffing levels and
wages are highly
regulated by national
government resolutions.
There is draft legislation
on municipal civil
service and functional
assignments that would
provide for greater local
autonomy on
administrative structures
shall be responsible for
administration of the
municipality, and shall
represent the
municipality externally.
Reasons for and
manner of recalling
a mayor before
termination of his
electoral term shall be
laid down by the law.
42, Dismissal of the Mayor)
YES. LG Law on
Municipal
Representation § 11.4.i
Local government
decides about basic
issues relevant for the
municipality, including
the organization of the
municipal office.
§ 16.3 The work of
municipal office is
organized/structured by
the mayor.
YES. LG Law, Chapter
3— Rights of Local
Government, Article 8,
paragraph 1: “Local
governments can create
administrative structures to
carry out their functions
and exercise powers, in
compliance with the laws in
force.” At the municipal
level, local government
employees now come
under pay scales similar to
the national civil service,
which serve as caps. Staff
of communes are not part
of the local civil service
system.
15
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
a dual subordination to
the local executive and
to the oblast department
head responsible for
that functional category.
LOCAL GOVERNMENT FUNCTIONS
The assignment of
functional
responsibilities and
expenditures is based
on the “Subsidiary
Principle”. This means
that, wherever practical,
the responsibility for
performing a function
should be assigned to
the lowest tier of local
self-government closest
to the citizens capable
of performing that
function effectively.
Assignment to a higher
level should be based
on overriding
considerations of
economy, efficiency, or
other national interest.
[ECLSG Article 4.3] If
this principle is followed,
the result should be that
local self-governments
should “have the right
and ability to manage a
9
NO. “Fourth-tier”
territorial units (cities of
district subordination,
towns, and villages) do
not have their own
budgets (even their
expenditure estimates,
unlike in other CAR,
include only expenses
for administrative staff
and sometimes for
beautification activities).
Formal responsibility for
performing certain
functions is
deconcentrated, but little
meaningful autonomy is
transferred to lower
levels. In particular,
most elements of
economic policy are
centrally determined.
Social policy is the most
deconcentrated but is
also poorly funded and,
generally speaking, is in
a state of crisis.
NO. While many
functions are
deconcentrated, the
local chief executive,
who is appointed from
above, is directly
responsible to a higher
level of government and
does not have real
authority to make
decisions about how to
carry out these
functions. Furthermore,
9
the LSPLP and LSGST
inadequately delineate
functions and authorities
across tiers of
subnational
governments. Sectoral
laws also create
confusion with the
overlapping of tasks
between the central and
local levels.
NO. Functional
assignments are vague
and contradictory in law
(Arts. 9, 16 and 61 in LG
Law). There is no
reference to subsidiarity
in current law.
Assignments de facto
follow the allocation of
budget revenues in
which higher levels of
government decide on
targets for successively
lower levels of
government. A new
local government
finance law and pending
draft legislation on
functional assignments,
if properly implemented,
will establish the
principle of subsidiarity
and clarify assignments.
In most cases local selfgovernments on an ad
hoc basis manage a
substantial share of
NOT YET. The
subsidiary principle will
be realized in the
second stage of
decentralization, which
is planned to be
completed by January 1,
2005.
YES. LG Law, Chapter
1—General Provisions,
Article 4, Paragraph 2:
“The relationship between
Local Government levels
and Central Government,
and between the local
government units
themselves will be based
on the principle of
subsidiary and
collaboration for solving
mutual problems.”
(Subsidiary is earlier
defined in Article 2 –
Definitions).
In Tajikistan the operational local government laws are the Law on State Power at Local Places (LSPLP) and the Law on Self-Government in Settlements and
Towns (LSGST).
16
substantial share of
public affairs under their
own responsibility.”
[ECLSG Articles 3.1].
The assignment of
functional
responsibilities
(expenditures) is clear.
Note: In practice this
involves clear
distinctions among core
functions at the local
level (i.e., those
mandated and
performed by all, those
that may be delegated
by or shared with a
higher level of
government, and those
that are discretionary). It
Central Asian Republics Local Government Initiative Phase II
public affairs
Furthermore, the main
overriding feature of the
governmental structure
in Uzbekistan is the
executive hierarchy,
with each successive
lower level appointed by
the tier immediately
above it. Additionally, an
act of a hokim or local
council can cancel any
acts of lower-tier
institutions
The vast majority of
local expenditures must
go through the
consolidated state
budget, which is
essentially a product of
central organs.
NO. The consolidated
state budget is generally
quite explicit in respect
to specific expenditure
responsibilities. Despite
this, division of
responsibilities in many
spheres is often ad hoc
and illogical. These
assignments are not
embodied in more
durable parliamentary or
administrative law, and
thus are subject to
custom or arbitrary yearby-year variation.
Where fundamental law
NO. Same as above. It
is also unclear who
owns many key service
facilities such as water
pipes, gas lines, and so
on. Responsibility is
further confused by a
lack of clarity on
responsibility and
management of joint
stock companies and
the role of local
government (if any) in
these services.
NO. See above. In
addition “dual
subordination” of local
budgetary bodies (to
both the local selfgovernment and various
central government line
ministries) confuses
functional
responsibilities.
YES. LG Law § 4.1
Section 3, The
municipality has specific
tasks identified herein
which creates a
sufficient framework for
undertaking initiatives
and performing selfgoverning activities.
In 2001, Law No. 416
/2001 on Transferring
Competencies from the
State Government
Institutions to the
Municipalities and
Higher Territorial Units
YES. Exclusive, shared
and delegated functions
are defined in Chapter IV
of the LG Law —Function
and Competencies of
Commune, Municipality
and Region. The GoA has
determined that a multiyear, sector-by-sector
review is necessary to
determine the respective
roles of municipalities and
communes, regions, and
the central government for
each of the shared
functions. This is complete
for water/wastewater and
17
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
also means that for
each basic service, it is
clear who actually
manages the service on
a day-to-day basis, who
builds needed facilities
and infrastructure, who
finances it, and who
provides standards and
regulates it.
does distinguish central
versus local roles (e.g.,
standard-setting as
opposed to rate-setting
or administration),
emphasis is placed on
the division with the
provincial level, not
between provinces,
cities, towns, and
villages.
was adopted. The law
identifies these areas
(20 areas of
competencies).
anticipated to begin this
year for primary/secondary
education, primary health
care, and social
assistance.
YES. LG Law § 4.1
Municipality and higher
territorial units are
responsible for
performing their tasks
from their own budgets.
For performing the state
administration tasks
they do acquire funds
from state budget.
(According to Law No.
303 on Budgetary
Rules).
YES. LG Law, Chapter
5— Local Government
Finance, Article 15,
paragraphs 3 and 4:
“Through law, communes
and municipalities are
empowered with sufficient
authority to obtain revenue
independently to finance
the exclusive functions
under the jurisdiction. The
central government shall
provide local governments
with funds that are
sufficient to meet the
General divisions of
spheres of responsibility
are poorly defined and
overlapping, both
horizontally and
vertically.
LOCAL GOVERNMENT FINANCIAL RESOURCES AND MANAGEMENT
Local self-government
authorities should
have financial
resources
commensurate with
their responsibilities
under the constitution
and the Law. [ECLSG
Article 9.2]
This means that they
should have discretion
to freely use these
resources within the
framework of their
NO. Citizens’
assemblies are given an
extremely wide mandate
in almost every area of
social policy and have
important
responsibilities in
environmental and law
enforcement policy as
well; however, only four
positions in the
assembly’s kengash are
paid. Kengashes of
citizens’ assemblies are
allotted resources from
NO: Jamoats cannot
impose any taxes even
though they have
service delivery
functions. Oblasts,
rayons and cities have
some autonomy in
establishing appropriate
tax instruments and
determining tax rates.
(Chapter 45 of the Tax
Code defines the tax
bases and rate
parameters for locally
set taxes.) However,
YES under law. The
2003 Law on Financial
and Economic Basis of
Local Self-Government
(Art. 2), The LG Law
(Art. 55), and pending
amendments in budget
legislation specifically
provide for this. These
provisions will be
implemented beginning
in the 2005 budget cycle
only. Current practice
involves higher levels of
government set strict
LG Law § 7.1 The
18
Central Asian Republics Local Government Initiative Phase II
powers. [ECLSG Article
9.1] Some meaningful
part of these financial
resources should come
from taxes and fees for
which the local selfgovernment can set the
rate.
the district budget to
provide social
assistance, but they do
not receive enough to
meet rigid centrallyimposed standards and
requirements for
distribution of these
funds. Lacking money
to perform their duties
according to the letter of
the law, the chairperson
of a citizens’ assembly,
no matter how honest,
may find himself
vulnerable to threats of
criminal prosecution and
audits at the hands of
the district attorney’s
office or the hokimiyat, a
crucial factor in
subordinating them to
executive structures.
tax collection rates are
extremely low and tax
revenues cannot
address all the local
requirements and
needs. In addition, the
Ministry of Finance
controls expenditure
levels (which are
published in the Annual
Budget Law). Approved
figures are routinely far
less than the sums
requested.
revenue and
expenditure targets for
lower levels of
government.
The system for
intergovernmental
transfers should be
transparent and
stable. Local selfgovernments should be
able to understand the
shared taxes and grants
to which they are
entitled. Annual
decisions on transfers to
sub-national
governments should be
predictable and timely
NO. Transfers at all
levels are largely
arbitrary, though they
are approximately
based on the principle of
equalization. Transfers
are negotiated both
during the budget
process and
(unofficially) during the
fiscal year. Budgetary
loans from higher
budgets may also be
made available upon
YES in parts of the law.
NO in practice. There
are four revenue
transfer sources
available for the local
government, but only
one can be said to have
an easily identifiable
methodology for
determining its size and
distribution. The formal
methodology is
relatively
straightforward, but it is
YES. The 2003 Law on
Financial and Economic
Basis of Local SelfGovernment (Arts 1, 7)
establishes these
procedures. Rates for
shared taxes should
remain constant for
three years and
transfers should be
calculated by formula.
NO in current practice
prior to implementation
of the law for the 2005
municipality funds its
needs mainly from its
own incomes, state
subsidies and other
sources.
requirements for the
provision of shared and
delegated functions.”
Currently being
improved. Law 303 on
Budgeting Regulations
sets basic rules; the
transfer amounts are
modified each year in
the Act on State Budget
for the given calendar
year.
Currently being improved.
Shared taxes are collected
and distributed on a
regular basis not less than
three times per year. Law
will eventually determine
the share of each tax due
the communes and
municipalities. Starting
from 2002, unconditional
transfers for the purpose of
achieving equalization of
resources among local
governments have been
Shares on taxes
administered by the
state are defined as a
special type of financial
Article 16 defines the
taxes, charges and fees of
municipalities/communes
and what is their
role/responsibility in
respect to these revenue
sources, including local
rate setting, administration,
etc. From 2003, this article
is effectively implemented,
with Law No. 8982 for the
Local Tax System and Law
No. 8978 for the Local
Small Business Tax.
19
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
enough to allow for
orderly budget planning.
The system should
include some provision
for equalization to
protect financially weak,
local self-governments.
[ECLSG Article 9.5]
request.
also widely recognized
to be vulnerable in its
implementation to a
significant degree of
informal bargaining,
both in the course of
determining amounts
distributed by the MoF
to its directly
subordinate subnational
jurisdictions and in the
subsequent
intraregional process of
distributing funds to
lower-level local
governments.
budget cycle.
Transfers below the
oblast level are currently
not transparent and
reportedly subject to
behind the scenes
negotiations and
politics.
relationship between
state budget and
municipal/higher
territorial unit’s budgets.
Final specification of
these incomes, structure
and criteria for their
distribution shall be
stipulated by a special
regulation within the
second phase of public
administration reform
and financial
decentralization, with
expected validity as of
January 1, 2005.
distributed on the basis of
a transparent, objective
formula. The formula
incorporates a measure of
equalization to take
account of fiscal capacity
disparities. The formula
system is still evolving, with
the implementation of the
new local tax legislation for
2003. In 2002 and 2003,
the formula criteria and
resulting transfer amount
for each local government
were published as an
annex to the annual State
Budget Law.
LG Law § 7.4 The
municipality that does
not have sufficient
income for covering the
tasks’ implementation
can acquire state
subsidy according to a
rule set by the
government.
In order to borrow for
capital investment,
local self-governments
should have some
power to borrow from
capital market
sources. [ECLSG
Article 9.8] The
definition and exercise
of these powers to
NO. The Law “on the
budget system”
expressly forbids any
borrowing by local
governments from
capital market sources.
In any event, almost all
local expenditures must
be approved centrally,
so municipal borrowing
QUESTIONABLE. In
principle, municipalities
are allowed (Article 35,
Chapter VI of the Law
on State Power at Local
Places) to borrow from
capital market sources.
The market would
define criteria for
municipal
YES, WITH
LIMITATIONS. The
2003 Law on Financial
and Economic Basis of
Local Self-Government
(Arts 1, 8–11) allow
local governments to
borrow up to a threshold
were debt service is not
more than 20 percent of
YES. LG Law § 7.2 Th e
municipality may use
credit for financing its
tasks.
Law 303 on Budgeting
Regulations § 26.2.c
Municipal income may
include credit.
QUESTIONABLE. LG Law,
Chapter 5—Local
Government Finance,
Article 16, Paragraph 5:
“Communes and
municipalities shall be
authorized to borrow funds
for public purposes in a
manner that is consistent
with the conditions
20
borrow should be based
on an understanding of
municipal creditworthiness; the law
should provide some
limits on the amount of
local indebtedness.
Central Asian Republics Local Government Initiative Phase II
would have little
meaning, even if
allowed.
In practice, most capital
investments are made
by republican bodies
(through the CoM and
the Ministry of
Economics according to
the CoM’s capital
investments targeted
list), though they figure
into provincial budgets
as well.
creditworthiness in each
concrete case. The
legislation does not
provide limits on the
amount of loc al
indebtedness. However,
municipal borrowing
cannot be easily
realized, as the country
does not have a capital
market.
the annual budget. All
borrowing must be
approved by the Ministry
of Finance. In practice
there is no borrowing
from capital markets by
local governments.
§ 29.a Sets allowable
uses and rules for
credit:
For capital expenditures
For current
expenditures, only if the
debt is paid back before
the end of the budgetary
year
established by law.”
However, there needs to
be an additional law to
establish the basic rules.
As Albanian local
governments cannot be
considered creditworthy for
at least another few years,
the establishment of
borrowing parameters is
not the top priority.
The municipality may
create only such
liabilities that will not
jeopardize the long-term
balance of its operating
budget
Loans over SKK 75
million must receive
prior written approval of
the Ministry of Finance
Prior approval is also
needed for the issue of
municipal bonds (Act
No. 530/90 on Bonds)
Local governments
keep complete,
accurate, and
transparent books of
account
QUESTIONABLE. Local
governments must keep
complete books of
account, reporting
quarterly to the Ministry
of Finance in great
detail. Their accuracy,
however, is
questionable and a
number of line items are
QUESTIONABLE. Local
governments are
required to keep
complete books of
account, and they are
subject to internal state
audits However, the
accuracy and
completeness is a
matter of definition.
NOT ALWAYS.
Financial departments
of local governments
are required to provide
extensive monthly,
quarterly, biannual and
annual reports to the
Ministry of Finance.
These reports are
aggregated at rayon and
YES. LG Law § 9.5 The
municipality administers
its accounting according
to Act No. 563/91 on
Accounting. The annual
accounting report is
audited by an
independent auditor.
The auditor verifies
further facts, as
YES: LG Law, Chapter
5—Local Government
Finance, Article 20
Archiving of Finance
Records and Article 21
Internal Financial Controls.
As required by the law,
local governments have
formed Financial
Commissions to perform
21
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
confidential. Records of
off-budget funds are
even more opaque—
deposits into off-budget
funds from various
sources are recorded in
quarterly reports to the
Ministry of Finance, but
there is no transparent
mechanism for tracing
them after that.
The community-based
mahallas do not report
in a consolidated way
on income sources such
as donations,
businesses activities.
Neither local state
administrations nor selfgovernment bodies do
any financial reporting to
citizens.
oblast levels. However,
review of these reports
indicates numerous
inconsistencies. The
Ministry of Finance
relies more often on
reports from the
Treasury System, which
is a centralized function.
Tracking of arrears is ad
hoc. Although there are
restrictions on offbudget funds, they do
exist and there is no
adequate reporting
mechanism for them.
stipulated in Law no.
303 on Budgeting
Regulations.
internal audit function.
Article 21 allows but does
not require hiring of
independent auditors to
support the Commissions.
NO. State
Administrations are
authorized to coordinate
service provision on
their territories (Art. 9
and 61 of LG law).
YES. Const. § 67.3 The
State may intervene in
the activities of
a municipality and
a higher territorial unit
only by means
stipulated in the law.
YES. Per Law No. 8927 on
the Prefect, Article 6, point
d, the Prefect “is the only
administrative institution to
verify the legality of acts
adopted by the organs of
communes, municipalities
and region…The Prefect
exercises financial control
over these organs, in ways
and limits as defined by
law.” Per Article 16 of this
law, the Prefect is also
RELATIONS WITH CENTRAL GOVERNMENT
Supervision of local
self-government by
the State
Administration should
“aim only at ensuring
compliance with the
law or with
constitutional
principles”. [ECLSG
Article 8.2] For example
any review and approval
of budgets should focus
on completeness and
NO. An extremely large
share of the work of
local self-governments
involves the execution
of policies of formal
executive structures;
these same bodies see
that their orders are
implemented. Meetings
of citizens’ assembly
leaders with
representatives of the
hokimiyat are, generally
NO. Levels of service
are de facto set by the
dual subordination and
budgetary controls of
the central government.
Budgets are negotiated
and approved at levels
above the local
government. Local
councils of deputies
approve the local
budget only after
negotiation and
The Highest Control
Office of the Slovak
Republic (Act No.
39/1993) related to
funds, municipalities,
22
accuracy of information
and compliance with
procedural
requirements.
Central Asian Republics Local Government Initiative Phase II
speaking, quite
frequent; interviews with
oqsoqols (mahalla
chairmen) indicated that
they are expected to
behave like hokimiyat
employees.
approval of proposed
expenditures by oblast
and central government
approval.
non-profit institutions,
and other legal entities
is to control them only
when they manage
state budget financial
resources and state
properties and in no
other cases.
responsible to monitor and
control the performance
only of delegated
functions by local
governments, as well as
the use of funds
transferred for such tasks.
YES. Const. § 67. 2 The
duties and limitations in
implementation of
territorial selfgovernment may only
be imposed on a
municipality and
a higher territorial unit
by law or on the basis of
an international treaty
according to Art. 7, §. 5.
YES. LG Law, Chapter
3—Rights of Local
Governments, Article 7,
paragraph 1: “Each local
government shall have full
discretion to exercise
initiatives in the interest of
the Local Community to
any matter which is not
prohibited by law or which
is not exclusively granted
by law to any other
government organ.”
Legislation also
provides for extensive
supervision of local selfgovernments by state
bodies
Local self-government
authorities may take
any initiative, which is
not, by law, excluded
from their competence
or assigned to another
level of government.
[ECLSG Article 4.2]
NO. Initiative of local
self-governments is
stifled by the asymmetry
of relations between the
citizens’ assemblies’
leaders and the district /
city hokim. Selfgovernment functions
are vaguely defined,
unrealistically broad,
and often duplicate or
expressly supplement
functions of executive
bodies. Local
government activities
are, in practice,
negotiated with district
executives and other
relevant bodies.
As local selfgovernments are
plagued by a chronic
shortage of funds, and
normally cannot carry
UNCLEAR. Definitions
of competencies at each
level have significant
overlap and functions
are only vaguely
defined. Activities are in
reality defined by a
series of laws,
presidential decrees
and negotiated
agreements between
local government tiers.
In practice, some
initiative is possible, but
difficult. Depends on
local exec’s relations
with Dushanbe.
UNCLEAR. Local
government law has a
vague finite list of
responsibilities
undertaken by local
governments and all
additional activities
should be designated by
law (Art. 16, LSG & LSA
Law of KR). In practice
initiative is possible,
frequent, and officially
encouraged by the
national government.
LG Law § 4.1 The
municipality
independently decides
about, and performs all
the acts related to the
municipality and
property administration;
likewise, it decides
about and carries out all
the activities that are
under its jurisdiction, as
stipulated in a separate
law, provided that these
23
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
Local self-government
authorities should
have recourse to the
judicial system to
protect their powers
and secure respect for
the principles of local
self-government
enshrined in Law.
[ECLSG Article 11]
Changes in the
geographic
boundaries of local
self-government
authorities should be
made based on
out most of their
mandated duties in a
satisfactory manner,
initiative welcomed by
district authorities is
generally limited to
fundraising or
organizing unpaid labor
(xashar) to meet these
priorities.
YES IN LAW;
QUESTIONABLE IN
PRACTICE. Local selfgovernment authorities
have the theoretical
right to judicial recourse,
constantly reaffirmed in
legislative acts.
This is, however,
relatively meaningless
in practice, as the
judiciary and the
provincial/district-level
prosecutor’s office are
not independent bodies.
In practice, disputes are
solved by negotiation
according to local power
distributions.
NO/QUESTIONABLE.
The 30 August 1996 law
“On the procedures for
addressing matters of
administrative -territorial
structure and the
activities are not
performed, according to
the law, by state or
other legal entity or
natural person.
YES IN LAW;
QUESTIONABLE IN
PRACTICE. LSPLP and
LSGST. Local selfgovernment authorities
are juridical entities with
certain independence to
initiate lawsuits.
However, no explicit
right to contest
decisions of higher tiers
of government through
the judicial system and
unlikely any such action
has been attempted.
YES. Art. 69 of the LG
law specifically provides
for appeals to court
against actions, which
“violate the rights of
local self-government”.
YES: Const. § 65 A
municipality and a
higher territorial unit are
legal persons.
NO. There is no direct
consultation with the
affected population.
Although boundary
changes and transfers
of administrative centers
YES. Consultation is
mandated (though the
degree of consultation is
not specified); the
decision is entirely
within the authority of
YES. Const. § 64.2
“The basic unit of
territorial selfadministration shall be
the municipality.”
Const. § 66.2 The
In several cases, local
self-governments have
contested interpretation
of laws through the
Constitutional Court.
YES: LG Law, Chapter
3—Rights of Local
Governments, Article 8,
Paragraph 6: “Local
governments are juridical
persons and may exercise
all the rights set forth in the
Civil Code of the Republic
of Albania (including) the
right to bring a civil
accusation.”
YES. LG Law, Chapter 10,
Reorganization of Local
Governments, Justification
and documentation of the
reorganization process
also requires submission
24
consultation with the
communities affected,
possibly by means of
a referendum. [ECLSG
Article 5]
Central Asian Republics Local Government Initiative Phase II
naming and renaming of
places in the Republic
of Uzbekistan” (#276-I)
stipulates that secondtier local councils are to
effect changes in
boundaries of villages
and towns (Articles 6
and 14, respectively);
changes in boundaries
of cities are proposed
by the Cof M and
approved by the Oliy
Majlis (Article 13). In all
cases, hokims are to
petition the appropriate
decision-making body
for the change (district
hokims petition for
villages and towns;
provincial hokims for
cities).
Changes to
administrative borders
of cities, towns, and
villages are to take into
account the opinion of
local self-government
bodies. Article 5 of the
law “on citizens’ selfgovernment institutions”
also provides for
changes in the
geographic boundaries
of mahallas, made by
10
should first be
considered by the local
10
council, any disputes
are resolved by higherlevel governments.
Ultimately, the decision
rests with the Upper
Chamber of Parliament
who can support or
cancel the decision or
proposal coming from
below as well as
establish or abolish
oblasts, rayons, and
villages on
recommendation of the
government. In case of
necessity the Upper
Chamber has the right
to initiate these changes
on its own except for the
GBAO.
the national parliament.
unification, division or
cancellation of
a municipality shall be
regulated by law.
LG Law § 2. 3 The
municipality is
established, closed
down, divided, or
merged by the
governmental decree. It
can be decided about
only with the agreement
of the municipality,
based on the statement
from the regional office
in whose territory the
municipality is located.
of “the opinion of the
community that lives in the
local units that shall be
affected by the
reorganization as well as
the opinion ’For‘ and
’Against‘ expressed
directly or indirectly by
various interested groups
in this reorganization”
(Article 67, point c), which
must be documented.
“The methods used to
collect the opinions of the
community such as public
hearings, open meetings,
surveys and referenda, if
possible” (Article 67, point
ç).
LG Law § 11a.1 Local
office announces local
referendum if merging
of municipalities, their
division, or closing down
is at stake.
Constitutional Law on the Order of Addressing Issues of Administrative and Territorial Arrangements of the Republic of Tajikistan Chapter 3, Article 17.
25
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
The Central
Government has the
ability to monitor the
progress of effective
fiscal decentralization.
This means the data
and resources to
accurately report on
revenue and
expenditure patterns
within and among
different subnational
levels of government.
local state organs on
the initiative of selfgovernment bodies.
Considering the degree
of subordination of selfgovernment organs to
these same executive
bodies, however, these
modest provisions’
efficacy in guaranteeing
real consultation with
communities is
questionable.
N/A (given the absence
of any fiscal
decentralization). In
respect to monitoring
capability, the MoF
collects data on the
second-tier provincial
governments, but
province-to-province,
comparative data on
expenditures at lowertiers can prove difficult,
at least for an outside
analyst to assemble,
particularly below the
provincial level.
The Ministry of Finance
has auditors (from its
Supervision and
Auditing
Administrations) in each
province, who have a
wide mandate to access
any financial records.
NO. Although the Law
“On State Financial
Control” and
Presidential Resolution
“On Establishment of
the Committee on State
Financial Control”
provide that all
necessary
documentation should
be available centrally, in
practice all data are
aggregated at the oblast
level so the MoF cannot
collect disaggregated
information. In addition,
all information submitted
to the MoF is submitted
in hard copy. There is
no computerization of
these data at the central
level.
NO. Data is aggregated
at the deconcentrated
level of rayons for the
Ministry of Finance.
Data from village and
small city governments
is not centrally available
YES. Law 303/95 On
Budgeting Regulations
§ 29.11 The
municipalities are
obliged to provide
information and
selected data about
their management to the
Ministry. The scope of
the data and way of its
submission is specified
by the Ministry of
Finance.
NO (but improving). The
MoF and MoLG request
detailed reporting forms
that ask for too much data,
which cannot be inputted
and analyzed in any
meaningful manner. There
still needs to be some work
to improve the various data
sources within the system
(reports to MoLG, reports
to MoF, report s of the
treasury). With the new
local fiscal decentralization
laws, developing timely,
accurate local government
finance information will
become more important in
order to refine the
equalization aspect of the
unconditional transfer
formula.
26
Central Asian Republics Local Government Initiative Phase II
Data, especially at lower
levels, are generally not
computerized.
OTHER EXTERNAL RELATIONS
Local self-government
authorities should be
able to form consortia
and enter into
agreements with other
local self-government
units to carry out
tasks of mutual
interest. [ECLSG
Article 10.1].
YES. See below.
Chairpersons of local
self-governments (i.e.,
citizens’ assemblies)
have the power to
conclude agreements
and contracts, pursuant
to their status as legal
entities. Such relations,
however, tend to be
handled through
hokimiyats, coordination
councils, the Mahalla
Foundation, or
village/town citizens’
assemblies, which can
unify several mahalla
citizens’ assemblies.
YES. Explicitly allowed
in Law on State Power
at Local Places,
Chapters I and III,
Articles 3 and 14. In
practice this does
happen for joint service
provision, but through
ad hoc negotiated
arrangements rather
than formal agreements.
YES. Explicitly allowed
in Art. 11 of LG law. In
sectors like water and
solid waste some de
facto joint collaboration
but nothing formalized
through agreements in
legal form.
Local self-government
authorities should
have the right (1) to
belong to a municipal,
NGO association that
can promote their
common interests,
and (2) to belong to an
international
association of local
authorities. [ECLSG
Article 10.1]
YES. No explicit law on
this subject referencing
municipal associations
per se. However, the
right to membership in
other organizations is
guaranteed to legal
entities (and, therefore,
to local self-government
organs) by the Civil
Code (Articles 40, 77)
and reaffirmed in other
YES. The legislation
allows the creation of
municipal associations
to promote common
interests and
membership in an
international association
of local authorities
(Articles 3 and 14 of
Chapters I and III
accordingly of the Law
on State Power at Local
YES. Both rights are
explicitly enshrined in
Art. 11 of LG law. At
present, there are two
active, registered nongovernmental municipal
associations: the
Association of Cities
and the Association of
Villages.
There have been only a
few court cases
initiated, all of which
were settled out of
court.
YES. Const. § 66
“A municipality shall
have the right to
associate with other
municipalities for
securing matters of
common interest”
LG Law § 20b
Municipalities may
establish an association
which will be a legal
person. Such
agreements require
approval of a majority of
the local council
members from each
municipality that is a
party to the agreement.
YES. LG Law, Chapter 3—
Rights of Local
Governments, Article 8,
Paragraph 5: LG has the
right in order “to carry out
specific functions on behalf
and in the benefit of their
inhabitants, two or more
units of local government
may exercise any
competence given to them
by law through
implementation of mutual
agreements or contracts,
delegation of specific
competencies and/or
responsibilities to one or
the other, or contracting a
third party.”
YES. LG Law § 11.4
Local government is
entitled to approve
municipal
representation in NGOs
and associations. It can
also approve the
agreements on
international
cooperation and the
municipality’s
membership in an
YES: LG Law, Chapter
3—Rights of Local
Governments, Article 8,
Paragraph 5: “Local
government units have the
right to be organized in
associations in conformity
with respective legislation
for associations.” There
are presently three local
government associations
in Albania: Association of
27
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
Article 10.1]
and reaffirmed in other
acts of legislation (e.g.,
Article 10 of 25 May
2000 law “On
guarantees of freedom
for entrepreneurial
activity”).
No municipal
association exists that is
truly independent from
the center and engaged
in advocacy. There is
not even any centrally
sanctioned association
of hokimiyats or their
associated councils
(apart from, perhaps,
the Oliy Majlis
“Hokimiyat Bloc”). The
officially sponsored
NGO “Mahalla” and the
parallel (often
indistinguishable)
organizations of
oqsoqols exist at village,
town, city, district,
province, and
republican levels.
QUESTIONABLE.
Legislation is somewhat
unclear as to whether or
not local selfgovernments can
belong to international
associations. Local selfgovernments can have
relations with analogous
on State Power at Local
Places). However, no
such organization
exists.
membership in an
international
association.
in Albania: Association of
Albanian Municipalities,
Association of Communes,
and Association of
Presidents of the Regions.
28
Central Asian Republics Local Government Initiative Phase II
relations with analogous
foreign bodies through
the Ministry of Foreign
Affairs, on the basis of
an interagency
agreement (22
December 1995 law “On
international
agreements of the
Republic of
Uzbekistan”) and,
reportedly, through
agreement between the
heads of the respective
administrative territorial
units, though the legal
foundation for this is
less clear.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
III.
29
LEGAL FRAMEWORK: COMPOSITION AND STATUS
This chapter orients the reader to the overall composition and status of the legal framework for
intergove rnmental relations and local governance in Uzbekistan. The provisions of specific laws,
decrees, resolutions, and orders are referenced and discussed as relevant in the other chapters that
follow. Annex B to this report contains a complete listing of the most relevant legal measures
selected for review as part of this assessment. Annex C provides abstracts of selected legal
documents from this list, compiled for this assessment by Andrei Makarikhin, an Uzbekistani
legal specialist.
NOTE
References to “Legal Log #s” throughout this report refer to order in which documents are listed in Annex
B.
[[Should all Notes be set apart similarly?]]
Exhibit 2 below summarizes the most important documents that form the legal framework within
which local government operates in Uzbekistan. This legal framework must be understood in the
context of a political culture that remains autocratic and statist in nature. Despite rhetorical
commitments to the rule of law and civil rights (as embodied in a constitution that provides for
separation of powers and guarantees of civil rights), the president, and various executive
hierarchies subordinate to him, exercise pervasive control over the judicial and legislative
functions, political activity, the media, civil society, and the economy. According to more
cynical observers, Uzbekistan’s ruling elite (in contrast to Russia’s, perhaps Kyrgyzstan’s) tends
to characterize laws as “symbolic”, in some instances as gestures to the international community,
enacted without any real intent to implement them conscientiously. With this in mind,
throughout this report an effort is made to distinguish law from practice.
Little Re-Examination of the Legal Framework
Since independence, the general legal framework for governance has received little
reexamination and certainly not in the direction of democratic decentralization—with the
exception of some significant reorganization within the state administrative structure in respect
to communal services and urban transport.
•
The 1992 Constitution itself addresses local government in three chapters: Chapter 16
very briefly specifies the types of sub-national jurisdictions within the system of
territorial administration. Chapter 21 deals with the formation of local executive bodies in
some detail, including the appointment of governors and mayors (hokims) and their
powers (Articles 99 to 104). A final Article 105 in this chapter, in two sentences,
provides for informal self- governance after a fashion at the town, village, and
neighborhood mahalla levels. Chapter 17 sets forth the status of the autonomous
Republic of Karakalpakstan.
30
Central Asian Republics Local Government Initiative Phase II
•
Shortly thereafter, these constitutional provisions were reiterated and elaborated upon in
three pieces of legislation, a law on local state administration (1993), a law on the
election of local councils (1994), and a 1993 law on citizens’ self- government institutions
(for towns, villages, and mahallas).
Exhibit 2. Summary Listing of Key Documents Shaping the Legal Framework for
Intergovernmental Relations and Local Governance in Uzbekistan
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
31
Constitution and Core Legislation Affecting Intergovernmental Relations
• Constitution of the Republic of Uzbekistan (12/08/92)
• Law On the Cabinet of Ministers of the Republic of Uzbekistan (new version) (08/29/03)
• Law On Local State Government (09/02/93)
• Law On elections to the provincial, district and city councils (kengash) of people’s deputies
(new version) (09/29/03)
• Law On citizens’ self-government institutions (new version) (04/14/99)
o Presidential Decree “On support for citizens’ self-government institutions” (04/23/98)
o Presidential Decree “On increasing the role of citizens’ self-government institutions
in providing targeted social support to the population” (01/13/99)
Acts Affecting Intergovernmental Finance
• Law “On the budget system” (12/14/00)
o Order “On approval of the instruction ‘On procedures for calculation of local taxes
and fees and their payment into the budget’ (new version)” (02/16/03)
o Cabinet of Ministers Order “On improving the process of Financing Budgetary
Entities” (09/03/99)
o Regulation “On the procedures for renting temporarily unused government property
out to other enterprises and organizations by budgetary entities” (01/07/00)
o Regulation “On the reserve fund of the budgets of Karakalpakstan, the provi nces,
and Tashkent” (01/22/00)
o Instruction “On order of quarterly allocation of annual planned amounts of revenues
and expenditures, allocated in the budget of RK and local budgets, registration of
amendments adopted during budget execution, financing of organizations and
events described in the budget” (04/12/01)
Acts Governing Communal Services and Transport
• “Rules for rendering communal services to the population of the Republic of Uzbekistan”
(02/20/99)
• Cabinet of Ministers Order “On improving the organization of activities in the communal
service system” (21/12/00)
• “On Housing Associations” (04/15/99)
• Order “On the approval of the regulation ‘On the mechanism of compensatory cash
payments for payments on housing and communal services (starting 25 April 2003)”
(04/15/03)
• Law “On urban passenger transport” (25/04/97)
• Presidential Decree “On demonopolization and improvement of management in the
automotive transport sector” (04/06/01)
• Cabinet of Ministers Order “On approval of the rules for delivery of natural gas to consumers
in the Republic of Uzbekistan” (10/01/00)
o Cabinet of Ministers Order “On measures to improve management of the natural
gas supply system in the Republic” (10/02/03)
•
“Rules for use of the communal water supply and drainage system in the Republic of
Uzbekistan” (09/16/94)
• “Rules for rendering communal liquid and solid waste disposal” (20/02/99)
–
The latter law was replaced in 1999 with a law (amended in 2003) containing
language that considerably altered the mandate of the mahallas. Most changes
made bestowed on citizens’ assemblies broader powers; notably, increasing their
32
Central Asian Republics Local Government Initiative Phase II
involvement in political activity (greater role in nominations for legislative
candidates and in forming electoral commissions) and maintaining law and order.
The 2003 amendments provided for a charter in each mahalla, included
provisions for the (paid) mahalla offices of posbon (neighborhood guardian) and
educational advisor (tarbiyatchi), and explicitly mandated a “make-up
commission” to deal with divorce and dysfunctional families. 11
–
A new version of the law on elections for local councils was passed in September
of 2003, allowing for nomination of candidates to local council seats by voter
initiative groups and stripping local councils themselves of this right; the new
local electoral law also greatly expanded the list of government officials that are
ineligible to hold seats.
•
There is no separate law that deals with budgets and financial management at the
subnational level. The Law on Budget System and the Tax Code have some provisions
helpful in understanding the structure of intergovernmental finance and how it operates.
However, as in many CEE countries and Newly Independent States of the FSU (NIS) ,
one must look to the annual budget laws, as well as a large set of regulations and
instructions, to understand tax sharing arrangements and functional assignments, to the
extent they are spelled out in legislation at all.
•
The urban service related laws listed in Exhibit 2 do reflect some effort to rethink the
roles of the central and local governments in delivering basic services, as well as the
private sector (particular in respect to urban transport and housing management).
To the best of the authors’ knowledge, the only major legislation currently under development
that would affect local government institutions and operations are a Treasury Law and a new
version of the 1999 Law on Housing Associations. Neither of these initiatives looks to increasing
autonomy of local authorities vis-à-vis the center. The September 2003 draft of the treasury
legislation under consideration envisions local treasury offices as subordinated subdivisions of a
central treasury within the Ministry of Finance. The housing legislation, initiated in large part at
the prompting of the USAID LGI-II program, looks to bolster the ability of owner-controlled
housing associations to manage their apartment buildings more democratically and without
undue interference by local authorities. As such it would contribute to a clearer separation of
private and public spheres of activity at the local level.
The Distinction between Local State Organs and Organs of Citizens’ Self-Government.
The reader should bear in mind that “local government”, as used in Uzbekistani legal and
political parlance, designates all sub- national levels of government, from the province (viloyat)
on down. In understanding the relevant legal nomenclature, it is important to note that
government institutions in Uzbekistan are formally divided into two categories:
11
The posbon, educational advisor, and “make-up commission” were established in legal acts prior to 2003 (see
CoM resolution #113, 15 March 1999) and were created in many mahallas, though not all; the 2003 amendments
enshrined these acts in the Law on Citizens’ Self-Government and provided for their further institutionalization.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
33
•
Firstly, state organs , formed mostly by a system of appointments from higher levels of
government; local councils of people’s deputies are also considered state organs.
•
Secondly, organs of citizens’ self-government, officially independent and autonomous
within their respective territories and theoretically selected by the citizens themselves
through free and fair (though not necessarily direct) elections. In practice, however, these
organs function as if subordinated to state executive structures in a variety of ways. In
effect, they merely constitute a lower tier of the state hierarchy. Indeed, as discussed
further in the chapter on self- government bodies, the mahalla, or neighborhood
committees, themselves have their own kind of national hierarchy of coordination bodies
at the village/town, district, provincial, and republican levels. 12
These two categories of institutions are discussed in detail, respectively, in the two chapters that
follow immediately below.
Conclusion
As will be apparent to any reader of this assessment, Uzbekistan could benefit from a
thoroughgoing review of its system of intergovernmental arrangements and system of local
government with an eye to bringing them, over time, into conformity with the norms of
democratic, market-oriented countries. Such a process can begin with modest incremental steps
in the direction of meaningful local autonomy, improvements in transparency and accountability,
and more active engagement with citizens in decisionmaking on basic services. That said, in the
current political climate, it seems unlikely that USAID or other donors could succeed in
engaging the central government in sponsoring this type of policy dialogue.
12
Article 17, Law “On citizens’ self-government institutions”
34
IV.
Central Asian Republics Local Government Initiative Phase II
TERRITORIAL STRUCTURE AND STATE ADMINISTRATION
Territorial Administration: Three Tiers Plus One
The formal state structure consists of three distinct levels or tiers: the republican level (first tier),
the viloyat-, or province- level (second tier), and the nohiya/tuman-, or district- level (third tier).
In addition to Uzbekistan’s twelve provinces, the second tier viloyat-level encompasses Tashkent
City, the capital and only city of republican subordination, as well as the autonomous Republic
of Karakalpakstan. The third tier district- level also includes cities of provincial subordination
and Tashkent City’s own urban districts. Below the third tier exist various other LGUs, which
belong either to the state hierarchy or to self- government structures. Cities of districtsubordination (under caretaker deputy district hokims),13 plus towns and villages (for which the
main governing structures are citizens’ assemblies and their mahalla coordination bodies)
together could be considered a weak, de facto “fourth tier” of self- government and state
structures. The committees of neighborhood- level self- governing citizens’ assemblies (more
commonly known as mahalla committees) represent the smallest territorial administrative unit.
It should be noted that “fourth-tier” territorial units do not encompass the entire population, as
cities of provincial subordination and Tashkent City’s tumans are subdivided into mahallas only.
The diagram in Exhibit 4, below, depicts the structure of territorial administration in Uzbekistan.
Exhibit 5 at the end of this chapter provides a statistical summary of the number of jurisdictions
at each tier within the hierarchy with some related data on urbanization and population ranges.
As can be seen in Exhibit 3 (immediately below), second-tier entities (provinces, the autonomous
republic, and capital city) average about 1.8 million in population, on the high end of the
spectrum in Central Asia. Third-tier districts and cities of viloyat subordination average in the
130,000 range.
Exhibit 3. Central Asian Republics: Number and Size of Second-Tier Jurisdictions
Country
Uzbekistan
Tajikistan
Kyrgyzstan
Kazakhstan
14
Number of Jurisdictions
14
4
9
16
Average Population
1,823,000
1,533,000
536,000
935,000
Hokimiyat Executive Structure
At the republican level, the executive branch, headed by the president and the CoM, dominates
the governing process. This predominance of the executive branch repeats itself at the second
13
In 1996, hokimiyats of cities of district subordination were absorbed into the districts themselves; Presidential
Order #1651 (26 November 1996) “On improving the structure of government institutions for hokimiyats of cities of
district subordination”
14
Number of jurisdictions includes capital city, and in Uzbekistan, the autonomous republic as well.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
35
and third tiers as well. The executives of the twelve provinces and Ta shkent City, known as
hokims, are appointed by the president himself. 15 Karakalpakstan’s Council of Ministers (its
equivalent of the hokim) is appointed and dismissed in the same way. 16 Executives of third-tier
LGUs, also referred to as hokims, are indirectly accountable to the center through the second-tier
LGU hokims that appoint them. 17 The corresponding local council, theoretically a directly elected
legislative body, technically has the power to reject a hokim’s appointment, but this does not
happen in practice. In addition to the hierarchy of hokimiyats (as the hokim’s office is called),
there is a distinct but interrelated ministerial structure with provincial- and district- level
departments. Both hierarchies are characterized by upward, vertical accountability to the
president himself, though local ministerial departments are generally also horizontally
accountable to their respective hokims. On the local level, these hierarchies often complement
each other, performing distinct functions, but they also compete for influence in less welldefined or especially important spheres. Other centralized national hierarchies, such as the
Ministry of Internal Affairs, the National Security Council, the Tax Inspectorate and the
prosecutor’s office (Office of the Procurator), 18 also exist and, accordingly, compete for
influence in certain spheres. As a result, dual subordination of lower- level institutions (to both
the ministerial structure and the hokimiyat structure , or even to more than one different
ministry) is systemic in Uzbekistan.
Cities of District Subordination: Change in Status
Cities of district subordination were officially abolished in 1996 by presidential order #1651,
though they continue to exist as “cities” for some purposes (including statistical) and, typically,
are run by a deputy district hokim. In this capacity, the deputy hokim oversees the city
administration and, in particular, coordinates the city’s mahalla committees. Like all other subdistrict government units, the former district-subordinated cities have no budget of their own; all
their needs are theoretically addressed in the district budget itself.
Dual Subordination and Functional Assignments
The fundamental Law on Local State Authorities, itself, when addressing the powers of hokims
(Article 25) speaks of the province, district, and city levels in the aggregate, making no effort to
differentiate among tiers. Moreover, the law provides no specificity whatsoever in respect to
delineating a concrete division of labor between the central government and local tier
administrations in respect to basic functions such as education, health, urban planning, and
communal services.
15
Article 2, Law “On local state government” (1993)
Article 88, “Karakalpak Constitution” (1993)
17
Article 2, Law “On local state government” (1993)
18
The prosecutor’s office in Uzbekistan differs from a prosecutor’s/district attorney’s office in the United States in
that it has extensive investigative functions as well.
16
36
Central Asian Republics Local Government Initiative Phase II
Exhibit 4. Uzbekistan Structure of Territorial Administration
Note: There are 29 cities of viloyat subordination with their own hokimiyats. Other cities and urban settlements,
regardless of their formal characterization, are administratively subordinated to their respective districts. Number of
urban settlements excludes Tashkent City and the 29 cities of viloyat subordination already accounted for in the
chart.
REPUBLIC OF UZBEKISTAN
- President
- Cabinet of Ministers
- Ministries, State Committees
and Agencies
- Oliy Majlis (parliament)
TASHKENT CITY
12 VILOYATS
- Hokimiyat
- Local Council
- Hokimiyat
- Local Council
11 URBAN DISTRICTS
- Hokimiyat
- No Local Council (subject
to Tashkent City Council)
Autonomous Republic
of Karakalpakstan
- Council of Ministers
- Jokargi Kenes
(parliament)
29 Cities of Viloyat
Subordination
162 Rural
Districts
- Hokimiyat
- Local Council
- Hokimiyat
- Local Council
203 Urban
Settlements
1462 Rural
Settlements
- Subject to district
structures (often
deputy hokim for
city, some role for
self-government
structures in towns)
- Subject to district
structures, some
role for selfgovernment
structures
Mahalla Citizens’ Assemblies (self-government institution)
The Mahalla Committee (Chairperson, Secretary, etc.), Educational Advisor, Posbon, Sub-Committees (the
Welfare Commission, the Women’s Committee, etc.), Audit Committee, Administrative Commission
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
37
Achieving Administrative Flexibility in Practice
The following anecdote illustrates how the system, in practice, does accommodate a greater degree of
flexibility than is first apparent in respect to the operations of executives at the local level. In interviews,
government employees (understandably) proved reluctant to suggest that practice differs from law in any
material way. However, one senior official interviewed was uncharacteristically candid with regard to the
difference between the letter of the law and practice in his viloyat’s administrative structure. In
Uzbekistan, the republican level dictates the number of staff in local administrations (in hokimiyats and in
ministerial offices) and their responsibilities. The department headed by this official, confronting a huge
increase in its workload (in part due to new responsibilities for coordination with several international
donors), found that it needed many more staff than the eight allowed to it by statute. The Department, on
its own initiative, proceeded to obtain the needed personnel, creating new positions and divisions. This
reorganization doubled the number of deputy directors from two to four. Though the two new deputy
directors retained the official, lower, salaries attached to their previous positions, they were simply “given
the titles they need to carry out their expanded duties.” The additional staff was obtained by cannibalizing
organizations subordinate to the department in question (e.g., budgetary entities and governmentcontrolled social organizations under its purview).
Instead, an intricate and, at times, ambiguous or even self-contradictory system has evolved that
governs the division of functional assignments among different levels of government and among
various departments and offices on the same tier. Insofar as a basis for these assignments can be
found in law, one must search through a hodgepodge of provisions found in a variety of more
sector-specific legislation, decrees, orders, and resolutions. Within these complexities, several
broad, general tendencies or patterns can be identified.
The center only delegates those responsibilities that it can afford to without losing its grip on the
state apparatus. Robertson and Kangas, in their 2002 article “Central Power and Regional and
Local Government in Uzbekistan”, write: “The power to appoint and remove officials as well as
set goals for regional production and financing are strong indicators that the central government
still maintains a firm control over the regional governments.”19
Social policy tends to be delegated farther down and more comprehensively than economic and
political functions, which are more tightly controlled by the central government. Thus, law
enforcement organs, local financial departments, and the tax inspectorate are more vertically
subordinated to their respective line ministries vis-à-vis hokimiyats than local health and
education departments. Official sources stress increased efficiency and accountability achieved
in social services by making their daily management more local. Critics, however, see this as a
convenient abdication of responsibility—in effect, a way for the central government to deflect
blame for the rapid decay prevailing in education, health, and welfare.
Dual subordination of lower-tier, local actors manifests itself in a variety of ways, both official
and unofficial. In a system dominated by the executive branch, checks and balances from the
legislative and judicial branches are weak. Instead, separate centralized executive hierarchies
compete with each other for influence and control.
19
P. 270–71
38
Central Asian Republics Local Government Initiative Phase II
Two 1997 CoM orders transferred oversight of many local departments from ministries to
hokimiyats (Legal Log #26, 27), representing a shift in the balance of power between these
hierarchies. Dual subordination, however, remains a persistent feature of the political landscape
in Uzbekistan.
Personnel-related dual subordination
One of the ways in which dual subordination manifests itself in Uzbekistan is through
appointment and dismissal of local officials. For the vast majority of local- level ministerial
positions, these personnel actions proceed on a consensus basis, requiring the signature of both
the ministry and the hokimiyat. Even for positions in which the law does not require the signature
of the hokim (such as for the tax inspectorate or for university rectors), custom dictates that the
ministry that is in charge still act to secure the hokim’s permission. By contrast, as a rule, a
hokim seeks no ministerial confirmation, formal or informal, for appointments of deputy hokims
and other senior members of his immediate staff.
Legal-institutional dual subordination
The republican ministries set national standards (based on centrally-determined policy
considerations, as well as on objective technical criteria)that apply to all of their subsidiary
departments as well as to related budgetary entities, regardless of their formal subordination. For
example, a medical university, naturally, follows standards set by both the Ministry of Higher
Education and the Ministry of Health. A less legitimate form of central control can be found in
the widely observed, bureaucratic mission creep of several republican entities, such as the tax
inspectorate, the police, and the prosecutor’s office, as they endeavor to enlarge their official
mandates to include an ever-increasing litany of standards and monitoring functions.
In respect to policy direction and ongoing administrative oversight of ministry-subordinated
entities, hokimiyats officially have the right to participate in matters of local significance. In most
instances, this obligates the hokimiyat and the ministry to coordinate and compromise with one
another, with major issues resolved by consensus. Local ministerial departments also work
actively with the hokimiyat in the development of its own policies and programs, though here the
hokimiyat is the senior partner, especially in light of its considerable powers over appointments
and dismissals.
Nonetheless, conflicts do arise, in part because legislation often gives the same or overlapping
powers to several different institutions. Even in those cases in which the law is relatively
explicit, with distinct spheres for particular institutions more or less spelled out with some
clarity, struggle and confrontation does occur. Local officials interviewed cited numerous
instances of their departments receiving contradictory orders from their ministry and the
hokimiyat, as well as being caught between two masters in other ways. Even when there is a
clear, unambiguous line of subordination to a single higher organ on one issue or another, special
requests by other higher organs lacking formal legal authority over the given matter are not
uncommon. Though no officials interviewed admitted to succumbing to any such requests, the
considerable political pressure that hokimiyats and higher- level ministerial organs can bring to
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
39
bear on local ministerial departments and other budgetary entities provides powerful incentives
to comply.
Fiscal-Budgetary Functional Assignments
Local branches of the Ministry of Finance, security structures, and the tax inspectorate are
financed from the central budget. Other sub-national departments of ministries (education,
health, etc.) are financed from local budgets. These departments have no direct vertical
budgetary ties with their respective ministries, though expenditures of higher-tier ministerial
offices generally include objects directly subordinate to lower tiers, and ministerial directives
powerfully influence local departments’ choices of what to include in a budget request.
The interplay of ministry and hokimiyat in forming budgets for local Departments of Education
graphically illustrates the patterns described above. Any given district-subordinated school
receives most of its funding (for salaries, minor repairs, etc.) from its district- level Department of
Education, which is funded through the district budget. However, the provincial Department of
Education supplies district-subordinated schools with most of their equipment, from desks to
chalkboards to library stock; all of this comes from the provincial budget. Thus, each districtsubordinated school is actually sustained by both the district- and provincial- level budgets.
Additionally, budget requests from both the district- and provincial- level Departments of
Education must be based on standards established by the Ministry of Education in Tashkent; the
Ministry itself has also purchased equipment for schools subordinate to lower tiers.
Other Examples Of Dual Subordination In The State Government Structure
Tax Inspectorate
The tax inspectorate constitutes a special case. By law, it is supposed to be entirely independent
of local government structures; 20 its salaries and other expenses are included in the central, rather
than the local, budget. 21 Its officials are appointed and dismissed from the center, without the
approval of the hokim,22 though it is “polite” to get his blessing. However, on a day-to-day basis,
the local tax inspectorate officials work closely with the hokim, an immediately present and
powerful figure, whereas they may rarely, if ever, see their actual boss at the republican level.
The Committee of Architecture and Construction
The provincial division of the Committee of Architecture and Construction is funded from the
local budget; it receives its instructions from ministerial organs. The district- level chief architects
answer to the provincial divisions regarding conformity with engineering, safety, and other
standards. On questions of design, they are subordinate both to the district hokim and to the
provincial administration of architecture and construction.
The Security Apparatus
20
Article 3, Law “On the state tax service” (1997)
Article 3, Law “On the state tax service” (1997)
22
Article 10, Law “On the state tax service” (1997)
21
40
Central Asian Republics Local Government Initiative Phase II
Security structures are, for the most part, funded strictly from the central budget; the provincial
Administration of Internal Affairs receives some funds from the provincial budget, however, for
the traffic police and firefighters. Prisons are subordinated to the Internal Affairs Ministry as
well.
Ministry of Finance
Local Ministry of Finance officials are paid from the central, not the local, budget. Their local
directors are appointed by the hokim, with the Ministry’s approval. The hokim can also remove
the local financial director.
Communal Services and Urban Transport.
Dual subordination in these sectors is discussed in detail in Chapter VIII, below.
The Court System and Judicial Oversight of Local Government Administrative Practices
Courts of General Jurisdiction (which handle civil and criminal matters) exist at both the district
and province level and are subordinated to the Supreme Court. Commercial disputes, whether
involving private or public corporate enterprises (including communal companies), are litigated
within 143 regional Economic Courts with appeal to a High Economic Court in Tashkent. The
Ministry of Justice handles procurement on behalf of the court system.
An American Bar Association/Central European and Eurasian Law Initiative (ABA/CEELI)
report cites laws that, on paper, give citizens the right to appeal to the courts for redress for any
government administrative decisions that they feel are illegal or any government actions by
government officialdom perceived as violating their civil rights and liberties. 23 The authors go on
to observe:
Lawyers with whom the team met could not identify a single high profile decision by the
courts that directed the [public] executive to comply with a citizen request…Courts,
however, will issue such orders to executives, and they would be complied with, as long
as they did not involve important political oligarchic interests. Lawyers also reported
uneven results when seeking orders to local authorities (khokims). In one case, the lawyer
sought, and failed, to get the khokim to issue a propiska (residence registration). In an
inheritance case, however, the court ordered the khokim to provide an apartment to a
relative of the deceased. These victories, however, seem few and far between. Moreover,
lawyers are not yet using these laws as tools to provoke societal change, because they do
not believe that the judges will rule against the state.
A Tashkent lawyer interviewed for this local government assessment, in general, confirmed the
above observation. He was aware of some property confiscation cases in which citizens
succeeded in getting compensation awards adjusted. He also reported that private companies
23
ABA/CEELI, Judicial Reform Index for Uzbekistan, May 2002, p. 12. The two laws citied: Law on Appeals of
Citizens [No. 1064-XII, 6 May, 1994], and The Law on Appealing to the Court Against Acts and Decisions
Violating Civil Rights and Liberties [no. 108-I, 30August, 1995].
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
41
have had quite good success in winning commercial disputes with communal companies in the
Economic Courts, provided that the decision had no adverse effect on the hokimiyat budget.
The Status of Karakalpakstan
The legal foundation for Karakalpak autonomy is enshrined in chapter XVII of the Uzbek
Constitution, and reiterated in chapter I of the Karakalpak Constitution. (See box, below.) In
general, the autonomous Republic finds itself no less bound by Uzbek legislation than do other
second-tier LGUs, but it does have more of a formal mandate to pass its own additional
legislation. The Constitution also guarantees cultural rights, and confers official status on the
Karakalpak language—the only official language to exist in the Uzbekistan besides Uzbek.
“Chapter XVII of the Uzbek Constitution: The Republic of Karakalpakstan”
Recap of Key Provisions
Article 70: The sovereign Republic of Karakalpakstan (RK) is a part of the Republic of Uzbekistan (RUz).
RUz protects the sovereignty of RK.
Article 71: RK has its own Constitution. The Constitution of RK cannot contradict the Constitution of RUz.
Article 72: Laws of RUz are also binding on the territory of RK.
Article 73: The territory and boundaries of RK cannot be altered without its agreement. RK independently
makes decisions on its territorial-administrative structure.
Article 74: RK has the right to secede from RUz on the basis of a universal referendum of the people of
RK.
Article 75: Interrelations between RUz and RK, within the framework of the Uzbek Constitution, are
regulated through agreements and contracts between RUz and RK. Disagreements between RUz and RK
are settled through arbitration.”
The state administrative structure in the Republic of Karakalpakstan, as outlined in the
Karakalpak Constitution, differs only slightly from that of other Uzbekistani LGUs. The main
difference is that executive and legislative (representative) branches on the level of the
autonomous republic are more distinct than they are in the provinces and Tashkent City. In other
second-tier LGUs, the hokim heads both the provincial executive structures (the hokimiyat) and
representative structures (the provincial local council). In RK, these positions are not merged.
The chairperson of the legislature, the Jokargi Kenes (Supreme Council), proposes a candidate to
head the Karakalpak Council of Ministers, the republic’s main executive structure. This proposal
must have the approval of the Uzbek president (Karakalpak Constitution, Articles 70 and 81).
Third-tier structures in Karakalpakstan, however, do not significantly differ from those in the rest
of Uzbekistan. Hakims (rather than hokims) serve as both the district/city executives and the
heads of their local councils. They are nominated by the republican executive (the Council of
Ministers) and approved by the republican legislature (the Jokargi Kenes). Self- government on
the neighborhood level is carried out, not through the mahalla, but via the “makan-kenes”
(Karakalpak Constitution Article 99); there is no legal difference between the two, as they are
both citizens’ assemblies.
42
Central Asian Republics Local Government Initiative Phase II
Despite meticulous rhetorical emphasis on Karakalpakstan’s unique status (much ink is spent in
legal acts specifically referring to “the Council of Ministers of the Republic of Karakalpakstan
and provincial hokims”), the RK’s autonomy is not well established. Except for a few structural
matters, all Uzbek law is binding in Karakalpakstan; broadly speaking, it must observe standards,
rules, taxes, and price controls set by the central government in Tashkent. In the Karakalpak
Constitution, most nominations for major posts are done only with the agreement of the
President of Uzbekistan (Karakalpak Constitution, Article 81).
Weak on paper, Karakalpak autonomy is even less evident in reality. Writing in 2002, Robertson
and Kangas comment:
As an example of […] recognizing regional autonomy when the position of the central
authorities is relatively weak, the March 1990 legislation that established the presidency
in Uzbekistan took great care to recognize that this new institution would not infringe on
the rights of then Karakalpak Autonomous Soviet Socialist Republic. However, as old
institutions were solidified and new institutions were created by the strengthening regime,
the nominally autonomous republic was instead brought under the direct supervision of
the government, and the existing leaders of Karakalpakstan were forced to resign. By
July 1997, when President Karimov made an inspection tour of the Karakalpak
Autonomous Republic to force the retirement of these new incumbents whom he blamed
for poor cotton harvests, the republic was treated the same as any other viloyat. Karimov
imposed the standard central response to political and economic problems in Nukus [the
capital of Karakalpakstan]—a purge of the leading cadres.” (p. 277)
Also, as Uzbekistan’s poorest second-tier LGU and being situated downstream from the rest of
RUz, Karakalpakstan is totally dependent on the rest of Uzbekistan both financially and
ecologically. In its practical ability to exercise autonomy, therefore, Karakalpakstan is limited in
ways that other ethnic minority areas (such as the industrialized, ethnically Tajik cities of
Samarqand and Buxoro) would not be, were they to have a special status.
Tashkent City
The Constitution of the Republic of Uzbekistan confers no special status on Tashkent City, other
than its designation as the capital city; legislatively, Tashkent generally receives the same
treatment as any other second-tier LGU.
The city is divided into 11 urban districts (tumans), each with its own hokimiyat. However,
unlike other third-tier LGUs in Uzbekistan, these urban districts lack local councils of their own.
Instead, all local council functions for individual Tashkent tumans (confirming the tuman budget,
confirming hokim appointments, etc.) are performed by the second-tier Tashkent City Council.
Due to Tashkent’s size, wealth, infrastructure, status as capital city, and other idiosyncrasies (the
only city with a subway), Tashkent City (when compared with other provincial level
governments) may be treated differently in some legislation or held to a different standard in
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
43
practice. For example, in the “Rules for use of the communal water supply and drainage system
in the Republic of Uzbekistan” (Legal Log #42), Article 1.2 reads, “For Tashkent City the
present rules can be amended and modified in light of specific conditions in the city’s water
supply and sewage disposal. Such modifications must be approved by the Ministry of Communal
Services of the Republic of Uzbekistan and the Tashkent City Hokimiyat.” This is by no means
an isolated case; many legal acts allow for Tashkent’s unique circumstances.
That said, there is nothing in Uzbekistani legislation that systematically confers on Tashkent City
any more autonomy than that enjoyed by the Republic’s 12 provinces.
Conclusions
Central Control With Some Limited Deconcentration
“Local government”, as used in Uzbekistani legal and political parlance designates all subnational levels of government. Within the sub national tiers, any meaningful deconcentrated
authority resides in the second-tier, provincial- level hokimiyat, still at quite a distance removed
from the citizens who look to government for reliable and affordable services to be delivered
within their respective communities.
The current administrative and political structures in Uzbekistan still closely resemble Soviet-era
antecedents (notably the ispolkoms, or executive committees) in their vertical integration of
decision- making authority between the center and the various levels of sub-national government.
Centrally appointed executives are chosen for their loyalty to the president, and monitored for
their conformance to policy directives handed down from above (e.g., fulfilling cotton plan
targets). Thus, local government functions and is perceived more as a deconcentrated agent of
the central government than as a distinct autonomous political and administrative entity.
Upward Accountability Rather than Downward; No Incentive for Citizen Engagement
The local government executive may or may not have any meaningful ties to the people of the
local territory that he serves and, when appointed, may not even be a resident of jurisdiction over
which he has been chosen to preside. Managers of local administrative entities must contend
with a dual accountability up the chain of control but have virtually no accountability down the
chain to either the Council of Deputies or to the people receiving services. Given these
bureaucratic and political realities, local officials and their staffs have little incentive to involve
citizens or citizen groups in solutions.
Limited Motive and Scope for Local Executive Initiative
The current legal, political and financial context provides little motive or scope for local
executives and administrators to exercise initiative, especially those below the viloyat level.
Nonetheless, despite this strong inclination to look to “the center” for solutions, some local
executives do exhibit initiative and a willingness to experiment with new methods of local
service delivery. And, in the absence of clear guidance and sufficient resources, local
administrators at times find they no choice other than to act using whatever means are available
to them.
44
Central Asian Republics Local Government Initiative Phase II
Moreover, practical realities (e.g., a timid, self-censoring media, a lack of computerization in
administration and the limits of a poor telecommunication system) tend to allow some scope for
unsupervised local action. That said, these opportunities for local initiative arise from
circumstances that constrain effective centralized control, rather than from a well-established
legal and regulatory framework that openly acknowledges the importance of local administrative
autonomy for policy and service delivery.
45
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
Exhibit 5. The Demographics of Territorial Structure in Uzbekistan
Tier
First
Second
(province-level)
Third
level)
(district-
%
Urban
36.9
29.8
Type of Administrative Unit
# of Units
Population
Population/Unit
Republic of Uzbekistan
Viloyat (Province)
1
12
25,523,000
21,810,400
1,817,533
49.1
100
-
Republic of Karakalpakstan
Capital City (Republican Subordination)
Rural District (may include cities and towns with
urban population)
Urban District (Tashkent City only) ++
1
1
162
1,554,800
2,157,800
19,517,200#
120,785 – 120,169#
11
2,157,800
196,164
City of Viloyat Subordination (with hokimiyat)
City of formal Viloyat Subordination that is
factually subordinated to the district/other city
hokimiyat through a deputy hok im for the city
City of district subordination (subordinated to
district hokimiyat)
Town
Citizens’ Assembly (town, village, and mahalla):
Of which Rural Citizens’ Assembly
Of which Mahalla Citizens’ Assembly
29†
26
3,848,000#
3,404,900#
130,968 - 134,410#
16,527 - 17,019#
25,523,000§
-
-
100
Sub-district (no
independent
state
administrative
structure)
Self-government
100
100
100
100
0
-
Population
Range
667,800
2,797,800
3,800
<250,000¦
29,642–
288,177††
+
+
–
–
64
113
9,782‡
1,462
8,120‡
500–17,000
(approx.) ‡
All figures for this chart were taken from the State Committee on Statistics of the Republic of Uzbekistan (2002 Annual Regional Statistical Report and
Uzbekistan in Figures 2002) except for the following (Footnotes continue on the next page):
† According to the list of cities of viloyat subordination included in CoM order #459 “On improving the staff structures of district and city hokimiyats” (Legal
Log #26)
‡ Interview with Nigmatilla Abdullayevich Abdullaev, First Deputy Chair of “Mahalla” Foundation, 5 November 2003. Figures for number of mahallas and
number of residents vary widely from source to source: Human Rights Watch, on page 6 of its 2003 report on human rights abuses by mahalla committees “From
House to House” cites a January 2001 seminar paper that puts the number of mahallas at approximately 12,000, with them having between 150 and 1,500
households. In her Central Asia and the Caucasus article, Zoia Arifkhanova cites a 1997 Human Development Report as referring to over 10,000 mahallas in the
Republic.
§ A citizen may belong to a mahalla citizens’ assembly and a village or town citizens’ assembly simultaneously.
¦ OSI table 9A.3 “Rural Settlements by Population Size Categories in Uzbekistan (January 1, 2000)” (Bektemirov and Rahimov, Local Government in
Uzbekistan)
46
Central Asian Republics Local Government Initiative Phase II
# Plus or minus 49,900. Figures derived from (1) state statistics on population of most cities of viloyat subordination (2002 Annual Regional Statistical Report),
(2) the official Tenth Anniversary Political Map of the Republic of Uzbekistan, which gives administrative designations as of January 20, 2001 and population
ranges for all cities (ranges from this map used for Shirin, Xonobod, Quvasoy), and (3) The Tashkent Viloyat hokimiyat, which gave 33,000 to 35,000 as the
approximate population for Ahangoran
†† “Calculation of population [of Tashkent City] for January 1, 2004 (tentative figures)”, Tashkent City Administration of Statistics (Note: Bektemir District,
with only 29,642 residents, is somewhat of an outlier; a mere quarter the size of the next largest district, Mirobod, with a population of 123,601)
‡‡ Ranges for urban settlements in Uzbekistan are quite wide and not particularly instructive. For urban population distribution, see OSI table 9A.2 “Urban
Settlements by Population Size Categories in Uzbekistan (January 1, 2000)”
§§ As of December 26, 2003 Cabinet of Ministers Order #570, which eliminated eight urban districts, all that remained in the Republic, except for those in
Tashkent City.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
V.
LOCAL GOVERNMENT COUNCILS, CITIZEN’S
BODIES, AND RELATED GOVERNMENT-NGO HYBRIDS
47
SELF-GOVERNMENT
Uzbekistani law provides for three types of institutions which, in theory, allow for some check
on executive authority at the local level, and, through these institutions, for some accountability
to the public at large and opportunities for direct engagement of citizens with their government:
(1) elected local councils of people’s deputies, (2) mahalla committees and their chairmen
(oqsoqols), chosen by citizens’ assemblies, and (3) mahalla (citizens’ assembly) coordinating
councils at the village, town, and district levels. In practice, these institutions tend to function,
for the most part, as loyal extensions of the local state administrations. Local councils, in
particular, rarely play a significant part in local governing; their extensive treatment in this
chapter should not be understood to mean that the local council is an influential actor on either
the provincial or district level.
This chapter touches briefly on the role of the Mahalla Foundation, which, at first glance, looks
like an independent NGO but, in reality, is government-sanctioned and supported. Mention is
also made of the transition from Soviet-era collective farms to shirkats in the agricultural sector,
and how this has increased the responsibility of hokimiyats for public service delivery in the
countryside.
Local Councils of People’s Deputies and State Executive Encroachment
By law, people’s deputies of both district and provincial councils are to be directly elected by
citizens. (See the subsection that follows on the local electoral process). The formal powers of
these councils include confirmation of key local appointments (including hokims), creation of
local extra-budgetary funds, 24 approval of key local decisions, and ratification of the local
budget. In addition to the “people’s deputies”, the council is chaired by the appropriate hokim
(himself a people’s deputy) and his deputy hokims. 25 He appoints his own deputy hokims, subject
to presidential and local council approval. 26 In reality, however, legal requirements that hokims
be chosen from among elected members of their local councils have little effect, and do not
constitute a meaningful check on state executive structures’ power to appoint lower- level
hokims. Rather, higher organs will often appoint their chosen candidate for hokim and either
force a people’s deputy out of office or simply have the incumbent removed by the council
itself. 27 The council then schedules a special election and the path is cleared for the new hokim’s
membership in the council. 28
24
Article 14, Law “On local state government” (1993)
Article 2 Law “On local state government” (1993)
26
Article 21 Law “On local state government” (1993)
27
Local councils of people’s deputies are given the power to remove their own members in article 24 of the 1993
law “On local state government”.
28
The process for special elections to replace a deputy who has resigned is described in article 44 of law 520-II “On
elections to the provincial, district and city councils (kengash ) of people’s deputies (new version)”.
25
48
Central Asian Republics Local Government Initiative Phase II
Councils Large but Variable in Size
The sizes of councils of people’s deputies, determined locally, vary considerably. Olmaliq City
and Buloqboshi District, for example, both have approximately 115,000 residents; Olmaliq,
however, has 30 people’s deputies in its local council as compared to just over 20 in Buloqboshi.
Tashkent’s urban districts do not have their own local councils; rather, the Tashkent City Council
also serves as each district’s representative body. 29
Council Sessions Infrequent
By law, a hokim must convene a meeting of the council of people ’s deputies at least twice a year;
sessions generally last for two days, though nowhere is their length established by law. 30
Additional sessions are rarely convened except for extraordinary circumstances such as the
appointment or removal of the hokim. A session may also be convoked by no less than two-thirds
of the people’s deputies (Legal Log #5, Article 17). Generally, the minimum of two short
sessions is the norm, too infrequent and brief (typically a day or two per session) for councils to
exercise any real oversight of the hokimiyat or to serve as a counterweight. The sessions are
sufficient for local councils to rubber-stamp the budget, relevant appointments, and other
measures. Indeed, much approval by local councils occurs only as an afterthought, well after
implementation of the decisions that required their approval.
Role of Permanent Commissions
Local councils create their own permanent commissions, 31 which largely reflect the committee
structure of the Oliy Majlis. However, whereas the Oliy Majlis has 13 committees, most local
councils only have four or five permanent commissions. The particular commissions vary
according to locality, but the most common are commissions on the budget, construction, the
environment, agriculture, industry and transport, and social issues. Individual local commissions
have extensive contacts with the corresponding committees/commissions of representative
bodies at both higher and lower levels.
Although these commissions do work between sessions, virtually all local decisions of any
importance are made by the hokim and his appointees. As a matter of fact, those elected as
people’s deputies tend to be executive appointees anyway or are directly dependent on the
hokimiyat in some other fashion (i.e., mahalla chairpersons, appointed directors of state-owned
enterprises, etc.); their loyalty to the executive patronage structure is far more significant than
any accountability to their constituencies.
Councils Do Not Use Their Powers
Many sources, both official and unofficial, indicate that the local councils of people’s deputies
do not independently wield the powers the law gives them and merely function as rubber-stamp
bodies. Their subordination to executive structures is in sharp contrast to their lack of
accountability to the electorate. Official sources tend to blame this on a lack of initiative on the
29
Article 7, law 520-II “On elections to the provincial, district and city councils (kengash ) of people’s deputies (new
version)” (2003)
30
Article 17 Law “On local state government” (1993)
31
Article 19 Law “On local state government” (1993)
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
49
part of the local councils themselves; other observers note that the sweeping powers held by the
executive branch, both de facto and de jure, dwarf those of local councils, rendering them
ineffectual.
Provincial local councils can cancel acts of lower executive and representative institutions; 32 acts
they pass, in turn, can be cancelled by the Oliy Majlis. All acts passed by local councils,
therefore, can simply be cancelled by higher bodies. Another significant factor that prevents
local councils from acting independently is that provincial- level councils are composed largely
of district and city hokims—thus, the provincial hokim, who appoints and dismisses district and
city hokims as members of the executive branch, presides over them in the council as well. In
districts and cities, the local councils tend to be packed by mahalla chairs that, though formally
elected by citizen assemblies, are known for their dependence on and obedience to the
corresponding hokim.
Local Council Elections
Elections to provincial, district, and city councils of people’s deputies are extremely opaque and
do not provide for fair competition. According to representatives of international NGOs in
Uzbekistan, no significant impartial monitoring has been conducted for local council elections
since their inception.
Electoral Commissions
Quite apart from independent Uzbekistan’s unfortunate electoral history in general, the law “On
elections to the provincial, district and city councils of people’s deputies” (Legal Log #15) itself
contains provisions that, in effect, provide the state with ample opportunity to manipulate
elections. Most importantly, the process of selecting members of election commissions is firmly
controlled by the state. These state-appointed bodies handle functions of districting, registration
of candidates and voters, and conduct of the count, while mechanisms for oversight or appeal of
commissions’ actions are weak or non-existent.
Election commissions also control all private donations as contributions to specific campaigns
are prohibited; any private money can only be donated through an electoral commission as
general support for running the election as a whole (Article 48, see Annex C for full translation
of article). Needless to say, this results in uneventful, lethargic races, and much of the electorate
is unaware that local councils even exist.
Provincial electoral commissions are formed by the corresponding provincial local council
(Article 10); the provincial commissions, in turn, appoint members of commissions for
individual electoral districts in provincial races, of which there may be up to 60 per province
(Articles 7, 12). Members of both commissions require the approval of deputies from district and
city councils (Article 16).
32
Article 24 Law “On local state government” (1993)
50
Central Asian Republics Local Government Initiative Phase II
Self- government bodies approve members of district and city electoral commissions (formed by
the correspond ing local council); the self- government bodies also confirm appointments (by
district and city electoral commissions) of members of commissions for electoral districts for
third-tier local councils (there may be up to 30 electoral districts per administrative unit) and
their sub-districts (Articles 12, 14, 16).
The Nomination Process
Procedures introduced in August 2003, in preparation for the December 2003 elections, specify
that district and city councils will no longer have the right to nominate cand idates for the
provincial council elections. 33 Likewise, provincial councils will not be able to nominate
candidates to the Oliy Majlis. 34 Nomination rights will be reserved for parties, initiative groups,
and self- government bodies. One observer states that this represents only a minor improvement
(but a step in the right direction nonetheless), predicting that malleable mahalla committees will
replace local councils as the instrument for packing local councils with the hokim’s favorites. In
any event, parties also often nominate “independents” from the executive branch in lieu of their
own members.
The nomination process is arduous and constitutes a significant obstacle to free, fair, and
contested
[[Uncontested? Contestable?]]
elections. Political parties and initiative groups of voters are allowed to nominate candidates;
both, however, must be officially registered. Indeed, an initiative group must gather the
signatures of eight percent of the voters in every mahalla or village of its electoral district after
its registration with the appropriate electoral commission (Article 22); signatures gathered prior
to registration are not counted (Article 22-1). In addition to registered political parties and
initiative groups of voters, self- government bodies in an electoral district also have a right
(through a meeting of their representatives) to collectively nominate a single candidate (Article
22).
Elections are conducted in single- mandate districts for five- year terms (Article 1; see also Article
101 of the Constitution). The law does not require, but rather recommends, that local deputies be
elected from among the residents of a given electoral district (Article 22). Taking into account
the ease with which sitting deputies can be removed (Lega l Log #5, Article 24) and subsequently
replaced via special elections (Article 44), this provision leaves the door open for the election of
virtually anyone to a local council at any time. Since council membership is a prerequisite for the
coveted post of hokim, the looseness of these procedures further strengthens the hand of the
executive hierarchy to appoint whomever it wants and emasculate
[[Could this possibly be changed to “weaken”?]]
33
Article 20, law 520-II “On elections to the provincial, district and city councils (kengash) of people’s deputies
(new version)” (2003)
34
Article 20, law 518-II “On elections to the Oliy Majlis of the Republic of Uzbekistan”
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
51
any genuine hokimiyat accountability to local councils. In practice, hokims are appointed first,
and only then formally elected to their local councils.
The law treats elections as valid if at least 33 percent of the electorate participates (Article 41).
In order to win, a candidate must receive over 50 percent of votes cast; if no candidate receives
over 50 percent of the vote, run-off elections are organized (Article 41). Unlike mahalla
committee elections, balloting must be secret (Article 5) and direct. In order to vote for a
candidate, voters must cross out the names of all of his/her opponents (Article 38).
See Appendix J for a breakdown of the composition of the local councils of Tashkent City and
Tashkent Province as of late February 2004. Data do not reflect the results of the February 29
Tashkent Province special elections (to fill the seven empty seats).
Legislating the Mahalla: Modernization of an Indigenous Institution or State Co-optation?
In contemporary Uzbekistan, the mahalla (a traditional form of societal organization in regions
of Central Asia that have that have historically been sedentary) has been integrated into the
government structure in important ways. While retaining some of its traditional functions, the
mahalla today combines features of both local self- government and state administration; as such,
it serves as perhaps the most significant instrument of government control below the district
level.
Thus in modern-day Uzbekistan, “mahalla” (roughly translated as “neighborhood”) has two
overlapping manifestations:
1. In the socio-anthropological sense, “mahalla” refers to an informal solidarity group,
common to all traditionally settled peoples of Central Asia. This is the understanding that
continues to dominate outside of Uzbekistan (principally in Tajikistan, Afghanistan and
China’s Xinjiang Province but also among some minority nationalities in Kazakhstan,
Kyrgyzstan, and Turkmenistan).
2. Additionally, in the post- independence era, the Uzbekistani mahalla has acquired a legal
status as an organ of citizens’ self- government with paid officials and concrete
responsibilities, especially in the social sphere.
(See the addendum to this chapter for more on the history of the mahalla in Central Asia.)
“… the mahalla, or neighborhood, structure… de facto address[es] matters on [its] own. A traditional
aspect of Central Asian society, the mahalla is being recreated in independent Uzbekistan. When it
comes to addressing the day-t o-day problems of Uzbek citizens, the mahalla has become a vehicle
through which such matters are addressed.”
—Robertson and Kangas, p. 266
“In public, the institution of the mahalla is evoked constantly as proof of the continuation of indigenous
traditions and democratization, but in private the most democratic elements of the tradition are quietly
repressed in the interest of national security”
52
Central Asian Republics Local Government Initiative Phase II
—Bichel, p. 302
Since 1992, Uzbekistan has made a concentrated effort to co-opt the mahalla into governing
structures, including it in the Constitution (Article 105) and many other legislative acts as an
organ of self- government. National legislation bestowed new responsibilities on mahallas, and
they are also now expected to implement additional orders issued by district hokimiyats. While
similar community organizations were given legal status within a hierarchy of local selfgovernment in other countries, the extent of their formal integration into state structures
distinguishes Uzbekistani mahallas from similar bodies in other former Soviet republics.
According to official figures, by 2003 Uzbekistan had over 8,000 registered mahallas. 35
As outlined in the April 1999 Law “On self- government” and other legislation, a mahalla’s
population as a whole constitutes a type of citizens’ assembly. Everyone in Uzbekistan belongs
to at least one such citizens’ assembly. At the head of the mahalla sits its kengash, or mahalla
committee. The kengash typically has around 15 members: the oqsoqol (chairman), the kotib
(secretary), and advisers on specific matters, which often roughly correspond to state ministerial
functions—an adviser on religion, for the women’s committee, for health, etc. There are also
advisers for more traditional functions, such as wedding planning and coordination ceremonies.
The last few years has seen the creation of the offices of the neighborhood guardian (posbon) and
educational advisor.
The mahalla chairman (oqsoqol), according to Article 20 of the law “On citizens’ selfgovernment institutions”, is elected to a 2.5-year term upon receiving over one-half of votes cast
“with the approval of the appropriate district or city hokim.” According to Republic Mahalla
Foundation officials, the election of the oqsoqols and other kengash members proceeds more or
less as follows: All older than 18 are eligible. An electoral commission (nominating committee)
divides the mahalla up into sectors (generally blocks or streets). Each sector will choose a
representative to participate in the general assembly (in most cases the commission members
simply find someone who is recognized as a leader of sorts). According to a district Mahalla
Foundation director and an oqsoqol interviewed, the only official role of the hokimiyat in the
selection process is to conduct a background check (vetting them for criminal record, religious
opposition, terrorist association, etc.) on candidates nominated by the electoral commission.
In practice, the election process appears to be a quite compromised one:
•
35
The kengash is officially elected by individual citizens, but often only a small number are
present—“representatives” of other voters (in more traditional areas, these tend to be
male heads of households—elsewhere, though, it is not unusual even to have a female
oqsoqol). One oqsoqol interviewed said that only 80 to90 individuals were present at his
election—out of a total of 220 families. Another source reported that in her family’s
mahalla, the selection process followed a traditional pattern of the recognized (and more
religiously devout) elders simply on an informal, self- selected basis forming the
committee (the kengash), with the current oqsoqol elevated to the post after completing a
Different sources give widely varying figures for the number of mahallas in Uzbekistan. The figure used here was
provided in November 2003 by Nigmattilla Abdullayevich Abdullayev of the Mahalla Foundation.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
53
hajj (pilgrimage to Mecca). Though the law allows for either secret or open voting, thus
far election by show-of-hands (and, usually, through representatives) has been the norm.
•
According to many accounts, mahalla elections merely rubber-stamp an uncontroversial
and malleable candidate offered by the district hokim, and are not free, competitive, or
fair. Nor are they broadly inclusive. District hokims apparently fire and appoint oqsoqols
at will, without waiting for their term to end. The basic mechanism for this is to pressure
them out of office. There is always some kind of deviation from state policy on providing
welfare assistance; often other laws are also broken inadvertently in one way or another.
In order to avoid the shame and legal implications of a full- fledged investigation by the
Ministry of Finance’s Supervision and Auditing Administration or the procurator’s
office, many oqsoqols simply resign at the hokim’s request. Then a meeting of
“representatives” is called to elect a new chairman.
According to Mahalla Foundation sources, oqsoqols are younger than in the past, most being
younger than 50. Some gender roles are also changing as the mahalla becomes a formal organ of
government. As noted above, it is not unheard of for citizens’ assemblies to have female
oqsoqols—a term that is literally translated as “white beard” and traditionally simply means
“elder”. The Law on Citizens’ Self-Government allows for voting that is open or secret, direct or
through representatives. Though voting by open meeting of representatives remains the norm, a
number of mahallas reportedly were cons idering using a secret ballot for the NovemberDecember 2003 elections.
Town and Village Mahalla Coordination Councils
Town and village coordination councils are officially classified as “social organizations,” though
they are currently financed from district budgets. They are unlike district and provincial councils,
as they are not directly elected bodies, nor can they be called legislatures. Article 17 of the 1999
law “On citizens’ self- government institutions” gives mahalla citizens’ assemblies the right to
form mahalla coordination councils (councils of oqsoqols); this is in addition to the options that
villages and towns have to elect their own citizens’ assemblies.
Town and village coordination councils’ main function is to mediate between the hokimiyat and
the mahalla committees, which all send their own representatives. This, however, does not mean
that third-tier LGUs and mahalla committees themselves do not have direct contact. Budgetary
requests, for example, are made by citizens’ assemblies directly to the district financial
department without passing through any intermediate body, and the district itself monitors
mahallas’ expenditures. Town and village coordination councils also make decisions on matters
that concern the entire town or village, such as a common cemetery or a community center used
by all residents. Councils typically include, at the very least, a chairman, a secretary, and the
head of the town/village draft board.
Local governments, however, generally take the lead in mahalla coordination, especially as they
wield the power to refuse confirmation of elected citizens’ assembly kengash chairpersons and
54
Central Asian Republics Local Government Initiative Phase II
have considerable unofficial levers of executive influence in the process of selection and removal
of citizens’ assembly kengash leaders. Indeed, district and city hokimiyats often have one deputy
hokim in charge of coordinating mahallas (i.e., citizens’ assemblies).
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
55
The Modern Day Mahalla as an Instrument of State Administration
The present-day mahalla finds its primary role in the arena of social policy, both as an
instrument of state administration and in its more traditional capacity. In the words of one
commentator: “The mahalla is the primary site and source of state welfare assistance, with the
local leader having total control over who receives what and how much.”36 In addition to
distributing social assistance payments, mahallas are expected to work with and help raise
school-age children; they are responsible for important aspects of reproductive health and family
planning, and they handle requests for divorce and complaints of domestic violence.
•
•
•
•
The delegation of certain aspects of social policy is officially intended to make social
programs more cost-effective and directed.
Some programs (e.g., pensions) are still centralized, 37 as is minority education and other
minority policy (presumably because this has an effect on external relations), but much in
this sphere (especially paperwork) has also been delegated to the mahallas and other
organs of local government.
General poverty makes competition for limited social funds particularly acute. This,
along with third-tier LGU and mahalla discretion regarding distribution of welfare
monies, probably contributes to corruption and misappropriation.
Officially, the government envisions a proactive mahalla, involved in reforming society
rather than simply governing the population. It
[[The mahalla?]]
•
•
•
36
should pass the complaints of its residents on to organs of state government. 38
In theory, the modern mahalla is supposed to bridge government and civil
society/business. Indeed, the mahalla has engaged in some limited NGO cooperation,
such as USAID’s Red Apple Program, which enlisted mahallas to distribute
contraceptives and perform other reproductive health functions. The Swiss Water Project
for Central Asia has mahallas in its pilot villages set up water committees, actually
resurrecting one pre-Soviet aspect of the mahalla’s responsibilities.
Many, however, fear that the government uses mahallas to crowd out truly independent
NGOs—making them a government-controlled substitute for genuine grassroots
involvement.
The mahalla designates an educational advisor to work with schools and the local
department of education to monitor truancy, encourage enrollment, consult with parents
on special education options, and generally take an active interest in raising the children
of the mahalla. The educational advisor is subordinate only to the mahalla’s kengash,
Bichel. p. 301
Robertson and Kangas. Unity or Separation? Kempton & Clark Eds. “Central Power and Regional and Local
Government in Uzbekistan.” 2002. p. 281
38
Arifkhanova, Zoia. Central Asia and the Caucasus. “Traditional Communities in Modern Uzbekistan.” October
2000. p. 3
37
56
Central Asian Republics Local Government Initiative Phase II
•
and some officials from the Department of Educatio n characterize them as unhelpful and
claim that they are just “former teachers who don’t want to teach anymore”.
Many informal traditional functions continue, often with an official mandate: care for
the vulnerable, wealth redistribution, coordination and support for celebrations and
holidays, etc.; the mahalla determines wedding dates, helps conduct various traditional
ceremonies, organizes xashar (unpaid communal labor) twice a year (for cleaning,
greening, or construction of mosques, tea houses, etc.) The primacy given to family
loyalty and traditional family values remains a common theme; each mahalla has a
“make-up commission” to provide counseling to dysfunctional families and couples
considering divorce.
•
The mahalla’s responsibility to issue certain certificates (a role assigned during the
Soviet era) has expanded in post- independence Uzbekistan. If neighborhood officials in
the late Soviet period certified place of residence and family composition, mahallas now
also issue certificates to verify that a resident does not owe anything for communal
servicesand fill out forms for exit visas for the unemployed (the employed have them
filled out at their place of work) in addition to handling many family and property-related
issues. 39 The kotib prepares the paperwork and the oqsoqol signs. All data collected in
this way are passed on to the local hokimiyat.
•
Some but not all mahallas have a role in collecting fees for communal services; the
kengash enjoys some discretion in spending these revenues 40 if the neighborhood has no
outstanding communal service debts.
While there is considerable republic-wide variation between mahallas’ structures and functions,
within any given third-tier LGU there appears to be relatively little differentiation (a consistency
that reflects the dominance of the district hokimiyat).
Mahalla committee chairmen regularly meet with hokims, who generally treat the oqsoqols as
employees of the state structure; they are frequently made to implement unpopular policies (such
as the de-greening of many of the streets of Samarqand).
Relatively recent legislation (most importantly, the 1999 law “On citizens’ self- government
institutions ”) provides much of the foundation for the increase in accountability of the mahalla
committees to the center. This legislation allows for theoretical two-way accountability, but
actually gives local executives more extensive control than had existed in the Soviet period. For
example, Article 10 of the 1999 law states that citizens’ assemblies (a category that includes
mahallas) are to:
hear quarterly reports of the heads of district, city and regional hokimiyats on the issues
included in the field of activity of self- government institutions. Minutes of citizens’
assembly meetings on these reports shall be sent to the hokimiyats of the provinces and
39
40
Article 13, Law “On citizens’ self-government institutions” (1999)
Presidential decree #2832 “On a new phase in deepening reform in the communal service sector” (2001)
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
57
the City of Tashkent accordingly, which, in turn, register them and also supervise the
handling [by mahallas] of citizens’ requests.
In reality, due to huge power asymmetries between the executive branch and self- government
institutions, such provisions provide, not two-way accountability, but rather a sound legal
foundation for mandatory meetings of oqsoqols held by the hokimiyat. Robertson and Kangas
write, “Accountability of higher officials to lower constituencies [in Uzbekistan] simply does not
exist.”41 As a result, the organs of self- government are de facto integrated into the state
government structure. For example, Article 5 of the presidential decree “On increasing the role
of self- government institutions in provision of targeted social support for the population” of
January 13, 1999 (Legal Log #18) allows the hokimiyat considerable freedom to oversee a
mahalla‘s distribution of social aid. While this may (quite appropriately) make mahalla
committees more accountable in distributing state welfare aid, it also provides the government
with yet another lever of control over them.
Simultaneously, however, despite a large degree of local executive influence in self- government
bodies, “[mahallas] are clearly seen as an important outlet for mass participation in a limited set
of issues.”42
Mahalla Finances
In interviews, mahalla committee chairpersons and their advisers often complained that they do
not have enough resources to perform their duties under the law, much less to take advantage of
their proximity to the community and help it mobilize as a true social organization. Many felt
that resources they receive from the budget further restrict them by making the m accountable to
local financial organs and the hokimiyat.
Mahallas do receive some funding from district/city budgets. For the first time ever, mahalla
leaders (as well as secretaries, the posbon and the educational advisor) are paid employees of the
state, with their salaries and pensions determined centrally, not locally. 43 The oqsoqol, kotib
(secretary), and the posbon receive a full standard salary; the pedagogical worker receives a half
salary. All other functions in the mahalla are carried out on a voluntary basis.
Mahallas also receive third-tier LGU funds from the appropriate budget for redistribution to lowincome families and unemployed mothers of children under two, though they just determine
recipients; physical disbursement is carried out by banks (for more details on social aid by
mahallas, see chapter VIII below).
Uzbekistani law also provides for non-budget sources of funding for mahalla activities.
Mahallas in some localities collect communal service fees on behalf of public utilities and get to
retain up to 10 percent of the gross revenues collected for their own activities; however, funds
41
p. 266
Robertson and Kangas. p. 283
43
April 23, 1998 executive order “On support for self-government institutions”, Legal Log #13
42
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Central Asian Republics Local Government Initiative Phase II
collected in this manner must, first of all, go to paying back communal service debts and helping
needy families pay their utility bills.
Businesses can also make donations to the appropriate mahalla, as the citizens’ assembly and its
committee have a considerable degree of oversight in relation to economic activity. Some
mahallas also grow crops or operate small businesses (bakeries, barber shops, TV repair, real
estate, etc.), a practice that is officially encouraged and may represent a step away from a market
economy. 44 One mahalla in Tashkent reportedly earns over one million so’ms annually from
commercial services. Other revenue-creating activities, such as rental of furniture and dishes for
weddings and other ceremonies, are not uncommon.
Like other entities that receive budgetary money, mahallas have their own bank accounts. Their
financial activities are monitored by the district financial department’s supervision and auditing
administration. The prosecutor’s office also monitors mahalla activities, checking all
documentation of appropriations decisions and making sure that official guidelines are followed
in administering social assistance payments. Once a year, the mahalla council is required to
prepare a written report for the general assembly of residents. However, general assemblies are
often not held or are held with only a small fraction of a mahalla’s members present. Even when
accessible to residents, the report does not include a clear accounting of the diverse revenues
passing through the mahalla (the share in communal service collections, income from business
activities, donations, and social protection payments it administers).
As noted above, interviews with mahalla officials revealed that a shortage of funds is endemic;
there is also a lack of meaningful flexibility in making spending decisions. One kengash member
noted that “significant responsibilities have been given over to the mahallas, but these new
powers can be exercised only within an extremely rigid and restrictive framework.” Funds raised
by citizens’ assemblies through collection of payments for communal services must be used to
pay off communal service debt and help low- income families pay for communal services and so
do not normally constitute a source of funding for citizens’ assemblies’ general activities; indeed,
payment collection in much of Uzbekistan is not administered by the citizens’ assemblies at all. 45
Article 10 of the law “On citizens’ self- government institutions” stipulates that the minutes of
citizens’ assembly meetings on quarterly reports are sent to hokimiyats, which register them and
supervise the handling, by self- governments, of citizens’ requests. Executive organs’ supervisory
powers are especially strong in relation to distribution by self- governments of social aid. Though
the law repeatedly stresses accountability of the kengash of the citizens’ assembly to its
residents, in practice it accounts only to the appropriate district hokim, whose approval is
required to confirm the election of any kengash chair.
44
Order of the Oliy Majlis “On implementation of the law of the Republic of Uzbekistan ‘On citizens’ selfgovernment institutions’ in Tashkent Province” (1997); Ministry of Justice Regulation #808 “On ‘EnterpriseMahalla,’ an economic cooperation and mutual assistance program” (1999)
45
Article 4, Presidential decree #2832 “On a new phase in deepening reform in the communal service sector” (2001)
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
59
Key decisions on the consolidated state budget are made at the republican level; even the formal
budgetary process does no t allow for discussion below the district level (beyond submission of
requests)—payments to citizens’ assemblies are itemized in the district budget.
The Problematic Relationship between Mahallas and Housing Association (TSJs)
Housing associatio ns (TSJs) and mahallas overlap in terms of territory, members, and often
staff; moreover, their powers and responsibilities under the law also overlap. These factors, as
well as the mahalla’s widely observed mission creep, have contributed to a profound lack of
clarity surrounding mahalla-TSJ relations. Uzbekistani legislation provides for the TSJ as a
democracy of multi- unit housing-owners, unified by a common economic interest in their
building(s), whereas mahallas and other citizens’ assemblies are supposed to be democracies of
citizens with a mandate in the social sphere that is considerably wider than that of the TSJ.
Inasmuch as multi- unit housing-owners are also citizens, there is necessarily interaction between
TSJs and mahallas, but, in law, their underlying raisons d’etre are distinct.
The problem of under-defined, unregulated practical relations between TSJs and mahallas is
further exacerbated by the large size of TSJs and their boards’ abdication of duties to residents.
To ensure some baseline degree of care and management in the face of neglect by oversized
TSJs, the Soviet-era domkom (“building committee,” though usually made up of one person)
remains quite common in multi- unit buildings, despite the fact that it is not provided for
anywhere in Uzbekistani legislation. The domkom often works closer with and accounts more
directly to the mahalla committee than the TSJ board, an arrangement that undermines housing
associations as an institution, clearly intruding on their mandate under existing legislation.
The Urban Institute’s USAID supported LGI-II program office in Tashkent is currently in the
process of conducting several joint activities with mahallas and the Mahalla Foundation, having
identified problematic interrelations between the two institutions as a constraint on advancing the
LGI-II program objective of promoting more democratic and effective TSJ management. To
address this problem, UI has tried to promote open discussion among stakeholders on mahallaTSJ relations, inc luding surveys of chairpersons of both types of organization and round table
discussions. Based on the results of these and other activities, UI plans to prepare
recommendations on viable alternatives for regulating interrelations between housing
associations and self- government bodies.
See chapter VIII, below, for more on the reorganization of the communal sector (including
mandated TSJ formation in multi- family buildings) in the aftermath of housing privatization.
The Mahalla Foundation and Hierarchy of Mahalla Coordinating Councils
The president created the Mahalla Foundation by executive order in 1992. It is described by its
leaders as an NGO, although it appears to function more as an adjunct to the government rather
than a truly independent entity guided by its charter and members. The Mahalla Foundation even
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Central Asian Republics Local Government Initiative Phase II
formally approves some acts of legislation that concern mahallas and their activities in the
community (see, for example, Legal Log #49). Donor organizations that monitor the non-profit
sector find little transparency (particularly in financial matters) or top-down accountability to its
members. According to the Foundation’s chairman, the organization receives no government
budgetary support, and claims to be member-supported, though in a cursory survey of legislation,
the authors of this report found at least one documented instance of the Foundation receiving
considerable funds from the reserve fund of the CoM (Presidential Decree #478, October 8,
1992).
In parallel with the state administration itself there are, in fact, two related mahalla hierarchies
that extend from the village all the way to the republic level. The first is the Mahalla Foundation
itself with about 230 local offices at the district/city level. Secondly, Article 17 of the 1999 Law
on Self-Government Institutions states that, in addition to a Republican Council of Chairmen
(oqsoqols) [of Citizens’ Assemblies], [[“coordinating councils on the affairs of citizens” can be
established at the city, district, provincial levels.”]] [[Is this sentence missing a set of quotation
marks somewhere, or is there one extra?]] Additionally, in villages and towns, there may be a
citizens’ assembly for the entire village/town, which overlaps with those of its constituent
mahallas. Officially, both village citizens’ assemblies and those of mahallas on its territory are
bona fide self- government bodies; in practice, however, the typical functions of the kengash of a
larger citizens’ assembly which has several smaller assemblies on its territory closely resemble
those of a village coordination council of oqsoqols.
Based on Article 17 of the Law on Self-Government Institutions, the mahalla citizens’
assemblies each send a representative (generally the oqsoqol himself) to form villagecoordinating councils (confusingly enough, also called kengashes). In turn, the village
kengashes, as well as town and village citizens’ assemblies, each send representatives to a
coordinating council at the district level, and so on up to the Republic level. The district or city
level coordinating councils meet once a quarter though may be gathered more frequently by the
corresponding deputy hokim.
Although presumably, at each level, the members of the kengash coordinating council would
choose their chairman, the head of the Mahalla Foundation at each territorial level typically
doubles as chair of the coordination kengash, having been recommended by the hokim for both
positions. One chairman interviewed asserted that the functions of the coordinating councils at
the district level and above are relatively trivial compared to those of the mahallas themselves
(primarily organizing volunteer “greening” and flower plantings and clean-up campaigns). Other
observers, however, note that this dual- hierarchy of mahallas facilitates top-down management
of local self- governments by hokimiyats, which can use these structures to hold individual
mahallas accountable for implementing executive policy. The authors also encountered instances
of regiona l Mahalla Foundation chapter decisions (i.e., decisions of a local NGO) being cited as
though they were legislative acts, having equal force with other legislation (the authors, however,
were not able to explore the extent to which this practice is widespread). 46
46
For example, a Protocol Decision of the local chapter of Tashkent City’s Mirzo-Ulug’bek District (passed
February 18, 2004) has been often cited as requiring participation of the corresponding citizens’ assembly in
founding meetings for all new housing associations. This was cited by the hokimiyat’s registration department in at
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
61
The Shirkat in Modern Uzbekistan
In any assessment of local government in Uzbekistan, some mention should be made of the
shirkat xo’jaligi (shirkat), the post-Soviet successor to the kolkhoz, or collective farm in
Uzbekistan. Unlike in European parts of the Soviet Union, in Central Asia the collectivization
drives of the early Stalin years tended to preserve and even underscore traditional solidarity
groups within the new kolkhozes.47 In time, the kolkhoz itself became an integral part of
traditional life in the Uzbek S.S.R., serving both to isolate rural communities and mediate
between them and government bodies. 48
The shirkat xo’jaligi differs from the Soviet collective farm in that shirkats have generally shed
the social infrastructure objects they had maintained (and related social services they had
supported) under socialism. For example, Andijon’s Buloqboshi District’s eight shirkats
transferred their thirty-two schools, five hospitals, twenty- four kindergartens, and one medical
clinic to the district Hokimiyat at no charge when it became clear that the collective farms could
no longer afford to operate them. Additionally, now state land not used for cotton and wheat
orders from the center is often sharecropped out under the traditional ijarat system. 49 Otherwise,
however, collective farms have changed relatively little since independence. 50
Each shirkat has a chairperson (rais), who is accountable to the district hokimiyat via the deputy
hokim of agriculture (though some chairpersons of especially large, important, or lucrative
shirkats may be accountable to someone above the district level). Deputy hokims of agriculture
(who also have a key role in the distribution of irrigation water) 51 often meet with shirkat
chairpersons to coordinate their activities and manage resources. Shirkat chairpersons, therefore,
are part of the executive hierarchy, and are shuffled around, appointed, and removed in much the
same fashion as hokims and other appointees of republican executive hierarchies.
The borders of shirkats do not necessarily correspond to those of territorial-administrative
units—indeed, they can even straddle more than one district. Shirkats generally include several
citizens’ assemblies, but their respective functions are relatively distinct—citizens’ assemblies
fulfill mostly social functions, while shirkats are economic institutions.
In their primarily economic capacity, shirkats command substantial land and property resources.
They manage state land renting it out to private farmers (a significant way in which chairpersons
and the deputy hokims to whom they are subordinate can supplement their meager official
least three instances as a reason for denying registration to new housing associations, although the April 15, 1999
“TSJ Law” states that only the agreement of one-half of apartment-owners is required.
47
Roy, Oliver, pp 86-87
48
Roy, Oliver, p 92
49
Roy, Oliver, p 187
50
Roy, Oliver, p 184
51
Potable water from the local vodokanal, however, is typically used for irrigation of vegetable gardens on private
plots (i.e., those which belong to individuals under the permanent use right).
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Central Asian Republics Local Government Initiative Phase II
salaries) and ensuring that planting quotas for cotton and wheat are met. Significantly, the
performance of any given rural hokim or rais is judged largely according to cotton harvests, and,
as a result, they often significantly overshoot planting quotas. Shirkats also supply seed,
agricultural equipment, fertilizer, and pesticides to farmers; additionally, they ha ndle cotton and
wheat sales to the government (at below- market prices dictated by authorities in Tashkent).
The rais also has important social functions (but, in contrast to the Soviet era, not in the
oversight of municipal-type services such as schools and health clinics). The decisionmaking
process within the shirkat is based on personal relations and other subjective criteria and is
generally neither transparent nor even-handed (though this depends on the particular chairperson
and the relevant hokimiyat). People approach chairpersons with their problems, and they, in turn,
can make requests of the hokimiyat, the local vodokanal, the Ministry of Agriculture, their
factory managers, and so on. 52 Indeed, chairpersons are extremely well- integrated into local
patronage networks. In his book The New Central Asia, Oliver Roy comments that “the kolkhoz
[as a solidarity group] extends towards the town” making it relevant for urban power structures
as well; 53 he does, however, indicate that, recently, increased income from central on- and offbudget sources has weakened the ties of the rais with his/her own peasant farmers and made
republican politics in general less rural.
Conclusions Regarding Local Councils of Deputies
Although the councils of deputies are uniformly elected directly by the people and by law have
some fairly broadly defined approval powers over executive action, in practice they function as
anemic, rubber-stamp bodies over which the hokim holds sway.
Moreover, the right of bodies at higher tiers to nullify any local action further discourages
independence. No one interviewed for this assessment could recall a single instance of a council
questioning the appointment of a hokim or refusing to ratify an executive action brought to a
hokim for approval. They are constrained by the lack of control over the executive branch that
manages their territories.
Two brief sessions a year is insufficient for a council to exercise any real oversight of the
executive, even if it were so inclined. Direct election of local government executives and/or
strengthening of the local council (including its more active involvement in selecting and
removing hokims) are a necessary pre-requisite for introducing any genuine accountability into
the system. Meaningful changes in the present provisions for choosing hokims would most likely
require a constitutional amendment. None of the senior government officials or members of
parliament interviewed felt consideration of any such initiative would be at all likely any time in
the near- to mid-term (next five years or so).
52
53
Roy, Oliver, p 185
Roy, Oliver, p 91
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
63
Conclusions Regarding Mahallas
As noted above, one of the most distinct aspects intergovernmental arrangements in Uzbekistan
has been the anointment of the traditional mahalla, in law, as a form of local self- government,
and, in practice, as an extension of state administration down to the neighborhood level. This cooptation of the mahalla has proved expedient for the government for two reasons:
•
It makes the president a defender of tradition, adding to his legitimacy. By
revolutionizing and modernizing the mahalla’s structure and functions, he can also claim
to be a reformer. 54 Reforms and delegation of duties allow the government to shift
responsibility for a failing social policy and deteriorating social infrastructure away from
the central government. Support for mahallas allows the government to assert that it has
acted to make governance more local, and, therefore, more accountable and efficient.
The mahallas, at little administrative expense to the government, currently run major
social programs, providing aid for non-working mothers of children under two years of
age, aid for low- income families, and aid for low- income families with children who are
minors.
•
Legisla tion of mahallas brings this entrenched institution into the official realm, making
it more accountable to the center and limiting its potential as a source of opposition. This
begs the question: To what extent are mahalla committees actually self-government
institutions and to what extent are they merely an extension of the state government’s
executive structure?
As these arrangements have taken hold, the mahalla has become something of a compromised
institution in the eyes of the international community, particularly insofar as it may serve as an
arm of the state internal security apparatus.
Implications for Technical Assistance
Certainly, if USAID should decide to explore broadening its program to strengthen democratic
local governance, it must rega rd the mahalla with a clear and skeptical eye. That said, there are
some forms of engagement that might merit consideration:
Option I—Promotion of Democracy and Accountability in Mahallas
Option I would be a wide program of engagement and training predicated on the assumption that,
in light of the considerable variation among mahallas in Uzbekistan, someone is doing
something positive—and that the way forward is to identify exemplary practices and the
conditions that make them possible, to analyze them, and to promote their adoption elsewhere in
the Republic.
54
Robertson and Kangas. p 283
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Central Asian Republics Local Government Initiative Phase II
•
A starting point might be to conduct some formal survey work to identify, if possible, a
subset of mahallas that appear to be functioning as genuinely representative bodies—that
is, those tha t demonstrate some active, broad-based participation in selecting the
chairman and other leaders, some evidence of general meetings being used to inform and
engage constituents, some measurable perception among residents that the mahalla
leadership is trus ted and perceived as working on behalf of citizens. Such a survey might
focus, in part, on the recent (November-December, 2003) mahalla elections—including
trying to follow up on reports that a few mahallas, on their own initiative, might
experiment with some form of secret ballot. The authors’ interviews with managers of
various donor- funded projects that operate at the grassroots level revealed several who
felt they had true mahalla partners for their projects, which, in some meaningful ways,
operate as accountable and constructive bodies (even if they do not necessarily function
exactly as envisioned by the law “On citizens’ self- government institutions”).
•
Assuming that the above survey work identified some model mahalla practices, a training
activity might be designed to deepen and broaden these practices. For example, partner
mahallas might agree that, as part of their annual written report to their members
(perhaps to be displayed on a community bulletin board, a practice that Mercy Corps, for
instance, has found to be useful and verifiable), they would include a complete financial
account of their revenues and expenditures (including donations, shares in gas collection
receipts, and local hokimiyat budget support). Similarly, an initiative might look to more
complete, standardized reporting on the distribution of social assistance payments
through the mahallas. Also, the program design might look ahead to the next mahalla
elections in mid-2006 as an opportunity to promote an active, democratic nominating
process and widespread use of secret ballots, perhaps bolstered by some actual changes in
law or other legal directives. Attraction of international monitors from other projects
could be one goal for the 2006 mahalla elections, but there would have to be something
promising to monitor by that time.
A precondition for proceeding with this type of initiative might be the willingness of the
Mahalla Foundation to serve as an active implementing partner. At a minimum, the
Mahalla Foundation and major central government actors would have to give real
guarantees of passive support.
Of course, further consideration of any mahalla strengthening activity should also consider
whether, from the strategic perspective of the international donor, it is better to accept as a
permanent given the constitutional conversion of the mahalla into an official self- government
body, or, if anything, to encourage its clearer separation from government altogether and
continued development as a truly independent, accountable, transparent community-based NGO.
Here it should be noted, as detailed in the concluding chapter below on related donor activities,
that several international donors have sponsored assistance to mahalla development along NGO
lines.
Option II—Program on Interrelations between Local Self-Government Institutions and
Housing Associations (TSJs)
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
65
Option II would have a much narrower focus; by concentrating on the TSJ-mahalla relationship,
it would build on existing USAID LGI-II activities in Uzbekistan, which are currently limited to
TSJ development. It would use working groups, trainings, and other activities to provide
legislative and practical clarity on the division of functions between mahallas and TSJs in
relation to multi- unit housing stock and on the potential for constructive, structured cooperation
between Uzbekistan’s two most local institutions. Option II could also serve as a useful entrée
into a more extensive program based on option I, should the mahallas or the Mahalla Foundation
prove to be a constructive partner. Even if option II were not followed by an expansion of work
with mahallas, it would help define issues within the chaotic housing and communal services
sector on its most micro level and stimulate a crucial dialogue between these two significant
bodies.
A relatively modest expansion of LGI-II could build on these efforts and reinforce progress made
with mahallas in the course of the existing USAID program. Such an expansion might include:
•
•
•
improvement of legal regulation of this crucial interrelationship;
joint trainings of TSJ and mahalla chairpersons on matters of common interest;
dissemination of best practices in mahalla-TSJ cooperation and encouragement of their
adoption elsewhere.
66
Central Asian Republics Local Government Initiative Phase II
________________________________________________________________________
ADDENDUM TO CHAPTER V: THE MAHALLA IN AN HISTORICAL AND CENTRAL
ASIAN CONTEXT
Traditionally, the mahalla is a self-contained unit that mediates between the individual and the
outside world. For its members, it often represents a much more meaningful point of
identification than some meta-personality, such as class or nationality. 55 The traditional mahalla
values collegiality, trusteeship, paternalism, respect for elders and the family, and deference to
custom. 56 Family (rather than the individual or any alternative sub grouping) represented, and still
represents, the most important solidarity group within the mahalla. 57 The mahalla’s main
traditional spheres of activity are (1) economic, (2) religious, (3) ritual, and (4) everyday social. 58
Traditional mahalla functions (some of which have been relegated to the dustbin of history)
include:
•
•
•
•
•
•
•
•
•
provision and coordination of venue, support, goods, and services for ceremonies and
holidays; there is a constant flow of goods and services among members;
intervention in the sharing and redistribution of wealth (especially around holidays and
the opening of new businesses);
governing water rights;
mediation of property disputes and other local matters;
maintenance of social order;
tax collection;
levying of militaries;
dealing with familial matters, marriage disputes, and so on with the participation of the
female elders;
caring for the vulnerable (elderly, orphans, destitute, etc.).
Soviet Repression and Co-opting the Mahalla
At first, the Bolsheviks tried to eradicate the mahalla, dismissing it as a relic of the region’s
feudal past. In particular, it offended their ideological sensibilities by serving as an alternative
focus of civic duty and social responsibility. After several decades, however, the Soviets found it
expedient to co-opt this institution, albeit under a different name and with major changes. Thus,
the mahalla reality often existed parallel to fabricated official institutions, leaving it in a position
to recover quickly after independence.
55
Bichel, Anthony. Unity or Separation? Kempton & Clark, Eds. “Identity / Difference in Central Asia: Tribes,
Clans and Mahalla.” 2002. p 293
56
Arifkhanova, Zoia. Central Asia and the Caucasus. “Traditional Communities in Modern Uzbekistan.” October
2000. p 1
57
Robertson and Kangas. Unity or Separation? Kempton & Clark Eds. “Central Power and Regional and Local
Government in Uzbekistan.” 2002. p 273
58
Arifkhanova, Zoia. Central Asia and the Caucasus. “Traditional Communities in Modern Uzbekistan.” October
2000. p 1
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
67
Throughout the 1920s and 1930s, the mahalla was caught up in the broader official Soviet
campaign against traditional Central Asian culture and a purge of its pre-revolutionary cadres.
The Sovietization of the region was particularly harsh on…[economic] practices, as the
notion of non-elected village elders interpreting social customs was simply unacceptable.
Economic matters, such as water rights, were to be subsumed under the control of
planning agencies and economic ministries. Social and legal matters, likewise, were taken
over by more centralized institutions. It was often the case that the village elders, the
[oqsoqols], were forced publicly to perform demeaning tasks, such as building latrine
trenches, in an effort to destroy this social institution. In the late 1930s, such figures were
often considered ”enemies of the state” and simply purged. 59
Moscow also sharply curtailed the religious functions of the mahalla, in accordance with its
policy of atheism; however, the mahalla and local party officials often played an important role
in protecting mullahs (and their personal libraries) from state persecution. 60
Later, especially under Brezhnev, the Soviet state adopted a more hands-off attitude towards
local governance that allowed mahallas to readjust to new conditions. This changed again under
Andropov and Gorbachev, who were widely perceived as interfering in traditional life—for
example, a worker was give n only three days off for the death of a close family member, as
opposed to the customary forty.
During Soviet times, oqsoqols existed unofficially and were active in housing arrangements and
wedding planning. Women’s committees were active and officially organized on the mahalla
scale, as was the issue of certain certificates, especially in the later Soviet period.
Changes/Adaptations over the Course of the Soviet Era :
59
•
The mahalla lost much of its economic function due to central planning and much of its
religious function due to official atheism.
•
Collectivization was implemented on the basis of existing solidarity groupings—often the
mahalla—a development, which served to strengthen and modernize the institution. In
his book, The New Cent ral Asia, historian Oliver Roy indicates, “The brigade and the
uchastok (groupings of houses) duplicate the qawm (extended family) and mahalla
segmentations and give them an almost administrative reality, which… has never been
expressed in official terms.” Within the collective farms and state farms, even the
traditional system of land tenure was largely preserved: in the collective farm, sons’
houses are often built on the father’s plot.
Robertson and Kangas. Unity or Separation? Kempton & Clark Eds. “Central Power and Regional and Local
Government in Uzbekistan.” 2002. p 282
60
Roy, Oliver. The New Central Asia. New York University Press, 2000. p 146.
68
Central Asian Republics Local Government Initiative Phase II
•
Local electoral commissions and party associations were established in each mahalla. 61
•
The mahalla became responsible for the inventory of population, for issuing certain
official certificates, and for performing some important bookkeeping functions.
The Post-Soviet Mahalla Outside of Uzbekistan
Elsewhere in Central Asia, the mahalla, where it exists today, remains a largely informal,
traditional institution. During the civil wars in Tajikistan and Afghanistan, the mahalla, in many
areas, was seen as the only legitimate, capable governing body, and it often intervened to fill the
power vacuum that opened in the absence of more centralized authority, providing social
support, essential services, and a semblance of order. Despite extensive discussion after the war
of bringing mahallas under the purview of official legislation, mahallas in Tajikistan today still
largely function as non-governmental organizations; as such, their activities and responsibilities
vary widely from case to case.
Unlike Uzbekistan and Tajikistan, the other three post-Soviet CAR draw more on a nomadic
heritage, one in which the settled tradition of mahalla is largely absent. Though Kazakhstan,
Kyrgyzstan, and Turkmenistan are all home to significant minorities of historically settled
peoples for whom the mahalla is a reality (mostly Uzbeks, but also Tajiks, Uygurs, and other
non-Uzbek Turkic populations), the national majorities in these republics have no history of the
mahalla. Thus, the governments themselves generally hearken to other pre-Soviet institut ions to
gain the legitimacy that continuity with past traditions affords. In these republics, as in
Tajikistan, those mahallas that do exist are often unofficial or register as non-governmental
organizations.
61
Bichel, Anthony. Unity or Separation? Kempton & Clark, Eds. “Identity / Difference in Central Asia: Tribes,
Clans and Mahalla.” 2002. p 301
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
VI.
69
INTERGOVERNMENTAL FINANCE
Note: As it was not possible to obtain detailed budget data for all or even for a representative
sample of LGUs (especially on the third tier), the authors reviewed data from an illustrative city,
two districts, and one province to capture some of the diversity among LGUs throughout the
country.
Macroeconomic Context for Local Government
From 2000 to 2003, local government expenditures more than doubled in real terms. 62 At the
same time, republican government expenditures have seen a smaller increase. In 2000, local
government expenditures were only 5 percent greater than republican government expenditures.
In 2003 they were forecasted to be 60 percent greater than republican government expenditures.
However, local government as a share of GDP has decreased in the past four years, from 30
percent in 2000 to 25 percent in 2003. This means that growth in the economy has outpaced
growth in government expenditures.
Exhibit 6. Macroeconomic Context for Local Government (in million so’ms)
1
2
3
4
5
6
7
8
9
2000
2001
2002
2003
(forecast)
GDP
Consolidated government expenditure
Of which Republican government expenditure
Local government (LG) expenditure
Of which Transfers to LG from State
budget
3,255,600
960,571
4,925,300
1,308,200
7,469,300
1,900,542
9,849,000
2,492,507
467,966
492,605
582,132
726,068
868,206
1,065,193
952,729
1,539,778
67,090
116,811
188,349
257,053
LG expenditure/GDP (%)
LG expenditure/consolidated government
expenditure (%)
Transfers to LG/consolidated government
expenditure (%)
Inflation rate (%)
30%
27%
25%
25%
51%
56%
56%
62%
7%
18%
9%
14.4%
10%
13.2%
10%
9.6%
Source: Ministry of Finance, 2003
Republic- level bodies are, in large part, supported by commodities sales. Cotton, gold, copper,
precious stones, and energy account for roughly 70 percent of Uzbekistan’s US$2.8 billion in
exports (with cotton alone accounting for 25 to 30 percent). 63 Uzbekistan is the biggest natural
62
IMF, 2003 Monetary Policy and Uncertainty: Adapting to a Changing Economy" Jackson Hole, WY gives 39.9%
for inflation rate in Uzbekistan during 2000-2003.
63
Commodities and cotton as share of export from 2001 World Bank data, World Bank Uzbekistan Country Brief
2003; export figure for 2002 from CIA World Factbook. See links below:
70
Central Asian Republics Local Government Initiative Phase II
gas producer in the CAR (though Turkmenistan’s reserves are much more vast) and one of the
top ten producers in the world; over one-quarter of its production is sold or traded to its
neighbors. 64 All of these export sectors are firmly under the control of the central government.
Customs duties are also a lucrative source of funding for central institutions.
Transfers And Mutual Settlements
The intergovernmental finance system in Uzbekistan is fairly complex, ostensibly in order to
achieve an equalization of financial resources among provinces that have very different fiscal
capacities. 65 In the absence of an equalization grant, equalization takes place through differential
tax-sharing rates and general budgetary support from higher levels of government. Currently,
eight (Karakalpakstan, Andijon, Jizzax, Namangan, Samarqand, Surxondaryo, Sirdaryo,
Xorazm) of the country’s fourteen provinces receive general budgetary support through transfers.
Transfers as a share of consolidated government expenditures have risen from seven percent to
ten percent from 2000 to 2003.
Provinces also equalize among districts and cities within their jurisdiction, much in the same way
as the central government equalizes among provinces.
Officially, the size of transfers cannot be altered during the budget year, though this does happen
de facto through the mechanism of mutual settlements.
Shared National Taxes and “Local” Taxes
Shares of several important national taxes are apportioned at various levels to each province,
based on its estimated fiscal capacity. In 2003, eight of the country’s fourteen provinces received
100 percent of the value-added tax (VAT), personal income tax (PIT), and enterprise profits tax
collected in their jurisdictions. 66 Tashkent City (a second-tier LGU, like the provinces) received
the smallest share of these taxes collected within its jurisdiction: only six percent (VAT), thirteen
percent (PIT) and seven percent (enterprise profits tax). 67
http://lnweb18.worldbank.org/ECA/eca.nsf/ExtECADocbyUnid/909615C3A1325A8A85256D5D006894FF?Opend
ocument
http://www.cia.gov/cia/publications/factbook/geos/uz.html
64
Data on production from US Department of Energy, Energy Information Agency Website 2003 Report; data on
share exported from CIA World Fact Book. See links below:
http://www.eia.doe.gov/emeu/cabs/caspian.html
http://www.cia.gov/cia/publications/factbook/geos/uz.html
65
In 2002, the GDP per capita of Tashkent City was four times that of Karakalpakstan Republic and per capita
revenues generated in the capital were ten times that of Karakalpakstan.
66
Of tax collections allocated to LGUs, the VAT is the largest contribution, followed by the PIT, a collection of
excise taxes, and then the enterprise profits tax. (MacNevin, October 2003)
67
MacNevin, October 2003
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
71
In addition to these three principal taxes, the 2003 Annual Budget Resolution states that all
revenues from several other national taxes will be credited to the local budgets: the water use tax,
the ecology tax, the unified tax on small and medium enterprises (SME), and excise taxes for
beer, vegetable oil, and soap and detergent (see 2003 Annual Budget Resolution). In 2003, some
provinces also received a share of other excise taxes. All provinces have a unified land tax on
agricultural enterprises. Although this is considered a local tax, a portion of the unified land tax
went to the repub lican budget to finance the Fund of State Promotion of Equipping Rural Areas
with Agricultural Machinery. 68
NATIONAL TAXES AND LOCAL TAXES AND DUTIES , AS IDENTIFIED BY THE
1998 TAX CODE
National Taxes (Article 6) Local Taxes and Fees (Article 7)
Enterprise profit tax
Property tax
Personal income tax (PIT)
Land tax
Value-added tax (VAT)
Infrastructure development tax
Excise tax
Vehicle fuel consumption taxes
Natural resource tax
Fee charged for the right to trade
Ecology tax
Registration fee imposed on legal and natural
entities involved in entrepreneurial activity
Water use tax
The major “local” taxes have their rate and base established by the CoM. “Procedures for
payment and rates of the unified tax on SME are specified by the Cabinet of Ministers of the
Republic of Uzbekistan.” (Article 8, Tax Code) “Rates of property tax imposed on legal and
physical entities are established by the Cabinet of Ministers of the Republic of Uzbekistan.”
(Article 91, Tax Code) “Rates of land tax are specified by the Cabinet of Ministers of the
Republic of Uzbekistan.” (Article 99, Tax Code). For both land taxes (a unified land tax on
agricultural enterprises and an alternative land tax), the Annual Budget Resolution (passed by the
CoM) defines even the tax rates for the individual districts and cities within each province. In
addition to specifying a base rate for each district and city, the Budget Resolution provides the
coefficients with which to modify the base rate of the unified land tax based on whether or not
the land is irrigated and the quality of the land. The 2003 Annual Budget Resolution also states
that the “maximum” rates provided for the vehicle fuel consumption taxes are actually “unified
and fixed throughout the whole territory of the Republic of Uzbekistan” (Annexes 16-18, 2003
Annual Budget Resolution).
State institutions at the provincial level are able to set the rate of the infrastructure development
tax and some local fees within maximum rates established by the CoM through the Annual
Budget Resolution. (Annex 18, 2003 Annual Budget Resolution, Legal Log #38) However, a
“procedure for the calculation and payment of property tax, land tax, infrastructure development
tax, and the consumption tax on petrol, diesel fuel and liquefied gas is regulated by certain
instructions” (Resolution on Approval of Directions on the Procedure for the Calculation and
Payment to the Budget of Local Taxes and Fees, February 16, 2003). Despite established
quarterly tax rates, the amount companies pay tends to be negotiated rather than percentagebased and companies are even encouraged to make pre-payments. (See Exhibit 7 for a complete
list of local government revenue sources.)
68
MacNevin, October 2003
72
Central Asian Republics Local Government Initiative Phase II
Exhibit 7. Local Government Revenue Sources
Nationally administered shared taxes with shares of up to 100 percent allocated to subnational budgets as
specified on an annual basis in a resolution of the Cabinet of Ministers:
Excise taxes
VAT
Enterprise profits tax
Personal income tax
Unified tax on SME
Ecology tax
Water use tax
Taxes which have their base and rates established by the Cabinet of Ministers, but whose revenues are
allocated to local governments:
Property tax on enterprises
Personal property tax
Land tax
Unified land tax on agricultural enterprises
Local taxes and fees set at the provincial level within parameters established in the annual budget resolution:
Infrastructure development tax
Vehicle fuel consumption taxes
Fees charged for the right to trade in commodities
Registration fee for entrepreneurial activity
Non-tax revenues identified in various legislation, including:
Proceeds from privatization
Revenues from leasing of local government property
Administrative fees
Some fines and penalties
Revenues from economic activities
Revenues from auctions and lotteries
Voluntary contributions from enterprises and individuals
Deposits into extra-budgetary funds for local tax collection or frugality beyond official prognoses
Transfers from higher tiers of government, including:
Intergovernmental transfers for general budgetary support
Mutual settlements between budgets for deficit reduction (including forgiveness of budgetary loans from
higher tiers)
In addition to the taxes and fees specified in the Annual Budget Resolution, local governments
obtain revenues from other taxes and fees, including permits from vendors, as well as fines and
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
73
penalties, road police duties, and other receipts. 69 Some of these are divided among the various
tiers of government.
Maximum Rates on Local Taxes and Fees, As Established by the 2003 Annual Budget Law
Tax
Maximum rate
Infrastructure development tax
8 percent of net profit
Vehicle fuel consumption taxes for:
Petrol, diesel fuel and liquefied gas
30 Uzbek so’m per liter†
Natural gas
30 Uzbek so’m per kilogram†
Fee charged for right to trade
3.5 times the monthly minimum wage
Licensing-related fee levied for the right to trade in:
Alcoholic beverages
5 times the monthly minimum wage
Tobacco products
5 times the monthly minimum wage
Registration fee imposed on legal and natural entities
involved in entrepreneurial activity
5 times the monthly minimum wage
†A footnote to this table in the 2003 Annual Budget Law explains that the “maximum” rates for the vehicle fuel
consumption taxes are actually unified and fixed throughout the whole territory of the Republic of Uzbekistan
In addition to setting the 2003 rates for local taxes and fees, the 2003 Annual Budget Resolution
changes the tax rates on most national taxes—only the VAT remains unchanged. However, given
the fact that local governments are generally given the amount of revenues that will cover their
historical costs, plus an adjustment factor, these changes may affect them little. If at some time
the local governments are to be held accountable to their citizens for taxes and expenditures, then
it would be important to have relatively stable tax rates and for the shares apportioned to the
provinces to be codified.
Revenue Structure Of Provinces, Districts And Cities
Andijon Province is an example of a “subsidized” province—it receives central government
transfers as well as retains 100 percent of the revenues from the VAT, PIT, and the enterprise
profits tax collected within its jurisdiction. Andijon’s largest tax collections are from the VAT,
PIT, enterprise profits tax, and vegetable oil excise tax; in 2001, these four items constituted 73
percent of the province’s tax revenues.
Xo’jaobod is a “donor” district in the “subsidized” province of Andijon. It indirectly benefits
from the republican transfers that Andijon Province receives while “contributing” much of the
tax revenues collected within its jurisdiction to equalization for poorer districts and cities
elsewhere in the Province. In 2002, Xo’jaobod District retained only 43 percent of the revenues
it had collected, but in 2003 it was allowed to retain VAT revenues that constituted 39 percent of
its budget revenues.
69
MacNevin, July 2003
74
Central Asian Republics Local Government Initiative Phase II
Exhibit 8. Distribution of VAT and PIT Tax Shares Among Provinces, District and Cities
(percent share of actual 2002 revenues)
National Tax
VAT
PIT
Source: Ministry of Finance, 2003
Province
District
City
%
59.8
39.8
36.9
48.9
3.3
11.3
100
100
Much of the national tax collections, which are apportioned to local budgets, stay at the
provincial level. In 2002, sixty percent of the VAT collections apportioned to provinces were
included in the provincial level budgets, while 37 percent were reapportioned to districts and
only 3 percent to cities. 70 For the PIT, 40 percent of collections apportioned to provinces were
included in the provincial level budgets, 49 percent were re-apportioned to districts and 11
percent to cities.
Both the provincial and district levels of government are heavily dependent on shares of the
national taxes and general budgetary support (transfers) from higher levels. Across the country,
these constitute two-thirds of local budget revenues. These numbers, of course, oversimplify the
situation, as the six “donor” province- level governments receive no general budgetary support at
all.
Exhibit 9. Revenue Structure of Provinces, Districts, and Cities (percemt share of actual
2002 revenues)
1
2
3
4
5
6
Province
Local government revenues transferred from state budget
General budgetary support
25.6
National taxes with shares apportioned to the local government
VAT
15.6
PIT
7.7
Enterprise profits tax / Unified tax on SME
6.8
Property tax on enterprises
0.9
Excise tax
11.9
District
City
32.0
1.4
12.9
12.7
4.2
2.7
2.3
5.5
13.7
2.7
7.0
7.1
0.4
3.5
29.3
100
0.9
7.2
54.7
100
Own revenues
7
8
9
10
Capital revenues
Non fiscal revenues
Local taxes and fees
Other revenues
Total
Source: Ministry of Finance, 2003
0.2
1.1
30.3
100
In contrast, cities receive very little in the way of general budgetary support (less than 2 percent
of their budgets). Across the country, roughly two-thirds of cities’ budgets are own revenues and
one-third comes from shared national taxes. Cities with the status of provincial subordination are
generally larger than districts, and they are more likely to be commercial centers. Therefore, it is
70
Here, cities of provincial subordination (district-level)
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
75
not surprising that they would have stronger fiscal capacity and thus be able to generate more
revenue and, for those cities located in donor provinces, to serve as “double donors”.
Olmaliq City (Tashkent Province) is an example of a “double donor” city. Of the six taxes
producing the most revenues within Olmaliq City, the city received no revenues from four of
these – enterprise profits tax, natural resource tax, social infrastructure development, and VAT.
These revenues will go towards equalization with other districts in Tashkent Province and,
ultimately (as the Province itself is a “donor” on the republican level) to other provinces in the
republic.
Olmaliq received seven percent of PIT revenues collected within its jurisdiction, which equaled
15 percent of the city’s budget. Olmaliq was allowed to retain all revenue collections from the
property tax on enterprises (10 percent of the city’s budget) and the ecology tax (40 percent of
the city’s budget). (The ecology tax is a one percent tax on enterprise production, so it is
understandable tha t a city with several large enterprises could generate a large portion of its
revenues from this tax.) Olmaliq also retained all of the revenues from the tax on physical and
legal entities’ business income, the total land tax, and the unified tax, each constituting six
percent of the city’s budget.
Reform Efforts in the Tax System
Efforts underway to reform the country’s tax system involve changes in local taxes, which will
hopefully contribute to a larger and more stable tax base for local governments. Since 1998 the
base of the property tax on enterprises is now reevaluated at the beginning of each calendar year.
The Ministry of Finance characterizes the property tax as “a stable source of funds for financing
local budget expenditures.”71 While this has produced relatively significant revenues in larger
cities, the property tax is still a very small part of revenues in most provinces and districts. In
Olmaliq, the property tax on enterprises was ten percent of the city’s revenues in 2002 and 2003,
although the personal property tax was only one percent of the city’s revenues. However, in
Xo’jaobod District, the property tax on enterprises and personal property tax each were only one
percent of the district’s revenues. In Andijon Province as a whole, property tax on enterprises
was two percent of provincial revenues and personal property tax contributed less than one
percent of tax revenues.
The Ministry of Finance notes that, by introducing a unified tax on SME, they have encouraged
the development and legalization of small businesses, which has consequently tripled revenues
from the tax in its three-year existence. 72 In Olmaliq City, this tax constituted six percent of the
city’s budget, but in Xo’jaobod District and Andijon Province the tax constituted only two
percent and three percent of the respective jurisdictions’ budgets. Again, it is still a far way for
this tax to play a significant role in most local budgets.
71
Juraev, Turabjon. Deputy Minister of Finance for Taxation Policy, “On the Road to Perfecting Tax Policy”, Halq
So’zi, September 20, 2003
72
Juraev, Turabjon. Deputy Minister of Finance for Taxation Policy, “On the Road to Perfecting Tax Policy”, Halq
So’zi, September 20, 2003
76
Central Asian Republics Local Government Initiative Phase II
The 1998 Tax Code denotes national taxes and local taxes, but in reality there is little distinction
because 100 percent of the revenues of several “national” taxes go to local budgets, while the
CoM dictates the rate and base of the major “local” taxes. However, rationalization of the tax
system, reducing the number of taxes, simplifying their calculation and evaluating tax bases with
market value proxies, should have a positive effect on local government revenues.
Expenditure Responsibilities
There appears to be some consistency as to which functions are performed by each level of
government, despite the fact that these functional responsibilities are neither articulated in the
Constitution nor in the Law on Local State Authorities. The Law on a Budgetary System
(December 14, 2000) does make an attempt to define responsibility assignments by sector for
republican and local bodies, but fails to distinguish between province- and district- level budgets
or otherwise elucidate their respective roles in a similar manner. 73
As one can see from the table below, the share of expenditures for each sector has seen little
change in the past several years. Education remains the largest single sector in local government
expenditures.
Exhibit 10. Local Government Expenditures by Sectors (percentage)
2000
1
2
3
4
5
1.23
Local administration
38.21
Education
14.51
Health
11.01
Social assistance
35.04
Other
100.00
Total
Source: M inistry of Finance, 2003
2001
2002
2003
1.28
40.77
15.09
10.27
32.59
100.00
1.15
40.77
14.95
10.57
32.57
100.00
0.80
37.19
13.03
9.55
39.43
100.00
Below the provincial level, education and health are clearly the top two expenditure
responsibilities of local governments. Most of the expenditures made by Olmaliq City were for
hospitals, schools, and kindergartens. These three budget items constitute 74 percent of the city’s
expenditures for 2003. A large share of these expenditures was on salaries; 86 percent of the
city’s employees work in the educational and health sectors.
Schools, hospitals, and kindergartens are also big expenditure items for districts. In Xo’jaobod
District, these three budget items constitute 64 percent of the district’s expenditures for 2003.
Ninety percent of the district’s employees work for the education or public health departments.
In Buloqboshi District, also in Andijon Province, these three budget items constitute 71 percent
of the district’s expenditures for 2003 and 93 percent of the district’s employees are health and
73
Center for Economic Research.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
77
education workers. Clearly these are service providers—teachers, doctors, and nurses—as well
as administrative and managerial staff.
In contrast, provinces across the country spend only one third of their budget on the education
and health sectors combined. Within the education sector, provinces are responsible for
professional colleges. A province also has other schools subordinated to it—generally boarding
schools, special education, and several additional schools, which, for one reason or another, are
not administered by a third-tier LGU. Within the health sector, provinces may also be
responsible for hospitals, as well as ensuring public health in general.
Exhibit 11. Expenditure Structure by Type of Administrative-territorial Subnational
Jurisdiction (percent share of actual 2002 expenditures)
Expenditure Responsibility
Local administration
Education
Health
Social assistance
Capital investments
Other expenditures
Total
Source: Ministry of Finance, 2003
1
2
3
4
5
6
Province
District
City
1.01
22.60
11.00
1.08
30.12
34.20
100
1.23
56.55
17.66
19.80
4.77
100
1.49
53.33
21.48
11.94
11.77
100
It appears that districts bear a relatively heavier social assistance burden than do cities. Across
the country, social assistance makes up 20 percent of districts’ budgets and only 12 percent of
cities’ budgets. Xo’jaobod District spent 23 percent of its budget on social assistance, with the
two most important items being allowances to low- income families with children under 16 and to
unemployed mothers with infants. Buloqboshi District spent 19 percent of its budget on social
assistance, again mostly for allowances to low- income families with children under 16 and to
unemployed mothers with infants. In reality, the district does not perform these functions itself,
but transfers most of the funds and responsibilities for social assistance to the citizens’
assemblies (mahallas) located within its jurisdiction.
Provinces have very little expenditure responsibility for social assistance. Across the country,
social assistance comprises only one percent of provincial budgets.
Provinces are the only type of local government with capital investments in their budget. Thirty
percent of provincial budgets are spent on capital investments. The provincial governments also
subsidize district heat and hot water.
Conclusions
Need to Establish Guidelines and Transparent Procedures for Allocating National Tax
Revenues and Transfers
78
Central Asian Republics Local Government Initiative Phase II
There is no explicit set of instructions or transparent procedures as to how to determine what
percentage of its taxes a donor unit must contribute, nor for deciding how much to allot a
subsidized local government unit—such judgments are subjective. Distribution of national tax
revenues and transfers should be an open and transparent process, with the local governments
(including districts and cities) receiving an explanation of how the distribution was decided.
Uniform Treatment of National Tax Revenue Shares Will Help Bring Stability to Local
Government Revenues
It is encouraging that the 2003 Annual Budget Resolution states that all revenues from several
national taxes will be credited to the local budgets. However, as long as such statements are
made in annual budget laws, which pass shortly before the budget year begins, local
governments do not have the ability to plan budgets accurately. It appears that Uzbekistan is
moving toward a more stable and consistent assignment of national tax revenue shares from year
to year, but this should be codified in a local government finance law, as opposed to annual
budget laws.
Current Intergovernmental Finance System Does Not Promote Good Financial Management
The current intergovernmental finance system, which combines differential tax shares, general
transfers, and mutual settlements to make up for budget shortfalls, is undesirable from the
perspective of efficient and equitable public financial management. There are potential incentive
problems and, generally, too large a role for bilateral negotiations across multiple tiers of
government. An elimination of transfers based on ad hoc coverage of the operational deficit
between expenditures and revenues would be a first step in introducing a hard budget constraint
for local governments. Under the current system, local governments are not accountable for
efficiently us ing their revenues or for revenue collection effort. A system under which transfers
equalized according to fiscal gap, rather than simply covering budget shortfalls, would reduce
potential disincentive effects for local revenue mobilization, as well as provide greater
predictability for sub- national revenues.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
VII.
79
LOCAL BUDGETS AND FINANCIAL MANAGEM ENT
The Budget Process
Uzbek officialdom tends to project an image of a thoroughly proceduralized and monitored
budget process that produces a balanced bud get at the local and central levels. 74 The end result is
portrayed as a rigid, non-negotiable plan for the coming year, giving actors at all levels little
freedom to deviate significantly from the budget. There are, however, several mechanisms for
giving the budget some flexibility and even modifying it during the year, as well as other
important ways in which budget entities and LGUs, especially hokimiyats, achieve some freedom
in spending, essentially outside of the budgetary framework.
Prior to passage of the Law on the Budget System in 2000, reportedly the Ministry of Finance in
Tashkent was more unilaterally directive in specifying expenditure allocations at the local level.
Under the new system, the territorial (dual subordinated) finance departments perform the lead
role in initial budget preparation, which gives the hokimiyats somewhat more of an opportunity
to advocate and negotiate for their interests.
The Consolidated, Central, and Local Budgets.
The budget in Uzbekistan can be separated into two categories—the central budget (central
government spending) and local budgets, produced by second- and third-tier LGUs. 75 Subdistrict LGUs do not have a budget. The central budget and all local budgets, plus republican
targeted funds (such as the Road Fund, the Pension Fund, etc.) collectively form a consolidated
state budget.76 Interbudgetary relations within this structure are entirely vertical, indeed
hierarchical. Horizontal relations are effected only through the appropriate higher- level budget77
– Redistributions between local budgets on the same level are managed by the next level up.
Loans can be taken only from higher- level budgets. Local ministry offices from different LGUs
communicate extensively with their respective hokimiyats during the budget process, but not
with each other.
MoF officials assert that some territorial units below the third tier (towns, villages, urban
regions) have an “expenditure plan” (in Russian, smeta raskhodov), but, unlike in other CAR,
this plan includes only the territorial administrative personnel, their office space, communal
service expenditures, and other related expenses. Budgetary entities on the territories of towns,
villages, and urban districts are not included in the expenditure plan, though some plans also
dedicate funds to “development”, a category that, in those instances the authors encountered,
constituted greening and beautification activities.
74
Articles 5 and 24, law “On the budget system” (2000)
Article 3, law “On the budget system” (2000)
76
Articles 3 and 9, law “On the budget system” (2000)
77
Articles 18.5 and 21, law “On the budget system” (2000)
75
80
Central Asian Republics Local Government Initiative Phase II
Projection Based on Coefficients
The sizes of local budgets each year are determined by looking at earlier years, taking into
account changes that took place that year and modifying this figure by a standard coefficient
determined by the Ministry of Finance. Sometimes, the base number will be adjusted in
connection with a specific event, such as the construction of a large factory, which would
drastically increase the productive capacity of the affected LGU as a whole. Balancing of local
budgets is achieved by tinkering with subsidies and the sharing rates for national taxes.
Though legislation is rather vague regarding spending obligations of different levels of
government, the center pays for most defense expenditures, national security, and justice; other
expenditures are shared between different levels.
The Budget Preparation Calendar
The budget process itself begins in early May every year, when the Ministry of Finance asks the
CoM for permission to send budget requests to the provinces. The actual requests are dispatched
May 25, and the provinces pass them on to district hokimiyats. Also in May, budgetary entities
such as libraries and sport complexes calculate their estimated expenditures 78 and submit their
budget requests to the local ministerial department to which they are subordinate. Local
departments of district and provincial line ministries, then, send their requests to district and
provincial financial departments, theoretically without any involvement from higher-tier
departments in their respective ministries.
Next, district- level financial departments, with the assistance of the local council’s budgetary
commission, are to prepare “applications”—draft local budgets—on behalf of their respective
hokimiyats, which they are to submit to provincial financial administrations by June 25. The
budgetary commission that helps produce the initial draft includes both local council deputies
and representatives from the hokimiyat. Local councils’ budgetary commissions are largely used
to diffuse blame for budget cuts, and their main task, according to one observer, is to keep
expenditures down. After making the appropriate revisions, provincial hokimiyats submit
provincial budgets (including budgets of all their subordinate cities and districts) 79 to the
Ministry of Finance by July 1. This is also the deadline for the ministries to prepare their drafts.
The Ministry of Finance’s territorial and sectoral divisions review all applications and make
amendments, theoretically after consultation with the applicant. It is here, in the central ministry,
that the biggest cuts are made.
No later than September 15, the Ministry of Finance sends a draft state budget to the CoM for
approval. The budget document is then passed on to the Oliy Majlis by October 15 for
ratification, and by the end of December, the CoM issues a regulation containing the approved
budget for the coming year. Finally, revised local budgets are sent back to their respective
provinces/districts for ratification by the appropriate local council 80 (they can, theoretically,
78
Article 6, supplement to Cabinet of Ministers resolution #414: “On improving the process of financing budgetary
entities” (1999)
79
Article 9, law “On the budget system” (2000)
80
Article 7, law “On the budget system” (2000)
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
81
amend it, but this happens only very rarely) 81 and the hokim issues a regulation with the
approved local budget for the coming year.
Modifications during the Budget Year
During implementation, the “planned budget” can be altered, producing a quarterly “modified
budget” that includes all changes and deviations from the plan, whatever their source. Changes
are made using budget form #11 at the national level and budget form #17 at the provincial
level; 82 local financial departments meticulously record all alterations. 83
Additionally, mutual settlements can be used to bring local budgets into balance when there has
been a change in the functional division of responsibilities between the center and local
governments during the course of the year, non-realization of a revenue plan, or when budgetary
loans are to be forgiven.
At the core of central budgetary control in Uzbekistan is a system of highly specified
categorization of explicitly justified expenditures. Officially, each budgetary entity gets exactly
what it needs (or what it is entitled to by legislation) every year, though elementary logic and
overwhelming amounts of anecdotal evidence indicate that social and economic infrastructure
does not, broadly speaking, meet the high standards established by legislation. Moreover, the
size of each local budget is not determined by these requests, but rather by the historical size of
the local budget and a few other factors, as described above. A district hospital, for example,
may be ordered by the Ministry of Health to purchase items which local financial organs will
then be unable to fund. Thus, ministries can set impossible standards for social programs at the
republican level, while shifting the blame for not meeting these standards to LGUs.
Schoolchildren who want books routinely pay for them themselves and entire infrastructure
projects may exist only on paper. 84
Expenditure Categories Defined in Law
Each distinct local budget request must directly refer to a particular article of an official act as a
justification for the expenditure. Uzbekistani law recognizes four broad categories for local
expenditures, which are further divided into a number of subcategories:
• Category I: Salaries for employees of budgetary entities and other payments gauged on
the salary scale (aid to low income families, student stipends, etc.);
81
An official from the Tashkent Province Financial Administration noted that a few years ago, the local council
made some significant changes to the provincial budget, but he said such instances are quite rare; officials from
other LGUs said they could not recall this happening in their own provinces/cities/districts.
82
Article 92, MoJ #1025 “On order of quarterly allocation of annual planned amounts of revenues and expenditures,
allocated in the budget of RK and local budgets, registration of amendments adopted during budget execution,
financing of organizations and events described in the budget” (2001).
83
Article 91.1, MoJ #1025 “On order of quarterly allocation of annual planned amounts of revenues and
expenditures, allocated in the budget of RK and local budgets, registration of amendments adopted during budget
execution, financing of organizations and events described in the budget” (2001)
84
Experience with water supply system outside of Qo’qand, from interview with Melinda Leonard, Mercy Corps,
Uzbekistan—September 20, 2003.
82
Central Asian Republics Local Government Initiative Phase II
• Category II: Supplements, representing payments to the Pension Fund, unions, or other
social support funds—set at 37.2 percent of salaries themselves;
• Category III: Capital investments are usually a part of the provincial, but not the district,
budget, as major capital projects tend to be too expensive for third-tier LGUs. This category
includes construction of new buildings, such as schools, colleges, and hospitals. Decisions on
what new objects need to be built are made by local departments of the Ministry of
Economics; the CoM also has a list of specific priority construction projects, “the State
Investment Program”. 85
• Category IV: Other expenditures, including communal services, renovation and repair of
existing capital stock, food for some hospitals or schools, and so on. It is within this category
that there can be some flexibility in spending, though this can be used only to effect minor
changes, which must be registered with the appropriate financial department. 86
1. The hokim can order a shift of up to 10 percent from any one budget entity to another,
to be approved by the Ministry of Finance and its local department; larger
reappropriations must be approved by the local council of people’s deputies, rather than
the hokim.87
2. Additionally, any budgetary entity enjoys 15 percent flexibility in spending resources
allotted to it by the budget;88 for example, a principal could elect to use monies
designated to repair a roof in his school to replace a broken window instead. Such
changes are registered with the local financial department. Any larger-scale reallocation
requires prior approval from the appropriate financial authority.
According to CoM resolution #414: “On improving the process of financing budgetary entities”,
categories I and II have first priority for financing. 89 Additionally, payments for the first category
cannot be made without the corresponding payments for category II. Within category IV, “other
expenditures” are prioritized by law as follows: (1) foodstuffs, (2) medicine, (3) communal
service payments, and (4) other expenses. 90
Budget Implementation
Hokims bear official responsibility for budget implementation. 91 If revenues cannot cover
expenditures in the short-term and the working cash balance has been exhausted, it is possible to
85
Article 2, Cabinet of Ministers resolution #414: “On improving the process of financing budgetary entities”
(1999)
86
Article 34, law “On the budget system” (2000)
87
Article 34, law “On the budget system” (2000)
88
Article 34, la w “On the budget system” (2000)
89
Articles 11 and 16
90
Article 18, supplement to Cabinet of Ministers resolution #414: “On improving the process of financing budgetary
entities” (1999)
91
Article 7, law “On the budget system” (2000)
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
83
receive a loan from a higher- level budget. According to Article 36 of the 2000 law “On the
budget system”, the Ministry of Finance determines the procedure for awarding budgetary loans
and sets limits on their duration and other conditions; budgetary loans are interest-free and
typically have to be repaid within one to three months. Loans are typically repaid by the end of
the quarter, but loan forgiveness through mutual settlement is not uncommon. Particularly in
agricultural districts, budgetary loans are a crucial source of liquidity—the economy of Andijon
Province’s Xo’jobod District, for example, relies on agricultural processing; many of its factories
operate only seasonally; therefore, Xo’jobod relies on budgetary loans to finance its first-quarter
expenditures every year. Budgetary loans are all the more important for LGUs because they are
prohibited from borrowing from other sources (banks, other LGUs on the same tier, etc.).
Despite strict provisions in the main budget law prohibiting deficits, many local budgets end the
year in the red. Getting arrears under control becomes a first priority for the next year, but this
just leads to even bigger arrears a year later—creating a republic-wide problem of rolling arrears
in local budgets. The authors of this report encountered conflicting opinions as to the scale of
this problem. According to one MoF official interviewed, some progress has been made in recent
years in imposing some discipline on this process. He reports that five years ago, the aggregate
arrears of all local governments at the end the year exceeded 20 billion so’ms. A Department of
Inter-budget Relations was created within the MoF to police the system (utilizing the threat of
freezing bank accounts and reducing subsidies to get local officials to be more fiscally
responsible). According to this source, the end of the year debt was reduced to two billion so’m
in the Department’s first year of operation, and by the end of 2002 had shrunk to a “nominal
level”. Other sources, however, assert that these “rolling arrears” still constitute a major problem.
One way in which donor LGUs appear to keep some wealth on their territory is through
manipulation of the privatization process. For example, Olmaliq City (subordinate to Tashkent
Province) relies on this approach to finance local social facilities. In 2003, Olmaliq was slated to
retain only 12 percent of the revenues it collected, providing 28 percent of provincial budgetary
revenues. The city’s largest factory is the state-owned AGMK metallurgical plant. In addition to
its productive capital, the AGMK plant owns and operates approximately 40 percent of city
roads, a large share of unprivatized housing stock, as well as many social and commercial
objects, including 15 of 36 kindergartens, preventive medical treatment centers, campgrounds,
and a hotel. AGMK records expenditures on social objects and roads under its purview and,
according to section 2, Articles 19 and 31 of the Tax Code, it can write this amount off of its
profit tax base. Thus, a considerable share of the wealth produced in the city is used to finance
social objects without ever being entered in the budget.
In other LGUs that were visited, social object divestiture was more advanced (especially among
the notoriously cash-strapped shirkat xo’jaligi collective farms), as was privatizatio n. The main
reasons cited for this were (1) that the formerly state enterprises had been operating at a loss;
they could not sustain their social objects, and (2) the need to attract private (especially foreign)
capital. Indeed, even Olmaliq’s second- largest factory, Ammofos, divested itself of most of its
social objects in order to attract foreign capital.
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Central Asian Republics Local Government Initiative Phase II
Discretionary Spending by Local Executives: The Reserve Fund, Privatization Proceeds
and Extra Resources
LGU’s have three revenue sources tha t allow them some modest spending autonomy: first, the
provincial hokim’s reserve fund; second, proceeds from privatization; and, third, extra-budgetary
resources (“extra resources located during budgetary implementation”). Additionally, especially
frugal budgetary entities or those with a non-tax source of income (such as rent) also enjoy some
freedom in determining expenditures.
The reserve fund and extra resources located during budgetary implementation are controlled by
the local executive, with very few limitations on their use. Proceeds from privatization must be
spent, according to established proportions, on renovating housing stock, providing housing for
the poor, and investments in rural development. The size of the reserve fund as a portion of the
budget is relatively stable, at approximately one half of one percent of planned expenditures,92
while the importance of extra resources varies geographically and over time. In sharp contrast to
the rigidity of budget expenditures (which are theoretically hard to change, even for the local
executive), the reserve fund and extra-budgetary hokimiyat funds (and, to a lesser extent,
proceeds from privatization) are spent at the hokim’s discretion.
The hokim’s reserve fund exists only at the provincial level; its purpose is to allow the executive
to put on important ceremonies and to address unexpected problems. These funds are used for
cultural celebrations and holidays, sporting events, epidemic fighting, natural disaster relief,
“improvement of budgetary allocations” if not enough funds were provided in the budget, and
for “other expenditures”93 (urgent repairs of social objects, employee bonuses, etc.) Apparently,
resources from the reserve fund are also disbursed as general grants to budgetary entities or local
ministerial departments. All expenditures from the reserve fund must go through the local
financial department for approval. 94 Unused money in the reserve fund is not carried over to the
next budget year. 95
Provincial governments also receive 30 percent of the proceeds from privatization of objects on
their territory. These funds must be dedicated to making capital repairs on multi- unit housing,
building housing for low- income families, and developing social and physical infrastructure in
rural regions.
“Extra resources” can accrue in a variety of ways—the largest amounts come from the LGU
overfulfilling the revenue side of the budget96 and from “free remainders” 97 on the LGU’s
92
The exact figure is set on an annual basis by the MoF.
Article 7, MoJ registration #877, Regulation “On the Reserve Fund of the Budgets of Karakalpakistan, the
provinces, and Tashkent” (2000)
94
Article 10, MoJ registration #877, Regulation “On the Reserve Fund of the Budgets of Karakalpakistan, the
provinces, and Tashkent” (2000)
95
Article 14, MoJ registration #877, Regulation “On the Reserve Fund of the Budgets of Karakalpakistan, the
provinces, and Tashkent” (2000)
96
Collection of excess revenue appears to be quite significant, especially in large donor LGUs such the Tashkent
Province-subordinated City of Olmaliq, which routinely collects excess revenues —in 2003, it overcollected by 27
million sums [[so’ms?]]and 92 million sums [[so’ms? ]]in the first and second quarters, respectively. Andijon
93
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
85
settlement account above and beyond the requis ite working cash balance, 98 which is determined
by the Ministry of Finance. Other, less significant ways of getting extra resources do exist, such
as funds freed up by leftover unused reserves (for example, of gasoline or animal feed) and the
difference between payables and receivables at the end of the quarter. The hokim’s first
priorities must be fulfilling the expenditure plan and maintaining the requisite working cash
balance; 99 often, LGUs do not even meet the requirements for the working cash balance and must
request budgetary loans. 100 LGUs that meet these requirements, however, can spend the
additional funds with few restrictions. By law, extrabudgetary hokimiyat funds must go toward
economic, social, or cultural events; capital investments included in the state targeted list;
maintenance of objects in districts, cities, and villages; renovation of buildings; or purchasing
equipment for hokimiyats and local ministerial departments. 101 The hokim receives requests for
financing on additio nal expenditures from budgetary entities and then directs the funds through
financial organs. These resources, however, are vulnerable to being partially or totally
reappropriated by higher-level organs, especially when other provinces or districts fail to collect
their scheduled amounts. In any event, most sources of discretionary spending theoretically
represent just a one-time windfall, as they reflect imperfections in the Ministry of Finance’s
estimates that should be rectified in the next year’s budget, 102 and a LGU that has collected
excess revenues or saved on expenditures may just have its plan for the next quarter or year
adjusted as a result. However, the negotiated nature of the entire budget process implies that,
here too, there is room for maneuver, and observers note that sources of additional funds such as
overfulfillment of the revenue side of the budget and free remainders nonetheless serve as
powerful incentives for LGUs to distort their forecasts, underestimating their revenue plans and
overestimating their spending.
Budgetary Entities’ Development Funds
A budgetary entity’s development fund comes from unspent budget money at the end of each
quarter, profits from paid services, half of all rents, and donations. 103 Resources in the budgetary
entity’s development fund should go, first of all, towards paying off its debts. If all of a
Province’s Xo’jobod District (a donor district in a subsidized province) reported less-significant excess collection;
the neighboring Buloqbashi District, which receives double subsidies, characterized its collection of excess revenues
as unimportant.
97
Free remainders are not as significant a source of extra resources as overfulfillment of the revenue side of the
budget—in 2002, out of twenty-three third-tier LGUs in Toshkent Viloyat, only three had free remainders.
98
For definition of “working cash balance”, see Article 3, law “On the budget system” (2000)
99
Article 87, MoJ #1025 “On order of quarterly allocation of annual planned amounts of revenues and expenditures,
allocated in the budget of PK and local budgets, registration of amendments adopted during budget execution,
financing of organizations and events described in the budget” (2001)
100
Article 32, law “On the budget system” (2000)
101
Article 85, MoJ #1025 “On order of quarterly allocation of annual planned amounts of revenues and
expenditures, allocated in the budget of RK and local budgets, registration of amendments adopted during budget
execution, financing of organizations and events described in the budget” (2001)
102
Article 15, supplement to Cabinet of Ministers resolution #414: “On improving the process of financing
budgetary entities” (1999)
103
Article 5, Cabinet of Ministers resolution #414: “On improving the process of financing budgetary entities”
(1999)
86
Central Asian Republics Local Government Initiative Phase II
budgetary entity’s debts are paid off, at least 75 percent of all remaining funds must be spent on
efforts to strengthen the material and technical base of the entity itself. No more than 25 percent
of remaining funds can be spent on employee bonuses and hosting social events. 104 Expenditures
of budgetary entities’ development funds are overseen by the local financial department’s
Supervision and Auditing Administration in the same way as other expenditures.
When unused government property is rented out to a private entity, the budgetary organization
keeps half of the proceeds, depositing them into its own development fund; the other half is
considered local “other revenue” and is contributed to the local budget. 105 The price of rental of
non-housing real estate is determined in an agreement between the budgetary entity and the
renter, but should be no lower than the minimum set by the provincial hokim.106 The minimum
cost of rental for other government property is set in the Regulation “On the procedures for
renting temporarily unused government property out to other enterprises and organizations by
budgetary entities” (MoJ registration #869); yearly rent should be 20 percent or 30 percent of the
book value of the property itself, depending on when it was included in the inventory of major
resources. 107
Treasury Functions
All LGUs in Uzbekistan, from ministries to provincial hokimiyats to mahalla committees have
their own accounts in private banks; it is through these accounts that all transfers and other
budget operations are made. 108 Theoretically, each LGU can make its own choice as to which
bank it uses, based on where it can get the best services and terms.. Official sources cite factors
such as geographic proximity and professional qualifications of bank staff. Other observers
indicate that agreements are more complicated, particularly that banks often want their
accountholders to deal with certain contractors. It is not uncommon for a provincial hokimiyat, a
district hokimiyat, and their corresponding mahallas to all use separate banks. For example,
Olmaliq, a city subordinated to Tashkent Province, uses the Real Estate Savings Bank, whereas
all its mahallas keep their accounts in the People’s Bank (indeed, they are required to by various
regulations on distributing social aid). The province itself uses the Uzbek Industrial Construction
Bank. This practice of keeping all government accounts in private banks and carrying out all
transfers through them is slated for elimination in 2006, with the World Bank-supported
introduction of a national treasury system.
The pending treasury system reforms may reduce the role of local governments in actually
processing transactions and reduce the extent to which revenues and expenditures flow through
104
Article 29, supplement to Cabinet of Ministers resolution #414: “On improving the process of financing
budgetary entities” (1999)
105
Article 5, CoM order #414 “On improving the process of financing budgetary entities” (1999); Article 3.12, MoJ
regulation #869 “On the procedures for renting temporarily unused government property out to other enterprises and
organizations by budgetary entities” (2000)
106
Article 3.4, MoJ regulation #869 “On the procedures for renting temporarily unused government property out to
other enterprises and organizations by budgetary entities” (2000)
107
Article 3.9
108
Article 37, law “On the budget system” (2000)
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
87
hokimiyat bank accounts. Under the new system, budget implementation would be overseen by
treasury offices at the province, district, and city levels. These offices would not be subordinated
to the hokims. A unified treasury account would reside at the central bank in Tashkent City.
Some functions and MoF staff of the territorial finance departments will be transferred to this
more vertically subordinated treasury structure. 109
Audits and Monitoring
All financial departments undergo a general audit once every two years to verify that they have
been spending according to the budget. This general audit is carried out by the Ministry of
Finance’s Supervision and Auditing Administration. It also analyses monthly and quarterly
reports submitted by all local financial organs.
In addition, the Supervision and Auditing Administration also checks budgetary entities—both
their budget expenditures and their extra-budgetary development funds. 110 The Ministry of
Finance has the power to stop financing a budgetary entity if it is found to be making unlawful
expenditures, breaking budgetary discipline, or failing to fulfill reporting requirements. 111
Particularly, welfare expenditures by mahallas are under the constant supervision of district
financial departments—often to the point of severely restricting the mahalla’s decision- making
autonomy.
“Non-state” companies, including “self- financing” utilities, must go through an annual private
audit. They may choose from approximately 75 registered auditing firms in Uzbekistan, which
mainly do a large amount of perfunctory filling out of forms under the tax filing format; there is
no separate management filing. According to accountants interviewed for this study, the utilities
do not use the auditing information internally, nor do tax inspectors consider it. Audits are
conducted in a perfunctory way, simply to comply with the law.
Conclusions
Perverse Incentives to Underestimate Revenues
The principal source of local budget autonomy comes not from budgeted funds, viewed as
inadequate even for covering the basic “protected” spending items, but rather from “surplus”
revenues above budget projections. This creates a strong incentive for downward bias in budget
revenue projections. Other things constant, the bias would also increase the size of the
intergovernmental transfer for budgetary support calculated to close projected fiscal gaps. Local
executives should have discretionary authority, but it should not rest upon generating excess
109
MoF staff assigned to the World Bank Public Finance Management Reform Project.
Article 35, supplement to CoM resolution #414: “On improving the process of financing budgetary entities”
(1999)
111
Article 36, supplement to CoM resolution #414: “On improving the process of financing budgetary entities”
(1999)
110
88
Central Asian Republics Local Government Initiative Phase II
revenues for which no formal budget items exist. In addition to the negative financial
management implications from this downward bias in revenue projections, dis cretion in this
form equates with a lack of accountability and transparency.
Need for More Programmatic Presentation of the Budget and Better Budget Classifications
Budget preparation at all tiers of government stands to be improved from the very outset, with
modern approaches to strategic prioritization and a transparent presentation of established budget
priorities oriented more toward program outputs and outcomes. Determination of expenditure
needs should be linked to these budget priorities, programs, and outputs.
Need for More Orderly Budget Preparation Process That Allows for Setting Priorities in a
Strategic Manner Based on More Predictable Revenues
The determination of local revenues and, to some extent, expenditures under the present system
leaves local governments subject to great uncertainty in their financial operations, becoming
aware of their actual budget only at the very end of a process that is largely outside of their
control. Effective budget preparation, from establishment of key priorities and commitments
forward through final sectoral and program allocations, demands a clearer and more predictable
knowledge of revenues, so that specific sectoral objectives can be pursued within a realistic
budget constraint.
Effective strategic prioritization also requires more than an annual time horizon. Although local
“socioeconomic development plans” typically make reference to multi- year objectives, they tend
to lack necessary detail and financial realism. These multi- year plans also tend to exist in
isolation from the annual budgeting process. This contrasts with the multi-year capital
improvement plan (CIP) process as practiced in the West, where, on an annual basis the capital
portion of the local budget is reviewed and approved in concert with approval of a revised and
extended CIP.
Need for Stronger Horizontal Accountability Legislation formally establishes both horizontal
and vertical accountability mechanisms in the form of financial reporting and audit processes.
Horizontal mechanisms (such as quarterly reporting to the local council’s budget committee,
year-end reporting to the full council, and the local council’s authority to initiate inquiries and
carry out audits) are, in reality, quite weak and not utilized, except perhaps sometimes at the
initiative and with the support of the hokim.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
89
VIII. URBAN SERVICE DELIVERY AND RELATED FUNCTIONS
Urban service providers in Uzbekistan grapple with transition-era problems endemic to former
Soviet republics: aging, obsolete (high energy-consuming) equipment, the depressed economic
conditions and reduced public expenditure capacity which constrains needed reinvestment, a
huge gap between costs and revenues reflecting a heritage of free or heavily subsidized services,
the decline in real wages which frustrates efforts to move towards full-cost pricing, the
chicken/egg dilemma of having to introduce real pricing concurrently with a collapse in quality
and reliability of service, and bloated communal companies lacking the skills and organizational
culture needed to convert public utilities into self- financing, market-based enterprises with a
consumer service ethic. 112 In dealing with these problems, Uzbekistan, with help from a variety
of donors, has made some efforts to reorganize the sector, introduce pricing reforms, and reduce
subsidies, but the problems remain daunting—most notably, the sheer magnitude of deferred
maintenance and investment needed to achieve efficient and environmentally sound operation.
Reorganization of the Communal Service Sectors
During most of the transition period, a Ministry of Communal Services directly oversaw the
regional and local entities responsible for delivering most utility-type services (potable water,
sewage, solid waste, gas supply, housing maintenance, heat and hot water). The heads of the
local agencies responsible for these services were appointed by ministerial order. Electricity was
provided through a Ministry of Energy; today a state stock company, GAK Uzbekenergo,
produces and distributes electric power.
In September 2000, under a major reorganization, the communal service ministry was converted
into the State Agency for Housing and Communal Services (O’zkommunxizmat), which reports
directly to the CoM but no longer enjoys ministerial status. The new agency has only about 40
employees compared with over 300 in the Ministry it replaced. Today, O’zkommunxizmat
primarily conducts training, contributes to developing tariff methodologies, and sets standards
(e.g., for water quality). However the new agency has no organizational mechanism or resources
to monitor compliance with these standards.
O’zkommunxizmat does have direct administrative responsibility for distribution of natural gas
(which is regarded as a state resource) and for major water lines that cross viloyat boundaries.
The other communal services are now subordinated to the viloyat hokimiyat through an entity
known as a TKEO. All communal service organizations (except for natural gas and electricity)
now report to a TKEO. The TKEOs, in turn, report to hokimiyats and also provide relevant data
to local tax and statistical bodies. However, they do not have significant direct accountability to
central ministries. Aside from the hokimiyats and the tax inspectorate, only the prosecutor’s
office is entitled, in some sense, to supervise/monitor communal service organizations
112
See for example, Price and Subsidy Policies for Urban Public Transport and Water Utilities, Working Paper # 5,
World Bank, March 1999.
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Central Asian Republics Local Government Initiative Phase II
By law, the general director of the TKEO hires and fires the heads of individual communal
service organizations with the approval of the viloyat (provincial) hokim; in practice, though, the
hokims often choose the heads themselves. The TKEO director also needs the hokim’s blessing
on appointments to his “nomenklatura” (a defined list of only 2 or 3 positions after the director
himself); other staff he would generally select without such consultation. 113
District and city level hokimiyats will typically provide hokimiyats at the viloyat level with
information and recommendations related to communal service management and have
considerable influence over their respective district and city KEUs (Communal Services
Operation Administrations), but lack meaningful formal approval authority in the delivery of the
services themselves. 114 For example, the viloyat hokim, through the TKEO and its province- level
vodokanal, would appoint and remove the heads of water companies at the city/district level, just
as the provincial hokim and TKEO have the official power to appoint all heads of district and
city KEUs. In both cases, though, the lower-tier hokims would be consulted in the process and, in
some instances, might actually nominate or block the appointment of candidates.
Republican officials interviewed characterize the reorganization of communal services described
above as a change from dual subordination to direct subordination under the hokimiyat. They
noted gains in responsiveness to local needs but at the price of some loss in professionalism.
Rate-Setting In The Communal Service Sector
Institutional Interaction in Tariff-Setting
Roughly in parallel with the reorganization described above, the Ministry of Finance was
assigned responsibility for setting tariffs for the basic urban services regarded as “natural
monopolies” (heat, hot water, potable water/sewage) that operate under the purview of the local
TKEOs. The Republic level MoF has, in turn, delegated primary responsibility for rate setting to
viloyat level MoF offices, and these do, indeed, tend to be the key decision-makers in the
process. However, on closer examination, the rate-setting process is still influenced by multiple
agencies at the local and republic levels, with significant central government involvement.
113
"After this Assessment was written, the government of Uzbekistan began to rethink the structure and functions of
state bodies for administration of communal services at the local level. As of December 2004, legislation providing
for the liquidation of TKEOs and KEUs had been reviewed by all relevant state bodies, and preparations were being
made to submit it to the CoM for approval. Under the new resolution, existing TKEOs and KEUs would be replaced
with province- and city-/district-level communal service divisions everywhere except for Tashkent City. The
divisions are to fulfill information-gathering functions and monitor implementation of state communal service
policy. Divisions will not, however, have direct administrative authority over utilities and, in particular, will not
have the power to hire and fire directors of utilities. In Tashkent City, the existing TKEO will lay off roughly twothirds of its personnel, though it is unclear to the authors whether it will undergo similar changes in its functional
responsibilities; it is also unclear whether district KRAVSes will be affected. It remains to be seen to what extent
these changes will actually increase the administrative independence of utilities vis-a-vis hokimiyats."
114
The administrative environment in Tashkent City is somewhat different; there, by CoM order #178 (April 18,
2001), KEUs were replaced with KRAVSes, which were theoretically relieved of all administrative powers and
responsibilities. This provision, however, has largely been ignored, and KRAVSes continue to wield influence and
operate as they had before the reform.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
91
•
The MoF and O’zkommunxizmat establish the methodology for rate calcula tions, an
explicit criterion being the ability of the population to pay.
•
The given communal service organization (e.g., the vodokanal for water) initiates a rate
request, performs the draft rate request, and takes it to the TKEO (technical staff of its
constituent vodokanal, the district heat company, initiate requests for rate increases and
perform the initial calculations).
•
The TKEO checks the figures and does its own analysis.
•
At this point, the hokim, although he has no formal authority to do so, might assert
himself and impose his own views and analysis. The hokim’s approval is, in practice,
mandatory (especially in more urban areas, where tariffs are more politicized), though
not always written. The TKEO then takes the request directly to the provincial financial
administration for review.
•
The MoF, at the provincial and national levels, performs additional review and analysis,
and in some sense ratifies or modifies the proposed rate.
•
The MoF at the provincial level, and subseque ntly at the republic level, forwards the
proposed rate to the corresponding level of the Anti-Monopoly Committee, which
reviews the proposal for legality.
The hokimiyat formally approves and promulgates the rate as determined by the MoF (with no
involvement by local council of people’s deputies anywhere in the rate setting process).
The Ministry of Finance also sets prices for gas and electricity (based on rate proposals from the
directors of O’zkommunxizmat and GAK Uzbekenergo, respectively).
The Office of Analytic Administration (within the CoM apparat), presides over an influential
inter- ministerial “analytic group on rates” which combines representation from the republic
agencies listed in the above bullets as well as the Ministry of Economics and the City of
Tashkent. The chairman of this group also leads a group on communal services.
Not surprisingly, the republic- and local- level officials interviewed gave somewhat contrasting
descriptions of how the tariff setting process works in practice. One local finance director
asserted that, while his office will, in conjunction with the hokimiyat, submit tariff proposals and
calculations, the republic level MoF more often than not sets the tariffs itself. Another specialist
commented that, generally, the province- level MoF office has the most influence on the process.
Most likely further investigation would confirm that the interplay among hokimiyat, TKEO,
republic and local level offices of the MoF and of the Anti-Monopoly Committee varies from
province to province.
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Central Asian Republics Local Government Initiative Phase II
Rate Variations Among and Within Provinces
While it is the hokimiyat at the viloyat level which issues tariffs for the entire province, the rates
themselves, based on input from lower-tier communal service agencies, may vary among the
constituent district and city service areas—although such intraprovince variations are probably
the exception rather than the rule.
Moreover, under the rate-setting methods in effect, tariffs also differ considerably from one
province to another. For example, in Tashkent City, water costs 24 so’ms per cubic meter; in
another province, the reported cost is in the order of 400 so’ms per cubic meter. Water in
Tashkent Province costs more than twice what it costs within the capital city itself. Though
established by a central body, rates for gas can also vary among provinces. Electric rates, by
contrast, remain uniform across regions, but on a nation-wide basis are different for roughly 10
different categories of consumers.
Hokimiyats (and local solid waste companies) enjoy more genuine discretion to establish prices
for solid waste removal, which is not regarded as a natural monopoly.
Housing management/maintenance fees in multi- unit buildings, in principle, are established by
residents themselves, through their housing associations (known by their Russian- language
acronym, TSJ), although in practice local officials often dictate the charges to be imposed.
The Effort to Achieve “Self-Sufficiency” Targets
In mid-summer 2001, a cabinet resolution introduced the principle of “self-sufficiency” (i.e., full
cost recovery) for communal service tariffs. According to the MoF office responsible for tariff
policy, water, sewage, and solid waste tariffs are now set levels that meet these “self-sufficient”
criteria (or at least come close); natural gas tariffs are also close to attaining this target.
Moreover, occupants of apartments are on their own in respect to funding housing maintenance
through their TSJ housing associations. Heat and hot water rates, however, constitute the biggest
burden on consumers and have much farther to go, with the aim being to phase in full cost rates
by 2006 (pushed back from the original year 2000 goal). In the meantime, the shortfall is funded
through the viloyat (provincial) budgets. Exhibit 12 below compares the City of Tashkent’s
estimated unit costs and unit rates for basic communal services. As evidenced by these estimates,
none are over 85 percent of cost recovery, with hot water lagging far behind the others.
Although this assessment did not examine rate-setting in detail, based on interviews our
impression is that, for official purposes, “self-sufficiency” refers only to current operating
expenses without taking into account the recovery of capital investments. The cost-accounting
methods in use do not seem to allow for capital cost amortization or for hidden subsidies (e.g.,
office space or electric power provided to the local utility company for free or nominal cost).
Thus, in reality, all communal services remain either subsidized to some degree or are able to be
self-sufficient only through starving themselves of any investment in maintenance, repair, and
improvements. The MoF rate methodology does allow communal companies up to a 10 percent
net revenue (in effect, a profit), which could, in theory, be used to fund infrastructure renewal
and reserves for capital purposes. In practice, we were told that the figure for Tashkent City, by
far the richest jurisdiction in RUz, hovers around the two percent level.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
93
Typically, commercial and industrial users pay higher utility rates than residences (perhaps 20
percent more for heat and hot water), resulting in substantial hidden cross-subsidies among the
sectors. This differential between rates for commercial and residential consumers also leads to
subsidies from communal service divisions in industrialized provinces to those in heavily
populated provinces with less industry, particularly for natural gas. According to one expert,
efforts to stop this practice are behind the large number of reorganizations of the natural gas
sector since independence.
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Central Asian Republics Local Government Initiative Phase II
Exhibit 12. Cost and Rates for Communal Services to Residential Customers, Tashkent
City
Cost and Rates for Communal Services to Residential Customers, Tashkent City
Unit of
Service
Measurement As of 01.01.2004
As of 01.02.2004
(monthly,
(expected)
according to
Cost
Rate
Rate Cost
Rate
Legal
Basis
Rate
standard
/
/
usage norms
Cost
Cost
where
applicable)
m2 of heated
Declaration
Heat
area
129.6
78.00
60.2
139.97
95.00
67.9
#508-TG-
Hot
per person
3181.00 1100.00 34.6
3444.04 1303.92 37.9
2003
m3 of water
25.42
25.42
Declaration
water
Cold
22.00
86.5
22.00
86.5
water
#478-TG3
Sewage
m of waste
13.96
10.50
75.2
14.0
10.50
75.2
2003
Solid
per person
286.43
250.00
87.3
290
250.00
86.2
Order
waste
of
hokim
#766
To date there is no history of debt finance being used to finance communal service infrastructure
(that is debt secured by the faith and credit of a communal service entity itself, or by collateral
pledged from among its assets).
Billing, Collections, and Financial Reporting
In respect to billing and collections, the pattern varies geographically and among types of
utilities. In some second tier LGUs (particularly Tashkent City), utility entities perform this
function themselves; in other areas, the mahallas (for single- family homes) or the TSJs (for
multi- unit housing stock) collect fees from apartment owners. Recently, the Tashkent City
hokim, reportedly in reaction to low collection rates, has transferred the responsibility for
collecting utility fees from TSJs and mahallas back to the utilities. A senior official speculates
that overall cold water/sewage collection rates, for instance, had been averaging about 60 percent
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
95
of the total amount billed. Namangan, for example, also has a collections service that collects
communal service payments.
Communal service providers in Uzbekistan also find themselves beset with collection problems
attributable both to corruption among collectors and to rampant cheating by consumers.
Some common collection problems (metered services)
•
Meters that can be manually rewound or tampered with in other ways routinely are—with
the tampering performed either by consumers themselves or by collectors/electricians as
a paid service. As a result (somewhat counter- intuitively) some homeowners invest in
meters at their own expense, because they will end up paying less than they would if
billed on a person-based or area-based calculation.
•
If meters are stolen, there is a penalty that can be paid; if that penalty is cheaper than the
payment due for services received, customers often fake theft.
•
Bypasses onto main pipes, or even neighbors’ lines. For example, tapping into neighbors’
phones, for instance, to make long-distance calls is especially common, so much so that
many households have their long-distance turned off altogether or, where available,
encoded.
Some common collection problems (services by formula)
•
People can plead destitution (“I can’t pay, so I’m not going to”)—this is often true, but
even when not, it is a comfortable lie and does not require conservation.
•
Certification as “vacant” of apartments that are actually occupied, or undercounting of
occupants (when rates are calculated on a per person basis). (In Tashkent City,
registration difficulties exacerbate this problem—people who illegally reside in the city
cannot register as communal service consumers even if willing to do so).
Generally, utility entities maintain their own bank accounts and books. In practice, the
hokimiyats (and their agent TKEOs), despite their financial stake in utility performance, do not
monitor and review the expenses of the communal companies under their purview. (The tax
inspectorates examine the utility company books, but with a view to tax compliance, not the
cost-effectiveness of their operation.)
An Additional Note on the Water Sector
Prior to 1993, water companies related through a republic- level vodokanal, which, in turn, was
part of the above referenced Ministry of Communal Services. In 1993, parallel presidential and
cabinet orders liquidated the republican- level vodokanal, making the local vodokanals
subordinate to lower tier governments.
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Central Asian Republics Local Government Initiative Phase II
Today, under the overall communal service structure described above, the vodokanals (which
render water and sewage services) function under TKEO and KEU supervision—with district
level vodokanals reporting to the TKEO at the provincial level. The division of labor among
regional, district, and city level vodokanals varies by location, depending in part on the
geography of the water supply. Sometimes a regional entity pumps water to the city, and the city
handles the retail distribution. In other instances, a city may enjoy a sufficient water supply
within its borders. O’zkommunxizmat operates nine republic pipelines among lower-tier
jurisdictions, and one province (Xorazm) obtains water from Turkmenistan.
Villages generally obtain their water from wells, although in some cases they receive water by
pipe from urban systems. (Several donor projects have been helping to create water associations
to maintain village water supply infrastructure as impoverished communal farms [shirkats] have
proven unable to do so themselves, understandably so, in the face of expectations to overfulfill
already high planting and production quotas for Uzbekistan’s thirsty leading export.)
The Ministry of Agriculture and Water oversees collection and initial distribution from major
reservoirs and rivers for agricultural purposes, but hokimiyats maintain power over the local
distribution systems. At the regional level there have been some initiatives to create water basin
authorities. In principle at least, viloyat (provincial) level vodokanals are supposed to pay fees to
the republican budget for water received from external sources via the nine republic pipelines.
However, in most instances, vodokanals rely on groundwater sources within their own service
areas.
With ASB and other international donor support, there has been some experimentation with
introducing water meters, but, with the exception of a significant number of meters in homes in
Tashkent City, households still pay based on a formula rather than actual consumption. The
difficulty of introducing water meters is compounded by the hardness of potable water in most
areas, which causes even the most expensive meters to break down relatively quickly.
The widespread use of essentially free potable water for home garden irrigation constitutes a
tremendous drain on local systems, especially in the more arid areas of the South and West.
Experts from the ADB and Swiss water projects interviewed for this assessment estimate system
losses from leakage at well over 50 percent and payment collection rates as low as 30 percent in
the jurisdictions with which they are familiar. ADB engineers believe that, in the cities they are
focused on, leak reduction initiatives (aimed at reducing leaks to 30 percent or less) could
increase water supply from six to ten hours a day. Pumps typically are oversized; more efficient
models could pay for themselves quickly in energy cost savings.
An Additional Note on Solid Waste Management
In Tashkent an agency known as PO Spetstrans performs “sanitary cleaning”—solid waste
disposal, as well as street cleaning; in the provinces, the equivalent entities are denoted as
Oblspetstrans. Legally, these are limited liability state-owned stock companies, viewed as
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
97
monopolies but not natural monopolies. They enter into agreements with housing associations
(TSJs), mahallas, and commercial property owners for trash removal. Outside of Tashkent City,
private individuals or companies with lower rates are frequently recruited to perform solid waste
disposal functions in lieu of Oblspetstrans, often on a semi-official basis. In Tashkent City,
however, Spetstrans was revived by an extensive EBRD program and remains the only
significant service provider. Landfills are operated by other entities known as PPOs (the Russianlanguage acronym for waste processing enterprises).
Hokims would not generally involve themselves directly in setting rates for solid waste services,
leaving this determination to the Spetstrans itself and the TKEO. However, there are exceptions.
Tashkent City guaranteed repayment of an EBRD loan for trash collection equipment; given this
financial exposure, the Hokimiyat took the lead in setting rates at levels sufficient to meet EBRD
requirements for loan repayment.
An Additional Note on District Heating / Hot Water
Heat and hot water in Tashkent are provided by the PO Tashteploenergo, elsewhere through
provincial organizations known as Issiklikmanbai. In Tashkent, about 90 percent of multi- unit
buildings have centrally provided hot water/heating; elsewhere the percentage varies.
In Andijon City, a city-operated plant provides heat (but no hot water) to a service area with
about 300,000 residents. Several international donors (the World Bank, EBRD, the Swiss, the
Japanese) have joined together to cofinance a project designed to reorganize district heating in
Andijon and up grade its heating infrastructure (including the addition of hot water) through
investment in a newly established, heating/hot water entity (HITS, Uzbek- language acronym for
Partnership for Provision of Heating Services). 115 Management services are to be procured
through an international competition (in progress at the time of the research for this assessment).
The project provides for metering and a new need-based subsidizing system. A tariff reform
study, aimed at ensuring full cost recovery, has been completed and is under review by the
government. According to Andijon City’s first deputy hokim, HITS will be more directly
accountable to the City administration than was the entity that operated the system in the past
(which had its finances intermeshed with that of the province- level district heating organization,
which prepared the rate proposals and allocated the local budget subsidy transfer). If successful,
the project could prove a precedent for more deconcentration of communal service operations in
the future.
According to one recent news report, in Tashkent City, this season has witnessed an
unprecedented aggressive campaign to collect heating/hot water tariffs from delinquent
customers. 116 The City Tashteploenergo, having found that the legal actions it had been taking
against delinquents in the city district (tuman) courts were not having any appreciable effect, is
reported to be entering basements to physically cut off service. At the same time, even Pravda
115
Hamkor Issiqlik Ta'minot Servis (Partnership for Provision of Heating Services)
Pronkina, Tatyana. “’Tashteploenergo’ vyshlo na tropu voiny s neplatezhesposobnym narodom.” Zamon.info.
http://www.centrasia.ru/newsA.php4?st=1076016420. 00:27, February 6, 2004.
116
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Central Asian Republics Local Government Initiative Phase II
Vostoka and Xalq So’zi, official government newspapers, are cited as characterizing heat/hot
water rates as too high for the population to pay. The report states that many customers assessed
by formula rather than use (which is the norm, even in Tashkent City) are requesting that their
hot water and heating infrastructure be physically cut off because the charges are prohibitive.
This type of news report highlights in human terms the dilemma of trying to pursue communal
service financial reforms (with an eye to the proclaimed 2006 date for heating/hot water to
achieve self- financing status) while overall efforts to improve macroeconomic conditions
(including growth in real household incomes) still struggle.
An Additional Note on Housing Management and Maintena nce
At the start of the USAID LGI-II project, the Urban Institute prepared an assessment of TSJs
created pursuant to a 1999 law as the mandatory vehicle for managing and maintaining the urban
housing stock. 117 To recap briefly here, the main findings relevant to the broader subject of this
local governance assessment were (1) Since 1993, ownership of virtually all multi- family
housing has been transferred to occupant-owners, and with the 1999 law, these privatized units
have, in turn, been organized into more than 1,400 housing associations ; (2) Concurrently with
the introduction of TSJs, the state-owned housing and communal service entities (known as
ZhEKs) were disbanded, in part with the idea that the owner-controlled housing associations
would be taking over most of the housing management functions previously performed by the
ZhEKs. That said, two new entities, the above- mentioned TKEOs and their subsidiary districtlevel KEUs have also taken over some of the ZhEK functions. In Tashkent City, KEUs were
subsequently transformed into KRAVSes (Communal Repairs and Emergency Service Agencies)
and their functional responsibilities were redefined (with little practical success) to remove any
administrative powers they had wielded as KEUs. In practice, it appears that the TKEOs preempt
housing management functions (setting and collecting housing partnership fees; appointing TSJ
directors) in ways that preclude the associations’ ability to function as democratic, ownercontrolled entities. Moreover, the housing associations are obligated to contract with the
KEUs/KRAVSes for housing maintenance.
These problems are compounded by the unwieldy size of the housing associations themselves,
each often encompassing a thousand or more units in numerous buildings.
Official recognition that the reforms were not working as intended prompted a 2002 Presidential
Decree and CoM resolution, which provided needed tax relief to the partnerships and earmarked
some funds for repairs to apartments built prior to 1991. The present USAID LGI-II project has
as its major aim the implementation of further reforms aimed at improving the independence of
the housing associations and their cost-effectiveness and responsiveness in providing housing
services to their owner-occupants. These aims are being pursued through support for
amendments to the legal framework, now making their way through the adoption process, and
pilot initiatives to break up the oversized TSJs into more compact associations, ideally on the
117
Carol Rabenhorst, et. al. Assessment Of Current Legal And Operational Status Of Housing Partnerships In
Uzbekistan, The Urban Institute, November 2002.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
99
principle of “one building-one association” with active participation and control by their
members.
Recap of Organizational and Budgetary Status of Communal Service Companies
Again, all the service-providing agencies cited above—vodokanals (cold water and sewage),
Spetstrans and Oblspetstrans (solid waste, Tashkent City and provinces, respectively), and
Tashteploenergo and Issiklikmanbai (district heat/hot water, Tashkent City and provinces,
respectively), and KRAVSes and KEUs (communal and housing repair companies in Tashkent
City districts and the district/city subdivisions of TKEOs in provinces, respectively) are each
subordinated to the general director of the viloyat TKEO, who, in turn, is subordinated to the
hokim. With the exception of KEUs, these agencies are not regarded as government entities. In
other words, they book their own fee revenues and expenditures; only the transfer payments from
the hokimiyat to cover the difference between heating/hot water costs and revenues is recorded in
the local government budget.
The Urban Transportation Sector
In the urban transportation sector, the government has moved, with some success, to separate
regulatory and management functions and to create a framework for private sector participation
though a competitive tender for route franchises. A 1997 Law on Urban Transport, as further
elaborated in 1998 and 1999 Cabinet of Ministers Orders, sets the legal framework for urban
transport as it exists today. 118 Previously, urban motor transportation was monopolized by a
government-owned stock company called Uzavtotrans. By 2001, Uzavtotrans was eliminated
and its routes turned over to the respective hokimiyats at the provincial level. The hokimiyats are
now required to allocate the rights to all urban motor transport routes through competitive
tenders. A dual-subordinated, special tender commission (headed by a deputy hokim) manages
the tender process with the technical work performed by an administrative department of the
Republic level Public Agency for Motor and River Transport (“Motor Agency”). In rural areas,
similar commissions operate under the provincial hokimiyat. According to the Motor Agency,
concessions for the operation of over 1,000 urban routes have been allocated through suc h
tenders, with active competition including private companies and small owner operator
associations. Buses and shuttle taxis belong to the respective carriers themselves; trolleys, in
most instances, remain under public ownership. This tendering process has now been operative
for several years with considerable assistance from the World Bank and international
consultants, who as early as 2000 were reporting “steady improvement” and “healthy
competition”. 119 The number of passengers entitled to fare reductions had been reduced to 5
percent (mainly veterans and invalids) of all passengers. Receipts were substantially increased
from the other categories of passengers who are still entitled to discounts (e.g., students,
118
CoM orders # 350 (August 17, 1998) on Organization of Tenders for City Transport, and # 313 (November 26,
1999), Implementation of the Urban Transport Concept.
119
The World Bank, Urban Transport Project, Project Appraisal Report, April 20, 2000, p. 4
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Central Asian Republics Local Government Initiative Phase II
pensioners, etc.—about 20 percent of ridership), with fares from the remaining 80 percent of
riders approaching full cost recovery levels, at least on an operating basis.
The 1997 law also assigned tariff-setting responsibility for urban transport to second-tier LGUs
based on cost and market considerations (through the commissions described above). The Motor
Agency and MoF share responsibility for elaborating policies that govern the rate setting process
at the provincial level. 120 In practice, the republic agencies set basic rules for setting tariffs and
conducting the requisite tenders. Within these guidelines, the hokimiyats have a fair amount of
discretion to set tariffs.
Losses in the urban transport sector are covered by local budgets (and, to some extent through
the mutual settlement process described earlier). Discounts for various categories of socially
protected individuals are funded through the state budget, but with the amounts defined at the
viloyat level.
(See Annex E for two charts provided by the Motor Agency. The first details the functional
division of labor between republic and provincial level agencies in the urban transport sector.
The second chart identifies the legal basis for these functional assignments.)
Since 2000, the World Bank has sponsored a $30 million urban transport project in five mediumsized cities. 121 At the time of project initiation, more than 80 percent of the bus fleet was deemed
to have exceeded its useful life, with daily breakdowns the rule, only about 60 percent of the
fleet considered operable, and oftentimes as few as 25 percent of the buses in service on a given
day. An interesting feature of the World Bank project is the creation of a commercial leasing
company that would make new buses available to private operators on a full cost-recovery basis.
Tashkent City also operates an extensive underground metro system. It is managed by Tashkent
Metropolitan, a body within Tashgorpastrans (which manages passenger transportation within
Tashkent City).
Much public transportation, especially outside of Tashkent City, is available through private
shuttle taxis, which purchase their licenses (and other necessary documents) from local
governments. Indeed, in some of Uzbekistan’s largest cities (e.g., Andijon, Fergana) this is the
only form of urban public transportation. Travel routes are set by transportation authorities for
older shuttle taxis that still have their rates officially dictated by the Motor Agency (these are
rather dilapidated vehicles and are now something of a rarity, as decaying fleets have not been
renewed at all in most places). Prices for private shuttle taxis are not set by the Motor Agency,
but they must travel the routes determined by the government and compete with the state’s own
fixed-price fleet.
120
This was further elaborated in the presidential order that formally liquidated Uzavtotrans, Presidential Order
2871 of June 4, 2001,on Demonopolization of Motor Transportation.
121
Uzbekistan-Urban Transport Project. See World Bank country web site for PID and appraisal report and Annex D
below for more details.
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101
Local Governme nts and Social Protection
Reform of the social protection system often proves essential to the successful transition to urban
services that operate on a largely self- financing basis. Government leaders face political risks in
trying to convince their citizens to forgo entitlements of the past and pay from their own pockets
the full cost of services such as water and district heat. It greatly strengthens the hand of leaders
in making this case if they have in place a system of social protection that allows them to
communicate that these necessary pricing reforms are being introduced in a fair and
compassionate manner. At present, in Uzbekistan, little attention, if any, is being given to this
critical linkage between urban service reform and social protection policy.
One problem is the extent of poverty. The most expensive utilities, such as heat and hot water,
are expensive for almost everyone, not just the poorest, even subsidized as they are now.
The difficulty of establishing an effectively targeted, social protection-based pricing system in
Uzbekistan is compounded by the government’s limited ability to judge need objectively and
fairly. The “shadow economy” remains quite significant in Uzbekistan, by one estimate 35
percent of GDP, and constitutes many people’s main source of income. 122 Other social protection
programs, such as welfare aid to low-income families, are administered through mahallas in a
relatively opaque and subjective process (see below). The government, therefore, often resorts to
objective but imperfect measures of need, such as veteran status or official occupation.
Communal Service Subsidies
Until recently, specified categories of socially protected persons received discounts (ranging
from 30 percent to 100 percent) on their communal service payments. Moreover, if one member
of a household qualified, the entire family received the privileged discount. In spring of 2003,
Presidential Decree #3227 introduced a new system of compensation. The eligible persons
remain the same (33 categories of privileged persons), but the discount is now set at 45 percent
of the minimum wage for the eligible person only, regardless of the number of family members.
In autumn of 2003, the discount was 2,448 so’ms per month based on the then minimum wage of
5,440 so’ms. 123 This compares with an estimated total of about 13,500 so’ms (about US$14) in
monthly communal service charges for a family of four in Tashkent, 124 with GNI per capita
estimated at US$38 per month. 125 This subsidy is administered through the major state employers
and other social institutions, with the payment disbursed by the appropriate budget entity or fund
along with one’s salary or pension as the case may be.
As recalculated, the subsidies amount to between one-half and one-third of what was provided
before. Nonetheless, according to one member of a republic commission on tariff policy, the
122
Taskanov, Alisher. “Tenevye otnosheniia v Uzbekistane: byli, iest’ i … budut?” Tsentral’naia Aziia i Kavkaz. #6,
1999. p 4. This figure is given for 1997. According to the author, though several times higher than in developed
countries, the share of the shadow economy as a percent of the official economy in Uzbekistan is considerably lower
than in many other FSU countries.
123
The official exchange rate as of 16 February 2004 was 990 so’ms = US$1.
124
From Table in Annex G for City of Tashkent
125
World Bank Country Brief for Uzbekistan estimates annual GNI per capita at US$460.
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Central Asian Republics Local Government Initiative Phase II
state has no ability to ensure these payments are made on a timely and regular basis. He feels the
categories should be reconsidered and their number reduced, but, in the near term, sees no likely
movement in this direction.
General Assistance for Needy Families
Three types of social protection are funded by district/city budgets but administered through the
mahallas:
•
Aid to unemployed mothers with children under two years of age, with some means
testing (according to one MoF source, perhaps 70 percent of all mothers of toddlers are
eligible). Benefits are approved for a renewable one- year period. Starting in 2003, the
monthly amount was set at 200 percent of the minimum wage (per mother, not per child
under two years of age). Family income is also considered; a family with an income of
less than 150 percent of the minimum wage per family member is eligible for
consideration. Unemployed single mothers (or fathers) of children under two years of age
and mothers of children with disabilities automatically receive the subsidy (see order of
March 20, 2002, MoJ registration #1112).
•
Low-income families—temporary income support for particularly needy families.
Approved for a renewable three- month period. Monthly amount is from 150 to300
percent of the minimum wage, determined by the citizens’ assembly welfare commission
according to need. Other criteria include social justice; proven desire to work by able,
unemployed family members; and the potential of the family’s land for supplementing its
income (see CoM order #434, August 24, 1994).
•
Assistance to low-income families with children under 16 years of age. Eligibility also
based on need. Approved for a renewable six- month period. Set at 50 to –175 percent of
the minimum wage, depending on the number of children under 16. Recommended main
criterion is family income; a family with an income of less than 150 percent of the
minimum wage per member is eligible to be considered low- income. Non-encouragement
of voluntary unemployment is another central principle that the citizens’ assembly
welfare commission must consider (see CoM order #437, December 10, 1996; procedural
guide of June 4, 1999, MoJ registration #740).
As described by leaders of the Mahalla Foundation and relevant legislation, the administration of
these subsidies works as follows: Each citizens’ assembly has a “welfare commission”
(alternatively referred to as a “social commission”) to administer these subsidies; it reviews
applications, checks their validity (e.g., examines wage certificates and other documents), and
visits homes as need be. The commission then votes to decide which families of those on the list
of eligible applicants will receive subsidies. All subsidies are paid monthly. Once per month, the
secretary (kotib) of the mahalla takes copies of the list of approved beneficiaries and subsidy
amounts to the hokimiyat, which, in turn, transfers the requisite funds to the branch People’s
Bank for disbursement. Other copies of the list go to the local MoF financial administration, the
appropriate bank and the labor market office.
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103
This system lacks transparency and professional administration. The mahalla personnel engaged
in distributing this family assistance have no training and, for the most part, are free to choose
beneficiaries on relatively subjective grounds. Mahalla workers interviewed assert that
budgetary funds allotted to them for dispersal of subsidies are miniscule compared to need, and
that this also contributes to subjectivity. Based on our interviews and the recent Human Rights
Watch report cited earlier, decisions often reflect personal favoritism, and, in some cases at least,
assistance is withheld to punish political or social non-conformity and even membership to an
ethnic group. Reportedly, there has been some discussion within the government, but with little
real progress, about unifying these three forms of support into a single, means-tested family
income support.
Role Of Ministry Of Social Protection
The Ministry of Social Protection appears to play little to no role in overseeing the
administration of either the communal service or the family assistance subsidies. In the overall
state provision for social protection, the ministry primarily assists pensioners, blind persons, and
other invalids, in large part by providing social services such as nursing homes and specialized
medical services or by hosting high profile sporting and other events. It lacks experience and
expertise in the design and implementation of means-tested forms of income support.
Urban Property, Development Permitting, and Cadastral Records
In respect to public property, Uzbekistan has both Republican property and municipal property
(of a province, district or city); self- governments can also have property (see chapter 17 of the
Civil Code). The CoM’s lists of enterprises slated for privatization, however, do not reflect this.
Indeed, according to the head of one city cadastral agency, his cadastre, for record keeping
purposes, does not distinguish between objects of republican, viloyat, district, and city property,
though these distinctions exist (as reflected in the subordination of individual budgetary
entities)—all land, infrastructure, and buildings are simply recorded as state property. Sales of
public property are made by auction through a local office of the Department of State Property,
with 30 percent of the proceeds accruing to the account of the provincial hokimiyat. The
provincial hokim, by written order, must spend 50 percent of these funds on capital repairs of
multi- unit housing and public places; at least 25 percent must go to building housing for the
destitute. The remainder of the privatization money is to be dedicated to development of physical
and social infrastructure and industry in rural areas. 126
A local Bureau of Technical Inventory (BTI, an institutional holdover from the Soviet era)
maintains physical and legal cadastral information on residences. Prior to 1997, the BTI
performed broader recordkeeping functions on physical structures and natural resources. At that
time, a new Administration of Geodesy, Cartography, and Real Estate Cadastre was formed.
Local level offices of this agency each maintain 19 cadastres in all (a water cadastre, a city
construction cadastre, a transportation cadastre, etc.). Reportedly, housing records may soon be
126
Forty percent of proceeds from privatization go to the state budget to close the deficit, twenty-five percent is
reinvested into the enterprise and five percent go to cover the administrative costs of the Department of State
Property.
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Central Asian Republics Local Government Initiative Phase II
transferred to these offices as well, effectively merging the BTI completely into the Cadastral
Administration. 127
The cadastral offices serve as registration offices for the transfer of private interests in real estate.
In Uzbekistan, in strict legal terms, one cannot buy or sell land itself, only a use right to the land
and the physical objects on it—buildings, trees, and so on. (However, a permanent transferable
use right for most practical purposes is tantamount to ownership). Data on record at the cadastre
office is also used for fiscal purposes to calculate the land tax.
The office of the provincial, district, or city chief architect (heading the respective Department of
Architecture and Construction), dually subordinated to the State Committee of the Republic of
Uzbekistan and to the appropriate hokimiyat, maintains strict control over the urban planning and
development process and administers the permitting system for building construction. Larger
urban planning projects are normally subject to approval by the CoM.
Conclusions
A Common Set of Management Issues Confront All Service Providers
Some of the key issues common to the management and finance of local urban services are:
•
From a comparative international perspective, the reorganization of the communal
service sector in Uzbekistan does encompass some deconcentration in administrative
functions—but with no meaningful decentralization in respect to giving lower tier LGUs
any real discretion to manage the essential equation between setting the price of services
on the one hand and establishing the quality of service and levels of investment on the
other. Certainly there is no democratic interplay between citizens, either as consumers or
taxpayers, and local government in respect to determining the standards of basic services
or their pricing.
All basic services suffer from serious deterioration of physical infrastructure and equipment
due to a decade of deferred maintenance and lack of capital investment. The current
World Bank effort to introduce equipment leasing as a means to facilitate replacement of
127
"On 19 October 2004, after this Assessment was written, CoM Resolution 483 On Organization of the Activity of
the State Committee of Land Resources, Geodesy, Cartography and the State Cadastre in the Republic of Uzbekistan
was passed. This altered the structure of the cadastre bureaus throughout the Republic, forming a more centralized
body—Goskomzemgeokadastr (the State Committee). Heads of territorial divisions of the State Committee are dual
subordinated to the appropriate hokimiyat and the Goskomzemgeokadastr hierarchy (they are appointed or dismissed
by the appropriate higher body in the State Committee, subject to approval by the corresponding hokimiyat, Article
16 of attachment #5). The republican BTI administration was liquidated (Article 5) and the approved staffing
structures of the new province, city, and district departments of Goskomzemgeokadastr do not provide for separate
BTI clerks. The new State Committee's local offices have broad responsibilities in relation to registering use rights
and owners hip of land and real estate (including residences), as well as surveying and other functions (see section II
of attachment #5 to CoM Resolution 483 On Organization of the Activity of the State Committee of Land
Resources, Geodesy, Cartography and the State Cadastre in the Republic of Uzbekistan)." [[TO whom is this quote
attributed?]]
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
105
obsolete urban transport vehicles merits monitoring and possible replication. In the water
sector, there may be opportunities to link relatively modest investments in leak detection
and energy saving investments that have quick paybacks (such as better-sized pumps) that can
translate into improved service with improved cost-accounting, continued movement towards
full cost pricing, and more aggressive rate collection.
•
The current process for rate-setting in communal services is needlessly complex and
opaque, with rate increase requests initiated from lower tiers requiring six months or
more to receive approval from the central government in Tashkent. Simplification of this
process (preferably through greater local discretion) and the provision of greater
transparency must be achieved before Uzbekistan can hope to attract meaningful private
investment in the improvement of communal services (through concessions, franchises,
and the like).
•
Not too far down the road, the continued lack of clarity among levels of government in
respect to ownership and disposition of urban land and property may also prove a
constraint on both mobilizing private investment in urban development and also on
introducing debt financing techniques to help fund needed infrastructure investments.
The Critical Linkage between Social Protection Policy and Tariff Reform
As suggested above, a major constraint on introducing full-cost tariffs and putting basic urban
services on a secure financial footing are the low collection rates even at current below-cost tariff
levels, as well as a political culture born of universal subsidies and resistant to introducing real
prices. Here, thought might be given to linking tariff reform with better-targeted social protection
systems, which would allow the government to tell the public:
•
If we want decent services, we have no alternative to charging real prices and being
aggressive in collecting payments;
•
We will earmark increased revenues for concrete improvements in service quality;
•
Our longer-term policy is one of efficiency and cost cutting, which will eventually lead to
lower tariffs;
•
We recognize that doing this requires pain. With this in mind, we are introducing more
targeted forms of subsidy based on ability to pay to insure that these pricing reforms are
implemented in a manner perceived as fair.
One approach to accomplishing the above might be to introduce means tested utility (or housing)
allowances, such has been adopted in Russia and the Ukraine with some success. Support for
some initiative along these lines might be a promising option for expanding USAID LGI-II
activities in a way that complements and builds on the housing association reforms being
supported through the current LGI-II program. Assistance on the social protection side could be
coordinated with other ongoing donor funded efforts to reform specific urban services (water,
district heat, etc.), perhaps supplemented by some direct USAID LG-I help in municipal capacity
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building, particularly in respect to pricing and cost-accounting. Additionally, any program of this
kind would have to anticipate the risk of corruption among bureaucrats who would administer
the utility allowances. A precondition for any such project should be strong checks so as to lower
as much as possible the potential for middlemen to sell benefits rather than actually meanstesting them, creating yet another lucrative niche for lower officialdom. In addition to increasing
municipal capacity, therefore, transparency and accountability would be key.
A constraint on introducing the type of program described above is the apparent absence at the
national level of a strong counterpart agency with relevant experience and skills. The Ministry of
Social Assistance has little capacity to serve as a counterpart for designing and implementing this
type of reform. Government institutions with a considerably broader mandate, however, (the
MoF, MoJ, and sections of the CoM) all have an interest in setting up a system of social aid for
communal services and have proven to be valuable partners in USAID LGI-II project
implementation thus far.
Need to Address Rampant Cheating
As part of a program aimed at strengthening communal service finances, there are practical ways
to discourage cheating that could be explored and that would build on USAID LGI-II work with
housing associations. For example, meters could be installed at the point of connection between
apartment buildings and communal service company infrastructure. Residents could install
additional individual meters for their apartments if desired. Payments would be collected for the
building as a whole, which would be a powerful incentive for self-policing of cheaters—and
encourage the perception that the “stealing” involved is from neighbors rather than from some
remote communal services company. Of course, individual meters do more to encourage
conservation, but this would require considerably higher costs for investment in equipment, a
burden that most of the population cannot afford to bear. In the near term, perhaps metering
policies aimed at helping to create a culture of responsibility to pay for services received does
merit priority.
Approaches to Improving the Collection System
The collection system for payments on communal services also deserves serious attention.
Currently, Uzbekistan has no one model for how collections are to be conducted and legislation
does not ensure participation by the three key stakeholders: consumers, service providers, and
TSJs. In the provinces, collections tend to be carried out by mahallas for single-family homes
and by TSJs for multi- unit housing. 128 As this arrangement proved ineffective in ensuring
adequate collection rates, the Tashkent City hokimiyat decided to change to a system by which
consumers settle with each utility company individually. Some areas of the republic have since
followed suit and others are considering doing so. 129
128
This system can constitute a tremendous drain on TSJ finances as well, since debts and non-payments on
communal services are often covered from the TSJ’s own collections for its own maintenance and repairs.
129
Indeed, one provincial TKEO chairman interviewed indicated that his office was considering a similar
arrangement, by which workers from the appropriate banks would go door-to-door and collect communal service
fees, keeping a share for themselves as compensation.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
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Under current realities, a collection system that removes the TSJs from the equation (for multiunit housing stock) and puts the burden of collecting from individual customers on the utility
companies is undesirable for several reasons.
•
•
•
•
First of all, it excludes the TSJ, complicating the process of improving in-building
infrastructure, where much loss is incur red. Individual consumers, without their TSJ, lack
a framework for organization and are insufficiently powerful to ensure quality service.
This arrangement also deprives both TSJs and mahallas of one of their only potential
sources of additional funds—the commission they receive upon achieving a sufficiently
high collection rate.
Additionally, this is an expensive system for the utility companies, requiring a dramatic
expansion of their staff and a huge amount of paper and equipment for the required
documentation; such costs would either be passed on to consumers or subsidized by the
government.
Finally, the system of individual direct payments to each utility company is simply
inconvenient for residents.
One aspect of a program designed to put communal service financing on a more sound footing
would be work on development of a sound legislative basis to regulate relations between utility
companies, TSJs, and consumers. An end goal would be the creation and introduction of a clear
system of delivery and payments that would realign the interests of each party to encourage
investment in their respective parts of communal service infrastructure, simultaneously
increasing practical consumer control over quality. One critical prerequisite for such an
arrangement is the existence of genuinely democratic TSJs that are accountable to residents, the
encouragement and fostering of which is the primary goal of the existing USAID LGI-II project
in Uzbekistan.
108
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Central Asian Republics Local Government Initiative Phase II
RELATED PUBLIC ADMINISTRATION TRAINING CAPACITY
This assessment identified some in-country public administration training institutes which, if
USAID should at some point design a broader local government capacity building program,
might have some potential role as training partners: the Presidential Academy in Tashkent, at
least one viloyat (province) level training institute for local officials and staff, and the training
arm of the State Agency for Housing and Communal Services (O’zkommunxizmat ).
The Presidential Academy
The Academy of State and Social Construction under the President of the Republic of
Uzbekistan was founded by presidential decree on April 19, 1995. A brochure for the Academy
describes it as “the biggest scientific and educational center of the Republic.” According to the
President’s decree, its mission is to provide continuing education for intellectually gifted state
personnel and young, ambitious specialists to encourage them to be “staunch supporters of a
democratic state and civil society” and also function as a research center and think tank.130
According to independent observers consulted, the Presidential Academy does not have a
reputation for encouraging personal initiative, critical thinking skills, or exploration of ideas that
would represent a departure from the status quo.
In principle, the Academy recruits from all parts of the government and from major NGOs; in
practice, however, the vast majority of the student body comes from executive organs. Students
choose from two main areas of concentration: “State Construction” (the path of choice for the
many students from the security structures) and “the Economics Bloc” (Principles of Market
Economy and Interstate and Foreign Economic Relations). Each year the Academy enrolls
approximately 140 students and employs 60 lectors. The Academy cooperated actively with
foreign donors and, between 1995 and 2000, received nearly US$6 million in grants.
The Academy’s departments are State Construction and Law; Finance, Credit and Currency
Exchange; Management; Marketing and Audit; Social and Political Sciences; Philosophy;
Foreign Languages; National Heritage and Religion; Theory and Practice of State Regulation of
Market Economy; the History of Uzbekistan; International Law; Foreign Policy and Diplomacy;
World Economy and Contemporary Foreign Economic Relations; Physical Training and Sport.
None of these departments features a course specifically on local administration or
decentralization processes, though several treat this material in their syllabi. The Department of
Political and Social Sciences, for instance, offers courses in Political Science; Modern Political
Science; Political Sociology; Political Parties and Movements; Political Culture; Political
Institutions and Processes in Leading Foreign States—but nothing specifically local.
130
Official booklet of the Academy of State and Social Construction under the President of the Republic of
Uzbekistan, p 2.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
109
The Academy operates its own publishing house, research centers, and a self- financing Public
Administration Management Development Center set up with the help of a European Union
Tacis Programme grant to offer short, intensive courses for high-ranking civil servants.
Representatives of the Academy, however, said that the center, at present, does not dedicate
courses to local administration, intergovernmental relations, or decentralization topics.
Other Training Organizations
The Andijon Viloyat Hokimiyat has established a small academy, which offers training, primarily
on economic and engineering topics, open to local government personnel selected from
throughout the province. The academy offers both a one-year program with a relatively broad
public administration curriculum and week- long courses that address more narrowly defined
areas of government operation. Our understanding is that this is the only such viloyat sponsored
training institute in the country.
Earlier reference has been made to the role of The State Agency for Housing and Communal
Services (O’zkommunxizmat) in communal service delivery. The Agency operates a Training and
Engineering Center (O’zkommunukuvtashkilotchi). The Agency, and the Training Center in
particular, is an active partner in the current USAID LGI-II project’s work with housing
associations. Prospectively, the Training Center might cooperate with any additional capacity
building activities related to the delivery of the communal type urban services (water, wastewater, heat, etc.) that come under its purview.
The earlier UI assessment of housing associations 131 also described the Tashkent Public
Training and Education Center, the main purpose of which is the training of “secondary
school teachers and administrators, and development of textbooks. Some of the public education
work has been sponsored by grants and contracts with Eurasia Foundation, the National
Endowment for Democracy, and the Open Society [Institute] (Soros Foundation). Their focus is
on changing teaching methodology and ‘democratization’ of the mentality of Uzbekistani
students.”132 Of particular relevance to this broader local governance assessment,“The Center
recently began to design an in-service training program with state sponsorship, for Tashkent
local officials. The focus will be on public culture, education, and healthcare.”
A Note on the Absence of Municipal Associations
Apparently there is no municipal association of any kind (unless one chose to construe the
Mahalla Foundation, its closely associated Council of Oqsoqols, or local city and province level
associations of TSJs as such), nor is there an association of hokims in their capacity as appointed
executives. According to one report, the government does bring all hokims together every winter
131
Rabenhorst, Carol, et. al. “Assessment Of Current Legal And Operational Status Of Housing Partnerships In
Uzbekistan”, The Urban Institute, November 2002.
132
Ibid. p. 14.
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Central Asian Republics Local Government Initiative Phase II
for a conference of sorts, which includes seminars on various topics. Additionally, a bloc
coalesced within the Oily Majlis of the hokims that also serve as deputies in parliament.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
X.
111
RELATED INTERNATIONAL DONOR INITIATIVES
At this time, no international donor to our knowledge is engaged in a major, ongoing effort
explicitly directed at improving the legal/institutional framework for intergovernmental relations,
local government capacity building, or democratic governance at the local level. As noted earlier,
the USAID LGI-II program for which this assessment is being prepared centers on promoting
housing associations of owner-occupants. That said, if USAID should contemplate providing
broader support for local government strengthening, there are a number of other USAID and
international donor activities that should be taken into consideration—both in the design and
implementation of any such initiative.
•
Intergovernmental Finance. As noted earlier, Bearing Point’s USAID- funded program
of support for think tank development has underwritten policy analysis in respect to
intergovernmental transfers and revenue capacity. The World Bank has a Public Finance
Management Reform Project under preparation that aims at improved budget
preparation/execution and establishment of a Treasury. Although the focus is on the
central government, this work will most likely address relevant intergovernmental aspects
of budget process and treasury operations as well. In conjunction with project
preparation, some grant funded TA on these topics is already being delivered.
•
Urban Infrastructure. A number of donors have projects aimed at improving urban
infrastructure including solid waste management (EBRD/World Bank), urban transport
(World Bank), potable water supply (World Bank, ADB, the Swiss and Canadian
development agencies), and district heat/hot water (the World Bank, EBRD, the Swiss
and Japanese development agencies). Typically these projects combine financing for
infrastructure and equipment with some TA directed at management, organizational, and
tariff reforms, and, in some instances, the promotion of competitive practice and private
sector investment through franchises, concessions, and equipment leasing. Where these
efforts have promoted policy dialogue and some revisiting of enabling law and
regulation, the focus has been quite sector specific. (Note: USAID’s water sector program
concentrates on larger transboundary and irrigation issues rather than urban water supply
needs, though it has helped provide potable water for the arid, highly-polluted
Karakalpak Autonomous Republic.)
•
NGOs and Community-Based Development. Under the USAID Community Action
Investment Program (CAIP), grantees carry out stakeholder-based community
development projects in “conflict vulnerable” communities in the Fergana Valley and in
the southern provinces of Surxondaryo and Qashqadaryo. Often, the CAIP communities
as defined may encompass two or more mahallas. Of the sixty communities in the sout h,
most lie within the suburban areas of cities where the housing stock consists of single-
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family housing. 133 Twelve new communities are being added which may include higherdensity areas with apartment buildings. Before this addition, there had been limited
potential for coordination between CAIP and the LGI projects work with housing
associations. However, going forward, there may be some possibilities for targeting some
CAIP grants in ways that would complement LGI initiatives to promote more effective,
resident-based control of multi- unit buildings.
The CAIP project operates by convening a town hall-type meeting to select a
representative group that then serves as the counterpart to identify priorities for modest,
grant- funded community development initiatives and subsequently for carrying out their
implementation. Improvements include municipal- type infrastructure investments such as
extending gas lines, digging wells, and school repairs. For water projects, the group
prepares a sustainability plan.
The CAIP projects reportedly coordinate with local governments at various levels, in part
to obtain necessary permits and other approvals. However, if during the life of the CAIP,
USAID should decide to broaden the LGI to encompass broader municipal capacity
building, there would be important opportunities for integrating the two programs with an
eye to encouraging hokims themselves to initiate (and, in time, institutionalize)
stakeholder consultation in making capital spending decisions.
Another USAID initiative, which could prove a useful partner with any expanded local
government program, is the Civic Advocacy Support Program (CASP). CASP supports a
network of Civil Society Support Centers. These centers might partner in dissemination
on a variety of topics related to local government reform, training of facilitators and
providing other forms of support in promoting various models of local
government/citizen engagement and participation. Some of the centers have assisted
mahallas (and other forms of local NGOs) in performing Participatory Community
Assessments and implementing solutions that have emerged from these surveys. Also, as
described in UI’s 2002 assessment of housing partnerships, the Eurasia Foundation has
supported a comprehensive training and development program for NGOs and makes
grants to NGOs to implement related activities. This has included a program to develop
mahalla advocacy skills on behalf of their constituents. State and local government is
listed as an eligible category for grant applications to Eurasia.
The World Bank supports a Community Empowerment Network Program that also
operates at the interface between local government and the NGO community.
NDI, IRI, and OSCE have performed some national election monitoring, but our impression is
that none has conducted significant monitoring of local elections (i.e., mahalla or local council).
133
The description here of CAIP activity is primarily based on interviews with the CoP [[AUTHOR: Please define
acronym]]and staff of the Counterpart/CHF[[AUTHOR: Please define acronym]] project, which operates in the
south. Mercy Corps carries out comparable CAIP activities in the Fergana Valley under an agreement that extends to
May 2005.
Assessment of Intergovernmental Relations and Local Governance in the Republic of Uzbekistan
113
As reported in UI’s earlier housing association assessment, “OSI ended its program of assistance
to local governments because it was considered a negative experience in that the local authorities
were uncooperative in introducing more transparency and citizen participation in their decision
making…”134 Several years ago they did work directly on trying to strengthen mahallas as
community-based entities, including the training for the Mahalla Foundation staff in NGO
leadership. OSI lists its current programs as “civil society”, “law”, and “economic and business
development program.”135
UNDP does not support any intergovernmental policy work with the central government and, at
the local level, its activities consist primarily of discrete projects on micro- finance and
environmental topics.
Annex D contains a chart summarizing the most relevant of the projects funded by donors other
than USAID.
134
Carol Rabenhorst, et. al. “Assessment Of Current Legal And Operational Status Of Housing Partnerships In
Uzbekistan”.
135
After completion of this Assessment, in April 2004, OSI was denied official registration and was thus forced to
halt its operations in Uzbekistan.
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
ANNEX A
BIBILIOGRAPHY OF RELEVANT ARTICLES AND REPORTS
Central Asian Republics Local Government Initiative Phase II
ABA/CEELI, “Judicial Reform Index of Uzbekistan”, May 2002.
Arifkhanova, Zoia. “Traditional Communities in Modern Uzbekistan.” Central Asia and the
Caucasus. October 2000.
Baker and McKenzie. Doing Business in Uzbekistan. January 2003. http://www.bakernet.com.
Bektemirov, Kuatbay and Rahimov, Eduard; “Local Government in Uzbekistan.” Open Society
Institute’s Local Governments in Eastern Europe, in the Caucasus and Central Asia: Developing
New Rules in the Old Environment, Open Society Institute.
Bichel, Anthony. “Identity / Difference in Central Asia: Tribes, Clans and Mahalla .” Unity or
Separation: Center-Periphery Relations in the Former Soviet Union, D. Kempton and T. Clark,
Eds, Praeger Publishers, 2001.
Center for Economic Research Report (Preliminary Draft), “Local Budgets under Liberalization
of the Economy: Strengthening Revenue Base and Perfecting of Interrelation with Central
Budget.”
Davis, Marilynne, et. al. 2003. “Assessment of Intergovernmental Relations and Local Governance in the
Republic of Tajikistan”. Washington, D.C.: The Urban Institute.
Human Rights Watch, Vol. 15, No. 7(D). “From House to House, Abuses by Mahalla
Committees.” September 2003.
Karatnycky, Adrian, et. al. Nations in Transit 2002, and Nations in Transit 2003, Freedom House,
2002 and 2003, respectively.
MacNevin, Alex. “Estimating Revenue Capacity of Oblasts in Uzbekistan: Assessment and
Recommendations.” Bearing Point / USAID,11 July 2003.
MacNevin, Alex. “Estimating of Revenue Capacity of Oblasts in Uzbekistan.” Bearing Point /
USAID, 14 October 2003.
Rabenhorst, Carol, et.al. “Assessment Of Current Legal And Operational Status Of Housing
Partnerships In Uzbekistan”, The Urban Institute, November, 2002.
Robertson and Kangas. “Central Power and Regional and Local Government in Uzbekistan.”
Unity or Separation: Center-Periphery Relations in the Former Soviet Union, D. Kempton and T.
Clark, Eds, Praeger Publishers, 2001.
Roy, Oliver. The New Central Asia . New York University Press, 2000.
Ruzmetov, Xayrulla Ibadullayevich. “Printsip Razdeleniia Vlastei v Organizatsii Deiatel’nosti
Mestnykh Organov Gosudarstvennoi Vlasti.” Huquq. #2, 2003. Academy of the Ministry of
Internal Affairs of the Republic of Uzbekistan.
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
Taskanov, Alisher. “Tenevye otnosheniia v Uzbekistane: byli, iest’ i … budut?”
Tsentral’naia Aziia i Kavkaz. #6, 1999.
The World Bank, Europe and Central Asia Region, Price and Subsidy Policies for Urban Public
Transport and Water Utilities, Working Paper # 5, World Bank, March, 1999.
The World Bank, Urban Transport Project, Project Appraisal Report, April 20, 2000.
Central Asian Republics Local Government Initiative Phase II
ANNEX B
LEGAL LOG OF LEGISLATION, DECREES, AND RESOLUTIONS
SELECTED ACTS, BY DATE
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
No.
1.
2.
Title of Document
Official Document #
Constitution of the Republic of
Uzbekistan
Constitution of the Republic of
Karakalpakstan
N/A
Date
Adopted
12/08/92
N/A
04/09/93
Amended
-12/28/93 Law 989-XII;
-04/24/03 Law
-02/26/94 15th session Supreme Soviet;
-10/31/95 4th session Jokargi Kenes;
-12/15/97 13th session Jokargi Kenes
Laws of the Republic of Uzbekistan
3.
“On property in the Republic of
Uzbekistan”
Supreme Soviet
Bulletin 1990; #31-33;
p371
10/31/90
4.
“On the reorganization of local
government institutions in the Republic of
Uzbekistan”
“On Local State Government”
496-II
01/04/92
Supreme Soviet
Bulletin 1993; #9; p320
276-I
09/02/93
279-I
419-I
474-1
08/30/96
04/25/97
08/29/97
5.
6.
7.
8.
9.
“On the processes for settling matters of
territorial-administrative structure,
naming and renaming objects in the
Republic of Uzbekistan”
“On Accounting”
“On urban passenger transport”
“On the state tax service”
-Law of 05/07/93;
-09/23/94 Law 2022-XII;
-Law of 05/06/95;
-12/27/96 Law 357-I;
-12/13/02 Law 447-II
-08/30/97 Law 485-I;
-12/25/98 Law 729-I
08/30/96
-05/01/98 Law 621-I;
-08/20/99 Law 832-I;
-08/31/00 Law 125-II;
-05/12/01 Law 220-II;
-08/30/01 Law 271-II;
-12/13/02 Law 447-II;
-04/25/03 Law 482-II
Central Asian Republics Local Government Initiative Phase II
10.
11.
12.
13.
14.
15.
“On citizens’ self-government institutions
(new version)”
“On housing associations”
“On the budget system”
“On regulatory and Legal Acts”
“On the Cabinet of Ministers of the
Republic of Uzbekistan” (new version)
“On elections to the provincial, district
and city councils (kengash) of people’s
deputies (new version)”
758-I
04/14/99
-08/30/2003 Law 535-II
761-I
158-II
160-II
524-II
04/15/99
12/14/00
12/14/00
08/29/03
See commentary
520-II
08/29/03
Presidential Decrees
16.
17.
18.
19.
20.
21.
22.
“On improving the structure of
government institutions for hokimiyats of
cities of district subordination”
“On support for citizens’ self-government
institutions”
“On increasing the role of citizens’ selfgovernment institutions in providing
targeted social support to the population”
“On further reform of the system of
management of communal services”
“On a new phase in deepening reform in
the communal service sector”
1651
11/26/96
1990
04/23/98
2177
01/13/99
2791
12/19/00
2832
04/17/01
“On demonopolization and improvement
of management in the automotive
transport sector”
“On the introduction, starting 1 April
2003, of compensatory cash payments
instead of discount benefits for payments
on housing and communal services”
2871
06/04/01
3227
03/27/03
04/17/01 PD#2832
-05/30/02 PD#3079;
-08/07/02 PD#3113;
-03/27/03 PD#3227
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
Orders of the Cabinet of Ministers
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
“On the organizational and operational
issues of the Uzbek state-owned
automotive transport stock company
‘Uzavtotrans’”
“On measures to radically improve urban
passenger transport services for the
population of Tashkent City”
“On improving the staff structures of the
provincial and Tashkent City hokimiyats”
“On improving the staff structures of
district and city hokimiyats”
“On introducing amendments to CoM
Order #301 of 17 June 1997 ‘On
improving the staff structures of the
provincial and Tashkent City
hokimiyats’”
“On issues of organizing and holding
open tenders for urban passenger
transport”
“On approval of the ‘Strategy for
deepening of economic reforms in the
system of communal services for the
population’”
“On improving the process of Financing
Budgetary Entities”
“On the Strategy for development of
urban passenger transport in the Republic
of Uzbekistan”
“On measures to implement the law of the
Republic of Uzbekistan ‘On natural
monopolies’”
21
01/12/93
-06/30/98 CoM#272;
-12/17/98 CoM#525
291
08/19/96
301
06/17/97
459
09/30/97
-08/07/97 CoM#392;
-04/06/01 CoM#162;
-10/07/02 CoM#346
-02/28/98 CoM#82;
-02/28/03 CoM#112
-04/24/02 CoM#139;
-02/28/03 CoM#112
82
02/26/98
350
08/17/98
461
11/03/98
-04/19/00 CoM#153;
-02/13/01 CoM#74
414
09/03/99
-12/30/02 CoM#455
513
11/26/99
-09/19/00 CoM#359;
-02/28/03 CoM#112
364
09/21/00
Central Asian Republics Local Government Initiative Phase II
33.
34.
35.
36.
37.
38.
39.
40.
41.
“On approval of the rules for delivery of
natural gas to consumers in the Republic
of Uzbekistan”
“On regulating the structure of
supervisory inspections by provincial,
city, and district hokimiyats”
“On measures to regulate the system of
mutual settlements for electricity
consumed”
“On improving the organization of
activities in the communal service
system”
“On approving the regulation on the
agency ‘O’zkommunxizmat,’ model
regulation on TKEOs of Karakalpakstan,
the provinces, and Tashkent City”
“On forecasting major macroeconomic
indicators and parameters of the state
budget of the Republic of Uzbekistan for
2003 (excerpts)” (i.e., the annual budget
resolution)
“On the ‘Year of the Mahalla’ Program”
“Rules for Use of Heating”
“On measures to improve management of
the natural gas supply system in the
Republic”
8
10/01/00
455
11/21/00
469
12/05/00
-11/01/01 CoM#434
493
12/21/00
-10/08/02 CoM#347
74
02/13/01
-10/07/02 CoM#346
455
12/30/02
-07/02/03 CoM#300;
-08/21/03 CoM#361
70
271, s.2
421
02/07/03
06/16/03
10/02/03
Orders, Instructions, Rules, Codes
42.
43.
“Rules for use of the communal water
supply and drainage system in the
Republic of Uzbekistan”
Civil Code of the Republic of Uzbekistan
Ministry of Communal
Services #144
09/16/94
Approved by Law
#163-I
12/21/95
-03/20/02 CoM#90;
-02/28/03 CoM#112
-08/05/03 CoM#341
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
44.
Tax Code of the Republic of Uzbekistan
45.
Order of the Oliy Majlis “On
implementation of the law of the
Republic of Uzbekistan ‘On citizens’ selfgovernment institutions’ in Tashkent
Province”
Regulation “On contractual relations in
the system of housing and communal
services”
“Rules for rendering communal liquid
and solid waste disposal”
“Rules for rendering communal services
to the population of the Republic of
Uzbekistan”
Regulation “On ‘Enterprise-Mahalla,’ an
economic cooperation and mutual
assistance program”
Regulation “Procedures for registering
expenditure estimates and staff lists for
budgetary entities in the Ministry of
Finance and other financial bodies”
Regulation “On the procedures for
compiling, examining, and approving
expenditure estimates included in the
budgets of the Republic of Uzbekistan,
the Republic of Karakalpakstan, as well
as provincial and district local budgets”
Regulation “On the procedures for renting
temporarily unused government property
out to other enterprises and organizations
by budgetary entities”
Regulation “On the reserve fund of the
46.
47.
48.
49.
50.
51.
52.
53.
Approved by Law
#396-I
443a-I
04/24/97
MoJ #638
02/17/99
MoJ #647
02/20/99
MoJ #648
02/20/99
MoJ #808
08/27/99
MoJ #849
12/09/99
MoJ #888
12/28/99
MoJ #869
01/07/00
-09/10/01 MoJ #869-1
MoJ #877
01/22/00
-05/03/00 MoJ #877-1;
06/05/97
-03/07/00 MoJ #849-1;
-11/18/00 MoJ #849-2
Central Asian Republics Local Government Initiative Phase II
54.
55.
56.
57.
58.
59.
budgets of Karakalpakstan, the provinces,
and Tashkent”
Instruction “On order of quarterly
allocation of annual planned amounts of
revenues and expenditures, allocated in
the budget of RK and local budgets,
registration of amendments adopted
during budget execution, financing of
organizations and events described in the
budget”
Order “On determining the composition
of expenditures and introduction of a
maximum level of profit in setting rates
for communal services”
Order “On approval of the rules for
formulation and implementation of the
state budget of the Republic of
Uzbekistan”
Order “On approval of the instruction ‘On
procedures for calculation of local taxes
and fees and their payment into the
budget (new version)’”
Order “On the approval of a national
accounting standard for the Republic of
Uzbekistan: ‘Accounting Balance’”
Order “On the approval of the regulation
‘On the mechanism of compensatory cash
payments for payments on housing and
communal services (starting 25 April
2003)’”
-03/16/01 MoJ #877-2
MoJ #1025
04/12/01
-07/22/02 MoJ #1025-1
MoJ #1059
08/04/01
-10/13/03 MoJ#1059-I
MoJ #1111
03/14/02
MoJ #1217
02/16/03
MoJ #1226
03/20/03
MoJ#1232
04/15/03
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
ANNEX C
ABSTRACTS OF SELECTED LAWS AND LEGAL DOCUMENTS
RELATED TO LOCAL GOVERNANCE IN UZBEKISTAN
Prepared by Andrei Makarikhin
Central Asian Republics Local Government Initiative Phase II
[Note: Numbers refer to the order in the legal log, Annex C]
I. The Constitution and Laws of the Republic of Uzbekistan
? 1. Constitution of the Republic of Uzbekistan, 12.08.1992
The Constitution is the fundamental legal act of the Republic of Uzbekistan (RUz). All
provisions of regulatory and legal acts issued and adopted in the Republic must not
contradict the provisions of the Constitution. All regulatory acts shall be adopted so as to
implement the provisions of Constitution.
In general, the Constitution describes the overall structure of the system of local
authorities on the territory of the Republic. The general provisions of the Constitution
regarding local administration, then, are expounded on in detail by laws, decrees, and
resolutions.
The Constitution established the administrative-territorial division of RUz. The Republic
of Uzbekistan consists of provinces, districts, cities, towns, villages (qishloqs or auls) and
the Republic of Karakalpakstan (RK). Change to the borders of RK, the provinces, the
City of Tashkent, as well as the formation or elimination of provinces, cities, and districts
shall be made with the consent of the Oliy Majlis of the Republic of Uzbekistan (Articles
68, 69).
The Constitution establishes the basic principles of local state government.
Representative bodies in provinces, districts, and cities (except for cities of district
subordination and districts within cities) are Councils (Kengashes) of People's Deputies,
headed by hokims, which, proceeding from interests of the state and citizens resolve
issues within their mandate.
Local authorities are responsible for:
- Maintenance of legality, law and order, and safety of citizens;
- Issues of economic, social, and cultural development of territories;
- Formulation and implementation of the local budget, establishment and collection
of local taxes, formation of extra-budget funds;
- Control over local municipal services;
- Protection of the environment;
- Registration of civil status;
- Issuance of regulatory acts and other powers not contradicting the Constitution and
legislation of RUz.
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
Local authorities are responsible for implementation of the laws of the RUz, decrees of
the President of the Republic of Uzbekistan, decisions of higher government institutions;
they participate in discussions of issues of republican and local significance.
It is mandatory that lower government institutions implement the decisions of higher
government institutions issued within the limits of the latter’s authority.
The term of office for local council deputies and hokims is five years.
The hokim of a province, city, or district heads both the representative and executive
structures of the corresponding territory.
The hokims of provinces and Tashkent City are appointed and dismissed by the President
of RUz and approved by the corresponding Council of People's Deputies.
Hokims of districts and province-subordinated cities are appointed and dismissed by the
hokim of the corresponding province and are approved by the appropriate Council of
People's Deputies.
Hokims of districts within cities (urban districts) shall be appointed and dismissed by the
hokim of the corresponding city and approved by city Council of People's Deputies.
A provincial, district, or city hokim executes his powers on the principle of undivided
authority and therefore bears personal responsibility for the decisions and actions of
institutions headed by him.
The organization of activities, scope of powers of hokims and local Councils of People's
Deputies, as well as the procedure for electing local Councils of People's Deputies are
determined by law.
The hokim, within the limits of his powers, makes decisions, which are obligatory for
execution by all enterprises, institutions, organizations, and amalgamations, as well as
officials and citizens, in the appropriate territory.
Local self- government institutions in towns, villages, and mahallas of cities, towns, and
villages are citizens’ assemblies, which elect a chairman (oqsoqol) of the citizens’
assembly’s committee and his advisers. The term of office for the chairman and his
committee is 2.5 years. The procedures for electing the committee, for organization of its
activities and scope of powers of self- government institutions are established by law.
? 3.
Law “On property in the Republic of Uzbekistan” 10.31.90
This law is not commensurate with the current state of the economy of Uzbekistan. Many
provisions of the given law cannot be applied for various reasons. Nevertheless, the law
is still valid and below are some provisions which are of interest:
For example, article 22 of the law states that the property of a province, district, city, or
other administrative-territorial formation is property established or acquired at the
expense of the local budget, and also transferred state property that has local value.
In article 10, mahalla property is defined as property which is in the ownership, use, and
possession of primary tiers of community self- government—the mahalla, property
Central Asian Republics Local Government Initiative Phase II
created on the basis of family labor of mahalla residents or their joint income, revenues
from use of this property and donations, financial or charitable aid rendered by legal or
physical persons, material and financial resources provided by local Councils of People's
Deputies. Owners of mahalla property are mahalla residents. Elected bodies of mahalla
make decisions regarding the utilization, development, and transfer of mahalla property.
? 4. Law “On the reorganization of local government institutions in the Republic of
Uzbekistan” 01.04.92
This law was issued before ratification of the Constitution due to need to enhance the
power of executive authorities during the period of transition.
The law established the positions of hokims in the provinces, districts, and cities of RUz,
as heads of the local representative and executive decision- making authorities.
It modified the prior Soviet structure of local authority, introducing a system of new local
government institutions based on the old ispolkom (executive committee) structure of the
U.S.S.R. while also ostensibly hearkening back to traditional Uzbek governing structures
.1
It is established, that:
- hokims of provinces are accountable to the President of the Republic of
Uzbekistan and the appropriate Councils of People’s Deputies, they are his
official representatives in the appropriate territories, are appointed and dismissed
by the President of the Republic of Uzbekistan and these decisions are approved
by the appropriate provincial Council of Peoples Deputies;
- hokims of districts and cities (except for Tashkent City) shall be appointed by
the hokim of the corresponding province and approved by the corresponding
district / city Council of People's Deputies;
- hokims of districts and cities are accountable to higher hokims and to their
corresponding Councils of People's Deputies.
? 5. Law “On Local State Government” 09.02.93
This Law is the main document determining and regulating the structure and powers of
local government. The law contains 29 articles, each of them crucial for understanding
local government structure and functioning; therefore, only the most significant
provisions contained in the Law are stated below.
The Law is divided into the following chapters, each dealing with a distinct aspect of
local authorities’ functioning:
- Chapter I: General regulations
- Chapter II: Economic basis for local state government functioning
1
Robertson L. and Kangas R. Unity or Separation? Eds. Kempton and Clark. “Central Power and
Regional and Local Government in Uzbekistan.” 2002. p 265
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
-
Chapter III: Financial basis for local state government functioning
Chapter IV: Structure and organizational bases for local state government
functioning
Chapter V: Local state government institutions
Chapter VI: Powers of the Council of People’s Deputies and the hokim
Chapter VII: Guarantees of lawfulness in the functioning of the Council of
People’s Deputies and the hokim
In particular, the Law establishes that Councils of People’s Deputies are to be the
representative authorities in provinces, districts, and cities (except for cities of district
subordination and districts within cities, i.e., Tashkent City’s urban districts). An LGU’s
hokim is the supreme executive officer in the province, district, or city and
simultaneously heads its representative body. Formally, he is chosen from among the
Council’s deputies, though this provision does not seem to restrict the freedom of higherlevel executive officials to appoint and sack hokims at will. The hokims of provinces and
Tashkent City are accountable to the President of the Republic of Uzbekistan and the
appropriate Council of People's Deputies. Third-tier LGU hokims are formally
accountable to the respective higher hokim and to the appropriate Council of People's
Deputies.
Councils of People's Deputies and hokims manage social and economic development in
their respective territories, ensure observance of the law, manage relations between state
institutions and citizens’ self- government institutions, and recruit talented personnel into
the governing structures of the province, district or city.
Two amendments have been made to the Law:
1. Law #729-I, dated 12.25.98, amended Article 21 so as to eliminate the provision
according to which “deputy hokims shall be appointed and approved, as a rule, from
among the deputies of corresponding Council of People's Deputies”.
2. The law dated 08.30.97 introduces a provision according to which
The hokim of a province, upon agreement by the Cabinet of Ministers of RUz, is
empowered to subordinate the hokim of a city to the hokim of a district (except for
the districts within cities) and to form integrated governing institutions, with
subsequent approval of this decision by the provincial Council of People's
Deputies.
? 8. Law “On urban passenger transport” 25.04.97
This law defines urban passenger vehicles and establishes legal bases for their activity.
The law establishes that the payment for passenger transport and baggage in urban
passenger vehicles is subject to official tariffs, regulated by the Council of Ministers of
the RK, provincial state authorities, and the City of Tashkent.
Official prices for passenger transport and excess baggage in urban passenger vehicles
shall be based on the economic costs of transportation and demand for passenger
transportation services.
Central Asian Republics Local Government Initiative Phase II
The powers and responsibilities of local state authorities regarding regulation and
management of urban passenger transport activities include:
- determination of major areas for development and the approval of integrated regional
programs;
- conclusion of agreements with the administrative organs of urban passenger transport
for providing transportation services to the population and approval of routes and
schedules;
- establishment of maximum tariffs and supervision of their application;
- issues of location, construction, and improvement of passenger transport stations, stops,
control points, and other objects;
- quality control of passenger transport activities;
- other powers prescribed by legislation.
The powers and responsibilities of administrations of urban passenger transport
include:
- conclusion of contracts with specific carriers and coordination of their activity;
- ensuring timely functioning of all kinds of urban passenger transport;
- application of a unified technical policy;
- formulation and implementation of integrated measures for development of all types of
urban passenger transport and improvement of systems for serving passengers and
increasing the volume and range of services available to them;
- development of regulatory documents that determine procedures and rules for provision
of services to passengers;
- approval of routes of passenger transport and schedules of buses, trams, trolleys, and
shuttle taxi services;
- monitoring of observance of passengers’ rights;
- introduction of unified ticketing system for urban passenger transport, issuing of tickets,
cards and documents regarding rights to privileged use of transport for certain categories
of passengers;
- other powers prescribed by legislation.
Payment for passengers and baggage on urban passenger transport shall be made
according to tariffs, established by local executives of second-tier LGUs. Tariffs for
passengers and baggage shall be established according to economically justified costs and
the market of passenger transport services. Baggage in shuttle taxis is free.
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
? 9 The Law “On the state tax service” 08.29.97
The law establishes structure of the tax service in the Republic of Uzbekistan.
The bodies of the State Tax Service are: the State Tax Committee of RUz; state tax
administrations of RK, Tashkent City, and the provinces; and the state tax inspectorates
of districts, cities, and urban districts.
The bodies of state tax service implement their activities independently of local state
authorities and government institutions in accordance with the legislation (article 3).
Cooperation of state tax service with other institutions and organizations:
The state tax service performs its assigned tasks in conj unction with other state
authorities, local state authorities, self- government institutions, law-enforcement,
statistical and financial institutions, banks, and other organizations. These institutions and
organizations are obliged to render assistance to the state tax service for implementation
of state control over the observance of tax laws and in the struggle against tax offences
(article 7).
Thus, the Tax Service operates independently of local authorities; hokimiyats are obliged
to assist the Tax Service in collection of taxes, explanation of provisions of tax laws, etc.
? 12. Law “On the budget system” 14.12.00
This law is mostly dedicated to the central and consolidated state budgets but contains a
number of articles concerning local budgets.
The law contains certain relevant definitions, such as: “The local budget is that part of the
state budget, which determines the monetary resources of the corresponding province,
district, or city. It is formed taking into consideration sources of income and amount of
revenue from them, as well as categories of expenditure and amount of resources
allocated for specific purposes during the fiscal year.”
Additionally, the law contains the following provisions:
- Local representative institutions shall:
-ratify local budgets, and also confirm reports on their implementation;
-establish amounts of local taxes, duties, and fees that go into the local budget, as
well as privileges regarding them.
- Hokims shall:
-present draft local budgets to local representative bodies for approval; produce
reports on budget implementation for local representative bodies;
Central Asian Republics Local Government Initiative Phase II
-oversee the completeness and timeliness of collection of funds for the budget;
verify that expenditure proceeds as set out in the budget.
Revenues for local budgets shall be formed from:
1. Local taxes, duties, fees and other obligatory payments given to local budgets
according to criteria established by legislation;
2. State taxes, duties, fees and other obligatory payments given to local budgets
according to criteria, established by legislation;
3. Income from leasing state-owned objects according to procedures established by
legislation;
4. Monies, inherited by the state and donations received in accordance with
legislation;
5. Budgetary grants, budgetary subventions and budgetary loans from higher-tier
budgets;
6. Monetary grants from legal and physical entities and governments of other
countries;
7. Other revenues not forbidden by legislation.
Local budget expenditures shall be distributed within the limits of authorized budgetary
assignments in the form of:
1. operational expenditures of organizations financed from local budgets;
2. current budgetary transfers;
3. capital expenditures on purchase and reconstruction of basic facilities for state use
(including necessary labor and services);
4. purchase for utilization by the state of rights to land and other intangible assets.
5. other expenditures not prohibited by the legislation.
Local budget finances shall be spent on:
1. science, education, culture, public health services, physical education and sports
(in organizations financed from budgets of provinces and the City of Tashkent);
2. social security and welfare;
3. social protection of people;
4. activities of local state authorities;
5. funding of budgetary entities in various sectors of the economy, financed from the
budgets of provinces and the City of Tashkent;
6. implementation of specific programs and actions regarding development of
certain sectors of the economy, in accordance with legislation;
7. other goals stipulated by legislation.
Revenues and expenditures of local budgets should be balanced. Local budget
deficits are not permitted.
During approval and implementation of local budgets, it is prohibited to:
1. establish funds from sources not stipulated by legislation;
2. obtain loans, with the exception of budgetary loans, from higher budgets;
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
3. authorize expenditures in excess of authorized budgetary assignments, except in
cases stipulated by this law;
4. issue financial guarantees from budget funds for the benefit of other persons;
5. provide budgetary loans to legal or physical entities.
? 14. Law “On the Cabinet of Ministers of the Republic of Uzbekistan” (new version.
08.29.03
The Law contains general definitions of the Cabinet of Ministers, its structure, and its
relations with other governmental bodies (representative, local executive authorities, selfgovernment institutions).The Cabinet of Ministers is the highest body of executive
authority, headed by the Prime Minister, though the President has the right to preside if
he so wishes (Article 13). It supervises all state organs on republican and local levels
(Article 7). For center-periphery relations, the most relevant article of this law is article
11, “Relations of the Cabinet of Ministers with local executive authorities”. Article 11
states:
Within its authority, the Cabinet of Ministers:
- coordinates the activities of local executive bodies in matters related to the
provision of economic, social, and cultural development in regions;
- considers proposals of hokims of provinces and the City of Tashkent on issues,
which demand a resolution by the Cabinet of Ministers; it controls the process of
implementation of Cabinet of Ministers resolutions, orders and directives; it is
entitled to invite heads of local executive organs and hear information on
implementation of its resolutions;
- ensures cooperation of ministries, state committees, agencies and other
institutions of state governance and economic management with hokims of provinces
and Tashkent City; it also resolves issues and disputes that arise in this process;
- approves basic indicators of economic and social development in regions; it
establishes limits for the size of local executive institutions’ staffs, as well as their
approximate structure;
- has the right to suspend and annul resolutions and orders of hokims of
provinces and Tashkent City if they contradict the legislation of the Republic of
Uzbekistan.
(Although the hokimiyats are entitled to appeal these decisions of the Cabinet of
Ministers if they consider such cancellation illegal, this does not occur).
Article 10 regulates relations between the Cabinet of Ministers and the Karakalpak
Council of Ministers; the relationship is roughly the same as that between hokims and the
Cabinet of Ministers, though additionally, article 10 includes a provision that the Cabinet
of Ministers ensure that ministries and other state organs respect Karakalpakstan’s rights
in implementing certain regional development programs. Additionally, Karakalpakstan is
guaranteed permanent representation in the Cabinet of Ministers.
Central Asian Republics Local Government Initiative Phase II
? 15. Law “On elections to the Provincial, District, and City Councils (Kengashes) of
People’s Deputies (new version)” 09.29.03. (also see treatment of this law in chapter V
of the main text)
This law establishes the procedures for all stages of elections to provincial, district, and
city Councils of People’s Deputies, including issues of voting districts, polling stations,
electoral commissions, procedures for nominating candidates, rules for election
campaigns, procedures for voting, and so on.
Elections to provincial, district, and city Councils of People’s Deputies shall be carried
out in single- member districts on a multi-party basis for a term of five years.
All citizens of RUz who have reached the age of 21 by the day of elections are eligible to
run.
Territorially based voting districts shall be established for deputies’ elections:
- no more than 60 voting districts for provinces and the Tashkent City Councils of
Peoples Deputies;
- no more than 30 voting districts for district and city Councils of Peoples Deputies.
Only one deputy from each voting district shall be elected to the corresponding Council
of People's Deputies.
Political parties and citizens themselves have the right to nominate candidates to
provincial Councils of People's Deputies (district and city councils no longer have this
power, as per revisions approved 09/29/03).
Political parties, self- government institutions, and citizens themselves have the right to
nominate candidates to district or city Councils of People's Deputies.
A political party can nominate candidates to Councils of Peoples Deputies provided that
it has been registered in accordance with the law no later than six months before the date
of the announcement of elections.
Any citizen or group of citizens of the Republic of Uzbekistan with suffrage can form an
initiative group of at least 50 voters of the appropriate voting district to nominate
candidates to provincial, district or city Councils of People's Deputies.
Campaigns are government fina nced, and any donations must be made through local
electoral commissions (Article 48).
Article 48: Financing Elections
Expenditures related to the preparation for and conducting of elections for
provincial, district and city councils of people’s deputies are made by the
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
government. Financing or other material support of people’s deputy candidates
from other sources is prohibited.
Political parties and other groups, enterprises, establishments, organizations and
citizens of the Republic of Uzbekistan can volunteer their own resources for
conducting elections. These resources are accepted by the provincial, district, and
city election commissions for their use during the election campaign.
To win, a candidate must receive more than 50 percent of votes cast. If more than two
candidates ran and no one received more than 50 percent of the vote, there is a run-off
within two weeks between the two candidates who received the most votes.
Elections are considered invalid if less than half of registered voters take part.
Repeat elections shall be conducted in the following cases, no more than a month after
the initial elections (Article 43):
a. elections in this voting district are recognized invalid or void;
b. repeat elections failed to yield a deputy-elect;
c. there are no more than two nominees running in the voting district and neither was
elected.
Currently, many key provisions of this law are not being observed, or are being executed
in a perfunctory manner. When elections are held, the winners are already known, and in
many cases elections are only held to give the illusion of democracy.
II. Presidential Decrees
? 17. “On support for citizens’ self-government institutions” 23.04.98
The following privileges were established for oqsoqols (chairmen) and kotibs
(secretaries) of citizens’ assemblies:
1. Their salaries were increased by two categories in the uniform scale of salary rates.
Expenses related to payment of their salaries are covered from the local budget.
2. They are paid a full pension, as opposed to the half-pension that other working
pensioners receive in Uzbekistan.
? 18. “On increasing the role of citizens’ self-government institutions in providing
targeted social support to the population” 13.01.99
Self- government institutions shall serve as a vehicle for:
1. allocation and payment of childcare allowances to non-working mothers of children
under two years of age;
2. provision of basic foodstuffs to pensioners without a family.
Central Asian Republics Local Government Initiative Phase II
The Council of Ministers of RK, provincial, city, and district hokimiyats shall be charged
with constant supervision of the observance of the principles of transparency and social
justice in assignment of social privileges and verification that state budget proceeds are
used by self- government institutions strictly for their intended purposes.
According to many observers, local state government supervision over mahalla
administration of these and other welfare activities through Ministry of Finance auditing
organs and the Procuracy (Office of the Public Prosecutor) plays a major role in
subordinating self- government institutions to state executive structures.
? 20. “On a new phase in deepening reform in the communal service sector”
17.04.01.
This decree establishes that, upon timely collection of 100 percent of communal service
payments by self- government institutions (mahalla committees., 10 percent of collected
funds are granted to the self- government institution.
The proceeds shall be used to pay back any debts on payments for housing and municipal
services; issue bonuses to employees of self- government institutions ; render assistance to
low- income families in payment for services; repair apartment buildings; and improve
and develop mahallas, towns, and villages.
It should be noted that mahallas tend to have a poor collection rate and do not collect
communal service payments in all LGUs. Such a determination is normally made at the
provincial level.
? 21. “On demonopolization and improvement of management in the automotive
transport sector” 04.06.01
According to this decree, the Uzbek state-owned joint stock corporation for motor
transport (shipping and passenger), Uzavtotrans, was liquidated; new, provincial
automotive associations were formed.
The corporation Uzautotrans was a closed joint-stock company, the successor of the
Ministry of Automotive Transport of RUz and liable for all of its previous agreements
and obligations. It held all equipment and technical resources of enterprises included in it
and reported directly to the Cabinet of Ministers.
The territorial state joint-stock concerns and associations, which had been parts of
Uzavtotrans, were reorganized into territorial automotive transport associations and
transferred to the management of provincial hokimiyats and Tashkent City.
Issues regarding the formulation of tariff policy for motor transport services are relegated
to the Ministry of Finance of the Republic of Uzbekistan and the Uzbek Agency of
Automotive and River Transport. Establishment of precise tariffs for motor transportation
was assigned to hokimiyats of the provinces and Tashkent City.
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
III. Orders of the Cabinet of Ministers of the Uzbek Republic
? 24. “On measures to radically improve urban passenger transport services for the
population of Tashkent City” 19.08.96
According to this resolution, the association "Tashgorpasstrans" (“Tashkent city
passenger transport”) is transferred to subordination of the hokimiyat of Tashkent City.
? 25. “On improving the staff structures of the provincial and Tashkent City
hokimiyats” 17.06.97
This resolution details reforms of hokimiyat staff structures in the provinces and Tashkent
City.
The staffs of the hokimiyats of the provinces and Tashkent City are formally changed
from a system of “branch control” (control of ministries over their respective local
departments) to “functional control” (control of local execut ives over ministerial
departments on their respective territories).
It establishes an organizational structure for hokimiyat staff in the provinces and in
Tashkent City, also setting limits on the number of employees.
Groups for research and analysis within the staffing system of hokimiyats of provinces
and Tashkent City are established; their primary task is to implement and analyze the
progress of reforms in the respective territories.
Draft resolutions and documents are to be prepared by the secretariats of hokimiyats and
must be coordinated with these groups for research and analysis.
? 26. “On improving the staff structures of district and city hokimiyats” 30.09.97
The staffs of city and district hokimiyats are formally changed from a system of “branch
control” (control of ministries over their respective local departments) to “functional
control” (control of local executives over ministerial departments on their respective
territories).
A new template for district and city hokimiyat personnel structure was approved with
limits established on the number of staff.
What is the difference between #25 (for provinces) and #26 (for districts and cities)?
The system of executive authority in the Republic of Uzbekistan is built on the principle
of subordination to higher- level government structures. This is how relations between
hokimiyats are organized.
Central Asian Republics Local Government Initiative Phase II
The highest executive authority in the Republic is the Cabinet of Ministers (first tier),
followed by the Council of Ministers of RK, the hokimiyats of the provinces and
Tashkent City (second tier); the third tier is composed of city and district hokimiyats.
These two orders address the powers and authorities of the second and third levels of
executive structures, respectively. The research and analysis groups were established only
in second-tier units, so as to monitor implementation of reforms.
? 27. “On introducing amendments to CoM Order #301 of 17 June 1997 ‘On
improving the staff structures of the provincial and Tashkent City hokimiyats’” (UI
Legal Log #17) 26.02.98
This order establishes Departments of Special Secondary Education and Vocational
Training within the personnel structure of the hokimiyats of the provinces and Tashkent
City. These Departments should be created using the staff of the abolished Vocational
Education Departments and their curriculum committees, as well as the Departments of
People’s Education of the provinces and Tashkent City.
In light of this, the personnel structure of the hokimiyats of the provinces and of Tashkent
City was reviewed.
? 31. “On the Strategy for development of urban passenger transport in the Republic
of Uzbekistan” 26.11.99.
This order approves a development plan for urban passenger transport in the Republic of
Uzbekistan from 2000 to 2005 and the program of measures for its realization.
The hokimiyats of provinces and Tashkent City shall develop their specific regional
programs of reform and development of the urban passenger transport system on the
basis of this plan.
? 33. “On approval of the rules for delivery of natural gas to consumers in the
Republic of Uzbekistan” 10.01.00
According to this order, the state will regulate the wholesale prices for natural gas and
ensure their realization (i.e., the rules for securing permission to purchase at these prices).
The rules establish a system of gas delivery from gas producing enterprises through gas
distribution enterprises to consumers. The rules do not address other issues, such as tariff
establishment, relations between suppliers and local authorities, and so on.
? 34. “On regulating the structure of supervisory inspections by provincial, city, and
district hokimiyats”
Before issuance of this order, supervisory inspections were conducted by the Jokargi
Kenes of RK and hokimiyats of provinces, cities, and districts. Their main purpose was to
supervise implementation of republican legal acts by local government and management
institutions.
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
In the process of liberalization and deepening of economic reforms, the controlling and
regulatory functions of the state are being reduced.
Therefore, as of January 1, 2001, the positions of provincial, city, and district deputy
hokim in charge of supervisory inspections were eliminated; monitoring functions were
assigned to departments for supervision of execution of republican legal acts, to be
established on the basis of the staffs of provincial and Tashkent City hokimiyats.
? 35. “On measures to regulate the system of mutual settlements for electricity
consumed” 05.12.00
This resolution draws attention to the high level of consumer indebtedness to the
enterprises of SJSC Uzbekenergo (as of November 1, 2000 it was approximately 20
billion Uzbek so’ms). The responsibility of heads of enterprises consuming power, which
have debts to state joint-stock company (SJSC) Uzbekenergo, is increased (the heads of
enterprises can be taken to administrative court for failure to pay for supplied electric
power).
Electric power shall be sold by suppliers according to tariffs set by SJSC Uzbekenergo
and coordinated with the Ministry of Finance.
Payments shall be settled through bank transfer by the consumer to the settlement
account (or other bank account) of the supplier.
Settlement of accounts with the population for electric power can be made on a
contractual basis through “Integrated Consumer Service” (SEZ—an organization
providing repair and maintenance services), which is influential in local communal
services and housing.
? 36. “On improving the organization of activities in the communal service system”
21.12.00
This order approves the organizational structure of the agency "O’zkommunxizmat" and
the organizational structure of the Territorial Communal Services Operation Union
(known by their Russian acronym, TKEO). TKEOs are subordinate to second-tier LGU
hokimiyats. (see Annex I
[[AUTHOR: Is this perhaps Annex C, Section I?]]
for structure of O’zkommunxizmat, TKEOs and KEUs)
? 39. “On the ‘Year of the Mahalla’ Program” 07.02.03
The year 2003 was proclaimed “The Year of Mahalla” in RUz.
Central Asian Republics Local Government Initiative Phase II
Accordingly, the program “The Year of Mahalla” was approved. The program is directed
at further strengthening of the role and status of the mahalla in governance of the state
and society and in increasing its profile in the Republic’s socio-political and economic
life in 2003. Additionally, it aims to improve the regulatory framework for mahalla
activities. Mahallas should intensify their activities in encouragement of entrepreneurs,
development of the mahalla’s financial base, job creation, development of social and
communal service infrastructure, landscaping, strengthening of welfare help to lowincome families and young families, intensified care for the older generation,
strengthening of medical services in the mahalla, development of youth athletic
activities, and activation of the mahalla in preserving and spreading national values and
traditions.
Hokimiyats of provinces, cities, and districts must develop and carry out concrete
measures providing timely and appropriate performance of the program.
This act (along with Legal Logs #45and #49) epitomizes the broad, amorphous mandate
of the mahallas and demonstrates how legislation blurs and erases boundaries between
(theoretically) directly elected self- government institutions and appointed state executive
structures. Also typical of legislation regulating relations between central and local
government institutions, by heaping enormous responsibilities on the mahalla, the center
abdicates responsibility for resolution of many pressing social and financial problems.
IV.
Orders, Instructions, Rules, Codes.
? 42. “Rules for use of the communal water supply and drainage system in the
Republic of Uzbekistan” 09.16.94
These rules determine relations between municipal enterprises providing water supply
and sewage disposal services under the Ministry of Communal Services of the Republic
of Uzbekistan (which as of 2000 became O’zkommunxizmat —see #36) and
consumersconnected to the systems of municipal water supply and sewage disposal. The
Rules are binding for all ministries, state committees, concerns, agencies, the Council of
Ministers of RK, hokimiyats, associations, enterprises, institutions, organizations, and
citizens in the territory of RUz.
In particular, the rules establish:
- the procedures for connection of objects to systems of municipal water supply and
sewage disposal;
- installation and operation of devices for measuring and recording water supplied and
sewage disposed;
- accounting of water supplied and sewage received;
- accounts for water use and sewage disposal;
- conditions for cutting off of water supply and refusal of sewage;
- responsibilities of suppliers and consumers.
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
? 43. “The Civil Code”
In relation to local governance, the Civil Code establishes the following concepts:
public property, republican property, and municipal property.
“Public property” means “state property”, consisting of republican property and the
property of administrative-territorial formations, that is, municipal property (Article 213).
Municipal property includes property of local government institutions, local budget
resources, municipal housing stock and communal services, enterprises and other
property complexes, national education, culture, public health facilities, and other
property.
Municipal property is managed by the local government authorities or bodies authorized
by them.
Municipal property can be assigned to legal entities.
Local budget resources fall under municipal property and are composed of taxes, fees,
and other payments to the local budget, as well as other revenues.
? 44. “The Tax Code”
Local taxes, dues, and fees include:
1. property tax;
2. land tax;
3. tax on infrastructure development;
4. tax from physical entities for consumption of gasoline, diesel and gas for vehicles;
5. fee for permission to engage in commerce, including licensing fees for the right to
sell certain types of goods;
6. fee for registration of legal entities and physical persons engaged in business.
Local taxes and fees listed in items 1 and 2 shall be established by legislative acts of the
Republic of Uzbekistan and shall be levied over the whole of its territory. The rates of
these taxes and fees shall be determined centrally, by the Cabinet of Ministers of the
Republic of Uzbekistan.
The remaining taxes and fees shall be established by the state government institutions of
the provinces and Tashkent City. Maximum rates of these local taxes and fees shall be
established centrally, by the Cabinet of Ministers of the Republics of Uzbekistan.
Local taxes and fees shall be counted in the local budget.
Central Asian Republics Local Government Initiative Phase II
? 45. Order of the Oliy Majlis “On implementation of the law of the Republic of
Uzbekistan ‘On citizens’ self-government institutions’ in Tashkent Province” 05.06.97
This Resolution sheds light on practical implementation of the law “On self- government
institutions” (#10 in the Legal Log), as applied in Tashkent Province. The Presidium
(Kengash) of the Oliy Majlis has studied data on the implementation of this law (Legal
Log #10) in each province, and the resolution regarding Tashkent Province has been
published to provide an example. In particular, the resolution shows how self- government
institutions were established in the districts of Tashkent Province, how they function,
how they work with local authorities, and how their financing is carried out.
The Xonobod Village citizens’ assembly and the Usman Nosir Mahalla citizens’
assembly are used as examples of successful implementation of the law “on citizens’ selfgovernment institutions.” Practices singled out as exemplary include preservation of law
and order, organization of festivals, drawing the community in to help beautify the
neighborhood, and addressing unemployment by working with small business.
Other citizens’ assemblies are put forward as negative examples—oqsoqols who do not
know their responsibilities, yearly programs not being confirmed democratically at
general meetings, mahallas that are bad at finding additional sources of financing, and
unjust use of state welfare aide. Certain hokimiyats are reprimanded for not helping
enough in coordination of citizens’ assembly activities, presumably for giving them too
much autonomy. This order gives official support to the Mahalla Foundation,
reprimanding localities that have “not even set up local chapters.”
? 46. Regulation “On contractual relations in the system of housing and communal
services” 17.02.99
Owners of housing stock and communal facilities, hereinafter referred to as "customers",
or their representatives, shall conclude contracts on maintenance and repair of housing
and communal facilities in their ownership and on provision of services to consumers.
Organizations and enterprises of various forms of ownership, specializing in maintenance
and repair of housing and communal facilities and provision of communal services shall
be referred to here as "contractors".
The relations between customers and contractors regarding the maintenance of housing
stock and provision of communal services shall be based on a system of contractual
relations.
The system of contractual relations includes:
- a service contract between local state executive institutions and
housing/communal services organizations of all forms of ownership or
enterprises from other branches of the economy;
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
-
an agreement between legal entities, housing associations (known by their
Russian acronym, TSJ), citizen-owners of housing stock or communal facilities,
and organizations and enterprises of various forms of ownership;
- an agreement between housing/communal service providers of various forms of
ownership and consumers of services;
- agreements between organizations of various types, which specialize in various
activities in the sphere of housing and communal services.
The agreements should include the following terms and conditions:
- a level of quality, reliability, and environmental safety for labor and services
provided, to be guaranteed by the contractor;
- a scope of work (service);
- obligations of the customer regarding payment for works/services, as well as
terms and methods of settlement;
- economic sanctions against each party in the case of violation of contract terms;
- procedures for alteration of the conditions of the agreement;
- procedures for termination of the agreement and other provisions, prescribed by
the legislation;
- provisions protecting consumers’ rights.
? 47. “Rules for rendering communal liquid and solid waste disposal” 20.02.99
Any physical person or legal entity that specializes in disposal of solid and liquid waste,
irrespective of form of ownership and departmental subordination, may handle disposal
services.
The consumer of the service is a physical person, who uses the service (i.e., disposal of
solid and liquid household wastes).
In multi- unit houses, the legal entity operating the housing stock (housing association
[TSJ], the housing operating organization [ZhEK], etc.) shall conclude a contract on
disposal of waste on behalf of consumers.
The tariffs for disposal of solid and liquid household wastes shall be established by
second-tier local executives.
? 48. “Rules for rendering communal services to the population of the Republic of
Uzbekistan” 02.20.99
These rules regulate relations between suppliers and consumers of heat, gas, water
supply, and sewage disposal. They are binding throughout the territory of RUz.
The rules also contain (1) provisions regarding the procedure of supply, use of, and
payment for municipal services; (2) the rights, obligations, and responsibilities of the
consumers; and (3) the rights, duties, and responsibilities of suppliers.
Central Asian Republics Local Government Initiative Phase II
The rules establish that local government institutions monitor the safety of services for
consumers and that they have the right to determine standards and supply schedules and
establish a guaranteed level of quality, taking into account the capacity, structure and
condition of capital in municipal facilities, climatic conditions, and other local factors.
The supplier must notify the consumer on all rate changes.
? 49. Regulation “On ‘Enterprise-Mahalla,’ an economic cooperation and mutual
assistance program” 27.08.99
The economic cooperation program "Enterprise-Mahalla" stipulates that business entities
located on the territory of one or several mahallas shall carry out joint production and
commercial activity on the basis of contractual economic relations.
Officially, establishment of such cooperation enhances the role of self- government
institutions in the realization of market transformations in the country and the solution of
social problems (provision of the mahalla’s unemployed residents with jobs, especially
for young people; creation of new jobs; protection of interests of small businesses, etc.).
The means of cooperation are not limited to the mechanisms included in the regulation;
they are only the most widely applicable forms of cooperation.
? 56. Order “On approval of the rules for formulation and implementation of the state
budget of the Republic of Uzbekistan” 29.12.01
These rules describe, in detail, the procedure for compiling and implementing the state
budget. Additionally, these rules give the procedures for consideration of draft local
budgets and for finishing work on ratified budgets.
The procedures established by #12, are specified here in more detail.
? 57. “On approval of the instruction “On procedures for calculation of local taxes
and fees and their payment into the budget (new version)” 16.02.03
The instruction establishes the permitted range of local taxes and fees, procedures for
their collection, which authorities are entitled to impose them, etc. The instruction
describes in detail and establishes the concepts of local fees imposed by local state
authorities of RK, the provinces, and Tashkent City, such as fees for permission to
engage in commerce and the hokimiyat’s registration fee for legal entities and physical
persons engaged in business).
? 59. “On approval of the regulation on the mechanism of compensatory cash
payments for payments on housing and communal services (starting April 25 2003)” –
27 March 2003
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
Order #1232 identifies recipients of the newly established communal service
compensations and the size of the payments they receive. Recipients include much of the
educational sphere, some categories of the disabled and elderly, and some medical
professionals (all to receive an amount equal to 45 percent of the minimum wage
monthly, along with their paycheck or pension payment); veterans of labor get 18 percent
of minimum wage (Articles 1 and 2).
This act also sets documentation requirements (not too strict) for perspective recipients
(Article 5). Payments are not taxed (Article 13). Compensatory payments for the
employed come from the state budget; pensioners receive them from the extra-budgetary
Pension Fund (Article 16). Workers in non-budget organs receive them through their
organization, which gets an equivalent discount in its payments to the Pension Fund
(Article 16). All affected organizations must report on their payments monthly to the
Ministry of Finance’s Supervision and Auditing Administration (Article 18).
The new system of compensatory cash payments for communal services replaces a
system of discounts on communal service payments for certain categories of the
population.
Central Asian Republics Local Government Initiative Phase II
ANNEX D
SUMMARY OF RELATED INTERNATIONAL DONOR PROGRAMS
Central Asian Republics Local Government Initiative Phase II
PROJECT NAME
START
DATE
END
DATE
03/25/03
12/31/07
US$ 10 million
Tashkent Solid Waste
Management
Rehabilitation
12/01/1998
12/31/2003
US$ 46 million
Tashkent Water Supply
Improvement
06/03/2003
Bukhara and Samarkand
(Buxoro and Samarqand)
Water Supply Project
02/19/2002
(Approval)
Public Finance
Management Reform TA
Project
continuing
06/30/2007
PROJECT
COST
US$ 14.5 million
US$ 62.33
million
SUMMARY DESCRIPTION
Public Finance Management Reform TA Project
will improve fiscal discipline, strategic resource
allocation, and efficiency of budget resource use
by supporting the establishment of a treasury;
placing the budget into a medium-term
perspective; strengthening budget preparation,
execution, and monitoring capacity;, as well as
fiscal
transparency
and
related treasury
information systems
The main objective of the project was to restore
the basic municipal and industrial waste collection
and disposal services. Other objectives were to
address urgent environmental problems and public
health hazards and to strengthen the institutional
arrangements surrounding the municipal solid
waste management in Tashkent.
The project would continue to support the reform
process initiated by the ongoing Tashkent Solid
Waste Management Rehabilitation Project and
expand this process to the water supply sector.
The project seeks to improve the safety, quality,
reliability, efficiency, financial viability, and
sustainability of the water supply services in
Buxoro and Samarqand.
ORGANIZATION
World Bank
EBRD/World Bank
EBRD/World Bank
World Bank
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
Urban Transport Project
05/11/2000
12/31/2004
Urban Water Supply
09/27/2001
(Approval)
12/31/2003
(Estimated)
US$ 29 million
US$ 65.50
million
The Urban Transport Project for Uzbekistan aimed
to develop efficient and sustainable urban
passenger transport services in Samarqand,
Namangan, Buxoro, Nukus, and Olmaliq.
Supported activities included the establishment of
a commercial leasing scheme for the allocation of
new buses; rehabilitation and repair of new buses;
strengthening of urban transport operators; and
improvements in the institutional, financial, and
regulatory framework for urban transport services.
This project supported the Government's
objectives
of
decentralization,
human
development, and social protection by providing
improved urban water supply services and training
programs to strengthen institutional capacity and
community participation. The project area covers
three provincial capital cities, Karshi, Jizzax, and
Guliston, in the central and southern parts of the
country, with high incidences of poverty. The
Project improved water supply services to
approximately 484,000 people, about 45 percent
of who m are poor.
World Bank
ADB
Central Asian Republics Local Government Initiative Phase II
ANNEX E
LEGAL AUTHORITY FOR URBAN TRANSPORT MANAGEMENT
IN THE REPUBLIC OF UZBEKISTAN
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
LEGISLATIVE BASIS FOR URBAN TRANSPORT MANAGEMENT IN THE
REPUBLIC OF UZBEKISTAN
(Source: Uzbek Agency for Motor and River Transport)
Republican level
Territorial level
UZBEK AGENCY FOR AUTOMOBILE
AND RIVER TRANSPORT
HOKIMIYATS OF CITIES
Acts on the basis of: CoM order #296 of
07.11.1998 “On establishment of Uzbek
Agency for automobile and river transport”
and #245 of 06.05.2001 “On measures on
improvement of organizational structure of
management in the field of automobile
transport”, Decree of the President RUz
“On de-monopolization and improvement of
in the field of automobile transport” as of
06.04.2001
Act on the basis of: the Law of the Republic of Uzbekistan “On local
state authorities”. Art. 12 of the Law of RUz “On urban passenger
transport”
TERRITORIAL DEPARTMENTS OF
UZBEK AGENCY FOR AUTOMOBILE AND RIVER
TRANSPORT
Act on the basis of: CoM order #296 of 07.11.1998 “On establishment
of Uzbek Agency for automobile and river transport” and #245 of
06.05.2001 “On measures for improvement of organizational structure
of management in the field of automobile transport”, Decree of the
President of RUz “On de-monopolization and improvement in the field
of automobile transport” as of 06.04.2001, regulations of territorial
departments
TERRITORIAL COMMISSION OF UZBEK AGENCY FOR
AUTOMOBILE AND RIVER TRANSPORT FOR
ORGANIZATION OF URBAN PASSENGER TRANSPORT
Act on the basis of: CoM order #350 of 08.17.1998 “On issues of
organization and carrying out of tenders on urban passenger transport
services”, decision of City Hokim on establishment of commission,
regulations of the Commission itself
SPECIALLY AUTHORIZED ORGANIZATION
FOR URBAN PASSENGER TRANSPORT MANAGEMENT
Acts on the basis of: Art. 12 of the Law of RUz “On urban passenger
transport”, CoM order #513 of 11.26.1999 “On strategy of urban
passenger transport development”, resolutions of city hokims, bylaws
CARRIERS (ASSOCIATIONS, ENTERPRISES, INDIVIDUAL BUSINESSMEN)
Act on the basis of: Decree of the President “On de-monopolization and improvement of in the field of automobile
transport” of 06.04.2001, #245 of 06.05.2001 “On measures on improvement of organizational structure of management in
the field of automobile transport”, Civil Code of RUz, Laws “On automobile transport”, “On urban passenger transport”,
“On protection of consumers’ rights”
Central Asian Republics Local Government Initiative Phase II
ORGANIZATIONAL STRUCTURE OF URBAN TRANSPORT MANAGEMENT
IN THE REPUBLIC OF UZBEKISTAN
Republican level
Territorial level
UZBEK AGENCY FOR AUTOMOBILE
AND RIVER TRANSPORT
CITY HOKIMIYATS
• supervision over realization of strategy of
urban passenger transport development
and carrying out of tenders
• elaboration of regulatory and legal
framework for urban passenger transport
activity
• organization of licensing and control over
observance of license requirements and
conditions
• study of institutional, legal, and financial
reforms of urban passenger transport
• elaboration and implementation of complex regional programs of city
passenger transport development
• formation of competitive environment and establishment of equal
conditions for carriers
• establishment of routes and schedules of urban passenger transport
service
• quality control of services to passengers
TERRITORIAL DEPARTMENTS OF
UZBEK AGENCY FOR AUTOMOBILE AND RIVER TRANSPORT
• working out of proposals and assistance in preparation of regulatory and
legal documents
• supervision over realization of strategy of urban passenger transport
development
• preparation of documents, organization, and carrying out of tenders
• organization of licensing and control over observance of license
requirements and conditions
TERRITORIAL COMMISSION OF UZB EK AGENCY FOR
AUTOMOBILE AND RIVER TRANSPORT FOR
ORGANIZATION OF URBAN PASSENGER TRANSPORT
• coordination of urban passenger transport services
• establishment of equal conditions for carriers of different forms of
ownership and development of competition
• control over realization of complex measures intended for urban
passenger transport development
SPECIALLY AUTHORIZED ORGANIZATION
FOR URBAN PASSENGER TRANSPORT MANAGEMENT
• conclusion of agreements with carriers and coordination of services
• approval of routes and schedules of urban passenger transport services
• elaboration and implementation of complex measures aimed at urban
passenger transport development
• establishment of single ticketing system on city passenger transport,
production of tickets, passenger cards, and other documents for
privileged travel of some categories of people
• supervision over passengers’ rights observance
CARRIERS (ASSOCIATIONS, ENTERPRISES, AND INDIVIDUAL BUSINESSMEN)
• Provision of extension of market reforms in the field of city passenger transport
• Improvement of quality and culture of services to passengers and extension of range of automotive transport services
• Introduction of contemporary techniques and technologies; development and up-grading of maintenance and repair base; and
increase of the effectiveness of use of transport
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
ANNEX F
EXCERPTS FROM “THE PRINCIPLE OF SEPARATION OF POWERS IN THE
ORGANIZATION OF THE ACTIVITIES OF LOCAL GOVERNMENT
INSTITUTIONS”
By Dr. X.I. Ruzmetov
Central Asian Republics Local Government Initiative Phase II
NOTE: The following excerpts are taken from an article published in the Uzbek Interior Ministry’s
professional journal Law, #2, 2003. Dr. Ruzmetov is a professor at the Institute of Law and
associated with the Presidential Academy (a prestigious public administration training institute). He
is also a member of the ruling XDP (People’s Democratic Party)
“…The question of achieving balanced relations between branches of government on the local level is more
difficult than at higher levels. This is explained by the fact that other institutions do not interfere in the
activities of central institutions. The affairs of local organs, however, are invaded by higher-level
institutions, which influence the balance of power on the local level. In order to achieve separation of
powers on the local level, therefore, it is imperative to simultaneously address two issues:
First of all, to decentralize state governance;
Second of all, to better define and delimit institutional and functional powers between the representative,
executive, and judicial branches on the local level…” (p. 33)
“…The Republic of Uzbekistan is governed under a unitary system. It has two main characteristics: first of
all, the legal status of the administrative-territorial formations that make up the unitary government are
determined by the central government; second of all, the central government both directly and indirectly
controls local government institutions…” (p. 33)
“…The central government appoints heads of local administrations (hokims) in the provinces and Tashkent
City. These hokims, in turn, appoint lower hokims. In this way, the central government is assured an
overbearing, crude presence in the periphery. Through hokims, the center can interfere in all areas of local
life: political, economic, social, and cultural. Other mechanisms further fortify this tendency, such as
granting hokims leadership over both representative and executive institutions at the local level, the right to
veto acts of the representative institutions, as well as the right of the central government to cancel acts of,
and even sack, hokims.
Thus, there is a rigid hierarchy, which restrains the initiative of the population’s local institutions
in development of local self-governance. The approval of hokims by local representative institutions is
ineffective. With an undeveloped civil society, weak political parties, and an imperfect electoral system (in
which the link between deputies and the electorate is inconsequential), representative bodies cannot
embody true representation of the people, cannot take their crucial place in the system of separation of
powers.
Therefore, in order to establish civil society in Uzbekistan, it is necessary to create a balance of
power not only between branches of local government, but also in center-periphery relations.
Accordingly, a top policy priority for organization of center-periphery relations should be
decentralization. This does not mean that it is necessary to hastily decentralize governance and remove
local governance from the control of the center. The process cannot be forced, but nor can it be delayed.
Indeed, the current system of center-periphery relations remains unchanged for 12 years. The lagging
process of democratization in the state sphere impedes progressive processes in the social sphere. It is,
therefore, essential to transition from a centralized form of governance to a decentralized form through
relative decentralization.
For this, it would be expedient, on the one hand, to relinquish the power to appoint local leaders
and, on the other, to introduce the institution of local representative of the central government. The matter
of election of the local executive could be handled by the locality itself: election either by the local
representative body or by the population. The central government representative, then, should serve as the
channel, through which the center implements its policies locally: that is, to influence the implementation
of central decisions, observance of the law, guaranteeing human rights, address general government matters
in issues of defense, wholeness of territory, etc… For this, the representative of the central government
should be granted powers of arresting acts of local executive organs and of passing such acts on to the
courts. Other possible levers of influence vis-à-vis local institutions could be dissolution of the local
representative body, the power to sack the hokim, etc.” (p. 34–35)
Further, Ruzmetov proposes the French model, based on prefects, as the most appropriate for Uzbekistan.
He suggests that hokims be elected by local representative bodies, as he does not believe that a strict
separation of powers is as necessary on the local level as it is on the central level.
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
ANNEX G
COMMUNAL SERVICE TARIFFS, TASHKENT CITY, JANUARY 2004
Central Asian Republics Local Government Initiative Phase II
Service
Unit of
measure
(monthly
where
applicable)
Apartments
Rate
2
1 room, 18m /
2*
30m , 2
people, 110
kilowatts /
hour
2 rooms, 28m
2
/ 42m , 4
people, 150
kilowatts /
hour
2
3 rooms, 42m
2
/ 69m , 5
people, 185
kilowatts /
hour
2
4 rooms,
2
2
55.5m / 81m ,
7 people, 200
kilowatts /
hour
5 rooms, 70m
2
/ 100m , 10
people, 220
kilowatts /
hour
2
2
Communal property maintenance and repair per m of total area (average full rate) 44,27 so’ms
1st group (all-
per m 2 of total
inclusive, with
area
53.86
1615.80
2262.12
3716.34
4362.66
5386
40.81
1224.30
1714.02
2815.89
3305.61
4081
35.95
1078.50
1509.9
2480.55
2911.95
3595
34.87
1046.10
1464.54
2406.03
2824.47
3487
27.17
815.10
1141.14
1874.73
2200.77
2717
elevator)
2nd group (all-
per m 2 of total
inclusive, no
area
elevator)
3rd group (hot water
per m 2 of total
not included, no
area
elevator)
4th group (hot water
per m 2 of total
and heat not
area
included, no elevator)
5th group (hot water,
per m 2 of total
heat and sewage not
area
included, no elevator)
Communal Services
Heating
2
per m of living
95.00
1710.00
2660.00
3990.00
5272.50
6650
1303.92
2607.84
5215.68
6519.60
9127.44
13039
area
Hot water
per person
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
Cold water
per person
357.84
715.68
1431.36
1789.20
2504.88
3578
Natural gas
per person
115.82
231.64
463.28
579.10
810.74
1158
Solid waste
per person
250.00
500.00
1000.00
1250.00
1750.00
2500
Electricity
per kilowatt/hour
18.20
2002.00
2730.00
3367.00
3640.00
4004
7767.16
13500.32
17494.90
23105.56
30929
910.00
910.00
910.00
910.00
910.00
*
Total for communal
services
Telephone
per line
910.00
Total payment per month
1st group (all-
so’ms
10292.96
16672.44
22121.24
28378.22
37225
so’ms
9901.46
16124.34
21220.79
27321.17
35920
so’ms
9755.66
15920.22
20885.45
26927.51
35434
so’ms
9723.26
15874.86
20810.93
26840.03
35326
so’ms
9492.26
15551.46
20279.63
26216.33
34556
inclusive, with
elevator)
2nd group (allinclusive, no
elevator)
3rd group (hot water
not included, no
elevator)
4th group (hot water
and heat not
included, no elevator)
5th group (hot water,
heat and sewage not
included, no elevator)
* [[AUTHOR: Is this “kilowatt hour”, “kilowatt or hour”, or “kilowatts per hour”? ]]
Central Asian Republics Local Government Initiative Phase II
ANNEX H
ORGANIZATIONAL STRUCTURES FOR COMMUNAL SERVICES
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
Administrative Structure
of O’zkommunxizmat Agency
General Director
First Deputy
General Director
Communal Services
Reform and Reform
Monitoring
Administration
13 employees
Department of
Economic Analysis
and Forecasting
4 employees
Head of
General Directorate for Operation
and Development of Interregional
Water Pipes
Central Administration for
Supplying Natural Gas to the
Population and Enterprises
11 employees
Auditing Commission
for Natural Gas
9 employees
Department of Privatization and
Post-Privatization Support
3 employees
Accounting
and Analysis
Division
3 employees
Department of External
Economic Relations
2 employees
Management Division
3 employees
Human Resources
Manager
Juridical Consultant
Source: From CoM order #421 (2003)
Security Division
1 employee
Central Asian Republics Local Government Initiative Phase II
Organizational Structure of O’zkommunxizmat
Uzbekistani Communal Services Agency
O’zkommunxizmat
Agency
General Directorate for
Operation and
Development of
Interregional Water
Pipes
O’zkommunalloyiha
Institute
Training Center
O’zkommunuvtashk ilotchi
Five Departments
for Operation and
Development of
Interregional Water
Pipelines
(Tuyamuyun-Nukus,
TuyamuyunUrgench, Damxoji,
Jizzax Province
Water Pipelines,
Dehqonobod)
O’zgazloyiha
Institute
Public Corporation
Kommunalinvest
Open Joint Stock
Companies:
O’zkommunmashta’minot
(Tashkent City),
Fergana Gas Equipment
Factory,
Kommunalnik
(Samarqand City)
Gazavtomatika
(Tashkent City)
Angrengazmash
(Angren City)
Kommunalsozlovchi
(Tashkent City)
O’zbekgazsuvqurilish
(Tashkent City)
O’zkommunissiqlikta’mir
(Tashkent City)
Territorial Gas Supply
Companies in
Provinces, Districts
and Cities
Specialized Repairs
and Parts Enterprise
Source: From CoM orders #493 (2000) and #421 (2003)
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
Organizational Structure
of Territorial Communal Services Operation Union
(TKEO)
Except Tashkent City
Director
First Deputy Director—
Head Engineer
Division of
Infrastructure and
Networks
Department of Technical
Policy and
Task Coordination
Deputy Director
for Economics
Vodokanal
(Cold water and
sewage)
Issiqlik Manbai
(Heating and hot
water)
Communal
Services Reform
Division
Economic Analysis
and Forecasting
Division
Deputy Director
for Construction
and Capital
Repairs
Management
Division
Accounting Division
Construction and
Capital Repairs
Division
Division for
Training and
Retraining
Logistics Division
Legal Division
Central Operating
Service
Outdoor lighting
concern
Electronic transport
Concern (trolley)
Other organizations
and enterprises
Source: From CoM order #493 (2000)
Communal Service
Rates and Marketing
Division
Privatization and
Post-Privatization
Support Division
Open Joint Stock Company
Ta’mirqurilish Training and
Methodological Center
Communal
Drainage Concern
Bureau of
Citizens’ Services
Other enterprises
and organizations
for capital repair
and construction of
communal service
facilities
Security Division
District and City
KEUs (Communal
Service
Administrations)
Cadastre Bureau for
Technical Inventory
Central Asian Republics Local Government Initiative Phase II
Organizational Structure
of Tashkent City
Territorial Communal Services Operation Union
(TKEO)
Director
First Deputy Director
Economic Analysis and
Forecasting Division
Communal Services
Reform Division
Privatization and PostPrivatization Support
Division
Communal Service Rates
and Marketing Division
Construction and Capital
Repairs Division
Concern for Development and
Operation of Equipment for
Protection from Electric Shock
and Hazardous Materials
Special Works
Division
Tashkent Elevator Concern
Division of Infrastructure and
Networks
Division for Facades
and Landscaping
Workers’ Safety Division
Deputy Director for
Management of Housing
Stock
Housing Stock
Management Division
Director’s Apparat
(Management Division)
Accounting Division
Division for Training
and Retraining
Division of Official Letters
and Quality Control
Legal Division
Security Division
Administrative Division
Hotels
Logistics Companies; Parts
and Components Concerns
Repairs and Construction
Division Kommunal-Ta’mirlash
Gordorstroyremont
Concern
Spare Parts and Components
Division
Deputy Director for
Maintenance and Repair
of Communal Service
Infrastructure
Other Organizations
and Enterprises
Source: From CoM order #493 (2000)
Trust Suvsoz
(Vodokanal)
Urban Improvements
Division
Producers’ Union
Tashteploenergo
Toshshaharnur Enterprise
High-rise Office Building
Operation Enterprise
Self-financing
Division for
Dormitories
City Operator Service
Self-financing
Methodological Center
11 district
KRAVSes (local
maintenance
enterprises)
Unified Buyer
Service (SEZ)
Head of Department of
“Sanitary Cleaning”
(Deputy Director)
“Sanitary Cleaning”
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
Organizational Structure
of City / District Communal Service Administra tion
(KEU)
except Tashkent City
Territorial Communal
Services Operation
Union of Provincial
Hokimiyat
City / District
Hokimiyat
Director
First Deputy Director—
Head Engineer
Communal Services and
Maintenance Division
Landscaping and
Irrigation Service
Privatization and
Post-Privatization
Support Division
Producers’ Divisions
for Maintenance of
Housing Stock
TSJ Cooperation
Division
“Sanitary Cleaning”
Service
Construction and
Repair Sections
Engineer for Safety and
Citizens’ Protection
Accounting Division
Greening Service
Emergency Operator
Source: From CoM order #493 (2000)
Human Resources
Manager
Bureau of
Citizens’ Services
Other Services
Central Asian Republics Local Government Initiative Phase II
ANNEX I
TASHKENT CITY AND TASHKENT PROVINCE LOCAL COUNCILS
LATE FEBRUARY, 2004
Annexes - Assessment of Intergovernmental Relations and Local Governance in the Republic of
Uzbekistan
Tashkent City Council of People’s Deputies
by nomination
as of late February, 2004
At the time of writing, the Tashkent City Council included the City Hokim, all 11 district hokims,
as well as various executive appointees, an apparent violation of paragraph 6 of article 24 of the
Law on Elections to the Provincial, District and City Councils of People’s Deputies (which states
that, with the exception of hokims, executive branch officials may not simultaneously hold office
as people’s deputies). One informed observer stated that the vast majority of Tashkent City
people’s deputies are, either formally or informally, direct executive branch appointees. In
Tashkent City, they tend to be nominated by either the National Democratic Party (political
parties can nominate either their own members or independents) or mahallas.†
Tashkent Province Council of People’s Deputies
by nomination
as of late February, 2004
Nominated by
Xalq Demokratik Partiyasi (National Democratic Party)
Vatan Taraqqiyot Partiyasi (Party for Development of the Fatherland)
Fidokorlar Partiyasi (Party of Self-Sacrifice)
District Local Councils
Initiative Groups of Voters
Total (since 1999 elections, seven have resigned; old total number of deputies was 54)
of which city or district hokims
of which former hokims who remained deputies after dismissal
#
12
1
2
29
2
47
7
10
† In Tashkent Province, district-level local councils tend to nominate candidates from the
executive branch (including hokims and former hokims as well as other appointees). Elections
were held for the seven open seats on February 29, 2004.