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Ukrainian village moves from centralized administration to decentralized control

28.07.2017 10:32 "Agro Perspectiva" (Kyiv) —

Today Ukraine experiences fundamental changes in rural policy. The emphasis is not only on the territories development, but also on the maximum satisfaction of needs and interests of rural population. Notably, the human factor becomes dominant.

For our country, such approaches are innovative. Therefore, we carefully study successful practices of rural development in successful countries and, first of all, the United States of America, Canada, EU countries. We also use the experience of leading experts in this area, listen to their recommendations.

Thomas G. Johnson is one of such world’s leading experts. He was the Frank Miller Professor of Agricultural and Applied Economics, and professor in the School of Public Affairs at the University of Missouri (USA). He specializes in rural development economics, analysis of economic impact, and finances of local self-governance. Several years ago, he advised the Government of Ukraine on changing the policy of agriculture and rural development.

Recently, Thomas G. Johnson has visited our country. He willingly answered questions about the feasibility of introducing a new rural policy and its prospects.

- What is the purpose of your visit to Ukraine?

- I came to Ukraine to become familiar with the context, in which rural policy is developing here. Based on the data I received, and considering the experience of the USA, Canada, and the European Union countries, and jointly with the researchers from the University of Missouri, we will prepare recommendations on implementing the rural development policy for the Ukrainian government.

Community-based rural development must be developed very carefully to match the conditions in the countries where this program is implemented. Our recommendations will also be designed for local authorities. The government should create conditions that support the work of local authorities. And the latter, in turn, should receive examples of successful projects in territorial communities that also choose their own strategies. We hope that we can provide ideas that will stimulate their own innovations.

For this reason, it is very important for me now to understand the real situation in Ukrainian rural areas.

- You already had an opportunity to get acquainted with this situation. How would you describe it?

- I was in Ukraine several times. For the first time — about 15 years ago. At that time already, I considered the opportunities for agrarian and rural policy. I also considered the need for decentralization of power.

Since then, a great deal has been accomplished in your country. The process of decentralization of power is already taking place. Consolidated territorial communities are actively being created. At the same time, we should not forget that consolidated territorial communities will be able to generate prosperity, only if they have the necessary tools, financing, and a favorable regulatory environment for local businesses.

- What will a new rural development policy give to Ukraine?

- A good sound rural development policy allows local authorities to create conditions that will be attractive to new employers, investors, and, more importantly, to young people, so that they will have incentives to stay in those communities, to make themselves comfortable there with their families. I am not saying this for no reason, that the best way is that these issues be addressed by local authorities, because they know the strengths and weaknesses of their territories, and the demands of their population.

- Is the successful implementation of the rural development policy linked to the creation of a full-fledged land market in Ukraine?

- The two assets that rural communities depend on to develop, are their land and their people. Without certainty, more certainty about how land will be used, how it will be marketed, and how it will be regulated, it would be very difficult for local authorities to make good decisions.

Another aspect is no less important. The local authorities need a stable and understandable revenue base. It comes from the workers, the employers, and the land resources. And so, until the land resources are settled, they won’t have stable expected revenue base.

- The problem is that a lot of land plot owners, rural people, today oppose the introduction of a land market. What should Ukrainian authorities do to make it work soon?

- Many people are afraid of the proposed changes, and they can be understood. Not knowing what outcomes to expect of the market, they prefer to do nothing. But in the end development of Ukraine requires that one of its biggest assets — its land — be completely available to the economy. And it isn’t at this time.

To make the land market work requires that all participants have complete information. It is necessary to have lots of buyers and sellers, as well as complete transparency in the work of this market.

To have lots of buyers, there has to be an efficient finance system to allow people to have their means to purchase the land. The transparency of the market will mean that people who own the land right now will know whether they are getting a good price for the land.

If the land market is set up in that way, if its mechanisms are worked out thoroughly and responsibly, there will be nothing to fear for potential sellers and buyers.

- What are the challenges faced by Ukrainian territorial communities?

- I think that Ukraine needs to modernize governmental institutions, especially to develop sound information systems. Public agencies should be able to produce good data and to make it available widely to the public throughout the territory.

Another affordable step would be to develop a strong extension services. In Canada, United States, and Western Europe, that I am most familiar with, their prosperity can be traced to education. There people are learning throughout their lives. It is also critical for Ukraine to provide people with modern knowledge for development.

One more point. I see a lot of entrepreneurial tendencies in Kyiv and in some other cities. But I think entrepreneurial innovative risk-taking needs to be encouraged in rural areas.

— You visited Kipti Consolidated Territorial Community in Chernihiv Oblast and Fursy Consolidated Territorial Community in Kyiv Oblast. How would you assess the prospects of their work?

- In my opinion, members of both communities realize that the key to success is their consolidation and support of local leaders. Here everyone knows each other, so the leaders are those who are most trusted, who can unite people, ignite them with their ideas.

At the same time, I think that the process of creating consolidated territorial communities is not easy. People lived and worked in a certain system, which now they had to give up. They had a lot of questions, and not every question had an answer.

The transition from central control to decentralized control requires fine tuning not only for main approaches, but also for a lot of details. There must be a balance between responsibilities and resources. If that is out of balance, things will not work well. So, the process needs to be flexible and evolving.

- Rural development policy is also implemented in other countries of the world. Can we give examples of successful work of central and local authorities for its implementation?

- Several examples come to mind. For example, in Canada, they created a Rural Secretariat. It was responsible to advice the government, the Prime Minister and the ministers on what was required to make rural policy work.

In the United Kingdom, especially in England, they mainstreamed rural policy. That meant that every ministry had in their goals, rural policy objectives and indicators.

In the United States, they created a special ministerial level council, where members from each department met to discuss rural policy. And then at the state level each had a similar council that included representatives from the federal government and state level governments and local governments to discuss rural policy.

I think that in all cases such attention to rural policy was to the good.

- What should the Ukrainian government do to speed up the implementation of the new rural development policy?

- I will name the first three steps. First of all, to develop a sound efficient land market.

The second step — a sound and efficient financial market available not only to those who wish to buy farm land, but also to local authorities, local councils, so that they can make strategic investments. It is well known that you cannot wait for revenues to come before you invest. Nothing will happen on an empty place.

And a third step must be to establish a clear, a balanced and fair matching of village and local council responsibilities and revenue sources. The mechanism will not work if, say, the responsibilities will be too high, and revenues will be low.

- And what consolidated territorial communities and their leaders should pay attention to?

- Well, one thing would be not to assume that the only good investments are in buildings, roads, and other physical things. They also need to invest in their people, their knowledge and professional skills. This is especially true for young people.

During my stay in your country, I came up with lots of ideas for ways that the United States Agency for International Development (USAID) and other partners can assist Ukraine in meeting its potential. So, I will promote some of those ideas as well.

- As an international expert and simply as a person, you have a high interest in Ukraine. What is it connected with?

- One of the reasons is that in 1989 I became very excited about the changes in the world politics, particularly in Eastern Europe. Then there was the hope that the world would become a closer place. And I decided to become as much an expert as I could on Eastern Europe.

Second reason, my wife’s family were immigrants from Western Ukraine. So, I became very interested in all the stories and history from Ukraine, and was curious about what was happening here. I would like my professional knowledge to be useful here.

Today, Ukraine can take advantage of the experience of many successful countries in the world. I would mention Ireland, where I worked 25 years ago. It went from one ofthe poorest nations in the European Union to a successful and prosperous country. They have the highest income in the EU (Ed. — per capita). That would be an interesting one to learn from.

Taras TERNIVSKYI,

the National Press Club on Agrarian and Land Issues

Agro Perspectiva

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