“The current administrative-territorial structure of the Republic of Moldova remains to be one of the most fragmented in Europe. For a population of less than 3 million, we have 898 town halls, 32 districts and an autonomous territorial unit. The local public administration continues to face the same problems: lack of financial resources, lack of human resources, insufficient capacity to achieve its own competences, etc. And the situation is getting worse from one year to the next. Apparently, the Government is aware of the problems that have gathered in this area and has begun to communicate more openly on this subject, even coming up with a series of options for a possible reform of the local public administration, which gives us hope that things have moved out of place and in a predictable period of time, we could have certain changes. The questions that still remains to be addressed are the following. How will this reform be done? What will be the exact steps? What will be the results and impact to expect?…”
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Public Administration Reform Strategy 2023-2030

The Government has developed and published the concept of the next Public Administration Reform Strategy of the Republic of Moldova 2023-2030, which as in the case of the previous strategies, covers the most important pillars of the public administration, such as civil service management, public institutions, public policies and strategic planning, public services and local public administration. It should be noted that an essential part of the analysis component of the Strategy is given to the local public administration field, being detailed and argued the need for an intervention in this sector.

At the same time, it is to be highlighted the strategic objective for the component aimed at the local public administration, which proposes to gradually eliminate the excessive fragmentation.  Solid premises shall be created based on effective policies of local economic development and growth and consolidation of financial autonomy. It is also key to increase significantly, especially in rural areas the capacity of local authorities to provide basic public services as well as the access of the population to them.

The Government’s commitment to the local public administration reform

Although the Government is still in the process of developing the Strategy for the Reform of Public Administration of the Republic of Moldova 2023-2030, which according to the Action Plan for the implementation of the measures proposed by the European Commission in its Opinion on Moldova’s application for accession to the EU is to be approved by the end of this year. For now several steps where already taken on the subject of local public administration reform.

First of all, the Webinar “Administrative-territorial reform in the Republic of Moldova: national proposals and global experience“ of November 1, 2022, in which the Government presented two options for an eventual reform of the local public administration, both presented below,  will be noted.

According to the government’s estimates, one of the two options should contribute to increasing the capacities of the local public authorities of level I to efficiently provide local public services and fulfil the legal competences, as well as to be sustainable economically and financially. The number of districts is to be established depending on the administrative-territorial organization of level I, the option being examined with 5 districts/regions, according to the current circumscription of the regional development regions or 10 districts/regions, according to the circumscription of the territorial offices of the State Chancellery.

At the same time, the government’s commitment to fully engage in an eventual reform of the local public administration was also communicated during the Event “Public Administration Reform: Challenges and Perspectives” on November 28-29, where the options that are under examination were repeatedly presented.

At the same time, although a final concept of local public administration reform is not yet approved nor published, the most important measure that was taken by the Government and which demonstrates the intention to start this complex reform is the inclusion in the draft state budget law for 2023, approved by the Government on December 7, this year,  of an amount of 250 million lei for the Voluntary amalgamation Fund of localities. According to the draft law, the distribution of these allocations will be carried out in the manner established by the Government.

Reform options

From those presented by the Government, so far it is considering two reform options, both of which are based on the latest complex study on administrative-territorial reform scenarios, elaborated in December 2018 with the support of the German Agency for International Cooperation (GIZ).

Option 1 – Compact scenario. According to this option, a reformed local public authority is to meet a minimum set of criteria, including: geographical continuum, a minimum number of 5000 inhabitants, road connection and a maximum distance from the center of 25-30 km. At the same time, a number of conditions are proposed regarding the choice of the administrative centre, such as fiscal capacity or the services provided. At the same time, the new local public authority will have the capacity to provide salaries for at least 20 employees from the own resources of the public authority. Preference for administrative centres is to be given to cities. In case of full implementation of this option, the number of local public authorities of level I will be between 90-130.

Option 2 – Moderate scenario. According to this option, as in the case of the compact scenario, a reformed local public authority is to meet the condition of the geographical continuum or road link. At the same time, in this scenario, the minimum number of inhabitants of the new territorial administrative unit will be 3000, the maximum distance from the center of 20-25 km and the capacity of financial support from own resources of a minimum number of 12 employees. In case of full implementation of this option, the number of local public authorities of level I will be between 150-200.

Option 3 – Municipalisation. Additionally, to the two options proposed by the Government, the Coalition for Decentralization, proposed an alternative option. According to her, the local public authorities of level I remain with the same competences, except for the local public authorities, which are currently the district residences. They are to receive the responsibility of fulfilling the entire set of competences and providing services on the territory of the city of residence, as well as the responsibility of all other competences and services on the territory of the other territorial administrative units that today are carried out by the district councils and their structures. In the case of this option, the current structures of the districts would be fully absorbed by the mayoralties of the districts’ residence cities, which would acquire the status of municipality. The mayor of the future municipality will be elected directly by the vote of the entire population of the municipality (the territory of the current rayon). This option is also supported by the Congress of Local Authorities of Moldova.

Implementation mechanism

The options presented by the Government are proposed to be implemented on via voluntary amalgamation, where the decision to amalgamate or not based on the established criteria will be left to the discretion of the local public authorities. At the same time, the Government will come up with a series of incentives to facilitate voluntary amalgamation, among them being salary incentives, special transfers with general destination for the amalgamated authorities, grants for infrastructure development for a period of at least 4 years, priority for allocations from external assistance programs, etc.

At the same time, based on the fact that the voluntary amalgamation process implies that the amalgamation decision is taken by the local public authorities themselves, through the scenarios proposed by the Government it is mentioned that the decision is to be taken by the local councils with 50%+1 of the total number of counsellors. But once the decision is taken and implemented, the process becomes irreversible, as they no longer have the right to return to the previous situation.

Also, according to the presented, the voluntary amalgamation proposed by the Government within the two basic scenarios can be complementary to the scenario with the municipalization proposed by the Coalition for Decentralization. In this case, a different mechanism for the local finances will be established, taking into account the fact that we would have different competences between the mayoralties of the municipalities and the mayoralties of the other administrative-territorial units.

The next steps…

Given the fact that the Government has planned in the draft state budget law for 2023 an amount of 250 million lei for the Fund for voluntary amalgamation of localities, one can have a certain certainty that it is determined in starting the reform of the local public administration as soon as possible, on the way of voluntary amalgamation.

However, the issues published and communicated so far do not provide a clear picture of the perspective of the results of the local public administration reform in the long term. The application of voluntary amalgamation, even accompanied by a wide range of stimulants, cannot give us guarantees that it will be very popular among mayors and expect an outcome impressed by those who will want to amalgamate. Therefore, from the stage of adoption of the law, the period for which the opportunity of voluntary amalgamation is opened will be limited, after which the normative amalgamation will be applied.

At the same time, the exclusive application of the above-mentioned criteria and conditions in the process of voluntary amalgamation carries the risk of ending up in a situation where some small and resource-limited localities, which will not want to participate in the voluntary amalgamation process, remain isolated and without the possibility of amalgamation. In such situations it will be impossible to talk about higher quality services or town halls with increased resources. Therefore, it is recommended to establish a certain map around which voluntary amalgamation will be carried out, with the subsequent application of normative amalgamation on the basis of the same map.

As for the district authorities, given the fact that their role and competences have diminished over the years, without having greatly reduced the number of personnel limit and their number, it is certain that in their case the normative amalgamation is to be applied directly, even from the first stage, with the revision of the competences that are still to be kept to them.

Also, although it is to be appreciated the government’s determination to engage in this complex and sensitive reform, one thing that is omitted for the moment is the lack of broad consultations on a model that is intended to be approved. The public presentation of several scenarios and the collection of opinions on them is opportune for the initial stage, but the model that will be intended to be approved will be individually subject to broad consultations, first of all with the local public authorities and the Congress of Local Authorities of Moldova, but also with civil society, academia, political parties etc.

In addition to the consultation, based on the level of sensitivity of this reform and the possibility of political exploitation of the subject, it is important to try to establish a consensus with political actors, especially with opposition parties. However, the exposure of the risk that in the process of implementation it will be cancelled, or once implemented to return to the initial situation, presents many more dangers and will lead to much worse results than maintaining the status quo.

Finally, the Government’s desire to carry out this reform is to be noted the fact that the success of a reform of such a scale depends on each of us, it is important to ensure a close cooperation and openness between the central public authorities, local public authorities, civil society, the private sector, the academic environment and last but not least the development partners.
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Adrian Ermurachi is co-executive director of the Institute for European Policies and Reforms (IPRE).
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This op-ed is prepared within the project “We and Europe – Analysis of EU-Moldovan relations through innovative media and analytical products”, implemented by the Institute for European Policies and Reforms (IPRE), in partnership with IPN, Radio Chisinau, Zugo.md and with the support of Konrad Foundation Adenauer.