The elevation of the region above the center can be perceived them as a threat – Ustenko about leadership Odessa to financial rating

Odessa took first place in the ranking of the financial health of budgets of Ukrainian cities. This explains the active criticism of the leadership of Odessa. This opinion Facebook expressed economist, Executive Director of the International Fund blazer Oleg Ustenko.

A rating of «Transparent, financially sound and competitive municipalities in Ukraine», initiated by the U.S. Embassy in Ukraine and compiled by the Institute for economic and social reforms, Slovakia (INEKO) in partnership with the International centre for policy studies (MCPD), was promulgated on 23 March.

«In the context of decentralization the problem of economic growth objective should have been to cease to be a problem only the center. Part of this «headache», with the authority and the state financial flows had passed. And here the regional authorities are faced with the fact that – unlike Central government – on the ground, tools to boost growth much less, than in Kiev. Possible – even hypothetically – the palette of incentives, including investment, monetary and fiscal, regional authorities can act only through investment direction. They have no impact on monetary policy, and the ability to stimulate growth through fiscal policy in more than restricted,» wrote Ustenko.

He added that «according to the investment direction of the local government should compete with the Central government».

«On the one hand, the Central government, despite their lack of involvement in politics at the local level, you receive additional benefits from increased investment in the region. That is quite natural. The center always absorbs a national effect from any investment – reducing devaluation pressure on the hryvnia, strengthening the financial stability of the country, increasing the revenues of the Central budget and decreasing the number of «hotelok» the regional authorities to the Central authorities. On the other hand, in the regions are beginning to realize that their success is not a product of the joint action centre and the region, and achieve the «contrary», – said Ustenko.

«Contrary to what any region encased in the «country framework». You cannot be more successful than the whole country in General. It is impossible to obtain an investment rating higher than the rating of the country. You can not borrow in the financial market is cheaper than borrowing Central government. Well and it is really dangerous to be in a situation when the region can become more efficient than the Central government. For regional authorities it is dangerous politically. On the one hand, the «elevation» above the centre can automatically be seen by them – as a threat. On the other hand, to be absolutely unsuccessful as dangerous to regional authorities», – the economist added.

In this case, says Ustenko, «they will come under a barrage of criticism and might lose his political future, but for completely different reasons.»

«Not the least of which is the desire of the center to «translate arrows» of popular discontent in the region with actions of the Central authorities at the regional. Thus, in the absence of clear guidance and real full decentralization, local political elites objectively needs to be in terms of when to be average much more profitable than to be on pole position (either very successful or very unsuccessful). Thus, used in the country model of relations with the regions encourages mediocrity. Drama in the fact that «regional mediocrity» will inevitably escape and at the Central level, «Downing» center», – said the expert.

In his opinion, this theory is confirmed by the results of the study «Transparent, financially sound and competitive municipalities in Ukraine.»

«It is interesting how the top 5 and five outsiders. If the theory described above is correct, and under a barrage of criticism must be as one and other. Significant that the five leaders have actively criticized at least two heads of the municipalities which occupy the first position in the ranking. The case of the Odessa mayor is vigorously discussed in the country is not the first week. It is not surprising that Odessa is defined by this study as the most advanced region of the country in almost all economic indicators in the rating. Similarly, attacked the mayor of the Dnieper. For obvious reasons, the leadership of Vinnitsa, located in the top-5, is rather an exception to the rules,» he said.

The leadership of Rivne and Poltava, the expert added, is at risk, as well as the leadership of outsiders from Lutsk, Cherkassy and Kherson.

«In the conditions of competition are not only countries, but regions decentralized European States. But the competition of regions in the context of developed democracy and a relatively high quality of the business climate does not tolerate mediocrity. In the Ukrainian realities, unfortunately, she stimulates her», he concluded.

The elevation of the region above the center can be perceived them as a threat – Ustenko about leadership Odessa to financial rating 30.03.2018

Март 30th, 2018 by
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