Kyiv, December 17. Decentralization of authorities, financial resources and responsibilities will increase regions’ competitiveness for investments and will improve local governments’ performance. This is the statement of Natalya Izosimova, Director of the Foundation for Effective Governance, during the debate on the motion “Decentralization will boost regions’ competitiveness”. This event was held by the FEG in partnership with the Intelligence Squared.

“Decentralization is one of the ways to restore harmony between the Center and the regions. Yet one shouldn’t forget numerous cases of corruption, irresponsibility and unprofessionalism among local officials. That’s why delegation of additional resources and authority without introduction of effective control mechanisms may be catastrophic for Ukraine. Another important question: can local governments implement the strategy of regional development on their own?” she asked.

The Director of the FEG noted that there are a number of deprived areas in Ukraine where independent local financial bodies simply cannot function. “These regions need support from the national government”, emphasized Ms. Izosimova.

According to the speakers, advocating decentralization at the debate, the main problem today lies with the central authorities, which are afraid of losing their grip on power and influence over the regions.

“However, there is no other way. If we want to ensure normal life standards for the people, their problems should be solved as close to them as possible. Chances to change the existing situation become real as local leaders realize that they have the right not only to ask for being taken into serious account, but rather to demand it”, stated Vinnitsa Mayor Volodymyr Groysman at the debate.

Irina Khakamada, economist and lecturer, also stressed inevitability of decentralization. “The period of stability in global economy is over. We’re looking at a sweeping wave, stirred up by the appearance of new economic players. Only responsibility of all economic subjects: national economic systems, corporations, entrepreneurs – can win under these conditions. Decentralization is this responsibility, however uncomfortable it may be”, explained Ms. Khakamada.

Other debate participants spoke in favor of partial decentralization. For instance, Volodymyr Yatsuba, Former Minister of Regional Development and Building of Ukraine, stated that with due consideration of every region’s potential, it is reasonable to advocate their fiscal decentralization and financial independence in the future. He also emphasized the necessity to consolidate administration resources at the central and regional levels, to create a definite system of subordination, and to work out an effective procedure of decision-making, particularly during the period of the economic crisis and political turmoil in Ukraine.

Pierre Defraigne, economist, Еxecutive Director of the Madariaga College of Europe Foundation and European civil servant from 1970 to 2005, pinpointed the risks of delegating authorities, financial resources and responsibilities from the Center to the regions. In his opinion, decentralization may hamper regional development and in the future even pose a threat to Ukraine’s territorial integrity.

“First of all, it’s necessary to solve the problems that have become the curse of the Ukrainian society: political instability, corruption, nepotism, infrastructure deficit. Only then you can opt for decentralization”, he said.

About the debates

The debate “Decentralization will boost regions’ competitiveness” which was held on December 17 in Kyiv, is the fifth public debate in Ukraine carried out in the Oxford Union style.
The event was organized by the Foundation for Effective Governance in partnership with Britain-based Intelligence Squared.

In 2009, the Foundation held a series of debates (debaty.org) on reforming Ukraine’s economy during the economic crisis. For future debates such important topics as Ukrainian-Russian economic relations, reform of education, administrative reform, regional economic development, the role of science and education in economic development, and innovation and technologies have been chosen.

“The goal of debates is to arrange an informative and efficient conversation on those issues of Ukraine’s economy development on which we don’t have a clear and simple answer. At the same time the debates are important both for the present and the future of Ukraine”, states Natalya Izosimova, Director of the FEG. –“However, for us the process of discussion is as important as the content. We’re trying to ensure that arguments in favor of opposing opinions can be expressed in a constructive manner, and that the opposing opinions can be heard."
A partner of the Intelligence Squared Nick Pisani is confident that such debates can attract attention of the public to culture of political discussions. “The debate helps present and, most importantly, future generations of decision-makers think and act in a different way,” he says.
Profile of FEG

The Foundation for Effective Governance (FEG) www.feg.org.ua was established in 2007 by Ukrainian businessman, Rinat Akhmetov with a mission to develop and implement long-term projects and programs which encourage the long-term economic development of Ukraine. FEG is committed to help reach public and political consensus on the key areas of the economic transformation programs.

To reach its objectives, the Foundation attracts leading Ukrainian and international experts with impeccable reputation. An Advisory Board, which includes famous public and political figures from different countries, ensures the Foundation’s independence. Among the board members are former Canadian Prime Minister Kim Campbell, former U.S. Senator Lincoln Chafee, former president of the National Bank of Hungary György Surányi, and General Director of the Ukrainian office of the International Investment Bank Morgan Stanley Igor Mityukov. The Board of Trustees takes an active part in building the Foundation’s strategy, selecting the priority projects and representing FEG both inside and outside Ukraine.

Dear colleagues,
For additional information, please contact Inna Gordienko, the PR Director of the FEG
Tel: (+38044) 501-41-07
Mobile: (+38095) 270-59-60
e-mail: igordienko@feg.org.ua