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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Presidential campaign lends privatization special features

10 March, 1999 - 00:00

Against the backdrop of official Kyiv’s endless refrains on the need to enhance local self-government, there is a growing separatist trend in the capital’s districts. This is the result of the city fathers’ concept of self-government as their undivided right to manage municipal property as they see fit, regardless of how differently this may be viewed by bureaucrats at the top.

The first attempt to tighten control over the monetary proceeds of the privatization of municipal property transferred to city districts was in the form of a Kyiv City Council resolution altering the procedures for receiving title. Henceforth, to change the pattern of ownership, district authorities have first to receive a deed (certificate) from the council. The document was to testify that such premises indeed belonged to a given district, and that the latter was indeed entitled to dispose of such property.

This decision was supposed to improve the usage and maintenance of housing and nonresidential structures. In reality, complicating these procedures lengthened privatization and added to the bureaucratic cohort. Another resolution was passed later, imposing a high price on the certificates. The district state administrations reacted sharply and before long the enactment was canceled.

Subsequent events demonstrated that municipal authorities had not abandoned plans to guide the money flow in their direction. On January 28, 1999, the City Council resolved to make the local councils’ housing and nonresidential facilities municipal property, actually putting an end to communal ownership by individual city districts, cutting the material and financial ground from under the feet of local self-government.

Article 142 of the Constitution of Ukraine reads that city district councils are subjects of the right to municipal property in what is referred to as relevant territorial communities, and that they have their own budgets. Clause 4, Article 16 of the law of Ukraine On Local Self-Government in Ukraine, states that all decisions authorizing local councils to manage property and funds owned by city district territorial communities are to be made by local community referendums.

As for the powers vested in the district councils, Clause 4, Article 41 of the same law provides that the authority granted district councils by a city council cannot be altered by city councils without the knowledge and consent of the given city district council within a given term of office.

In other words, any decisions and actions by city councils aimed at restricting the authority or financial principles of the local self-government of district councils without their consent violate the Constitution and other laws of Ukraine.

It would be more logical and civilized to leave the district administration the right to look for buyers and conduct privatization, subject to the invariable condition that a certain percentage of the proceeds is transferred to the city budget. This is standard practice and no one can object to it, while the assignment of title leads to confrontation.

And confrontation there was. The central municipal authority stopped accepting district title applications which greatly slowed the privatization process. However, as was the case last year, the district administrations responded with a powerful concerted action. This and the coming mayoral elections made the city fathers back off, although its preceding action was not canceled, and no final resolution was made. The matter is to be finally decided by the Kyiv City Council soon.

The outcome is hard to predict. On the one hand, slowing privatization, challenging district administrations, and undermining local self-government will negatively impact on social problems in the capital’s districts. On the other hand, the central government is engrossed in the presidential campaign, and drawing as much as possible on the municipal purse is of vital importance. In addition, putting the city districts on a short leash before the elections also seems not a bad idea. In fact, what is happening can be summed as further centralization of power, holding it and property in a single tight fist. And stepping up centralization has always been evidence of a transition to totalitarianism.

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