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GEORGIA ASSESSMENT STUDY ON CAPACITY BUILDING AND COOPERATION IN PUBLIC ADMINISTRATION IN THE CAUCASUS Tbilisi, May 2002 PREFACE This paper is one of three reports on public administration education and policy formulation in South Caucasian countries. It was compiled by the staff of Georgian Foundation for Strategic and International Studies (GFSIS) upon the request of Local Government and Public Service Reform Initiative of the Open Society Institute (LGI). The report is designed to assist in the preparation for the implementation of Public Administration Reform in the Caucasus project funded by Canadian International Development Agency (CIDA) to be implemented by Canadian Bureau for International Education (CBIE). The reports are designed as needs assessment studies, and may not cover extensively, or in depth, all issues pertaining to public administration in the South Caucasus. The reports may serve as an introduction to those interested in public policy and civil service in the South Caucasus, as well as international donor activities in these fields. The GFSIS team that have prepared the reports included Alexander Rondeli, Archil Gegeshidze, Eka Metreveli, Lily Begiashvili and Shota Utiashvili. LGI, CBIE and CIDA do not accept the responsibility for the accuracy and completeness of this publication. Any judgements expressed are those of GFSIS and do not necessarily reflect the views of LGI. The material in this publication is copyrighted. Requests for permission to reproduce portions of it should be send to GFSIS or LGI. For the reports on Armenia and Azerbaijan, please contact OSI Budapest or GFSIS. INTRODUCTION Georgia is located in the Caucasus, South-Eastern Europe. Population of the country is 4,5 million1. Most of the population are ethnic Georgians (70%), also, Armenians, Azeris, Russian, etc. Population is predominantly Eastern Orthodox (75%), also Muslims and Armnenian Apostolic. Although Georgia has a history of about three millenia, its has relatively short experience of independent statehood. It regained its independence from Soviet Union in 1991, and since then is undergoing very painful period of transition, made even harder by a civil war (1991-2) and two secessionist conflicts in Abkhazia and South Ossetia. Post-Soviet transition has been multidimentional, encompassing economic, political, administrative, judicial, financial, electoral and other reforms as well as creation of new instititions, that are associated with independent statehood (army, customs, national bank etc.) Georgia is a Presidential republic. Power is separated into three branches: Legislative, Executive, and Judicial. Legislative Branch: All legislative power is vested in the Parliament, which is the highest representative body of the State. It exercises legislative power, determines the main directions of domestic and foreign policy, carries out general control over the Government and other functions 1 This number comes from yet-to-be published report of Census 2002 within the framework of the Constitution. The Parliament consists of 150 proportional and 85 majoritarian members, elected for a term of four years on the basis of free, universal, equal and direct suffrage by secret ballot. The Parliament for the term of its authority elects the Speaker of the Parliament. Parliamentary committees are established for preliminary preparation of legislation; monitoring of fulfillment of previously adopted Parliamentary decisions; supervision of activities of state bodies accountable before the Parliament and controlling over all other governmental activities. The Parliament can set up ad hoc Parliamentary Committees. Members of Parliament cannot hold any office in Government. A member of Parliament has a right to question members of the Government and other executive bodies of the State. Executive Branch: The President is the head of the State and executive power in Georgia. The President represents Georgia in foreign relations, forms the Government, guarantees the Unity and integrity of the country. The President is elected for a term of five years on the basis of free, universal, equal and direct suffrage by secret ballot. One person can serve only two consecutive terms as President. The President exercises supreme co-ordination of executive branch through the State Chancellery, which is directed by a State Minister. The President cannot dismiss the Parliament; whereas the Parliament has a right to impeach the President in a case the President breaches the Constitution, or is convicted of high treason or a criminal offense. Parliament can also remove members of Government and other high officials within the executive bodies of the State. Legislative power is exercised exclusively by the Parliament, however in case of emergency the President can pass decrees which have force of law. Laws passed by Parliament must be signed by the President. The President can refer any law back to Parliament suggesting amendments. In the case of the President's amendments being rejected by Parliament, the President is obliged to sign and publish the law. The President appoints Ministers and other high officials, announces the state of war or emergency, signs treaties, and suspends or dismisses organs of local authority; all are exercised with the consent of the Parliament. The President can call for a referendum on an issue. Judiciary. The independence of the Judiciary is guaranteed by the Constitution. The highest court is the Supreme Court. It exercises control over lower courts. The Parliament appoints the Chairman of the Supreme Court upon the nomination by the President, and the Parliament can dismiss the Chairman. The Constitution establishes the Constitutional Court. The Constitutional Court rules on the legality and guarantees highest authority of the Constitution of Georgia. Local Governance. Capital of Georgia is Tbilisi. Administratively, country is divided into 53 districts. Districts are run by heads of district, called Gamgebeli and local councils called Sakrebulo. Gamgebeli is appointed by the President from the member s of Sakrebulo. Members of Sakrebulo are elected on the basis of free and direct suffrage. All mayors of the cities are directly elected except for Mayors of Tbilisi and Poti, which are appointed by the President. The President also appoints governors to oversee regional administration. Georgia's economy has traditionally revolved around Black Sea tourism; cultivation of citrus fruits, tea, and grapes; mining of manganese and copper; and output of a small industrial sector producing wine, metals, machinery, chemicals, and textiles. The country imports the bulk of its energy needs, including natural gas and oil products. Its only sizable internal energy resource is hydropower. Despite the severe damage the economy has suffered due to civil strife, Georgia has made substantial economic gains since 1995, increasing GDP growth and slashing inflation. The Georgian economy continues to experience large budget deficits due to a failure to collect tax revenues. Georgia also still suffers from energy shortages; The country is pinning its hopes for long-term recovery on the development of an international transportation corridor. The growing trade deficit, continuing problems with tax evasion and corruption, and political uncertainties cloud the short-term economic picture. The GDP for 2001 was Georgian Lari 6,505 million (average exchange rate 1USD=2,22GEL). This is 4,5% more than the previous year. Shadow economy is estimated 33% of GDP. Agriculture accounts for 19% of the GDP, and Industry – for 12%. GDP per capita varies according to different estimates, but it is estimated around 700 US dollars2. The process of reforming the public administration system began in 1991, as old soviet governing structures were abolished and new institutions were established. However, managerial and administrative inexperience among the new, non-Soviet elite, and the lack of a clear vision of the new system of central and local governance coupled with the political fragility of the government resulted in the reversal of early reforms after the coup of 1992. The years 1992-5 were characterized by nearly complete lawlessness in the country and the abolition of civilian government. A new stage of reforms started in 1995 with the adoption of the new Constitution and restoration of civilian authority. The government declared its desire to be integrated in European and transAtlantic bodies and its intent to seek transformation in all sectors, including the system of public administration, with the aim of achieving European standards. The government’s commitment to reform was further reinforced by the conditionality of international assistance, particularly that coming from the IMF and World Bank. The initial progress of reforms (from 1995 to 1998) was quite impressive, especially in the legislature, local administration, revenue and tax collection, and the legal and banking sectors. Unfortunately, there has been no rigorous effort to transform public administration; the changes implemented were few, unsystematic, and easily reversed. Overview of Past Reforms. Unfortunately, no consistent and comprehensive strategy for reforming public administration has ever been designed, which is quite natural, since the country has not yet decided what kind of government structure it wants to have. Institutional changes that have been implemented since 1995 reflected shifts of power distribution within the government, rather than the political will of the government to improve the policymaking process or the government structure. Most of the persons interviewed noted, that the public administration reforms were cyclical. That is, the government would implement a reform, and then instead of building on the reform, it 2 all of economic data comes from: Georgia, Statistical Review 2001, published by State Department of Statistics of Georgia, Tbilisi, 2002 would revert to the previous position. This happened in a number of ministries, which merged and separated several times; the most notorious examples include tax and customs administration, and the Ministry of Finance and the various ministries concerned with economic issues. Most of the reforms in different government agencies were personality driven. Both donors and local officials privately agree that reform in the government institutions greatly depends on the minister or other head of the agency. Mostly, these “reforms” are designed to respond to personal ambitions of the head, not to the institutional requirements. When the “reformist minister” leaves or becomes susceptible to pressure, the reforms are forgotten, their results are reversed, and the responsible staff are fired. The most visible reform in public administration has been the continual reduction in the numbers of civil servants, as required by international donors (IMF, WB) and budget deficits that did not allow the government to sustain large numbers of public employees. However, in most instances, institutions were ordered to reduce their staff by prescribed amounts, which was done at the expense of lower ranking and technical employees, keeping middle and senior levels untouched. These practices persist until now. The personnel reduction did not achieve its main goal: retaining the most promising employees and attracting new, better trained, and more open-minded ones. Internal corruption and cronyism was the main impediment to achieving the first goal, and very low salaries prevailing in the public sector the second one. Another aspect of reform, institutional optimization, was mostly ignored. Georgia currently has 21 ministries, 18 state departments and 15 independent agencies, more than 200 so-called “entities of public law” employing about 17,000 civil servants. Another 17,000 are employed in local governance and self-governance institutions3. All of the persons interviewed have noted that this number is too large and a substantial reduction is required. Public administration in Georgia is characterized by a large number of state agencies with similar functions. For example, there are four agencies responsible for promoting foreign investment, and their charters are copied from each other. One of quite rare examples of institutional reform was the merging of the Presidential apparatus and the staff of cabinet of ministers implemented in 1995, after the President acquired functions of the head of government. It resulted in eliminating a large number of parallel structures and reducing employees from over 1000 to 380. However, in most cases reduction has been implemented within each structure without eliminating parallelism. The reductions usually were at the expense of low ranking employees, which caused an excess of executives. According to a government official, in the State Chancellery 2/3 of employees are decision-makers. Similar problems persist in other state bodies. Perhaps the only example of what can be described a successful personnel and structure reform took place in the Parliament. Parliament has chosen systematic, top-down approach and managed to institutionalize reform. First, a new charter was adopted, followed by the new regulation. These two documents defined the functions of the staff of the Parliament, and appropriate structure. The next step was defining required quantity of personnel in each structural unit and the necessary skills and qualifications of each employee. After that, an independent commission 3 Personal Interview with high-ranking employee of State Chancellery was established with the function of attestation of employees and also hiring new ones. With very clearly defined job descriptions and required skills and qualifications, successful job competitions were held. The results of the reform were higher prestige of Parliament staff, increased salaries and much better chances of career advancement for the employees. The persons interviewed have unanimously noted, that success of this reform owes to strong political will and support of the Parliament’s leadership. Various ministries have gone through a number of structural reforms, with many mergers and splitting of ministries. Another reduction in the number of ministries is planned for this year. But, again, no development strategy exists to guide reforms. Tax administration was subject to the most rigorous reform, including tests of tax inspectors and some structural changes, such as consolidation of inspectorates. Reform was supported and supervised by USAID and Barents Group (a unit of KPMG Consulting) and was widely publicized. Reform in tax administration: fewer employees and more qualification exams The reform program of the tax administration was developed in accordance with a memorandum of understanding signed in March 1999 by the Georgian and US governments. The major features of this reform were a reduction in the number of employees, the selection of personnel on a competitive basis, and the provision of good salaries to combat corruption. A similar reform is planned in the Customs Department. The first stage of reform in Tbilisi was implemented by the end of 2000. The number of tax inspection offices has been reduced by half, and the structural reorganization of the central staff of the tax department and of the inspection of large taxpayers has been completed. Qualification exams for tax inspectors were held in the Kvemo Kartli region in October 2000, and similar exams were planned for other regions. However, most of the respondents from government and civil sector agree that this reform was a total failure. The reasons named were a lack of political will to support and sustain reform, imbedded special intersects (this field remains one of the biggest source of illegal income), and ill-designed tests (which did not reflect specifics of tax administration and consisted of general questions). Also, although the first stage was a written test and free from cheating, the second stage were less easily monitored oral interviews. Furthermore, the Soviet legacy of an Appeals Commission makes fair assessment more difficult. Two important steps were made in the field of public administration education reform Opening of the Public Administration College in Tbilisi by EU TACIS in 1994-98. [See, Chapter 5]. Establishment of the Georgian Institute of Public Administration [GIPA] was founded in 1994. [See, Chapter 5] Legal Reform. More positive results were observed after the legal reform that was undertaken, again with assistance of international donors. The reform included tests for judges, the selection of qualified judges, and an increases in their salaries (to at least GEL 500 per month). The prestige of the court system significantly improved as a result of these reforms. However, the government soon found itself unable to pay the increased salaries in a timely manner, thus leaving judges’ salaries below subsistence level. Although this was a blow to legal reform, it still remains one of the very few success stories of reform. Assessment of Legal Environment The Law on Civil Service of Georgia was adopted on October 31, 1997. Its purpose was to create a uniform system of civil service, to establish a concept of civil service, to lay out the principles of implementation of civil service, to elaborate its legal base, to establish the qualification requirements of civil servants, to establish the rules and procedures of recruitment and attestation, and to provide legal and social guarantees to civil servants. For 1997, this law was a progressive and effective tool for accomplishing the above-mentioned goals. The law was, to a certain extent, successfully implemented so that all branches of the government started and achieved fledgling progress toward realizing its provisions. However, there are many flaws in current Georgian civil service that keep it from operating along its legislative framework. The reasons are numerous, from pervasive corruption to prevailing social and economic realities. However, we think that quite a few crucial reasons can be singled out as major impediments towards the establishment of qualified and efficient civil service based on a merit system. The most important problem is inadequate implementation, and sometimes disregard for its provisions. Despite the fact that all of state agencies know the legal framework well enough, some of them neglect it and are absolutely confident that they will not be held responsible for this. Excessive loopholes, leading to a weakness of the law, as well as the exemptions of many groups within the civil service from the law, largely cause this. This is due to the fact that the law has become obsolete; it does not respond to new requirements, and does not facilitate the creation of a new mass of better-trained civil servants, which could help reform civil service and enhance the transition to international standards of governance. Article 2.2 of the law stipulates the list of state agencies that are considered parts of civil service: 1. Parliament of Georgia except for apparatus of factions 2. Government and sub-level institutions 3. Council of Justice 4. Constitutional Court, Common Courts, Procuracy 5. National bank of Georgia 6. Chamber of Control 7. Staff and branches of Ombudsman’s office 8. Governors and their staff According to Article 11.1 of the law, political appointees (according to the Constitution, these are the positions that are political, and the rules of election or appointment of which are defined by the Constitution, such as the President of Georgia, Members of Parliament of Georgia, and members of Government of Georgia) as well as members local self-governing bodies are not bound by the law. Moreover, Article 11.2 states that civil servants listed below are bound by the law on civil service, if they are not bound by the Constitution or other laws. The list includes: Ombudsman, Ambassadors and other diplomats, National Security Council Members, Commanders, Judges, Prosecutor General, members of Board of National Bank, President of National Bank, Chairman of Chamber of Control. Other than that, the same articles provide exemption from the law to the employees of the following bodies (if they are bound by a special law). From the list in the Article 2, which defines civil servants, exemptions are numerous: N 1 2 3 4 5 6 7 8 Agency Parliament Exemption a. members of the staffs of the factions b. MPs Government and sub- a. State Minister agency b. Ministers c. Diplomatic Corps d. NSC members e. Commanders f. Policemen g. Tax and Customs officials h. Military i. Members of Securities Commission j. In-land, railway, maritime and administrations Council of Justice Constitutional Court, a. Judges Common Courts, b. Prosecutor General Procuracy c. Prosecutors National Bank a. Board Members b. President Chamber of Control Chairman Staff of Ombudsman Ombudsman Governors and Their Staff civil aviation Of course, special laws create a more detailed and specific legal framework, but it should be stressed that so many exemptions and different norms do not contribute to efficient, uniform progressive and world-class civil service. This can be more clearly demonstrated looking more thoroughly into the law. The Article 9 stipulates absolutely different rules for defining salaries, positions and jobs. These different rules leave considerable flexibility to the defining authorities to pay according to patronage relationships rather than merit. N 1 2 3 4 5 6 Institution Defining Authority a. President of Georgia Law b. MPs c. Member of Constitutional Court d. Officials, whose job is stipulated in the Constitution Member of Council of Justice President of Georgia Staff of Council of Justice Staff of the Parliament Chair of the Parliament Staff of the State Chancellery President of Georgia Staff of Constitutional Court Constitutional Court Staff of Supreme Court Supreme Court 7 8 Staff of Common Courts Other civil servants 9 Local self-governance employees 10 Staff of Chamber of Control Council of Justice a) list of salaries and names of positions – by law; b) parameters of salaries – by the President of Georgia Local self-governing unit (Sakrebulo) Chair of Chamber of Control Different arenas for approving number of personnel: N 1 2 3 4 5 6 7 8 9 10 11 Agency Staff of the Parliament Staff of the State Chancellery Staff of Constitutional Court Staff of Chamber of Control Staff of the National Bank Staff of the Ombudsman Staff of Ministries Staff of State Departments Staff of State Inspections Sub-Agency Staff Local Self-Governance employees Approval Statute of the Parliament President of Georgia Constitutional Court of Georgia Chair of Chamber of Control Chair of National Bank Ombudsman Minister Head of State Department Head of State Inspection Heads of Relevant Agencies Head of Self-governance unit Thus, there is no uniform system of civil service even at the legislative level, since heads of these agencies have the capacity to define the staff of the agency, list of positions and salaries of employees. From a certain perspective this is not a totally inappropriate practice, since head of the agency knows best how many employees are required; however, the civil service is financed from national budget and each civil servant is an additional burden to the budget. Taking into account pervasive corruption in Georgia, the law gives high-ranking officials an opportunity to abuse their power and abuse the national treasury. Moreover, there are no penalties envisioned for the agency heads, who overstaff their subordinate bodies and cause a waste of state funds. One more weakness of the Law on Civil Service is Article 19, which states that additional requirements for recruitment can be elaborated by other law or based on the other law. This makes the selection criteria even more arbitrary and less uniform. Moreover, the agency heads are authorized to introduce these additional requirements. This effectively means that there are no uniform and universally applicable requirements for recruitment. Section 2 of this Article makes the problem even more serious by stating that in case of reorganization of the agency, followed by the reduction of employees, the head of the agency is authorized to introduce additional requirements. This gives heads of agencies wide authority unchecked by the law. These provisions go against the main principles of civil service of Georgia, elaborated in the Article 13: a. Equal access to employment in civil service by the citizens of Georgia based on their skills and professional training; b. Professionalism and competence of civil servants; c. Stability of cadres; d. Economic, social and legal protection. Article 25 is another example of ambiguity within the law. It elaborates the list of documentation that has to be submitted by the applicant. However, Section 2 states that failure to submit the document can be a cause for rejecting the applicant (not must be a cause). This means that it is not a universal obligation to submit all the necessary documents, since according to the law, failure to submit can or cannot be a cause for rejection. An agency head can thus apply this standard arbitrarily. The most important weaknesses of the law are Articles 29 and 30, which directly conflict with two of main above-mentioned principles: equal access and professionalism and competence. According to these Articles, the competition is not the only and mandatory requirement for recruitment, but one of many possible alternatives. Section 1 of Article 29 states that a person can be appointed (but is not necessarily required to be) based on the results of competition. This creates many problems: first, heads of agencies are not obliged to arrange the competition, and are therefore able to recruit desired people without a competition. Second, if the competition was held, the head may or may not take its results into account. This means that neither competition nor its results are mandatory for anyone. This strengthens the patronage system in the civil service, rather than creating a merit system. In these circumstances, the law can in no way guarantee equal access for civil servants and establish professionalism and competence. Article 30 lists the positions where appointments should be made without competition, thus underlining the non-binding nature of the competition and weak implementation of results. The positions are the following: a. b. c. d. e. f. Positions where appointments or elections are completed by the President or Parliament; Deputy Ministers, Assistant Ministers, Advisers; Temporary replacements; Acting officials in competition-bound positions; In case of promotion; Persons from reserve. Another weakness of the law is that it does not provide an adequate mechanism to protect the rights of civil servants, as well as provide social guarantees. Although Article 37 envisioned financial bonuses to employees according to years in service, it has never been implemented, since transitional clause 137 stipulated that Sections 2 and 3 of Article 37 (as well as Articles 47 and 42 and Sections 1 and 3 of Article 109) should enter into force from January 1, 2002. They did not enter into force at indicated date, due to lack of funds from the budget. The latter Articles refer to holiday bonuses, providing retraining to those fired as a result of state of health, liquidation of the institution, or reduction of employees, financial compensation to those fired as a result of reduction of cadres or liquidation of institution, and compensation of firing due to age or not responding to qualification requirements. The lack of implementation violates one of the main principles of Georgian civil service, namely, guaranteeing economic and social protection. According to the existing legislation, the head of an agency is able to pay a bonus to an employee for overtime work or for fulfilling especially important functions. The bonus should be paid from savings in salary fund. This recommendation is not imperative, however, and its implementation depends on its interpretation by each head of the agency. The non-binding nature of the law can be explained by the fact that no savings can be accumulated in the salary fund, which renders the law merely a recommendation thus and unable to provide any guarantees to the employee. Moreover, agency heads have absolute discretion when deciding who benefits from these bonuses, which even furthers patronage practices within the system. Although such provisions provide a personified and differentiated approach, they also can contribute to illegal favoritism and nepotism, thus further distancing from uniform standards. Of course, we do not exclude the possibility that some agencies make fair use of such provisions, stimulating hard and responsible work, but here we express concern about the ambiguities within the law. Processes for motivation and promotion of civil servants are elaborated in Articles 74 and 77. For the exemplary performance of functions, extensive and accomplished work, the performance of especially hard tasks, the following incentive structures are stipulated: formal gratitude (formal gratitude can be expressed by the official who has right to issue orders), financial bonuses, gifts, and the promotion of salary rank (the right of using this form is vested to the authority with the right of recruitment, while all bosses and structural units have the right to submit relevant proposals). According to Article 76, the person or the authority that has the right to recruit cadres also has the exclusive right to nominate candidates for promotion. According to Article 77, a person can only be promoted if he has already been employed at the previous position for at least 6 months and has been nominated by the relevant competition-attestation commission. Unfortunately, these are the only regulations pertaining to motivation and promotion of civil servants. The Articles we have quoted clearly demonstrate that the law is not only far from international standards, but it does not provide minimal guarantees to civil servants. This negatively affects the most important aspects for a civil servant: job security and predictability; it leaves the civil servant vulnerable to arbitrariness. They are not guaranteed adequate salary and social status. Even within the existing framework, these provisions do not create effective guarantees, and are mostly suggestions, rather than requirements. These establish more discretion for the agency head, rather then limiting it. None of the provisions make it mandatory to promote the best workers; nor does any specify the rules, procedures, requirements and schedules of promotion. One of the weaknesses of the Law on Civil Service is that it establishes a very loose system of attestation-competition commissions (which are responsible for hiring and promoting civil servants): N 1 Agency Staff of the Parliament 2 Staff of State Chancellery 3 Staff of Ministries 4 Staff of State Departments 5 Staff of State Inspections 6 Staff of the Constitutional Court 7 Staff of Common Courts Competition Attestation Commission Competition-Attestation Commission the Parliament Competition-Attestation Commission the State Chancellery Competition-Attestation Commissions Ministries Competition-Attestation Commissions State Departments Competition-Attestation Commissions State Inspections Competition-Attestation Commission Constitutional Court Competition-Attestation Commissions of of of of of of of 8 Staff of other Civil Service Agencies 9 Staff of Local Self-Governance Common Courts Competition-Attestation Commissions of Civil Service Agencies Competition-Attestation Commissions of Local Self-Governance Obviously, the law creates a climate that does not contribute to the establishment of a qualified and world-class civil service; moreover, it perpetuates cleavages within the civil service and promotes ever-widening discretion of individual heads of agencies. Naturally, when the head of an agency decides how many and whom to recruit, defines the ranks, holds competitions and attestations, promotes whoever he/she wants – there is no way one can be sure that this power will be used only based on law and national interests, especially when legal requirements are not real requirements, but rather recommendations within a loose framework. Articles 96 and 97 of the law assert that reorganization followed by staff reduction can be the cause of firing an employee. This, although at the first glance is a neutral clause, has been and will probably continue to be the source of many problems, since it gives the full authority to the head of an agency to start reorganization and thus puts all employees in a vulnerable position. This is especially dangerous with arbitrary leadership. One way to overcome this problem is to create a clause that would ban restoration of reduced positions in three years period. If the reduction is reconsidered and the position is restored, then that person’s position should be restored too, if he/she fulfills the qualifications. We think that codifying this norm would substantially increase the protection of civil servants and stability of public employees. As for other normative acts based on Law on Civil Service, Presidential Decree of January 12, 1998 N14, should be singled out. The decree established a charter of a civil service bureau, defined its functions, structure and main priorities. Presidential decree N7, dated the same day, obliges ministries to undertake measures to implement the law. The decrees N173, N174 and N361 were also designed to facilitate implementation of the law, establishing statutes of attestation-competition commissions, creating a reserve of civil servants, and also improving their qualifications. However, all of these decrees did not establish concrete mechanisms or allocate resources necessary for implementation. As we have seen, the existing law on civil service does not meet its own standards and does not contribute to the creation of a world-class civil service. The loose system of competitionattestation commissions does not contribute to greater specialization and higher standards, and instead causes minimal and selective use of legal requirements. A civil servant’s qualifications are not the most important criteria for filling a vacancy. The agency heads make decisions quite subjectively. The decision of competition-attestation commission is not obligatory, and clearly reduces impartiality. A system of promotion and stimulation of civil servants does not exist, which puts civil servants in a very unpredictable situation. The level of social protection of civil servant is clearly one of the lowest. Unhealthy customs that prevail in our society, and symbolic salaries force civil servants to use vested authority for corruption and other criminal purposes. Consequently, the prestige of civil service is minimal. This creates a gap between civil service and the greater population, expressed in the lack of popular confidence in authority. This gap is widening, due to the fact that few corrupt civil servants are prosecuted. Extremely difficult social conditions force the population to engage in extra-legal practices. The only way out of this situation is through a full transformation of the civil service. This requires the creation of one powerful authority that would cooperate closely with and will be closely supervised by Georgian civil society and the international community. This supervision will help ensure transparency within the civil service, help promote professionalism, make it more merit based, non-discriminatory and equally accessible to every Georgian citizen. This can be the most effective mechanism against protectionism, cronyism and bribery. Government priorities All of the persons interviewed have outlined the obvious and urgent need to improve the performance of the public sector, which only can be achieved through its total revitalization. This can be done in three major ways: first, the optimization of the civil service structure through removing parallel institutions and privatizing all services provided by national and local governments except the vital ones; second, creating incentives for civil servants to work in the public sector through increased salaries, better working conditions and career stability; and third, enhancing skills and qualifications for present and potential public employees through special training programs, and public administration schools. Unfortunately, so far no consistent government development or public sector reform strategy has been designed to reflect these needs. However, after the latest reshuffling within the government, a special working group headed by Deputy Minister of State Mr. Akaki Zoidze has been created with the aim to elaborate public administration reform strategy, which will be applied first to the State Chancellery and then to government ministries. It is expected that number of ministries will decrease, as well as the number of civil servants. Mr. Zoidze said that the strategy will be ready by mid-summer, and after it is approved it will be implemented. According to this optimistic scenario, Budget 2003 (in Georgia fiscal year coincides with calendar year) will be based on a reformed civil service. The opposition within Georgia views such plans with skepticism, arguing that these reforms have nothing to do with policy and are aimed only at removing members and supporters of the opposition from the high positions within the government. Designing a comprehensive public administration reform strategy will be quite difficult, since it is yet undecided what kind of government the country will have in the future: whether a Cabinet of Ministers will be created, or whether the President will remain the head of the government. Changes are also expected in the legislature. The Constitution envisions a two-chamber Parliament, although only one chamber has been established so far. Most experts agree that first the government structure must be decided and only then public sector reform strategy should be elaborated. Current government priorities are best reflected in the "Intermediary Document" of the National Anti-Corruption program. This document was drafted by the National Anti-Corruption commission and mandated and approved by the President. The World Bank has approved this document, and announced that its implementation will be one of the preconditions for implementation of the Poverty Reduction and Economic Growth Program, financed by a World Bank loan. The document focuses on four main aspects of improving governance: the liberalization of business environment, financial management of state resources, increasing the effectiveness of public administration, and improving law enforcement and justice systems. The concrete problems elaborated in Article 4 of the document, which focuses on civil service, are the following: 1. Civil Service Management. One of the reasons for the spread of corruption in civil service is the lack of a unified system of personnel management. The document recommends that a law be drafted that would require civil service employee ranking, increase the role of the Civil Service Bureau, and mandate that it coordinate and monitor personnel departments at various state agencies. (However, the head of civil service bureau has just been appointed. No staff has been recruited. The law that would increase competencies of the bureau has not been drafted. Consequently, quick changes are not expected here). 2. Decrease in number of civil servants (According to the various sources there are 34,00035,000 civil servants in Georgia, which are evenly split between state administration and local governance. It is believed that the national budget cannot sustain this number. It is expected that 25-30% of the civil servants will be fired within next 3-5 years). A decrease in the number of civil servants and optimization of structure of civil service will increase efficiency and create a possibility for increasing salaries (however, as head of budget service of the Parliament, Mr. Gotsiridze, said it will not receive any significant amount of money). So, it is recommended to reduce the number of public employees by 25%, based on the optimal structure and priority level of a given agency, not by applying universal percentage criteria. 3. Qualification of Civil Servants. Low professionalism and lack of skills are seen as one of the factors driving corruption. Current lack of funds does not allow organizing training programs for the civil servants. It is recommended to elaborate a long-term program with the aim of creating highly qualified public servants, for example through the creation of a Public Administration high school administered by the State Administration Institute, with the assistance of foreign experts to design teaching programs, manuals, methodic materials and training of the trainers. (However, most of interviewees strongly believe that State Administration Institute is stillborn body with no capacity, staff, adequate management, and funding or information technology.) 4. Rules for Recruitment and Promotion of Civil Servants. Job competition is not mandatory. It is the discretion of head of agency to decide to hold a competition. It is recommended to establish a strict procedure for mandatory competitions. Ways to facilitate publicity for competitions are to create a web-page that would display vacancies and promotions of civil servants, and to give the Civil Service Bureau (CSB) more competences in monitoring promotions (currently, promotion of civil servants is at the discretion of the head of a given agency). 5. Diplomatic service (not relevant for this study) 6. Status and Guarantees to Civil Servants. Civil service in Georgia is not associated with high prestige or a stable career. General and obvious requirements should be established, and all civil servants should pass relevant tests. Increases in civil servant qualifications should occur regularly. The promotion of civil servants should depend on achieving the higher standards. On the other hand, job security of civil servants should be strengthened. The firing of civil servants should only be allowed for concrete and proven violations. 7. Improvement of the system of salaries. Both the corruption and low prestige of the civil service are closely associated with low salaries. The average monthly salary of civil servants is lower than the consumer basket (low ranking servants get 40-70 GEL, highest ranking 160-220 GEL; the consumer basket varies, but is usually about 110-115 GEL). It is recommended by the mentioned intermediary document that civil servant salaries be at least as high as the consumer basket. In case of salary arrears, employees should be paid compensation. A group of high-ranking executives should be selected who will be paid substantially higher salaries (1000 GEL) with the aim of enlarging the group every year (however, when this idea was discussed in the Parliament, MPs demanded that they should all be included in the list). The mechanism of material and criminal responsibility should be imposed on those whose actions create wage arrears. 8. Allowing secondary employment. The civil servants whose salaries are lower than the consumer basket should be allowed to work elsewhere. At the same time, the Law on Conflict of Interests and Corruption should remain in force 9. Standards of Behavior (Ethical Code) of Civil Servants. An ethical code has a substantial role to play in preventing corruption. There is no single legal act currently that enforces an ethical code for civil servants in Georgia. The Law on Conflicts of Interest and Corruption is not working yet. It is recommended to codify norms of behaviors for civil servants, establish penalties for violations, and to create internal inspections. 10. Financial Disclosures. Although public officials regularly submit financial disclosures, the current system of verification is not very efficient. It is recommended to improve the verification system and establish penalties for submitting incomplete information. The implementation of the given recommendations requires strong political will from the top leadership of the country. Most of the people interviewed, including high-level government officials, strongly doubt the existence of such political will. Past experience with civil service reform documents demonstrates their weakness. The National Program, created in 1996 under the supervision of the President, was not acted upon. A reform strategy designed with the assistance of TACIS was abandoned soon after the completion of the project. There was an attempt to design similar document by the civil society “Improvement of public administration- the most important pre-condition of social economical and political development of the state”, mandated by UNDP was also not acted upon. However, these last developments have prompted some positive signs: the reshuffling of government and the removal of most unpopular ministers following public pressure, the establishment of an anti-corruption commission, the appointment of young, reform-minded cadres to some high positions, and increased involvement from the international community, especially the US (which has always been the most important impetus for reform). Local Priorities and Needs Business people, civil society and international organizations alike have said that the civil service of Georgia urgently needs serious improvement. Listed below are the major problems expressed by those interviewed: 1. Business o Usually, businessmen encounter a somewhat unfriendly attitude from bureaucrats, which is probably a remnant of Soviet-style public dislike of richer individuals. This has been exacerbated as a result of current social and economic hardships. o Many times civil servants try to abuse their authority and extort money from businessmen for the services they are obliged to provide for free or for a minimal fee. o Civil servants do not adequately understand the importance of business for the country and their own duty to help the development of the business. o Significant portions of civil servants are incompetent, which makes the process of decision-making faulty and also negatively affects the quality of services delivered by the state. 2. Civil Society o The state does not provide timely and accurate information on ongoing important issues. o Sometimes civil servants deny to the civil society members requested information, or if they do, provide it after a long delay. o The large part of civil servants does not understand the role of civil society in the process of state building, and therefore there is no expressed will of co-operation from the civil service. o Participation of civil society in any decision-making process is very limited. The government is not very receptive to input from civil society. Expertise, accumulated within civil society, is very frequently ignored by government officials. The government does not adequately react to the proposals and initiatives of civil society. 3. International Organizations o The majority of civil servants lack the skills and qualifications necessary for modern management. They are poorly familiar with modern information technologies. This makes the decision-making process inefficient. o Interagency coordination is at very early stages, which hampers decision-making in complex issues. o The civil service is tightly centralized. Middle-level employees are afraid of making decisions. The process of decision-making is very lengthy and involves many individuals, which makes the time between making and implementing decisions unnecessarily lengthy and therefore inefficient. o The efforts (programs and projects) undertaken by donor agencies are poorly coordinated, which frequently causes duplication, thus making it more difficult to achieve common goals Based on above-mentioned, some goals and priorities have been outlined: 1. To strengthen system of training and re-training of civil servants. Non-state educational institutions need to be promoted, since they are more responsive to demand since they have more flexible curricula and admittance mechanisms; 2. To set up mechanisms for increasing motivation of civil servants, to encourage them to be more professional and honest. This is essential pre-condition for eliminating corruption; 3. To promote e-governance readiness, to more effectively use information technologies, thus making it possible to shorten time of making and implementing a decision. Local Stakeholders Name of the organization Address Contact person and telephone number Georgian Institute of Public Affairs 2 Brosse Str. 380008, Tbilisi, Georgia Giorgi Margvelashvili -rector Mzia Mikeladze - dean URL Description of the organization Year established Mission List of parent and subsidiary organizations Area of Specialization Services offered Number of employees Relevant History Financial resources/support received Name of the organization Address Contact person and telephone number URL Description of the organization Year established Mission List of parent and subsidiary organizations Area of Specialization Services offered Number of employees Relevant History Financial resources/support received http://www.gipa.ge A higher education organization providing graduate programs in public administration, journalism and media management 1994 Provision of graduate programs in public administration, journalism and media management; provision of consulting and training services to the government Parent: NAPA (National Academy of Public Administration, Washington, DC, USA) Higher education and training in public administration MPA, MJ programs, courses, training and advising see attachment 4 see attachment 4 NAPA (USA), Open Society Institute (OSI), Eurasia Georgian Foundation for Strategic and International Studies (GFSIS) 7 Nikoladze Str. Tbilisi, Georgia Alexander Rondeli – President Temuri Yakobashvili – Executive VicePresident tel:(995 32) 93 13 35 http://www.gfsis.org Independent, not-for-profit foundation, providing training, policy-relevant research, organizing seminars and conferences. 1998 Provision of training in the field of foreign policy, national security and economics none Training, research, publication Training program for government officials, research and analysis 7 With the assistance of US Government and RAND Corporation GFSIS has set up training courses for mid-career government officials. GFSIS has organized number of conferences both in Georgia and abroad. US Government, US Embassy to Georgia, Canadian International Development Agency, Open Society - Georgia Foundation, OSI Budapest Donor Landscape Foreign aid designated for the Public Administration reform in Georgia is focused both on local and central governments. Local Governance. In Georgia, donor aid is concentrated in local governance, in particular USAID, the Soros Foundation, and the Department for International Development (DFID). These activities emphasize local and political decision-making in the regions outside of Tbilisi, responding to citizen’s needs, setting priorities for services and laying the foundation for the coming municipal elections in June 2002. Activities in this area support regional selfgovernment initiatives, combined with the promotion of a vibrant civil society, as citizens will directly benefit from efforts that empower them to demand accountability, as well as enabling local government to meet the needs of its constituents. Officially, this concentration on local government promotes a new kind of institution building for the region. However, donors unofficially note that their interest in local governance belies a general frustration with lack of reform implementation by the central government. By concentrating on local reforms, they may achieve greater success. - USAID is the leading bilateral donor agency working in Georgia. The More Efficient and Responsive Local Governance program has been defined by the USAID strategic plan as a priority, based on the needs assessments carried out in Georgia and on requests by the Georgian government. The government has taken responsibility to enhance local governance and satisfy Council of Europe’s conditions, which call for greater autonomy for local governments. All organizations that have received funding from USAID on the basis of cooperative agreement, grant, or contract, have a local governance component in their action plans, for example NDI, Eurasia Foundation, the local NGO Horizonti, and The Urban Institute. [$6,550,000 has been allocated for the More Efficient and Responsive Local Governance program in the FY 2001.] - The Soros Foundation is also focused on strengthening local governance. The overall goal is to assist NGOs working in the sphere of local government, to provide support to local government elections, to assist the popularization of the idea of local government, and to train local cadres [Funding for FY 2002 is $250,00]. - DFID's program Good Governance/Democracy Building has a component of assistance to the development of good governance and civil society in Georgia's two regions, Shida Kartli and Javakheti, as well as to encourage public participation in the local governance process. [DFID’s total technical assistance programme in Georgia was £2,000,000 for FY 2000/2002 and £2,200,000 for FY 2001/2002 for the projects on Good Governance/Democracy Building, Conflict Reduction, and Rural Livelihoods.] Central Government. International donor efforts in assisting Public Service reform is mainly directed at capacity building within specific ministries and government entities. There has not been one unified plan of action aiming at improving Public Service in general. - TACIS Civil Service Reform Program carried out back in 1995-1997 in the amount of ECU 1,800,000. Two main objectives of the project were: 1. The establishment and training of both civil service reform and personnel management departments; 2. The establishment and training of the staff of a Public Administration College [PACT] at the Georgian Technical University, to provide training for the civil service. In order to achieve its objectives, TACIS implemented the following reforms: - - A management service unit (MSU) was established to identify the areas in which the Georgian administration could be improved and to carry out the necessary measures to enhance performance within the public sector. A personnel management unit was established and trained in areas such as salary structure, promotion, incentive policies, and training needs. Both departments were implemented as part of the State Chancellery. The program made some progress in restructuring some ministries, including Finance, Economics, Agriculture and Transport. The project supported the development of the Public Service Law and development of some human resource policy instruments, such as drafting a personnel procedures handbook (which has not been adopted) and the writing of job descriptions within the Chancellery. However, since the project has been completed, some of the highly skilled members of the Civil Service Bureau have joined the private sector, thus weakening the capacity to implement the law. Training. The Public Administration College of TACIS [PACT] was created under the Civil Service Reform and Training Program and also started in 1995. This program also included assistance with functional reviews of some government establishments. By February 1998, the PACT had trained about 1,800 civil servants from the Parliament and the Executive. The PACT ran both short and long term courses for civil servants in the areas of general management, economics, financial management, information systems and technology, Constitutional law and legislative drafting, tax administration, personnel management, management services, social security and the English language. The PACT's teaching staff have benefited from comprehensive training received in EU countries, and from development of curricula by EU trainers resident in Georgia. This has helped raise academic standards. The PACT was equipped with modern training facilities, as well as a library, but cannot run further training programs for civil servants since the TACIS program ended and the College has been unable to obtain budgetary support due to fiscal constraints. The persons interviewed who had been in touch with the project considered it to be very successful; 1500 government officials passed the 2 weeks training courses in different fields. Their newly gained expertise was successfully employed mainly in Parliament and the State Chancellery (until 1995 the Office of Head of State); however, after the end of the financing, the courses were closed, and accumulated experience was not used. - The Georgian Institute of Public Administration [GIPA] was founded in 1994 and supported by the U.S. Information Agency, the Institute of Local Government and Public Service, Hungary; and the U.S. Eurasia Foundation. The GIPA offers oneyear MPA courses through which it trains about 25-30 people annually. The courses are mainly taught by expatriate professors. The GIPA has a computer class and a library. - UNDP has conducted considerable work in strengthening the capacity of specific ministries and government entities engaging priority areas by adapting Western standards, as well as encouraging communication and information sharing between the different government entities and establishing mechanisms of collaboration. Following are the projects UNDP has already carried out or is currently implementing: Assistance to the Parliament of Georgia. [3 year project, 1996-1999. $329,650] To support the implementation of Public Service Language Center for Georgian public sector employees, in particular for Parliamentary staff. Emphasis was placed onrunning specialized English courses, designated to meet the participants’ professional needs. Capacity Building of the Public Defender’s Office. [4 year project, started in 1998. $985,371] To assist the development of the Georgian Public Defender’s capacity to operate as a fully functional, independent national institution, working for the protection and promotion of human rights. Modernization of the Program and Administrative Systems of the Ministry of Foreign Affairs. [1997-2001, $1,996,619] The goal of the project was the modernization of methodologies, programming, and administration of bilateral and multilateral cooperation, incorporating new information technologies and communications between the MFA [Ministry of Foreign Affairs] and the public and private sector. In addition, the project acted to reinforce national officials’ professional capacities in operational activities of the Georgian MFA according to the requirements of the international community. The MFA project can be considered a success story, as the impact of the project activities have obviously reached its goals at least partially, if not fully, and have achieved strengthening of the operational capacity of the Ministry: Computer Equipment and Technologies. Servers, computers, printers, network printers, scanners, fax machines, modems, blocks for uninterrupted electricity, the simultaneous interpretation digital system and other supplementary equipment were bought; a local computer network was installed; 200 users were connected to the local computer network; the MFA was connected to Internet by a special line; all computers have e-mail connection; e-mail links were established between the Ministry and the Embassies; the web site of the Ministry was created, which has contributed to an increase in transparency. The computer networks of the MFA and the State Chancellery were connected through the fiber-optic cable. Seminars, trainings, methodological manuals, software. More than 100 employees of MFA attended computer classes held in two stages; the training for the ministry staff directly involved in the realization of the project and training for heads of sections defining roles and functions of each section took place in 1998; additional training for the Ministry staff dealing with correspondence management of correspondence and achieves was held in 1999; manuals “General Principles and Possibilities of the Local Computer Network of the MFA” and “Computer Rules” were published for internal use; a specialized computer library was created, focusing on those Internet technologies which are in use at the Ministry; a unified standard of encoding was introduced; special software was translated and installed (for example, management of archival and correspondence systems; operational planning and management of international affairs; informational module of international instruments); software on administration management was created. Also a special unit responsible for management and informational system support was created within the MFA. This unit has enough human resources and capacity for further development. Overall the project had a positive impact on raising professionalism, work ethics and responsibility of the MFA employees. Modernization of the State for the Administration of Democratic Governance in the Sphere of the Presidency of the Republic. [3 year project, 1997-2000. $1,824, 977] This project was initiated to ensure the substantial improvement of the public administration system as well as efficiency within the State Chancellery, ministries and State departments, other institutions of the executive branch, improve democratization of the process, enhance the close relationship and cooperation with other government branches and civil society, establish the creation within the State Chancellery of an up-to-date information and management system using computer technology. Specific examples include: Computer Equipment and Technologies. By the end of 2000, the process of establishment, testing, approval and adaptation of the first state interdepartmental computer network was completed; government institutions of all the three branches of power, such as the State Chancellery and other executive agencies, the Parliament, the two main bodies of the judiciary, as well as the National Bank, the Central Election Commission and the Tbilisi Municipality, were incorporated into a common information space; a complex of specialized software to support the gigantic system of state information and management was created. Training. Hundreds of public servants have been trained within the scope of the project hardware, technical, network and software components' implementation. Two fundamental manuals were prepared and published: - The Information Management System – Practical Guide, 1999. - The Public Administration Improvement Issues: Methodological Approaches and Recommendation – Methodological Manual, 2000. Overall a platform with the corresponding infrastructure ready for implementing the public administration’s qualitatively new ideology, concept and approaches has been created. Modernization of the General Financial System of Georgia. [2 year project, Started in 2001. $1,307,700] One of the dimensions of the current fiscal crisis in Georgia is the lack of integration and coordination among governmental institutions, which is a cause of great inefficiency in the financial management of the state budget. Thus the objective here is to increase efficiency in the management of financial resources by the Georgian government through better coordination among and within agencies. This is to be achieved through the introduction of systems that will ensure the timely exchange of data that is essential for supporting the decision-making process both by executive and legislative branches of government. Problems. Although Georgia is supported by bilateral and multilateral assistance from several donors, the effectiveness and the impact of external assistance has been low. Consequently the reform processes also have been slow. The interviews conducted in the course of this project, as well as a round table meeting arranged by GFSIS on March 7, 2002, (which was attended by representatives of donor organizations, the Georgian Institute of Public Administration, and Deputy State Minister Akaki Zoidze) helped us to identify several key issues: The effectiveness of donors' efforts depends to a large degree on both the Georgian Government’s and the donors’ ability to manage and coordinate the identification, design, implementation and monitoring of donor assisted programs. Thanks to donor assistance, many documents and recommendations have been created, but few of them have been enforced. There are cases when the documents overlap each other, and often donors don't know about the work conducted before them. None of the programs that have been already completed have been fully successful. The work conducted is on the shelves of the State agencies. For example, consider UNDP projects carried out in the MFA and the State Chancellery. As UNDP representative Kakha Demetrashvilli mentioned, only 10 % of their work is used right now. Also Deputy State Minister said that the equipment and software installed in the State Chancellery is not in use. [But according to the interviews conducted, there is a huge gap between the state of affairs in MFA and the State Chancellery. MFA and Embassy's staff more or less are using the benefits of the program that has increased their efficiency and professionalism.] The assistance is characterized by a fragmented approach. To ensure the successful implementation of the reforms, a more clear, systemic, and long-term vision with specific targets and timetable is needed. Donors cannot force Georgians to use their product. Deputy State Minister Zoidze commented, “There is a vicious circle. The Georgian government is not efficient and as it is not efficient, it cannot use the assistance properly.” GoG and donors have not thought about the necessity to work simultaneously with both supply and demand sides of civil service reform. It might be said that there is a demand in Georgia and there are also cadres that can be used as a supply [alumni of different foreign funded educational programs, and academicians] but there are two major issues artificially creating the supply shortage: 1.) a lack of financial incentive and disillusionment within the government, and 2.) the lack of effort from the government's side to attract those cadres. The existing patronage system creates major problems, which diminish the possibility of merit-based recruitment processes and equal access to public service. The lack of the financial incentive from the civil servants' side is an obstacle to the creation of critical mass of public servants. Necessity to work with the public who has disillusionment in the reform process as the State failed to deliver on its promises. A cynical approach has been developed towards the donor efforts, too as no feasible results are felt so far Ongoing Initiatives - Possible partnerships The State has named Deputy State Minister Akaki Zoidze as the head of the Public Administration effort in Georgia. Mr. Zoidze has asked international donors such as DFID and the World Bank to direct their efforts in the direction of strengthening the capacity of the Central Government. Both Mrs. Lali Meskhi, the DFID representative, and Mr. Akaki Zoidze have stated that the DFID plans to fund a group of experts led by a Resident Adviser (a position within DFID) and consisting of local experts to work within the State Chancellery to assist with the public administration reform and provide a coordinating effort. World Bank. Similarly, after the GoG’s request, the World Bank is planning to carry out the project assisting Public Service reform, which is planned to begin in 2004. Right now the World Bank is working on a proposal earmarking $500,000 to conduct a needs assessment and identify public administration priorities. The project is in its preliminary stage of planning and key issues that would be addressed have been mentioned to us by Mrs. Elene Imnadze, Public Sector Management Specialist, at the World Bank: - The need to conduct the functional analysis of the state agencies and provide recommendations with regard to optimization of the cadres; They must increase the competency and interest of the public servants by addressing the issues of their number, qualification, and incentives; The need for the project to be conducted with insight into public needs, since reform cannot advance without the proper understanding of its necessity from the society's side. The preparatory work the World Bank is planning to conduct will include: the development of the functional analysis of restructuring; conduct functional and legal analysis; evaluation/description of cadres, including age, functions, job descriptions; the evaluation of salary system; the evaluation of existing expertise; assessing training needs; monitoring using before and after approach; defining strategy to carry out public relations. The Georgian Institute of Public Affairs [GIPA] and GFSIS, in collaboration with School of National Administration [ENA] and Institute of Regional Administration of Lyon [IRA], is planning to implement a project "Development of Recommendations on the Reform of Public Administration System in Georgia." On the basis of the studies conducted by the Georgian partners, the ENA and IRA will develop a set of recommendations that will be followed by a workshop in Tbilisi and presentation of recommendations to the GOG. GIPA and GFSIS view this project as a first stage of a long-term process for reforming the public administration system in Georgia. Prevailing Conditions and Obstacles to Administrative Reform The civil service of Georgia has many features inherited from the Soviet period. It has not undergone fundamental reform. Although changes of staff happen very frequently (almost every new minister brings his own people), the organizational culture remains intact. Although the legislative framework has changed significantly during the last decade, implementation of reforms remains a serious problem. Partly due to this problem, no sub-laws have been enacted to facilitate their implementation, nor was there sufficient will from inside or pressure from outside to implement the General Administrative Code, the Law on Civil Service, the Law on Conflicts of Interest and Corruption in Civil Service, etc. In a study undertaken by experts contracted by UNDP4 in 1999 the key problems were identified in the following order: Vazha Gurgenidze. Improvement of State Administration System – Main Pre-condition for Social-Economic and Political Development. UNDP, Discussion Paper Series 1. Tbilisi,1999 4 1. Absence of systemic approach at all levels, lack of strategic planning. Absence of any monitoring of implementation of strategic and long-term plans. 2. Non-existence of independent or external-to-the-agency control, monitoring, and audit. The performance of the agency is measured by the agency itself, or by higher authority, to which agency is directly subordinated. 3. Vague definition of goals and priorities. 4. Irrational division of responsibilities among different levels. Disproportionately high concentration of decision-making at the high (especially top) levels. 5. Low motivation of civil servants, through very low salaries. 6. Low level of professionalism: old mentality in the older generation, and lack of experience and skills among younger employees. 7. Lack of coordination and interagency co-operation. 8. Low work ethics and responsibility. 9. Equal appreciation of everyone’s labor. (Almost no one gets financial bonus for good work, or penalties for poor performance.) 10. Weak rule of law. As our study has shown, none of these problems have been adequately addressed since 1999. Positive results of generational change have been fully offset by widespread disillusionment with reforms, deterioration of education and training systems, pervasive corruption, increased cronyism, etc. One of the most prominent weaknesses of the Georgian civil service is that strategic issues do not receive enough attention. As analyses of Presidential and government decrees have shown, most of them concern short-term, tactical issues, and very few are concerned with strategic planning. Even if strategic decisions are outlined (electoral program of the President, anticorruption strategy, economic reform strategy, etc.) no mechanisms are set up for facilitating and overseeing their implementation. This means that most strategic recommendations either are not adopted (national security concept) or remain only on paper (electoral program). Most experts agree that a civil service functions along two sets of rules, formal and informal. Following informal rules is much more remunerative for a civil servant than following formal ones (according to World Bank data, the unofficial budget of Georgia’s civil service exceeds the country’s official budget). Strengthening the existing legal framework, setting the acceptable limits of behavior, and clearly defining competences and authorities are several ways to improve such a situation. However, this has not been done. In most of the government bodies, charters date back to the Soviet period, or change so frequently that nobody follows them. Functioning job descriptions exist only in Parliament and a few other agencies. The structure of executive agencies is subject to frequent change, and there is no code of behavior for the civil service. Nothing protects civil servants from the arbitrariness of their bosses. Frequently, heads of agencies define their own competence and structure. Rules and criteria for hiring civil servants are so weak that they give executives unchecked power to hire desired staff according to criteria known only to them. Some persons interviewed have said that the Georgian civil service has many features of “feudalism”; when a high-ranking executive gives a person loyal to him an agency to run. Then this middle level executive gives sub-agencies to his loyalists, so appointed managers are accountable only to the person who appointed them. Internal opposition to this structure is minimal. Because wages are so low, talented and resourceful people do not seek employment there. Such systems can most often be observed in “money making” agencies, like the tax administration or police. Another serious problem is the non-existence of external control or monitoring in the government. No external evaluation of policies or the effectiveness of individual employees is ever conducted. Most of the people interviewed agree that there is no unified civil service in the country. Different ministries have different systems of management; different ranking systems and different salaries make it hard to make comparisons between different agencies. There are no formal valid rules for promotion, so promotion depends mostly on loyalty to the boss. There is no functioning system of permanent training, because a successful career does not depend on this, and there are no funds for training centers. There are two prominent exceptions. Young people eagerly learn English language and acquire computer skills, hoping to find jobs in the private sector or international organizations. Many high-ranking executives have noted that the people who received training (especially abroad) are leaving the civil service. One minister tried to introduce a system of rapid promotion of foreign-trained young people, but this could keep them working in the ministry for only about 6 months. The single most important factor that prevents attracting and retaining talented people is very low salaries. In the State Chancellery the minimum monthly salary is GEL 91 and the maximum is GEL 175 (salary of the State Minister); in the Parliament the minimum is GEL 150 and the maximum is 450 (except for MPs); in ministries salaries vary from GEL 37 to 210. No reform has been carried out to address this problem: Donors are not allowed to pay salaries to local bureaucrats, and the state cannot. (However, as the experience of the Parliament shows, optimization of existing expenditures might allow doubling the salaries of employees. But this is possible in only a few well-financed and resourced agencies). The negative consequences of low salaries are numerous It does not allow the civil service to attract qualified people. Young, promising individuals enter the civil service only if they want to get some experience and, at the first opportunity, leave the civil service and go to international organizations or the private sector. People who join the civil service earn less than subsistence level, so they are prone to corruption. Low salaries and bad working conditions inhibit civil servants from striving towards personal and professional growth and is a major factor contributing to attrition. More than 80 people (out of fewer than 400 total) have left the State Chancellery in the last two years. The Ministry of Foreign Affairs has also lost some of its best people, and the situation is the same in other agencies. Attrition happens not only because of employees. It has become normal practice that every new head of an agency (ministers in particularly) fire old staff and bring new people, loyal to them. Considering how frequently agency heads are replaced; this becomes a serious problem (all of the heads of key ministries have been replaced at least three times in the last five years). This removes one of the most important motivations for civil servants – stability and a predictable career. Appointment of people with inadequate backgrounds and insufficient skills is a common problem. There is no special agency or mechanism that would control this process. The law on civil service envisioned creation of national bureau of civil service. It has been established and received technical support from SIPU but has never been very active and visible. Personnel management is at a very early stage of development. All of the government agencies have personnel departments, but of most of them are used only for keeping records, and are not given a say in recruitment or promotion. In this survey, we examined the cases of effective civil service agencies. The most widely advertised were the National Bank of Georgia (this is the case in most former Soviet republics, because most governments quickly realized the importance of this sector) and Georgian International Oil Company, which has received financial support and advice from international donors and former executives. Parliament looks a bit better than many other agencies, which is due to the political will of the leadership to undertake reforms, qualified staff, and support of multiple international donors. In many instances, capacity building in the state agencies ended with little success. There are many instances of failure, which include: projects of computerization and installation of computer networks, which are poorly-used and maintained; Training courses which are either attended by not the most adequate people, or by more promising civil servants, who use the skills and qualifications acquired at this courses as an opportunity to find job outside the civil service; Recommendations, elaborated during internationally funded project are quickly abandoned after the source of external financing dries up. Local Publication Resources and Literature Overview. Modern methods and principles of public policy and public administration are taught in GIPA in English by visiting American professors. No local literature has been used yet. However, as GIPA is planning to start training courses for local self-governance officials, they have indicated urgent need from their side of literature in Georgian. But, they could not indicate any existing literature in use. The Public Administration Department at Georgian Technical University does not have any modern PA literature. They either use old Soviet manuals of administration, or rely on findings and curricula of individual instructors. In the department, the common practice is teaching subjects that have some relevance to public administration (sociology, political science, international relations, etc.) to give the students some idea about public administration. No donor organization that has been interviewed has published or is in the process of publishing Georgian language literature in public policy/public administration. Regional Initiatives Since 1998 The Eurasia Foundation has supported the South Caucasus Cooperation Program (SCCP). The goal of the program is to facilitate greater contact and cooperation among leading organizations in Armenia, Azerbaijan, and Georgia. The program provides grants supporting innovative cross-border projects addressing issues of concern to the entire South Caucasus region. In the sphere of PA education the SCCP has begun to work on a regional program aimed at improving policy analysis in decision making. But their constituencies are think tanks, and not central governments. Part of the program is to encourage communication and information sharing regarding common regional priorities and mechanisms for regional collaboration. Although Georgia remains open to regional initiatives, our research in Armenia and Azerbaijan has shown that there is an extremely narrow window for cooperation. The Azeri Parliament recently discussed a bill denying admittance of Armenian citizens to Azerbaijan. When Armenian citizens travel in Azerbaijan, within the framework of joint projects conducted by international organizations and NGOs, they are always accompanied by bodyguards and are strongly cautioned against speaking Armenian. Our research in Azerbaijan has also shown that both Azeri state authorities and NGOs (with a few exceptions) are very reluctant to engage in bilateral co-operation. Information Technology Environment. As our observations and interviews have shown, the information technology environment varies greatly across agencies; it varies even more across regions. IT facilities outside Tbilisi are very poor, as are networks and internet providers The agencies that have had co-operation projects with donor agencies are usually much better equipped than ones that have not. The Parliament, Ministry of Foreign Affairs, State Chancellery, Ministry of Finance, Tax and Customs administrations, and Department of Statistics are quite well equipped with, in most cases, at least one computer in every office (mostly Pentium I and II; in some cases PIII). However, probably less than half of these computers are network-connected. Most of the agencies do not pay Internet fees. UNDP and TACIS have provided computers to many state agencies, and the Chinese government is in the process of granting about 140 computers to the Ministries of Economy and Foreign Affairs. However, most of the equipment is wearing out. Government agencies can hardly find money for maintenance, let alone for upgrades. Risk Assessment. Governance and institutional capacity. Georgia has only a decade of experience with democratic government, regulation of a capitalist economy, and open dialogue between government and civil society. In addition there is a very active dialogue within government which, while healthy in itself, can make decisive decision making difficult. These constraints make implementation major reform of civil service programs more difficult, Regional Instability. The Caucasus has throughout history been a politically volatile region, as a result both of its strategic geo-political position and of internal tensions. Any renewed political instability in the region, from whatever source, could divert attention and resources from pressing social and economic reforms. Exogenous Shocks. Georgia has suffered in recent years from a number of exogenous shocks—including the Russia crisis, drought, the closure of rail links north through Abkhazia—and there is unfortunately no certainty that similar shocks will not occur in future. Pervasive Corruption. It is a major risk that threatens almost every donor initiative, especially those that require close co-operation with the government. Lack of buy-in. Although most of the government understands quite well the importance of reforms and the role, that donors can play in this regard, many projects, involving international donors have been without tangible results. This has breeded a growing feeling that donors do not understand “local specificities”. Politicization of Reforms. Unfortunately, the reforms are widely politicized in Georgia, They are associated with certain political forces. So, political shifts in the government may threaten viability of reform. Sustainability The sustainability of civil service education projects, as well as most other projects implemented in civil service, remains a major problem. As most of the officials interviewed have noted, training sometimes brings adverse results, since newly trained employees can more easily find jobs in the private sector and international organizations, since neither the civil service nor training providers provide any post-training incentives to civil servants to stay in the public sector. Donors that have provided technical assistance (computers, software, networks, etc.) often complain that, after completion of the projects, the government is not willing to pay meager sums required for maintenance. The story of TACIS Public Administration College (PACT) is remarkable in this regard. As former employees of PACT told us, the European Commission was willing to pay 90% of the funds for continuation of the training programs and keeping PACT active. However, the government was reluctant to pay the symbolic remaining 10% (about $50,000). GIPA was being formed at the time and, according to an interviewee familiar with TACIS, the government sided with the American-sponsored project and abandoned what has been described as a successful training program. There have been no instances of large scale-projects where the government took over the financing. However, the positive long-term consequences of training programs have been widely stressed. The above mentioned programs have introduced or largely contributed to computer skills, English language ability, and western methods of education and research . The fact that these skills and knowledge are becoming more widely spread in the country is a direct result of the training programs.