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#13 - JRL 7007
Rossiyskaya Gazeta Eyes Russian Government Concept for Administrative Reform
Rossiyskaya Gazeta
27 December 2002
Report by Yevgeniy Arsyukhin:
"Self-Truncation: The Government Has Put Forward its Version of Administrative Reform"

The thing that has already been talked about for a year as an epochal event that is to happen "any time now" but that never has been happening took place yesterday [26 December]. The Russian Federation government formulated a concept of administrative reform and put it on President Vladimir Putin's desk. The president approved the concept. As was to be expected, it will swing into action in a year's time, after the presidential election. According to our information, the document has withstood competitive battle against two others. Who has won, the strongest or the fairest?

A seemingly unremarkable fact sheds light on this question. A question on reforming the gas sector was "dropped" from yesterday's government session agenda and there was a discussion of the strategy for developing the banking sector. It would be appropriate to recall in this connection that the Central Bank has recently been a model example of how a state governance body "must not" position itself. The Central Bank has been used as an illustration when talking, for example, about the fact that it is no good when a single power body sets the rules of play and itself plays by them. The most important point in the concept reported to the president is dividing state bodies into three categories (depending on function) -- law setting, supervisory, and "to provide services." Soccer players and referees separately.

A Russian Federation government source told your Rossiyskaya Gazeta correspondent that with that arrangement it was impossible to get by without cutting back individual departments' functions. The press has already named the candidates for reform -- they are primarily the sector-based ministries (Ministry of Agriculture, Ministry of Railroads, and Ministry of Transport). The State Fishing Committee's dream of becoming a fishing ministry is probably not destined to come true. These and a number of other departments are the rudiments of the old Soviet structure of a sector-based arrangement of the state apparatus. The new ministries are to be responsible not for plowmen and fishermen but for spheres like the economy, finance, and industry.

On the other hand, closer cooperation, if not amalgamation, between services dealing in what is fundamentally the same thing suggests itself. Thus, there are another couple of departments in charge of taxes and levies aside from the Ministry for Taxes and Levies. Hence, some commentators have hastened to conclude that the tax ministry may become a service amalgamated into one bloc with other fiscal departments, like the State Customs Committee, for example. This is all similar to the already forgotten idea of setting up a Ministry of Revenue.

Functionaries are unlikely to be comforted by the fact that the entire regime as a whole is ready to share its functions. According to our White House source, "The federal authorities must understand which powers they can transfer to the provinces and which they can get rid of altogether." In this connection, take note of the third type of state department "to provide services." In fact, this has already happened in the electricity industry (YeES Rossii RAO [Unified Energy System of Russia Russian Joint-Stock Company] plays a key role) and it will happen in transport when Rossiyskiye Zheleznyye Dorogi AO [Russian Railroads joint-stock company] is formed.

Despite the fact that global reform has been put off for a little over a year, it has essentially already begun. Thus, government sources have been saying a lot recently "There must be a tightening of control over the Central Bank's commercial spending." The majority of this wish has already become a reality after the adoption of amendments to the law on the Central Bank. We would remind you that former Central Bank Head Viktor Gerashchenko considered it sensible to resign during this collision.

Another example is the tedious but so important work that the Ministry for Development and Trade is doing with its "comrades in the provinces." There is no doubt that reform is a high profile and important business in the White House but for a regular citizen the authorities begin (and end) at best with the oblast administration and more often with the rayon or village administration. The crusade against bureaucracy declared by the Ministry for Economic Development has already begun. There is currently a battle to introduce a simple but key principle: That state purchases be conducted only on a tender basis, that is to say that only the best be bought for state needs and cheaply.

Sources in the Ministry for Economic Development and Trade told your Rossiyskaya Gazeta correspondent that moving state purchases wholly over to a tender basis could provide the budget with a saving of billions of dollars. It will be possible to release this money for objectives like reducing the tax burden (in the name of stimulating a growth in GDP) and stimulating investment. According to our ministry source, "The question has been put toughly: If we conduct administrative reform, there will be growth; if we do not, it means Russia is doomed to lose."

Thus, the gamble is more than great. But they are global aims. When it is a question of how a particular functionary feels, his instinct for self-preservation kicks in.

"Aren't you afraid of a functionary rebellion against administrative reform?" your Rossiyskaya Gazeta correspondent asked a high-ranking interlocutor in the Ministry for Economic Development.

"A functionary is not a rebel by nature. His functions are to do what has been instructed," was the answer. "But it is within his powers to perform them in such a way that the objective turns into its opposite. There will not be a rebellion against administrative reform. But it could be suffocated in embraces of friendship."

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