Representatives of selected Serbian municipalities (Backi Petrovac, Kursumlija, Mali Zvornik, Petrovac na Mlavi and Sjenica) and The National Association of Local Authorities in Serbia met on 15-16 May, 2019 with their Slovak counterparts to learn about decentralization and best practices in transforming the underdeveloped municipalities into attractive locations for both foreign and domestic investment.
Ján Marušinec, who is an international expert on public administration, outlined two basic approaches to disparities in regional development that the Slovak government employs. Beside direct investment transfers for underdeveloped regions, the central government indirectly supports those regional centers, which are driving forces of economic development. A good example of this would be the town of Košice, which attracts young people because of its higher technical education and science labs.
The journey to broader economic development in Slovakia began in parallel with the decentralization process in the year 2000, 10 years after the country had become independent. It included fiscal decentralization, transfer of competencies, and tax reform. Since then, the income tax revenues have formed an inevitable part of local budgets. Milan Muška, acting Vice President of the Association of Towns and Communities of Slovakia, discussed transferring state property to municipalities, and its negative effect on municipalities. As property needs to be modernized, the income of municipalities in most cases is insufficient. The modernization debt of only kindergartens and schools amounts to 1 billion EUR.
4th Industrial Revolution – Big Challenge for Municipalities
The decentralization process in Slovakia was supported by legislative changes, which have anchored strategic planning as compulsory, both on the central and local levels. There are about 120 strategic documents that focus on social and economic development in Slovakia. Muška recommended that Serbian colleagues should work on a similar strategic document, which would harmonize social and economic development in all regions. Specifically, he gave the examples of Slovak industry’s monothematic focus on car production, and a failed transformation of agriculture.
“Currently, we are evaluating proposals to increase economic security of the country and to widen our engagement in segments such as automation and digitalization so we can get on the 4th industrial revolution train. This is a big challenge mainly for municipalities,” said Muška.
Get Prepared and Rely on Your Own Forces
Serbian colleagues were also interested in Slovak experience with EU pre-accession funds. Municipalities in Slovakia were very well prepared – there was remarkable support from the state. This does not apply to structural funds, as the evaluation and monitoring is much more complicated, and staff demanding. It is necessary that the state create enough counseling and implementation centers to avoid disproportionate dependence on private agencies. In this context, Sjenica Mayor Hazbo Mujovic said that Sjenica has the highest percentage of international funds usage among Serbian municipalities. He also mentioned problems with payments administration by the state, but the National Association of Local Authorities in Serbia is helpful in negotiating support from the government.
Jozef Mikš, head of the Self-Government Financing Unit at the Slovak Ministry of Finance, presented contemporary organization of territorial self-government in Slovakia. Simultaneously, legal expert Jaroslav Pilát explained the division of competencies between the state, regions (higher territorial units) and municipalities. There are about two thirds of Slovak municipalities with populations totaling less than 2,000 inhabitants. This has caused problems in newly acquired competencies, which require an expert staff, e.g. construction offices. Despite the transfer of competencies that are accompanied by remarkable income inflows (taxes and administration fees,) Slovak municipalities often have financial problems. The Law on Budgetary Responsibility includes sanctions for the ones exceeding set debt limits. “Currently, there are 4 Slovak municipalities in forced administration,” said Mikš, adding they are “implementing recovery plans.”
Serbian municipalities are already recipients of EU pre-accession funds and their representatives were interested in practical experience. Independent consultant on EU projects, Martin Obuch, outlined the application procedures and decisive factors that have influenced successfulness in utilizing funds. He reminded Serbian guests they have to be prepared in advance, not only for the application process, but also for implementing, managing and monitoring funds. “Try to use as many pre-accession funds as you can. But use them for solving your real priorities, and do not apply at any cost,” said Obuch.
The Future is in Internal Potential
Anton Marcinčin is the advisor to the Prešov region and former government plenipotentiary for less developed regions. He reiterated the importance of strategic development planning based mainly on macroeconomic and demographic projections. Municipalities’ priorities should reflect the development strategy of the state and the region. The future of development on local levels rests in salvaging internal potential, be it civic communities or local companies, in order to make the development sustainable, Marcinčin said.
Keep Strategic Agendas In-house
“Be two steps ahead of others“ is the motto of Malacky mayor Juraj Říha and his team. During a short meeting he presented their achievements in social and economic planning. The necessity of planning is supported by the fact that they regularly prepare several strategic documents. Regarding financing, he highlighted the importance of cutting municipality operational costs in the first place and combining resources (taxes and fees) with the EU and other international funds. Separately, he mentioned that Malacky was the first town in the Bratislava region to introduce new development fees. Furthermore, they created a department for strategic development, which prepares in-house urban studies. Involving the local community and using a complex approach in individual projects are a must. Malacky currently has up to ten projects in different phases of implementation.
These include a new sports arena with an ice rink, a new nursery or a town square with underground parking – all of them to be finished in about 3.5 years.
Communal Reform in Slovakia is Inevitable
Cífer, a medium-sized village in the Bratislava region, was the last stop in the Serbian study visit. After a presentation on past development projects, Mayor Maroš Sagan answered a number of questions put forth by Serbian colleagues who were interested in his individual competencies as mayor. Additional questions centered on the priorities of the Cífer municipality. In the first years of his term, the priorities were crystal clear: new water and sewage systems. Recently, they built a new sports hall in the village´s centre. Additionally, the municipality is considering a referendum on buying an abandoned manor house with a park for community purposes. They encountered problems with performing new competencies, too. By joining resources with other municipalities in the Trnava region, they hired construction experts and established an associated office for 40 municipalities. Nevertheless, flaws in local administration still persist.
“The future government will have to tackle the problems as there is a great potential in making local government even more effective. There is a social consensus for communal reform,” concluded Sagan.