Pakistan

10 Role and experience of local governments in empowering communities and financial resources mobilization in Pakistan

Muhammad Ashraf, Secretary, National Reconstruction Bureau, Islamabad, Pakistan

Introduction

On its birth in 1947, Pakistan inherited a system of governance, which was designed mainly to collect land revenue and maintain law and order. Provinces were divided into administrative districts and tehsils. There was hardly any opportunity for public participation in governance.

Local government plan, 2000

The strategy for devolution under the Local Government Plan announced in 2000 is based on three basic principles:

a. people-centered development

b. rights and responsibility

c. service-oriented government

Salient features of Local Government System

• Power devolved to locally elected representatives; decentralization of administrative and financial authority.

• A three-tier federated local government system set up in every district on 14 August, 2001. Local governments at District, Tehsil, and Union levels.

• Local governments are an integral part of provincial governments.

• Integrates rural and urban local governments into one coherent structure in which district administration and police are answerable to the elected district government.

• Marginalized social sections have been given adequate representation at each level of local government. (33 percent for women, 5 percent for peasants, workers and minorities each).

• Provides a mechanism for monitoring service delivery.

• A system of checks and balance.

• Fiscal decentralization.

• New offices like information technology, literacy, finance and planning, and law, established at district level.

The local government system has been established in all four provinces of the country, comprising of 96 District Councils, 342 Tehsil/Town Councils and 6 022 Union Councils. Direct elections have been held to fill 126 462 Union Council seats across the country.

Local government structure

Union administration

At the bottom tier, the unions are organized in the rural as well as urban areas of the district. A Union has a directly elected council with 21 members including the Nazim (council head) and Naib Nazim and six women councilors. The Union Nazim is also a member of the respective Zila Council. Likewise, Naib Nazims are members of the Tehsil Council. This provides vertical linkages between the three tiers of local governments. The primary functions of the Union administration are community mobilization and monitoring of local development.

Tehsil Municipal administration

The Tehsil is the middle tier headed by the Tehsil Nazim. The Tehsil Council has indirectly elected councillors and Naib Nazims from the Union Council. There are reserved seats for women, peasants/workers and minorities. The Tehsil Municipal Administration is a new administrative entity at Tehsil level to handle essential municipal services under the Tehsil Nazim.

DEVOLUTION OF POLITICAL POWER

District government

The Zila (district) Council is the top tier of the local government system. It consists of a Zila Nazim, Naib Zila Nazims and indirectly elected councillors with reserved seats for women, peasants/workers and minorities. The district administration has offices for agriculture, community development, education, finance and planning, health, information technology, law, literacy, revenue and works and services, each headed by an Executive District Officer. The entire district administration functions under the control of the elected Zila Nazim.

Supporting institutions

To support the local government structures, a number of new institutions have been created.

• The Provincial Local Government Commission is an impartial arbiter between local governments and the provincial government.

• The Provincial Finance Commission is an institutional mechanism for revenue sharing between provincial governments and districts.

• The Zila Mohtasib (District Ombudsman), which is yet to be established.

• Monitoring Committees, which include:

  (1) Ethics committees
  (2) Accounts committees
  (3) Insaf (Justice) committees

• Musalihat Anjumans (Conciliation Bodies).

• Zila Mushavirat (District Consultation) Committees.

• Union Public Safety Committees.

• Citizen Community Boards.

• Village and Neighbourhood Councils (yet to be established).

Resource mobilization

Each level of local government has its own Local Fund which includes:

(a) money transferred by another local government;

(b) grants/money received by local government from the provincial government or other sources;

(c) proceeds of taxes/charges levied by local government;

(d) rents and profits payable to local government from immovable property vested in or controlled/managed by it;

(e) proceeds/profits from bank accounts, investments or commercial enterprises of a local government;

(f) gifts, grants or contributions to local government by individuals or institutions;

(g) income from markets or fairs regulated by local government;

(h) fines for offences under local government laws/rules; and

(i) proceeds from other sources of income.

All other financial receipts including the following are credited to the Public Account of the local government:

(a) receipts from trusts administered or managed by local government;

(b) refundable deposits received by local government;

(c) deferred liabilities.

Although local governments can raise funds from taxation, they primarily depend on fiscal transfers from the provincial government.

Resource mobilization by local taxation

Local governments are empowered to impose the following taxes/fees with the approval of the local council and after vetting by the provincial government:

District government

• Education tax.

• Health tax.

• Any other tax authorized by the Government.

• Local rate on lands assessable for land revenue.

• Fees in respect of educational/health facilities established/maintained by District Government.

• Fee for licenses/permits and penalties/fines.

• Fees for specific services rendered by District Government.

• Collection charges for tax recovery on behalf of the Government, Tehsil Municipal Administration and Union Administrations.

• Toll on roads/bridges/ferries within district limits.

• Rent for land, buildings, equipment, machinery and vehicles.

• Fee for major industrial exhibitions/public events organized by District Government.

Tehsil Municipal Administration

• Tax on services.

• Fee on sale of animals in cattle markets.

• Market fees.

• Tax on transfer of immovable property.

• Fee on advertisement other than on radio, television and billboards.

• Fee for fairs/agricultural shows/industrial exhibition/tournaments/other public events.

• Fee for approval of building plans.

• Fee for licenses/permits and penalties/fines.

• Charges for development/betterment/improvement/maintenance of public utility works.

• Fee on cinemas/theatres/other entertainment.

• Collection charges for tax recovery on behalf of the Government, District Government, Union Administration or any statutory authority.

• Rent for land/buildings/equipment/machinery/vehicles.

• Fee for specific services rendered by Tehsil Municipal Administration.

• Tax on vehicles other than motor vehicles registered in Tehsil.

Union Administration

• Fee for licensing of professions/vocations.

• Fees for registration/certification of birth/marriage/death.

• Charges for specific services rendered by Union Council.

• Rate for execution/maintenance of public utility work operated by Union Administration.

• Rent for land/buildings/equipment/machinery/vehicles.

• Collection charges for tax recovery on behalf of the Government, District Government, Tehsil Administration or any statutory authority.

Community participation through Citizen Community Boards

Citizen Community Boards (CCBs) enable citizen participation for improved delivery of local development services. It is mandatory to utilize 25 percent of the development budget every year for CCB schemes. Unutilized amounts are carried forward to the next year.

Number of CCBs by province

An analysis of the information reveals that communities are interested in investing in projects relating to agriculture, soling (bricks pavement), water supply, drainage, education, women development, education and health.

CCB projects by sector

Status of CCB schemes

SWOT (strengths/weaknesses/opportunities/threats) analysis of Local Government System

Strengths/opportunities

• Has abolished hierarchical administrative set up.

• Public participation in decision-making and local accountability.

• Elected head of government instead of bureaucrat.

• Reduced rural-urban divide.

• Bottom-up approach to development ensures that schemes reflect local aspirations.

• Provincial Finance Commissions for equitable resource distribution among local government levels.

• Easy public access to government information.

• Village and neighbourhood councils provide direct interface between grassroots level and local governments.

• Representation to weaker sections.

• Encourages amicable settlement of disputes through mediation/conciliation.

Weakness/threats

• Slow process for establishment of supporting institutions.

• The real test of decentralization is the relationship and distribution of power of decision-making between local government, provincial and federal representatives. This should be underpinned by law and clearly defined financial and budgetary arrangements and mechanisms for accountability at all three levels.

• Mobilization of funds from local sources needs local capacity building which is a slow process and will affect the work of local governments in the short run.

• A survey of 27 selected districts and 82 Tehsils indicates that local governments are not allocating the required 25 percent share of development budget for CCB schemes.

• Provincial Government functionaries have still not fully accepted the idea of decentralization.

• Lack of awareness/inadequate knowledge of the new system.

• Hesitation in accepting/adopting new structures of local governance.

• Limited capability/resources to identify/analyse local problems.

• Slow process of restructuring services.

• No District Ombudsman office to redress people’s complaints.

Way forward

• Local revenue mobilization is very important for the sustainability of local governments. There is need for comprehensive capacity building.

• Sincere efforts are required for accepting the new role assigned to elected representatives and civil society.

• The institutions provided under the new system must be fully functional to achieve the objectives of decentralization.

• Necessary to develop a positive interface between national lawmakers and local governments in line with the philosophy of decentralization.

• The process of service restructuring for devolution needs to be expedited.

• The advantages of the new system are yet to be understood by all stakeholders.

TEHSIL MUNICIPAL ADMINISTRATION

Sri Lanka

11 Devolution in Sri Lanka

M.O.A. De Zoysa, Director, HKARTI, Sri Lanka

Introduction

Nearly 40 percent of Sri Lanka’s workforce is in the agriculture sector which contributes 18 percent of the GDP (gross domestic product) and accounts for 23 percent of export earnings.

Despite a relatively high level of social development, between 20 to 30 percent of Sri Lanka’s 19.5 million people are estimated to be living in poverty. The nutritional status of children and women is especially poor with one in five children having a low birth weight of less than 2.5kg. More than a third of the children under five years old are underweight.

Administrative structure

Sri Lanka has nine main administrative divisions known as provinces, which are subdivided into 25 districts that form the main bases of the regional administration. Each district is headed by a Government Agent, usually a senior career civil servant. A district is made up of administrative divisions and there are 324 such sub-district units, each headed by a government official known as Divisional Secretary. The administrative division includes village-level administrative units called Gramasevaka Divisions, each headed by a government official known as Gramasevaka who assists the Divisional Secretary and police authorities in administrative matters and the maintenance of law and order at village level. There are 14 009 Gramasevaka divisions for Sri Lanka’s 38 259 villages.

Three types of local authorities are recognized by the Constitution - the Municipal Council, Urban Council and Pradeshiya Sabha. There are 14 Municipal Councils, 39 Urban Councils and 256 Pradeshiya Sabhas. Each council is elected for four years on the basis of proportional representation. The Municipal Council is headed by the Mayor and the Urban Council and Pradeshiya Sabha by a chairperson each.

Only a limited amount of powers have been conferred upon local authorities by the central government and their financial resources are restricted. There are a lot of checks and limits on the working of local authorities.

Devolution and delegation of powers

Provincial Councils

The year 1987 marked the beginning of a new era in the post-colonial political development in Sri Lanka with the introduction of a major devolution package. Until then, the dominant tendency was towards centralization of state power.

The 13^th Amendment to the Constitution and the Provincial Council Bill in 1987 together form the basis for the devolution of power to newly established regional level authorities called Provincial Councils. A primary objective for setting upthe Provincial Councils was to speed up regional development through people’s participation in policy planning and implementation.

The Provincial Councils are elective bodies with a term of five years. The membership of each council is determined on the basis of its land area and population with one member elected for every 1000 sq km and 40 000 people.

Powers and functions

The powers and functions of the Provincial Councils are set out in List I and List Ill of the 9^th Schedule of the 13^th Amendment. The 37 subjects in List I or Provincial List have been exclusively devolved to the Provincial Councils while 36 subjects in List III or Concurrent List can be exercised concurrently by the Central Government and Provincial Councils subject to the supremacy of the centre in case of a conflict. These subjects cover all matters relating to regional development.

The main function of the Provincial Council is to approve policy decisions taken by the Board of Ministers. The Executive Branch of the Provincial Council consists of the Governor and Board of Ministers headed by the Chief Minister supported by the Chief Secretary.

The Governor

The Governor is the Chief Executive Officer of the Provincial Council who is appointed by the President for a period of five years and can be removed either by the President or by a resolution passed by the Council to that effect. The Governor links the Central Government with the Provincial Councils. The Governor appoints the Chief Minister and other Ministers.

Under normal circumstances, the Governor’s position is expected to be similar to that of a nominal executive. But in cases such as financial instability, failure of provincial administrative machinery and proclamation of the Public Security Act, the Governor can use discretionary powers with the consent and approval of the President.

Chief Minister and the Board of Ministers

The Chief Minister is the political head of the provincial executive. In normal circumstances, the Chief Minister and Board of Ministers are collectively responsible and answerable to the Provincial Council. The Governor’s sanction is necessary for all executive decisions taken by the Board of Ministers on subject matters in the Concurrent List.

Financial arrangements

Each Provincial Council is authorized to establish a Provincial Fund and to make appropriations from the Fund, which receives proceeds from:

• central government grants;

• taxes imposed by provincial council;

• loans advanced by the Consolidated Fund;

• other receipts;

• foreign grants and aid.

Provincial Public Service

Provincial Councils are empowered to set up a Provincial Public Service. However, the councils cannot organize a provincial recruiting system and officers for the provincial administration are to be drawn from the central public service.

Functional autonomy of the Provincial Councils

The distinctive feature of the Provincial Councils is that they derive powers directly from the Constitution and any change to the existing framework can be effected only through an amendment to the Constitution. This would mean that the functional autonomy of the Provincial Councils is well assured. However, there are a lot of checks and limits imposed on the Provincial Councils.

Checks on the Provincial Councils

The most important check is the manner by which powers and functions have been devolved to the Provincial Councils. The national parliament is still supreme with regard to the exercise of state power and, as such, the Provincial Councils are virtually subordinate to the Parliament.

The Provincial Councils have not been created on true federal principles which involve the division of political power between the centre and regional units. Only administrative powers have been conferred on the Provincial Councils. Central control is retained over the Provincial Councils through the following provisions in the Provincial Councils Act and the 13^th Constitution Amendment.

• The Governor is a direct representative of the Central Government.

• Similar subjects in Provincial Council and Concurrent Lists and making central law prevail over provincial law in respect of matters in the Concurrent List.

• Provincial Councils have to exercise powers within the national policy framework.

• Constitutional provision pertaining to Provincial Councils can be amended by Parliament with a simple majority if all Provincial Councils agree to it or with a special majority if one or more Councils do not agree.

• Centre can enact laws in respect of any matter in the Provincial Councils List following the procedure in 4.

• Centre can enact laws on any subject in the Provincial Councils List on a request by a Council.

• Provincial Councils cannot enact on subjects in List II or the Reserve List.

• Special powers with the President to regulate Provincial Councils under special circumstances such as a proclamation of Emergency, grave financial crisis and failure of the administrative machinery of Provincial Councils.

• Provincial Councils are prohibited from dealing with matters declared to be of national importance by Parliament.

• Provincial Councils cannot deal with the activities of public enterprises set up under a law enacted by Parliament.

• The Auditor General audits accounts of the Provincial Councils.

The purpose of these checks is to ensure that the working of the Provincial Councils is consistent with the national objectives. Yet, this has considerably weakened the functional autonomy of the Provincial Councils.

The Provincial Councils’ working is also affected by inadequate central commitment to the concept of decentralized administration. This can be seen in:

• the lack of clarity in the division of functions between the Central Government and the Provincial Councils which has been the main source of frequent conflicts between the centre and Provincial Councils;

• lack of financial resources; inadequate funds are provided by the Central Government and Provincial Councils have little means to generate additional resources. The resulting dependence of the Councils on the Central Government has been used to tighten central dominance over the former;

• dependence of the Provincial Councils on the Central Government public service to run the Provincial Public Service.

What has decentralization achieved?

A recent study of the devolution process in Sri Lanka found the following weaknesses:

• decentralization has not reduced inter-regional disparities in human development, particularly in income;

• the complex and unwieldy system of decentralization is affected by internal conflicts over control of resources; seriously deleterious effect on the morale of provincial public servants;

• high administrative costs as a result of complexity, duplication, conflict and fragmentation.

According to the World Bank, decentralization introduced in 1987 may have made an already difficult administrative situation worse.

References

Abeyawardana, H. A. P. (ed.) 1992. Legal environment for local government in Sri Lanka. Post Graduate Institute of Management, University of Sri Jayawardenapura.

Gunawardena, A. S. 1991. Provincial Councils - structure and organization. The CRDS Monograph Series, No.14, Colombo, Centre for regional Development Studies.

Kodikara, S. U. (ed.) 1989. Indo-Sri Lanka Agreement of July 1987. The International Relations Programme, University of Colombo.

Navaratne, V. T. (ed.) 1989. Public Administration In Sri Lanka. Colombo, Sri Lanka Institute of Development Administration.

Tressie Leitan, G. R. 1979. Local government and decentralized administration, Colombo, Lake House.

1978. The Constitution of the Democratic Socialist Republic of Sri Lanka.

1987. Thirteenth Amendment to the Constitution of 1978,

1987. The Provincial Councils Act No. 42.

1987. Pradeshiya Sabha Act No. 32.

1990. Peoples Bank, Colombo, Economic Review.

12 Agriculture development strategies in support of decentralization in Sri Lanka

H.S.Dharmawardena, Acting Director, Agriculture Development Division, Ministry of Agriculture and Livestock, Sri Lanka

Introduction

Sri Lankan agriculture, despite its small contribution to the gross domestic product, is still the mainstay of the rural economy. Over the past few decades, declining income and livelihood opportunities in agriculture have compelled more and more rural youth to migrate to urban areas.

A national policy framework and strategy for the development of the agriculture and livestock sector prepared with the participation of all stakeholders, aims to reorient traditional agriculture to:

• optimize utilization of natural resources;

• attain a certain degree of self-sufficiency;

• develop the local agro-processing industry;

• promote entrepreneurship among smallholders;

• optimize export opportunities.

Implementation

The following are the key elements of these strategies.

1. Decentralization of powers and responsibilities to:

• increase people’s participation in governance;

• decrease the authoritative nature of the central government;

• minimize conflict among ethnic groups;

• improve socio-economic equity;

• achieve national integration;

• empower local communities.

2. Recognize and incorporate the concept of decentralization for the development of the agriculture and livestock sector.

• On most occasions, decisions made and plans prepared at the national level for agricultural and rural development do not match the actual needs of the rural sector.

• Decentralization of powers and responsibilities will enable the identification of correct and appropriate solutions for regional problems.

• There is a stronger commitment of the regional political leadership for the implementation of decentralized development programmes.

3. A common vision among key stakeholders in the agriculture and livestock sector.

4. Develop and implement a policy and strategic plan.

5. Combine and share efforts to optimize resources/benefits among partners.6. Foster competitiveness, growth and profitability in the sector to attract private investments.

7. Partnership among public, private, community-based institutions and non-governmental organizations for the development of the sector.

Institutional organization is an integral part of the development plan to achieve its goals and objectives. The plan involves a number of agencies both public and private as well as non-governmental organizations and farmer organizations. It also involves close coordination between the central government, provincial councils and international agencies.

The national-level plans incorporate regional requirements identified by provincial, district and divisional level institutions. Provincial councils are implementing the agriculture development plan through provincial ministries and departments. A team of extension officers has been established at the divisional and village levels.

Monitoring and evaluation

There is strong emphasis on establishing an effective monitoring and evaluation system from the national to the village level. Besides evaluation by the Ministry of Agriculture and Livestock at the national level, agriculture committees at provincial, district and divisional level carry out regular progress reviews. Agrarian development councils at the sub-divisional level and farmer organizations at the village level are also playing an active role in the monitoring process.

The following performance indicators have been developed under the plan to evaluate the achievements.

• Conservation measures.

• Increased availability of seeds and planting material.

• Extension service centres/production units established.

• Increased natural resources use efficiency.

• Cultivated area expanded.

• New extents cultivated under different crops.

• Increased average yield.

• Increased production.

• Economic growth.

SWOT (strength, weaknesses, opportunities and threats) analysis of the agriculture development plan strategy

Advantages, strengths and opportunities

• Recognition and incorporation of the decentralization concept for the development of the agriculture and livestock sector.

• Commitment of the regional political leadership to plan implementation.

• Beneficiary participation can be ensured.

• National-level plans reflect regional and divisional-level priorities.

• A strong team of extension workers responsible to central and provincial authorities.

• Authorities for planning, implementation and management of natural, financial, physical and human resources.

Disadvantages, weaknesses and threats

• More than one institution for similar activities.

• Inadequate definition of roles/responsibilities.

• Inadequate political commitment.

• Inadequate coordination among stakeholders.

• Heavy operational costs/overheads.

• Elaborate procedures for establishment and finances.

• Political conflicts, different visions, missions, goals and objectives.

• Political bias and interference.

• Inappropriate application of vested powers.

Agriculture development plan

To achieve the above goals, new approaches, interventions and reforms have been identified.

Relax quarantine measures in the seed and animal feed industry and make available increased quantities of quality seeds and animal feed.

Micro irrigation and controlled environment agriculture technologies.

The programme has a target of placing about 10 000 ha under micro-irrigation. In view of the use of new technology and potentially high income levels, this programme can draw in a significant number of youth.

Crop diversification.

Diversification to improve productivity and income opportunities from uneconomic paddy lands as well as marginal and unproductive tea and rubber lands.

Demand-driven research.

The research activities identified will integrate basic long-term and targeted short-term programmes to develop new technologies, practices and production enterprises that increase profits, enhance the farm ecosystem and develop small-scale processing technologies to create value-added products from agricultural commodities.

Customized extension.

Timely access to information and technical guidance is central to improved agriculture and livestock productivity. Agriculture and livestock stakeholders often find it difficult to obtain assistance on time. Several new measures are being implemented, including:

• one roof service centres;

• one-village-one-product programme;

• communication and information centres;

• establishment of agri-clinics;

• strengthening technology awareness through mass media;

• modernization of in-service institute and training centres;

• establishment of agriculture science gardens.

Rehabilitation of minor irrigation schemes, land consolidation and farm mechanization.

Farmer and community-based organizations, non-governmental organizations, pradesheeya sabhas, provincial councils and departments under the central government are directly or indirectly involved in the planning and implementation of activities for the rehabilitation/augmentation of minor irrigation schemes and water distribution networks to increase cropping intensity and productivity.

Micro-credit facilities.

The government is providing several facilities for low-interest farm credit such as Farmer’s Banks.

Agro processing and post harvest management.

Emphasis is being given to promotion of local agro-industry with a focus on regional export opportunities. Almost all provincial councils have made provisions to facilitate the establishment of agro-based industries at the village level.

Marketing.

The government has established a mechanism to provide soft loans to provincial councils, district secretariats and farmer organizations for purchasing paddy and other agricultural products directly from producers. This system has enabled farmers to get reasonable prices for their produce.

Agricultural resources centres.

More than 540 Agrarian Services Centres are being established at the divisional level to provide implements and services to the farming community. The Ministry of Agriculture and Livestock has developed a long-term plan to convert the Agrarian Services Centres into Agriculture Resources Centres with the support of all stakeholders including provincial councils, private sector and farmer organizations.

Establishment of rural knowledge centres

The government is giving priority to encouraging the use of information and communication technology to improve farmers’ livelihoods. Information and communication technology centres are being established for farmers.

Establishment and strengthening of farmer organizations.

Farmer organizations have long been an integral part of agricultural development in Sri Lanka and emphasis is being given to increasing people's participation and representation in the decision-making process at the village level.

The central government and provincial councils are conducting programmes for social mobilization, awareness, knowledge improvement and skill development to establish and strengthen community-based organizations and small farmer groups. Special attention is being paid to strengthen women’s groups through the introduction and expansion of agriculture-based cottage industries and self-employment opportunities.

Recommendations

• Identify stakeholders and their responsibilities.

• Strong recognition for stakeholder responsibilities.

• Strengthen inter and intra-agency linkages.

• Expand opportunities for beneficiary participation in every aspect.

• Identify potentials, trends and development needs with the participation of stakeholders.

• Plan and implement result-oriented programmes.

• Minimize overheads/operational costs.

• Minimize administrative and operational channels and barriers.

• Strengthen monitoring and evaluation.

References

2003. National agriculture and livestock policy.

2003. Regaining Sri Lanka. A strategic framework for developing the traditional agriculture crop sector.

2002. Administrative report. Western provincial council.

Regional

13 Decentralization in CIRDAP member countries: experiences and issues

Mya Maung, Director General, Centre on Integrated Rural Development for Asia and the Pacific (CIRDAP)

Many CIRDAP member countries have experimented with various kinds of decentralization measures with the following main objectives:

• make development programmes and projects more effective;

• increase people’s participation;

• ensure efficient delivery of services;

• mobilize local resources;

• engender lower-level democracy;

• enhance coordination;

• promote equity;

• increase the bottom-up flow of information;

• enhance responsiveness of the central government to citizen demands and interests;

• maintain political stability;

• provide education and training for political leadership.

Decentralization mechanisms differ across countries in structure, networking of multi-level tiers as well as in the sharing of powers and functions. The process ranges from administrative deconcentration involving transfer of national government functions to sub-national levels with central control of budgets and policy making, to fiscal decentralization which transfers partial control over budgets and financial decisions from higher to lower levels, and finally, to devolution or the transfer of resources and authority to lower tiers of governance. Such a wide diversity in the approach to decentralization also makes it difficult to compare the trends across CIRDAP member countries.

The process of decentralization has generally been guided by three major concerns in these countries:

1. failure of the centralized approach to meet local needs;

2. increasing awareness of the complexity of local issues and the inability of a centralized structure to deal with such issues;

3. need to ensure people’s participation to ensure effectiveness, efficient and sustainable local development, particularly in rural areas.

Bangladesh

In Bangladesh, the process of decentralization has been guided by the following concerns:

• failure of the centralized approach to meet development needs and initiate rapid growth;

• increasing realisation of the complexity of local issues and the inability of the central government structure to deal with such problems;

• need for people’s participation for effective and sustainable rural development.

Steps towards decentralization

1. During the initial phase (1973-75), the development of local self-government Institutions was hampered primarily by the inherited colonial style of local government institutions.

2. Between 1976 and 1982, efforts were made to strengthen the system by setting up village-based organizations known as Gram Sarkar. However, the Gram Sarkar did not get sufficient time for consolidation because of the change in government in 1982.

3. From 1982 to 1990, the focus of attention shifted from the village to the thana, which was upgraded as the Upazila to be headed by elected people’s representatives. The most important characteristic of the Upazila system was the retention of regulatory and administrative functions by the central government, while residual development functions were transferred to the Upazila Parishad. Further, the Upazila Parishad was given funds for development along with responsibility for the preparation of the five-year and annual development plans.

4. During 1991-96, the Upazila system was abolished and a two-tier system was introduced with district and union councils. The Thana Development and Coordination Committee was formed to coordinate development activities at the thana level.

5. Legislation in 1997 allowed the government to hold Upazila (sub-district) elections and establish the Zilla Parishad (at district level) following the recommendation of the local government reform commission. The present government (2001-06) reintroduced the Gram Sarker.

India

The 73^rd and 74^th Constitution Amendments provide the basis for the Panchayati Raj system with panchayats (elected councils) at village, block and district levels in each state. The main features of the system are:

• mandatory elections after 5 years;

• quotas for vulnerable social groups including women;

• financial devolution and delineation of areas of responsibility.

Impact of decentralization

• Establishment of a pro-poor decision-making mechanism.

• Development of improved collaborative linkages between rural communities and other tiers of panchayats and administration.

• Internal cohesiveness of local-level institutions with strong capacity and awareness strengthens them for effective advocacy with the local administration.

• Community participation in planning/follow-up and monitoring improves overall village development.

However, research studies indicate continuing resistance to decentralization efforts by the bureaucracy and lower-level government officials.

Indonesia

Since 1999, Indonesia has been emphasizing a bottom-up approach to development, with communities designing and initiating schemes, and the government playing a facilitating role. The law stipulates development of village institutions including financial institutions, promotion of community participation and village enterprises as well as rural production and services.

Yet, the decentralization process has resulted in the weakening of inter-linkages between national government and local entities in terms of priority setting and capacity building through development planning and improved delivery of support services.

Lao People’s Democratic Republic

The New Economic Policy introduced in 1986 advocates an area-based rural development approach which aims to promote locally-owned "centres for change and learning" through empowering district and local institutions, human resource and capacity-building for public management and participatory community development.

The strategies include:

• creation of lead coordination bodies for the harmonization of planning, development and extension works;

• upgrading local capacity to manage development programmes;

• implementing research and development activities through existing grassroots institutions.

Malaysia

Malaysia has a three-tier administrative system at the federal, state and local levels. The Malaysian management of the economy is highly centralized in the federal executive branch of the government. Development planning is macro-oriented. The states act as implementing agencies.

Myanmar

The government is taking various steps towards the emergence of a developed and democratic state that corresponds to the political, economic and social conditions of the country. Practices, experiences, knowledge and understanding of the process of decentralization are still limited in the country.

Nepal

Nepal has more than four decades of decentralization experience. The two-tier local government system includes the Village Development Committee (VDC), Municipality and District Development Committee (DDC), with the first two forming the bottom level.

Pakistan

Pakistan inherited a tradition of strong centralized administration and an efficient framework of civil services, and local government institutions have not yet developed fully.

Philippines

Since 1986, power and authority are being transferred from the national to local government units, the private sector and civil society Local government units enjoy considerable autonomy. At least one-fourth of the membership of local government councils is reserved for NGOs. Elected local officials and councils have the power to approve their own budget and tax rates.

Constraints

• ‘Recentralization’ trends in the different branches of government.

• Reconcentration of power and control.

• Lack of human, technical and financial capacity.

• Serious problems to popular participation.

• Development plans/programmes generated by local bodies are inadequate.

• Local bodies are inoperative.

Sri Lanka

The formation of the Development Council in 1980 led the decentralization effort in Sri Lanka, although it also led to the demise of the town and village councils. In 1987, the provisions of the 13^th Constitution Amendment devolved local government functioning from the central government to the newly created provincial councils which, in turn, led to the demise of the district development council.

Thailand

Local government in Thailand is organized at six levels, three each for urban and rural areas. All forms of local government are subjected to central government control through the Ministry of Interior. Participation and involvement of NGOs is also limited. The Education Act of 1999 paved the way for rigorous reform in the education sector including decentralized management and quality education.

Viet Nam

Despite Viet Nam’s political system being dominated by the Communist Party, the following economic reforms have taken place with effect from 1980s.

Recommendations

The major objective of decentralization in the region has been to evolve a mechanism to enable rural people to provide effective inputs to development programmes.

The following suggestions can be made.

• Devise effective mechanisms to make local-level institutions participatory so that rural people can integrate their needs in development programmes.

• Ensure bottom-up planning and its integration with development efforts at upper levels.

• A strategic plan for decentralization with strong commitment of the government, political parties and donor communities.

• Institutions with proper human and financial resources.

• Appropriate methods of monitoring and evaluation need to be developed and applied to ensure flexibility and strategic planning.

Institutional innovation is an integral part of the process since the creation and restructuring of local level institutions are necessary pre-requisites for success and sustainability of local development efforts. Despite the existence of various mechanisms, inadequate coordination of activities among the various agencies seems to persist and emerges as a critical bottleneck in the CIRDAP member countries. Innovative efforts are required to overcome such deficiencies.

The effectiveness of local government from the district to the village level is again compromised by its dependence on the state and even the centre for resources. The influence of the line ministries extends to the local level where officials retain dual loyalties to the parent ministry and local elective institutions. The services of employees should be fully delegated to the local bodies in order to make the devolution of power effective.

14 Country experiences in decentralization in South Asia

B. Sudhakar Rao, Centre on Integrated Rural Development for Asia and the Pacific (CIRDAP)

The seven South Asian countries - Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka - are home to about one-fifth of world population and two-fifth of its income-poor people. More than 80 percent of South Asia’s poor live in rural areas.

Decentralization of governance to the rural level is crucial for empowering the majority poor in the region to overcome food and income insecurity. The extent of decentralization in South Asian countries may be measured in terms of:

• local government expenditure;

• representation of women and other weaker sections in local government;

• investment in rural infrastructure development;

• direct elections to different layers of local administration.

Capacity building of the rural poor and of local institutions to plan, implement and monitor local development is a priority in these countries. An attempt is made to review efforts towards this in the South Asian countries.

Bangladesh

Despite a declared policy to enhance local government expenditure, this still remains below 3 percent of GDP (gross domestic product). According to a UN Development Programme (UNDP) report, the lack of capacity building and marginalisation has weakened local government in Bangladesh.

Donors have shown a preference to work with NGOs and other community-based organizations. But there is now a greater need for a viable local government system for sustainable institution building and economic development.

Well acknowledged NGO efforts in capacity building need to be supplemented by governmental organization at the grassroots level. The Bangladesh Rural Development Board is to supplement the activities of NGOs for capacity building and provision of livelihood information to poor households, which will be met through organized training at different levels of local administration.

India

The Government of India through the Ministry of Rural Development has initiated a national action plan for capacity building of 3.5 million elected leaders of Panchayati Raj institutions.

Most rural poor in India have a small asset base. The Gram Panchayat (elected village council) is responsible for developing and managing community property resources such as forests, pastures, degraded lands and water sources on the one hand, and rural infrastructure on the other. All this requires capacity building.

Some impediments to rural infrastructure development are (a) lack of need assessment; (b) uneven development; (c) poor maintenance; (d) priority to non-productive infrastructure; (e) poor quality infrastructure assets; and (f) lack of people’s participation.

Nepal

The Local Self-governance Act (1999) and Regulations (2000) are milestones in decentralization which provide the framework for a local participatory planning process. The problems noticed in the implementation of decentralization are: (1) non-adherence to the participatory planning process; (2) ineffective coordination; (3) parallel and duplicated planning; (4) inadequate information for the planning process; (5) non-adherence to prioritisation criteria; (6) weak horizontal coordination and monitoring systems.

The 1999 Local Development Fund programme mobilised community participation to implement micro-infrastructure projects in rural areas. Donor agencies have supported the process of local governance, particularly in the areas of capacity building, institutions and social mobilization.

The district partnership programme works with District Development Committees (DDCs) and Village Development Committees (VDCs). It is a unique programme to strengthen local governments with participatory planning, organizational management, monitoring capabilities and to create district-level data bases and local plans. Various international organizations are supporting projects in partnership with DDCs, NGOs and civil society. Usually, the government shares some of the cost. The DDCs, VDCs, NGOs and user groups share labour/costs and donors provide technical/financial resources.

Pakistan

The 2001 Local Government Ordinance provides for devolution and institutional restructuring, besides distribution of resources at district level and strengthening of grassroots organizations. The key features of the ordinance are:

• voter’s age has been lowered to 18 years;

• representation for women enhanced to 33 percent at all levels;

• representation for peasants, workers and minorities at all three levels;

• local development training programmes for councillors;

• district government, tehsil and Union Municipal administrations have been set up with vast powers;

• strong links between Union, Tehsil and District Councils for effective coordination of the development process;

• legislative opportunities for all councillors;

• all three councils have the power to levy taxes;

• councillors have legislative and monitoring powers;

• direct participation of councillors in planning, management and monitoring of development projects;

• Zila Nazim is head of the district;

• all Nazims and Naib Nazims must have minimum academic qualification -matriculation/secondary school certificate or equivalent;

• district bureaucracy under the District Coordination Officer who is accountable to the Zila Nazim; police accountable to the Zila Nazim;

• urban-rural division for development has been removed; Tehsil Councils will execute and supervise municipal projects;

• people’s participation through Citizen Community Board and village council;

• citizens have development monitoring opportunity through provision of information on real service delivery; citizens also have direct role in monitoring the performance of district administration and line departments through the Citizen Community Boards;

• obligatory public display of information on various development activities.

It is premature to pass judgement on transparency in decision-making, the accountability of decision-makers and the responsiveness of governing institutions to people’s needs.

Sri Lanka

The functional autonomy of local councils is inadequate because of limited powers, limited financial resources and multiple checks on their working.

The Independent South Asian Commission on Poverty Alleviation outlined a regional strategy with the following objectives:

• poverty eradication is not possible without a dynamic pro-poor development strategy and the starting point of such a strategy is total social mobilisation;

• the state has to be the prime actor and its objective is to give power to the people;

• a pro-poor, participatory agricultural development strategy and decentralized small-scale industrialisation along with participatory social development.

Capacity building for the poor through capacity building of decentralized institutions such as self-help groups and locally elected bodies is to be stressed. Examples of subjects relevant for capacity building are:

• Development of the non-farm sector such as pre/post-harvest and upstream/downstream activities. This includes development of market information, policy support, cost and quality effectiveness.

• Small-scale enterprise development by self-help groups as in Bangladesh, India and Nepal. Local government bodies can play a major role in the formation of self-help groups and in enhancing their capacities to set up viable rural enterprises.

15 FAO rural development priorities in Asia and the Pacific

Wim Polman, Rural Development Officer, FAO Regional Office for Asia and the Pacific

Rural development assistance

The FAO Regional Office for Asia and the Pacific is providing rural development expertise and assistance to 14 Asian countries - Bangladesh, Cambodia, China, India, Indonesia, Iran, Laos, Myanmar, Nepal, Philippines, Republic of Korea, Sri Lanka, Thailand and Viet Nam. Assistance on specific rural development policy and capacity-building issues has been provided to Malaysia, Mongolia and Pakistan through partnership networks, including public and private sector organizations.

Rural development goal/challenges in the Asia-Pacific region

The major goal is poverty reduction and household food security in rural areas. Over 500 million hungry and poor people live in the region’s rural areas. Of these, more than 70 percent are small farmers, landless workers, indigenous people and persons with disabilities, with women and children being the most vulnerable. The 1996 FAO World Food Summit and the 2000 UN Millennium Development Summit set as their main goal, the reduction of global hunger levels by half, by the year 2015.

It is not so well known that the poor and hungry people in the region include about 160 million rural persons with disabilities, which have been caused mainly by malnutrition and accidents. It is estimated that over 260 million rural persons in the region are physically or mentally disabled or both. The FAO regional office is playing an active role in the implementation of the UN ESCAP (Economic and Social Commission for Asia and the Pacific) "Biwako Millenium Framework for Action" which was adopted by Asian governments in 2003 with the aim of creating an inclusive and rights based society for persons with disabilities.

Rural development strategy

• To empower the rural poor for sustainable agriculture and rural development (SARD) for achieving the MDG/WFS goal.

• Policy advice and technical project support focused on the effective decentralization of public institutions and strengthening of grassroots organizations in order to enable the rural poor to Improve their:

  - participation in local-level decision-making and planning;

  - access to production/social resources and services;

  - self-management capacities for developing viable and sustainable market-oriented rural enterprises.

Main local outcomes

• FAO Rural Development projects and regional networking have enhanced the capacities of decentralized government agencies for pro-poor development planning and delivery of services and enabled small farmers, hill tribe communities, village groups and small farmers with physical and mental disabilities to develop successful, small-scale rural enterprises.

• Promotion of village-level rural SME’s (small and medium enterprises) with agricultural cooperative enterprise development (ACED) as the first priority.

• ACED provides an opportunity to small farmers, landless and other rural poor to improve their livelihoods in conformity with local cultural and social values.

• The application of cooperative principles helps in leveling social, cultural and political barriers. Rural cooperative enterprise promotion is based on group participation in the procurement, production, processing and marketing of farm/non farm products as well as delivery of production, financial and other services.

• Agricultural cooperative enterprises also function as vocational schools which promote a broad range of skills and learning, enhancing self-confidence and leadership qualities among rural people, thereby providing a sound basis for their improved participation in local governance.

Promotion of rural entrepreneurship

Main constraints

• Unsuitable policies, planning, legislation, trade/investment, social/cultural biases.

• Weak rural SME capacity-building institutions at public, private sector and civil society level.

• Lack of focus by donors, research agencies and NGO’s on rural enterprise development issues.

First priority: building awareness

Building awareness among national policy-makers/planners that:

- developing village-level entrepreneurship by the rural poor provides unique opportunities for poverty and hunger eradication in rural areas;

- establishing horizontal and vertical linkages among rural SME clusters provides a solid framework for improved access of the rural poor to production resources/services, enabling up-scaling and specialization of rural enterprises.

Second priority: enhanced training capacities of partner agencies for rural entrepreneurship promotion

The following training manuals have been developed by the Rural Development section in the FAO regional office.

- Success case replication. a manual for increasing farmer household income.2001

- A handbook for training of disabled on rural enterprise development. 2003

- Handbook on small enterprises for hill tribe people in Thailand. 2003.

- Promoting rural women’s cooperative businesses in Thailand: A training kit. 2004.

Third priority: regional country networking on promotion of ACED

Promotion of rural SMEs and ACED through the Network for Development of Agricultural Cooperatives in Asia and the Pacific (NEDAC), a forum for 19 cooperative public and private sector organizations from 11 Asian countries representing 3 million agricultural cooperatives. FAO-NEDAC member activities focus on policy, legislation and capacity building.

FAO-NEDAC meetings/workshops/missions

• Strengthening management and development of agricultural cooperatives, 1997.

• Financial viability of agricultural cooperatives, Bangladesh, 1998.

• Impact of globalization and liberalization on agricultural cooperatives, Thailand, 2001.

• Capacity building in agricultural cooperatives for changing market and human resource requirements in the region, China, 2001.

• Promotion of ACED business planning/field-level exchange visit, India, 2003.

• Joint NEDAC/ICA (International Cooperative Alliance) declaration on food security, through cooperative development, 2000.

• Joint FAO-RAPS/ICA mission to Nepal on national cooperative policy and training needs, 2000.

• Regional workshop on information technology in support of ACED, Thailand, 2004.

Support to capacity building for promotion of women’s agricultural cooperative enterprises in Thailand

An FAO Technical Cooperation Programme (TCP) project (2002-03) supported in-house capacity building in the Cooperative Promotion Department of Thailand’s Ministry of Agriculture and Cooperatives for the promotion of rural women’s cooperative enterprises.

Provincial-level mobile trainers’ teams in five regions were trained to use an FAO training handbook on business planning for rural women’s enterprises, covering food, wood, textiles and handicrafts produced by 5 000 women farmers’ groups. Additional ACED training programmes were organized for dairy and fisheries cooperatives.

The main outcomes of the TCP:

• recognition of the core role of the Cooperative Promotion Department in the One Tambon One Product (OTOP) national poverty reduction programme which assists local producer groups in marketing improved quality products;

• a shift in the attitude of women’s group members/leaders from traditional acceptance of outside help to independent business planning for improved marketing of their produce.

Joint UN ESCAP-FAO Asian project on for poverty alleviation through success case replication for market-generated rural employment

• Covering 3 300 farmer families in eight Asian countries during 1996-2000, the project developed an innovative methodology known as Success Case Replication (SCR) for multiplication of village-level, food/non-food rural enterprises. The project reported a success level of 71 percent. On average, participants obtained an additional annual income of US$500 at high cost-benefit rates - US$1 to US$54 in Sri Lanka.

• The successful entrepreneurs, often women, became SCR trainers themselves, resulting in a ten to hundred-fold replication of successful farmer enterprises.

• The factors in the success of the SCR approach are trust, use of local knowledge, enterprise skills adapted to local cultural/social conditions and strong commitment/monitoring by inter-agency public-private sector partners.

• The SCR methodology can easily be applied to other types of capacity-building rural development projects. The FAO Rural Development section in collaboration with the International Labour Organization (ILO) has used the SCR methodology for rural SME development by farmers with disabilities in Thailand and Cambodia

Rural SME development by hill-tribe village savings and credit groups

• Hill tribe people in northern Thailand are among the most vulnerable of the rural poor. The Thai Savings and Credit Union Cooperative League (CULT), and the Hill Tribe Village Association (MEDP) have successfully developed village-based savings and credit unions for hill tribe women. The mainly illiterate village women have been trained in the financial management of group-based credit mainly for the production of food to meet local consumption needs. Without access to roads, marketing inputs and services, most groups lacked market-orientation.

• Building upon these village credit unions, the FAO Rural Development section, jointly with CULT, MEDP, the Thai Government’s Welfare Centre and two local NGO’s, successfully developed a training programme for women’s group enterprise development in three hill tribe villages. An FAO handbook and training material on SME business planning for village women’s groups have been field-tested. These are being successfully utilized by CULT women enterprise centres for the domestic and international marketing of a range of high-quality artisan products.

Support to rural entrepreneurship by farmers with disabilities

• An FAO TCP project during 1998-2000 developed in-house training capacities within the Thai Ministry of Social Welfare and Labor for the development of entrepreneurial skills among farmers with mental or physical disabilities. More than 120 farmers with disabilities were enabled to start successful careers as mushroom producers. The training was organized after careful selection of the rural enterprise and participants; construction of adapted training/production facilities; and using a training methodology that emphasized attitudinal change along with entrepreneurial skills development.

• The project resulted in sustained increases in the incomes of the trainees, improving their food consumption and social status. The training is being continued with annual budgetary support from the Government. The ex-trainees have established a group farm with family support and assistance from the extension office, entrepreneurs and academia. FAO rural development activities in support of farmers with disabilities have been recognized by other UN agencies such as ILO, the Economic and Social Commission for Asia and the Pacific (ESCAP), NGOs and the international media.

Capacity-building for pro-poor local governance

The second FAO rural development strategy in the region is aimed at capacity building for pro-poor participatory local governance.

• A handbook has been developed and field-tested for developing capacities of governmental/non-governmental training institutions for participatory local planning and decision-making. The focus is on training three million rural councilors, a third of them women, elected to India’s village-level Panchayati Raj local governance institutions. The nine training modules in A handbook for trainers on participatory local development were prepared over three years in consultation with grassroots practitioners and senior government officials/experts on decentralization and rural development.

• An additional training package has been prepared on promotion of village-level SMEs by rural women

Regional networking on decentralization issues

The Dhaka-based Centre on Integrated Rural Development for Asia and the Pacific (CIRDAP) provides a broad platform for policy advice and capacity building within governmental rural development agencies in 13 Asian countries. The main priority is strengthening human resource development capacities within national and decentralized institutions for training of trainers on local governance.

• An FAO-CIRDAP regional workshop on decentralization and the role of rural organizations was held in November 1998 in Thailand.

• FAO Rural Development technical assistance was provided through projects funded by the UN Development Programme (UNDP) to strengthen (i) village-level planning for pro-poor local development and (ii) self-management capacities of small farmers’ and women’s production groups in five townships in Myanmar's southern Shan State in 2002.

• FAO Rural Development support to Laos in UNDP-funded project formulation for strengthening national planning capacities for the third phase of the National Decentralized Rural Development Planning Programme in 2001.

• Support provided through UNDP-funded projects in Viet Nam on capacity building for (i) provincial planning of agricultural support services during 1996-1998 and (ii) the "renewal of rural development" project in Viet Nam in 1998.