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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 multi-
dimentional, 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 trans-
Atlantic 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       Agency                  Exemption
1       Parliament              a. members of the staffs of the factions
                                b. MPs
2       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           civil   aviation
                                   administrations
3       Council of Justice
4       Constitutional Court, a. Judges
        Common          Courts, b. Prosecutor General
        Procuracy               c. Prosecutors
5       National Bank           a. Board Members
                                b. President
6       Chamber of Control      Chairman
7       Staff of Ombudsman      Ombudsman
8       Governors and Their
        Staff

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                          Institution                Defining Authority
1        a. President of Georgia                      Law
         b. MPs
         c. Member of Constitutional Court
         d. Officials, whose job is stipulated in the
         Constitution
2        Member of Council of Justice                 President of Georgia
         Staff of Council of Justice
3        Staff of the Parliament                      Chair of the Parliament
4        Staff of the State Chancellery               President of Georgia
5        Staff of Constitutional Court                Constitutional Court
6        Staff of Supreme Court                       Supreme Court
7       Staff of Common Courts                                 Council of Justice
8       Other civil servants                                   a) list of salaries and
                                                                   names of positions – by
                                                                   law;
                                                               b) parameters of salaries –
                                                               by the President of Georgia
9       Local self-governance employees                        Local self-governing unit
                                                               (Sakrebulo)
10      Staff of Chamber of Control                            Chair of Chamber of
                                                               Control

Different arenas for approving number of personnel:

    N               Agency                                    Approval
1       Staff of the Parliament          Statute of the Parliament
2       Staff of the State Chancellery   President of Georgia
3       Staff of Constitutional Court    Constitutional Court of Georgia
4       Staff of Chamber of Control      Chair of Chamber of Control
5       Staff of the National Bank       Chair of National Bank
6       Staff of the Ombudsman           Ombudsman
7       Staff of Ministries              Minister
8       Staff of State Departments       Head of State Department
9       Staff of State Inspections       Head of State Inspection
10      Sub-Agency Staff                 Heads of Relevant Agencies
11      Local         Self-Governance    Head of Self-governance unit
        employees

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.    Positions where appointments or elections are completed by the President or Parliament;
 b.    Deputy Ministers, Assistant Ministers, Advisers;
 c.    Temporary replacements;
 d.    Acting officials in competition-bound positions;
 e.    In case of promotion;
 f.    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                    Agency                        Competition Attestation Commission
1    Staff of the Parliament                     Competition-Attestation Commission         of
                                                 the Parliament
2    Staff of State Chancellery                  Competition-Attestation Commission         of
                                                 the State Chancellery
3    Staff of Ministries                         Competition-Attestation Commissions        of
                                                 Ministries
4    Staff of State Departments                  Competition-Attestation Commissions        of
                                                 State Departments
5    Staff of State Inspections                  Competition-Attestation Commissions        of
                                                 State Inspections
6    Staff of the Constitutional Court           Competition-Attestation Commission         of
                                                 Constitutional Court
7    Staff of Common Courts                      Competition-Attestation Commissions        of
                                                Common Courts
8    Staff of other Civil Service Agencies      Competition-Attestation Commissions of
                                                Civil Service Agencies
9    Staff of Local Self-Governance             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 competition-
attestation 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 34,000-
   35,000 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 co-
             ordinated, 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                         Georgian Institute of Public Affairs
Address                                          2 Brosse Str. 380008, Tbilisi, Georgia
Contact person and telephone number              Giorgi Margvelashvili -rector
                                                 Mzia Mikeladze - dean
URL                                           http://www.gipa.ge
Description of the organization               A higher education organization providing
                                              graduate programs in public administration,
                                              journalism and media management
Year established                              1994
Mission                                       Provision of graduate programs in public
                                              administration, journalism and media
                                              management; provision of consulting and
                                              training services to the government
List of parent and subsidiary organizations   Parent: NAPA (National Academy of Public
                                              Administration, Washington, DC, USA)
Area of Specialization                        Higher education and training in public
                                              administration
Services offered                              MPA, MJ programs, courses, training and
                                              advising
Number of employees                           see attachment 4
Relevant History                              see attachment 4
Financial resources/support received          NAPA (USA), Open Society Institute (OSI),
                                              Eurasia


Name of the organization                      Georgian Foundation for Strategic and
                                              International Studies (GFSIS)
Address                                       7 Nikoladze Str. Tbilisi, Georgia
Contact person and telephone number           Alexander Rondeli – President
                                              Temuri Yakobashvili – Executive Vice-
                                              President tel:(995 32) 93 13 35
URL                                           http://www.gfsis.org
Description of the organization               Independent, not-for-profit foundation,
                                              providing training, policy-relevant research,
                                              organizing seminars and conferences.
Year established                              1998
Mission                                       Provision of training in the field of foreign
                                              policy, national security and economics
List of parent and subsidiary organizations   none
Area of Specialization                        Training, research, publication
Services offered                              Training program for government officials,
                                              research and analysis
Number of employees                           7
Relevant History                              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.
Financial resources/support received          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 self-
government 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 one-
    year 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 on-
    running 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:



4
 Vazha Gurgenidze. Improvement of State Administration System – Main Pre-condition for Social-Economic and
Political Development. UNDP, Discussion Paper Series 1. Tbilisi,1999
       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, anti-
corruption 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.

				
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