Communities headed by Communist mayors receive twice as much in government subsidies as the rest

Over the last four years, transfers made from the State Budget to local administrations have largely depended on the political affiliation of the mayors. This is one of the conclusions at which the experts of the IDIS Viitorul Institute arrived in conducting an analysis of the local finance system, Info-Prim Neo reports. According to the experts, the current local public finance system favors a limited group of communities, while the largest majority of communities receive insignificant subsidies. Expert Veaceslav Ionita, program director at IDIS Viitorul, asserts that the biggest problem is not the shortage of funds in this system, but rather the way in which the allocated money is distributed to the local administrations. An analysis of the state budget laws for the period 2005-2008 showed that the communities headed by Communist mayors have received subsidies destined for investment by 2.2 times larger than those headed by mayors that represent other political parties. Veaceslav Ionita believes that the structure and the size of the local budgets do not correspond to the needs of the communities because of a preferential system that has been instituted by the Government of Moldova. Thus, the Communist Party (PCRM) currently controls some 37 percent of the mayor’s seats, but enjoys approximately three-quarters of the total capital investments made in the country. In conducting the study, the experts observed that the generous financing of unaffiliated mayors and even of some mayors representing other parties has been encouraging their shift to the PCRM. In these circumstances, says Ionita, the local authorities are no longer elected on a skills basis, but depending on their capacity to obtain subsidies from the Government, that is on a party-affiliation basis. The trend of government subsidies over the recent years indicates a series of changes in the system of distributing money meant for capital investments. Thus, since 2008, the central authorities have quit hiding their inclination to back the interests of those elected on PCRM’s lists. According to the experts, the Government tries to make the method of distributing subsidies look equitable, but the reality is completely different. The allocation of resources on political criteria brings great electoral benefits to the ruling party in smaller communities. The smaller the village, the greater the chances to buy votes. The experts go on to add that the way in which the money in the Government’s Reserve Fund is used also deserves increased attention. According to them, certain sums of money are suspiciously used to serve some political ends by favoring certain local authorities. The money destined for capital repairs is distributed on similar clientele-based criteria. Thus, 98 percent of the total sum earmarked for capital repairs was directly allocated to the communities whose mayors have been elected on PCRM’s lists, and the remaining 2 percent to the communities headed by independent mayors. Veaceslav Ionita asserts that the explanation for the current situation of the local authorities is the absence of a law on local finances that would actually do the job and create a strong legal framework. The economic analysts say that the present system is not based on a clear concept for the communities’ development. There isn’t a strong linkage between the economic potential of a certain community and its budget. Ionita remarks that a centralized, inefficient, politically-engaged and costly finance system like this is unable to correlate the national economic potential and the local budgets. The measures recommended by the experts to improve the situation are to optimize the administrative-territorial structure and to shift financial resources from excessive administrative expenses to capital investments in every locality.