The Management of Public Services in Central Asia

Institutional Transformation in Kyrgyzstan

David Scott

• Publisher: Routledge
• Year: 2016
• eBook ISBN: 9781317290131
• Edition: 1
• Topic: Politics & International Relations
• Subtopic: Social Policy
• Index: Politics & International Relations

The ending of the Soviet Union in 1991 had a major political and economic impact on Central Asia. Kyrgyzstan was one of the most severely affected countries, suffering a deeper recession than the other republics. During the first five or six years Kyrgyzstan followed the advice of the International Monetary Fund and was considered a model of both economic and political reform.

This book analyses the ability of the newly independent government in Kyrgyzstan to create a realistic national vision, prepare a strategy, organise and control its public services to deliver the desired result. Covering a fifteen year period and using the case study of the educational sector – which declined even though the economic situation in Kyrgyzstan improved – the author throws light on many other aspects of a country in transition, in particular, on strategy, implementation and outcomes. Comparisons with other sectors such as roads and pensions, and in particular the health care sector are presented. A multifaceted approach using case studies, phenomenology, interviews, historical and comparative analyses offers a more complete picture of national management of public service and the structure of government administration. The book also investigates the contribution made by the international aid organisations.

A detailed study of institutional transformation in Kyrgyzstan, this book is of interest to academics studying former socialist countries in transition, the history of the Soviet Union and Central Asian studies in general.

1    Introduction

In 1991 the Soviet Union collapsed and the Central Asian republics suddenly had to create the structures needed by an independent state. This was an unprecedented situation for which the republics had made no preparation. Some of the institutional structures continued for a while but before long the integrated economy of the Soviet Union fell apart. Each country had to fend for itself.

For almost 70 years, policy decisions had been taken in Moscow then communicated to the republics along with funds for implementation. When these arrangements suddenly ceased there was turmoil with mass unemployment causing poverty and shortages, particularly of food and medicines, causing hardship and hyperinflation. The leaders of all of the Central Asian republics decided to create free market economies. This meant they had to privatise industry, allow prices to rise to market levels and accept that the value of their new currencies would be set by international currency trading.

In this chaotic environment the government had to impose taxes, generally VAT and excise taxes, to pay for the essential services that would not be privatised. They also needed ministries and local government structures which could decide between competing needs, establish priorities and determine what could be achieved with the limited resources. Under the Soviet system the role of the republican ministries was limited to implementing the policies that had been established in Moscow. The independent states quickly had to make decisions and compromises about taxation and spending priorities. They worked with almost no statistical information and without any history to guide decision-making.

Although faced with similar problems, the republics made different decisions about the pace and detail of their economic reforms. The outcomes will be determined by these decisions along with varying inherited legacies and attitudes. This book concentrates on Kyrgyzstan, which was one of the poorer countries but also the one which was quickest to implement free market changes. It examines how Kyrgyzstan dealt with the conceptual and practical challenges of managing public services in a market economy. Two high-budget government responsibilities, education and health care, are examined to contrast different approaches and to consider their results. However, the issues raised apply to other public services and in large extent to the other republics.

The Soviet administration was replaced in Kyrgyzstan by an ineffective public administration that fragmented responsibility for the management of education over several ministries and regional governments. Within a few years the government increased the duration of secondary education and quadrupled the number of students in higher education, even though it could not fund existing schools and universities. Quality was sacrificed for quantity. The provision of education in rural and poor areas suffered most because the government decentralised responsibility for finance, introduced fees and allowed informal payments. Education lacked the basic functions of management: leadership, planning, organising and control. International organisations worked in Kyrgyzstan for a decade, but did not help the government confront the challenges of the huge reduction in resources. The quality of educational provision was still declining in 2005 and the decline looked likely to continue.

The government of Kyrgyzstan could not afford to pay for the level of public services provided by the Soviet Union. It was faced with a conceptual challenge to determine what level of service to provide with the reduced funding and the practical problem of creating structures to deliver the service. Public services needed to be managed because funding was limited. In order to achieve high priority goals, public services such as education must use resources strategically. The effectiveness of public expenditure varies considerably between countries. There are large differences in achievements at the same level of expenditure and similar achievements with large differences in public expenditure. Better outcomes are not always linked to high spending. The way resources are used is critical.

The book contributes to the understanding of contemporary Kyrgyzstan by describing what happened in the management of the education sector between the collapse of the Soviet Union in 1991 and the resignation of President Akaev in 2005.

The author worked for many years as a manager in a global industry and experienced many situations where businesses had to be restructured because of changes in the market or technology. The problem created when, within a few years, the money available to pay for education reduced by 70 per cent provided an opportunity to consider how a business approach might be applied to public administration. It seemed incredible that the government attempted to increase the amount of education provided when funding had been reduced to less than a third of the amount provided by the Soviet Union. The book shows that coherent decision-making was impossible with the structures set up after independence. However, there is no attempt to cover the difficulty that would have been faced by any politician who had proposed massive reductions in schooling. The detailed information provided in this work may allow others to consider this aspect of government decision-making.

The restructuring of one of the other big budget government activities, health care, is described because it was carried out in a business-like way. It is clear that the health care reforms resulted in provision that was much better than it might have been. However, the brave politicians and health care professionals who devoted many years and much personal effort to achieving the reform received little kudos. Health care continued to be poorer than during the Soviet period because the country was much poorer. It seemed that the people who had worked to prevent disaster in health care were blamed for the lack of resources.

The two sectors were reviewed using a simple model which considers the functions of leadership, planning, organisation and control. The weaknesses in the management of education are made more graphic by comparison with the management of health care. Both are large public services which suffered severe reductions in resources, but they were managed in different ways. The analysis shows that the health care approach was more effective. Good management cannot fully compensate for massive reductions in resources. The argument is that health care was better than it might have been, not that it was as good as during the Soviet era.

The book begins with a description of the political, social, economic, educational and health care context at the time of Askar Akaev’s presidency. The material in Chapter 2 is based on fieldwork and much of it is not available elsewhere.

Chapter 3 describes the structures set up to manage education after the collapse of the Soviet system. The structures include legislation, funding and administrative arrangements. Chapter 4 identifies concerns about resources, falling achievement, regional differences, corruption and the mistrust of qualifications. Chapter 5 shows that the Ministry of Education played a passive role in managing education.

Chapter 6 analyses the management of education using Fayol’s model which focuses on leadership, planning, organising and controlling. There are many models of management behaviour; this one was chosen because it could be studied without having access to senior members of the administration. Chapter 7 provides a description of health care during the same period using the same structure.

2 Soviet legacy and transition in Kyrgyzstan

When the Soviet Union collapsed at the end of 1991, Kyrgyzstan became independent and began the transition from central planning to a market economy.

This chapter provides a political, social, economic, educational and health care context for the challenges of changing from being part of the centrally planned Soviet economy to being an independent nation with a market economy. The events described in this chapter had an important bearing on the government’s response to the challenges.

2.1 Political context

The end of the Soviet Union, in December 1991, was the major political and economic event to occur at the end of the twentieth century and affected the everyday life of around 400 million people. Central Asia had been under the control of the Soviet government since around 1920. The Soviet authorities developed the infrastructure of Kyrgyzstan and governed the country for almost 70 years.

Initially there was constitutional uncertainty in Kyrgyzstan but, in 1993, the country adopted a new constitution and became a republic headed by a president who exercised executive power and was supposed to share authority with the parliament and the judicial system. The parliament had legislative power, but there was no concept of government and opposition. There were no large political parties based on coherent political platforms and wide social base. All members of parliament were in opposition to some extent, with the result that factions were small and differed according to the issue. This made parliament inefficient and fairly easy for the president to control. The president generally set policy. Regional government was provided in the seven oblasts and the capital city by branches of the executive; these were not locally elected bodies. The presidential administration had departments in each of these eight administrative regions. Below them were more than 400 city and village councils. The president appointed the governors of the oblasts, rayons and cities.

It is misleading to look only at the formal structure. The perception of how the system worked in practice is reported below. This perception was widely reported in Kyrgyzstan¹ but was difficult to verify.

The president was given money by the people he appointed as cabinet ministers, heads of institutions such as tax and customs, the state prosecutor, police, the security service, the directors of republican hospitals, the judiciary and the oblast governors. In some cases, people were appointed because of clan membership or their ability to deliver votes, but generally they paid for the appointment. These people had low salaries, much less than was needed to support the visible lifestyle they enjoyed. Once appointed, they had a limited and uncertain period of time in which to recover the investment made to obtain their job; they did this in a number of ways, including selling subordinate appointments.

Members of parliament were elected, but in most of the country, electors expected to be paid for their vote. This meant that, generally, only the wealthy could be elected; in a poor country this meant either businessmen or people involved in crime. Once elected, the members of parliament were rewarded with benefits such as freedom from tax investigations and the support of the police and the prosecutor. This supported their businesses, whether criminal or commercial. Although they debated legislation and often opposed the government, their primary concern was private business.

After independence, it became common for electoral candidates to make payments to voters. A commonly quoted example was that, in the countryside, groups of families or entire villages openly discussed the offers made by candidates and then collectively chose which to support. Typical inducements were said to be payments of a few dollars to each voter, with perhaps ten dollars to old people, and a contribution to the village school. In other cases vodka was distributed. In towns, it was reported that university rectors could deliver large numbers of votes. The mechanism was that a few students were asked to go to the polling station and return with their voting slip for which they might be paid about one dollar; these slips were completed in favour of the politician being supported and given to the next group of students who took them to the polling station and returned with their own blank voting slip which they exchanged for payment. When asked why they did this, the usual answer was to shrug their shoulders and say that the politicians will do nothing for them after the election so they may as well get something while they can.

Since there were no large political parties that were able to raise funds to support their representatives, each individual politician needed money to pay for votes. In an impoverished post-Soviet state, it was difficult for people to acquire large sums of money legitimately. The result was that political candidates sometimes needed the support of people involved in illegal activity. Once elected, members of parliament were motivated to use their period of office to build up funds for their re-election. There was a common public perception that some politicians were either criminals or had connections to criminals. In this environment decision-making did not depend on rules and policies but on deals. There was no certainty about how the administration would react in any situation. The government was structured to ensure that there were no challenges to the president. Responsibility was fragmented so that only the president and his administration could make decisions.

People working in public administration were more motivated by making money than doing their job. Little was done to manage the public services, and contact with the public was often seen as an opportunity to make money. Salaries were low and some people, who were incapable of doing their jobs, simply did nothing. They relied on a few “workhorses” to keep their department going. In this environment it was difficult for anyone to avoid corruption. It was an environment in which corruption and criminality could flourish. It was difficult for reformers, or those who wished to rid the country of corruption, to have any influence.

The skilled Soviet bureaucrats who had administered the country’s public services quickly dispersed; they joined private businesses, non-governmental organisations (NGOs) or emigrated where pay was higher. Favouritism towards social networks, based on clans,² and corruption became widespread and inhibited effective government (Cummings and Norgaard, 2004). These social networks were long-standing arrangements that had survived, even though the Soviet administration discouraged them (Rumner, 1989). After independence, they became more overt and were the core of organised crime in Kyrgyzstan. Most of President Akaev’s close associates were from his region, and consequently people from his Sarybagysh clan were prominent throughout the government administration.³ The civil service was dominated by people from his or his friends’ clans.

By the second half of the 1990s, jobs in government were mainly given either to people from a social network or in return for payment. In general, government employees were not motivated to work, because the person to whom they had given money protected them. These jobs were poorly paid, but contact with the public was a money-making opportunity, whether it was in connection with passports, driving licences, educational grants, taxes, customs clearance or police matters. Companies reported continual harassment by inspectors wanting to be paid. It is alleged that part of the money paid by the public was passed up to more senior people in the organisations. A survey (Urban Initiative, 2006), in early 2006, reported that 45 per cent of respondents perceived high levels of corruption in local governments. Rayon and state oblast administrations and ministries were perceived as corrupt by over 60 per cent of respondents and law enforcement entities scored significantly worse.

After independence from the Soviet Union the government of Kyrgyzstan became responsible for the macroeconomic management of its economy. Once the privatisation of most industrial and commercial enterprises was completed, the government had to broadly match its expenditure with its revenue from taxation. However, the tax system was not rigorously enforced. It was reported⁴ that memb...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Table of Contents
• List of figures
• List of tables
• 1 Introduction
• 2 Soviet legacy and transition in Kyrgyzstan
• 3 Creating post-Soviet structures for education
• 4 Education concerns
• 5 The Ministry of Education
• 6 Management of education
• 7 Management of health care
• 8 Conclusions
• Appendix: methodology
• Glossary
• Index