El sistema de las Naciones Unidas

The process of resource sharing with the wider population is further exacerbated by the complex and weak decentralisation process in Kyrgyzstan. Decentralisation saw major accomplishment in the transfer of state-owned assets to rural municipalities. Under these conditions, municipalities are responsible for their own budget management without direct accountability to the national government. The 1992 Act on ‘Local Self Government and Local State Administration’ ensures the transfer of local government powers to local councils (Alymkulov and Kulatov, 2001 p. 526). The principle of local self-government was subsequently codified in Article 7 of the Constitution (1993): “Local self-government in the Kyrgyz Republic is exercised by local communities, which govern affairs of local importance according to the law and at their own initiative” (Ibid). It provides a base for the operation of local self-governance at the village level. The Land Code under the Act ‘On communal property’ further defines the land as the property of village communities. Village administrations as such are independent from the central government. According to the law on self-governance, the use of natural resources should be managed via local self-governance. In reality, however, the hybrid institutional bricolage of Kyrgyzstan prevents the effective redistribution of rents stemming from the natural resource sector. Most of the natural resources are based at the community level and are managed by local self-government bodies. However, there is a lack of interaction between local and central state structures as well as between local populations and extractive companies (see also World Bank, 2015d). Moreover, local self-governments at the village level represents the first source of power and help. Yet, how effectively theses authorities respond to population needs depends significantly on the degree of accountability, by whom and how they are formed, and how they relate to the population. The World Bank/EFCA (2014) study notes that in many communities the vision of state agencies do not fall in line and is sometimes conflicting to the one of the local population. As the study further emphasises, the influence of state agencies on the opinions of the local populations is small. My interviews conducted with regional MSG representatives and also donor organisations working at village level reported that, although the post-Bakiyev68 government is trying to introduce regulatory mechanisms, their effective implementation is complicated or blocked at the local regional level, where

local power structures override central authority69 _{rules and instead impose their own}

governance system, which in return further serves to fuel local tensions. In fact, as Pauline Jones (2004b) describes in her analysis, subnational leaders exercise much greater influence in practice that they are allowed to on paper. The anthropologist Judith Bayer (2007, p. 3) notes “what we can observe in local political action are not representations of the state or state practices, but often entirely new practices”. The implication is that the state in Central Asia must often engage in political negotiations with its peripheries in order to implement its policies. Therefore, the context of political and economic decentralisation in Kyrgyzstan further explains the ineffective implementation of the EITI. Such a fragmentation between the national and local levels poses significant challenges to EITI implementation at regional levels. As a result, money is not always adequately distributed or lost in transfers between different structures of money allocation. The study of Baimyrzaeva (2011, p. 32) indicates that self-government bodies are ought to retain 90per cent of the locally collected revenue, but in practice they retain only 10 per cent. To complicate matters further, the budget is redistributed by the national government and also filtered through oblast and rayon levels of territorial state administrations before reaching local self-government bodies (Ibid). Taxes collected from mining industries at the local self-governance level directly go to the state national budget that later distributes the respective monies to relevant state agencies and regions to reach at the end local communities. As the graph below illustrates the multi-layered process makes resource distribution untransparent and consequently creates losses in the system.

69_{Similar findings were reported by David Trilling in EurasiaNet 2013. Kyrgyzstan: Amid Price Plunge,}

Gold Mine Auction Faces Multiple Hurdles. [Online]. Available at: http://www.eurasianet.org/node/66845 [Accessed 8 December, 2016])

Figure 3. Decentralisation and EITI process in Kyrgyzstan The graph below shows decentralisation and the EITI process:

Local self governance AO

AK

State Agencies (Ministry of State Agency

of Geology) State Administrations Donors State Redistribution of state budget Collection of taxes Monitoring Civil societies EITI Population Companies Influence Resources Transfer of Taxes

Local self governance AO

AK

Redistribution of state budget

What we can clearly observe is that the decentralisation process follows a top-down approach marked by weak accountability and monitoring processes. Moreover, many of the rural councils in Kyrgyzstan are subsidised, and those subsidies are allocated for earmarked targets (CABAR, 2016). Hence, such a system creates an inequitable structure of budget allocation with some rural villages receiving more resources than others70. In such a fragmented system, it becomes then evident that budget allocation does not match local conditions and the needs of the population. This further explains why central government rules and expectations mismatch with local village levels. Clearly, as the graph demonstrates, there is a huge gap between the central level, civil societies and the population. Donors interact with the government to mainly support governance development of the state, however, their work is tightly monitored by the state. Interviews from the field work show that in the overall process extractive companies mainly deal

70_{Author interview with Turgunbek Atabekov, Head of the “Foat” Public Association, Bishkek,}

with the natural resource sector in providing revenues for the government budget and have little interaction with civil societies and local communities.