Maksim SEMENYAK, World Bank Consultant, commissioned by “Municipality” magazine
Planning and forecasting tools are important for any development process, from family budgets and school schedules to complex and large-scale regional and national programs and strategies. LSG bodies are also involved in this process, being themselves, in fact, an important element in the development of their own territories and the country as a whole. Their efforts in making plans and programs bring different results: somewhere they help to reach new heights, and somewhere they leave the community in a state of stagnation. This difference depends on many reasons: the level of training of planners, the quality of methodological materials, the lack of funding. But the most important question is not about the reasons, but about whether the current development programs they are drafting are useful for LSGs and local communities themselves? Does anyone use them to actually manage the process of territorial development?
The best answer is yes, they are certainly useful if they are designed in such a way that they contain the information you really need, are easy to work with, and have all the necessary figures at hand. But how can we make sure that all socio-economic development programs really shape the future of municipalities and improve living conditions for local communities?
To respond to this challenge, the organizers and implementers of the project “Effective Governance for Economic Development” in the Kyrgyz Republic, funded by the UK Foreign, Commonwealth and Development Office (FCDO) and administered by the World Bank, took on the task of preparing a completely new methodological guide for developing socio-economic development programs for LSG bodies and districts. What problems did they have to face in developing the new methodologies, and what problems will representatives of LSG bodies and district state administrations face in the future? And most importantly, what should be the new methodologies for planning at the local level?
Technological progress does not stand still, not only in the area of new gadgets, but also in planning and data management. We are approaching the point where it is no longer possible to make more or less serious plans without digitalization, and the time when the necessary figure has to be found by digging through thick paper folders or calling friendly organizations will soon be gone forever. Therefore, the new way of developing territorial development programs relies on such important factors as systematic automated collection of reliable and accurate data, construction of clear algorithms of planning processes, combination of socio-economic and spatial planning.
Along with these technical innovations there are other important political circumstances: the development of a territory cannot be isolated, cannot but depend on the development of neighboring territories, region, country and contribute to their development. Therefore, the new methodologies had to reflect the issues of economic integration and specialization of territories and regions, issues of inclusive growth, environment and development of social infrastructure and economy.
What does economic integration mean?
In simple words, this is the presence of trade, production, market and transport links with neighboring and remote regions and territories. For example, vegetables are grown on the territory of one aiyl aimak, and a processing plant is located on the territory of the neighboring one. Both municipalities must be aware of this connection, the need for each other, and mutual dependence. Accordingly, it is necessary to include measures in the SEDP to strengthen, and not weaken, oneself and the neighbor. In particular, to create conditions for the development of labor force both in the production of raw materials for one LSG, and to create conditions for water supply for the other.
What does territory specialization mean?
Depending on natural conditions, labor resources, and transportation opportunities, each territory has specifics of producing certain goods or services. For example, growing vegetables (as in the example above) or producing garments (if there is a large number of experienced seamstresses). However, the modern economy allows LSG bodies to influence their specialization, as it offers a set of economic sectors that already depend little on natural-climatic or raw material conditions. Such industries, for example, include e-commerce, which should be developed not through material resources, but through knowledge and skills. There are also industries that are “universal” for the municipalities of Kyrgyzstan, such as tourism, which can be successfully developed in many LSGs in different forms and qualities. Here, too, there is scope for the LSG body, which can influence various factors, from the arrangement of public infrastructure to the organization of knowledge centers for receiving guests.
However, the actions and opportunities of LSG bodies are still limited by the powers that the legislation defines. And in every territory there are many issues and areas of development where LSG bodies cannot influence the situation. For example, if the state is planning the construction of a large infrastructure facility, the LSG body will not be able to participate in this directly, but it must be aware of these plans and take adaptive measures within the scope of its authority. Another situation is environmental restrictions. For example, an LSG body would like to facilitate the opening of a chemical production facility or the construction of a large tourist facility on the territory. But the state realizes that this can cause irreparable damage to the environment and imposes restrictions. Such plans or restrictions are an essential component of local development, and in the Kyrgyz Republic there is a long overdue need to introduce an integrated planning and forecasting system that links different levels of government (and planning) and also includes spatial aspects of planning.
The territory, its self-governments, local communities, businesses and even vulnerable groups are the working parts of one big mechanism, and the extent to which these parts are strong and work well together determines whether this mechanism will move forward or fall apart into small worn-out parts. It is therefore important for the new SEDP development methodology to be not disconnected from other levels of the integrated planning system and to be part of an overall hierarchy of interrelated integrated plans. An enlarged structure of such interconnection is shown in Figure 1.
Figure 1. Hierarchy of integrated plans, including spatial plans
In order to understand what part of the system we are in and what to do about it, the new SEDP development methodologies include a detailed description of interaction issues, roles and actions taken at various levels of government in planning socio-economic development and further implementation of the SEDP.
Returning to the issues of digitalization, it is necessary to emphasize the presence in the methodology of links with a completely new element of planning — an automated dynamic simulation model of socio-economic development, which is an information tool for managing arrays of data required for forecasting the development of territories and regions. In information systems and in general, in matters of information management, a distinction is made between unstructured and structured data: unstructured data are mainly textual data describing, for example, policies; structured data are data systematized according to certain features or properties (the most common example is tables, statistical data). Taking into account the realities of local forecasting processes, the new methodology for SEDP developing is designed so that structured data prevail. But this does not mean that we are returning to the practice of replacing integrated SEDPs with work plans only. It means that we will use more systematized development indicators, many of which will be calculated automatically with the help of a dynamic simulation model of socio-economic planning, and with their help it will be easier to make analytical conclusions, both at the LSG and district levels.
The planning object — a territory or region — will be considered by the model as an entity that includes a set of interconnected subsystems: population — a community of living and influencing citizens (labor resources, external migrants); economy — the material expression of the interaction of citizens and groups of citizens with each other (production, consumption, investment, etc.); natural environment — natural physical conditions affecting the socio-economic state of the territory (space — land for various purposes, minerals) and environmental issues; external world — economic entities and various social systems that are not located in the territory under consideration, but influence it (management from the center, subsidies, regional projects, price levels for goods and services, factors that strengthen or weaken migration processes, etc.). In simplified form, this looks roughly as shown in Figure 2.
The model is still under development, but the methodology already includes tools for working with it. It is expected that the model will become part of the existing Sanarip Aimak information system, complementing it with several modules such as Economy, Space, Environment, etc.
No matter how advanced the model is, the new methodology does not include too bulky data sets. It is necessary to limit ourselves to an optimal set of indicators that would allow us to “keep our finger on the pulse” of a particular area of development. Therefore, in the process of developing and piloting the new methodology for SEDP, a set of development indicators is selected that does not require excessive labor input for information search, but at the same time provides the necessary information to assess the state of affairs on most issues of local importance, economic, inclusive and spatial development.
The new methodology for developing the SEDP contains a unified set of indicators of input data and output data. In order for the data to be compatible with centralized planning systems and sectoral databases, such as the Gosregister database, this set must be sustainable, standard for all LSG bodies. At the district level, this list is supplemented with other indicators, also standard for all districts. The requirement that indicators should focus on indicators of national and sectoral programs, which is often found in various methodologies (including the existing SEDP methodology), should not be mandatory. Practice shows that this approach does not always work because such indicators are often vague or too diverse or change rapidly. The ideal situation would be when the standard indicators for SEDPs are so well selected that sectoral programs would choose their own indicators from the SEDP system.
Figure 2. General structure of the planning model
Another distinctive feature of the new methodology is the algorithm — a detailed sequence of steps for developing the SEDP and monitoring the SEDP. The algorithm is constructed in such a way that as it is executed, the SEDP template and its annexes are filled in. It also describes steps to work with the model and communicate information to other planning levels.
So, let us list most of the above described characteristics of the new methodology. The methodology is based on the following basic principles:
· SEDP is not just a report to the higher authorities, but a tool for managing the territory;
· SEDP aims at territorial or regional specialization and regional or country economic integration;
· SEDP engages citizens in the design and monitoring process;
· SEDP clearly describes the roles of all stakeholders;
· SEDP is inclusive – it seeks to identify and take into account all groups in the community (which is nowhere homogeneous), while creating conditions for development for lagging and vulnerable groups;
· SEDP includes socio-economic and spatial planning;
· the processes and forms for developing SEDPs are simple and straightforward.
The format and process for developing the SEDP:
· different levels of complexity for different levels of LSG capacity (one algorithm for cities and another algorithm for rural municipalities);
· different methodologies for the development of SEDP for LSGs and SEDP for districts;
· availability of standardized presentation templates and standardized indicator sets;
· step-by-step algorithm for developing the SEDP;
· use of data-driven modeling;
· assessment of available resources, including local budget revenues (taking into account inter-budget transfers), direct investments, budget investments, regional development funds, planning of budget expenditures on a program basis;
· step-by-step algorithm for monitoring SEDP and decision-making mechanisms based on monitoring results.
To make sure that the methodologies will be applicable at the local level, the World Bank together with the Ministry of Economy and Commerce of the Kyrgyz Republic with the participation of the Development Policy Institute is piloting the development of SEDPs in At-Bashy and Nookat districts of Kyrgyzstan, covering the district level — local state administrations and several LSG bodies. Based on the results of the piloting, the methodologies will be finalized to successfully replace such, albeit useful, but already outdated documents as:
· Methodological Guidelines for LSG bodies on the development of SEDPs of cities and aiyl aimaks, approved by joint order of the Ministry of Economy of the Kyrgyz Republic (No. 63-A dated 15 May 2018) and State Agency for Local Self-Government and Inter-Ethnic Relations of the Kyrgyz Republic (No. 01-18/56 dated 15 May 2018);
· Methodological Guidelines for district state administrations on the development of SEDPs, approved by the order of the Ministry of Economy of the Kyrgyz Republic No. 156 dated 19 November 2018.
The SEDP should not remain just another report that is needed by someone at the top or some consultant. The SEDP must become a real effective tool for managing the development of the territory. And bringing new approaches to the state of well-established mechanisms is an ambitious but achievable goal. Yes, many difficulties will have to be faced — this includes the lack of necessary data on the ground (including the fact that there is no one to collect and analyze this data), the lack of links between the programs of different levels (when LSG bodies have little idea of what the district is planning, and the district cannot collect and process the plans of the territories), and even the lack of time of the staff of municipalities and state administrations. But the new methodology is designed in such a way that once you clearly and conscientiously collect and systematize data, fill out templates, consolidate roles — then it will be easier to manage your own development, make plans that really work, bring real benefits to your village, city, district, region, country.
