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Despite the presidential character of these amendments, they produced a far from unanimous response in society. This issue became the focus of animated debate at the meeting of the State Duma, in the experts community, and in the press. The draft law encountered stiff opposition from some political parties the Communist Party of the Russian Federation (CPRF) and Yabloko; the deputies from the CPRF did not vote for the draft law in the first reading1. The All-Russian Council of Local Self-Government received more than comments from municipal formations suggesting significant alterations. The issue attracted the attention of the Congress of Local and Regional Authorities of the Council of Europe, which requested all the documents relating the draft law, as well as an independent experts estimation. Nevertheless, on 20 March 2009, the draft law was adopted in the first reading by a vast majority of 87 % of votes.

The content and the possible consequences of the adoption of this draft law have already been analyzed in detail in our previous publications. Here we should like to offer a general 1 It is necessary to note that this draft law was by no means supported by all the deputies from United Russia, either. Thus, one deputy from this party, Yelena Panina, declared that the mechanism of subordination of heads of local self-government to representative bodies suggested in this document is not going to work effectively. The endowment of local assemblies with additional powers, on the one hand, will result in strengthening the positions of local officials: during an electoral campaign for the representative bodies, the municipalitys head will do his best to pass to parliament a maximum number of his supporters. On the other, this creates the foundation for a takeover of local assemblies and councils by criminal structures, which will actually manipulate the mayor who is going to be dependent on them. (Based on materials published by Vzgliad, Pravo.ru, BIA, REGNUM, Newsinfo, 20.03.2009).

RUSSIAN ECONOMY: TRENDS AND PERSPECTIVES overview of the arguments for and against the adoption of these amendments, because they are sufficiently comprehensive in depicting the conceptually differing views of the prospects of local self-government in Russia.

The standpoint of the proponents of these amendments has found its most full expression in the discussions of this issue at the State Duma during the passage of the amendments in the first reading. It is noteworthy that their arguments were by no means based on appeals to legal norms. The in-depth analysis of the fact that a certain amendment was contrary to the RF Constitution, the previously adopted resolutions of the Constitutional Court, and the European Charter of Local Self-Government, attracted no attention at all, while the responses to such comments were of a purely declarative character (no controversies).

The positive substantiation of the amendments was based exclusively on the feasibility of adopting such measures, irrespective of whether they were indeed compatible with the legal framework of the Russian institutional system.

Firstly, it was stated that this legislative act was designed to protect the population from incompetent officials. In this connection, it was assumed that this protection can most quickly and efficiently be achieved by the superior bodies of authority, and not the population of a municipal formation by itself.

Secondly, it was stressed that the abuses resulting from the application of this legislative act can negatively reflect on only a very small range of persons, whereas for the majority of municipal formations the effect of these amendments will be positive. Thus it was recognized that the protection of the rights of some citizens can be sacrificed in order to satisfy the populist demands of all the others.

Thirdly, it was estimated as a positive achievement that the ideology pursued in the amendments was a successor of the practices of the Soviet time. Thus, in the speech delivered by one representative of Fair Russias fraction it was stated that in the early 1990s we destroyed the Soviet system of local authority where lower tiers were rigidly subordinated to the upper ones, and so the Presidents initiative was aimed at restoring that type of responsibility.

And fourthly and finally, there was expressed the conviction that, even if the draft law could indeed open up some opportunities for abuse, these opportunities would not be taken advantage of in actual practice. From this point of view, the following remark made by the Chairperson of the Committee for Local Self-Government of the State Duma, V. S.

Timchenko, is very characteristic: I am not sure than any political forces would, due to their political sympathies alone, prosecute any top officials, or heads of municipal formations.

At the same time, the opponents of this amendment noted that its adoption will result in the creation of an institution for dismissing inconvenient heads of local self-government who might be for some reason disliked by a corresponding governor; besides, this amendment increases the dependence of municipalities on the party of power. Thereby the independence of local self-government and its status outside of the system of bodies of state authority, which is guaranteed by the RF Constitution, is grossly violated. These arguments are, to a varying degree, made use of by all the opponents of these innovations. Thus, in the Statement made by the European Club of Experts in Local Self-Government and the Municipal Workers Club it is noted that, according to the experts community, the mechanisms suggested in the draft law cannot help in achieving the desired goal; on the contrary, they can only aggravate the situation still further, because 1) they destroy the well-balanced structure of the existing branches of local public authority, which is part of the constitutional foundation of the State, 2) they violate the constitutional principle of independence of local self-government, 3) the introduce an extra-judicial procedure for depriving authority of its powers, which opens up unlimited opportunities for corruption. The same points are stipulated in the appeal to the RF President of the Russian Democratic Party YABLOKO: The vagueness of the procedure MUNICIPAL REFORM AND VERTICAL OF POWER...

for enforced dismissal, lack of guarantees of judicial protection, the absence of an arbiter in the estimation of the grounds for putting forth the initiative of an enforced dismissal will inevitably give rise to intrigues, punishments based on motives of personal dislike, political ideology or economic interests.

In brief and more specifically, the arguments against the the draft law were as follows:

The removal of the head of a municipal formation is to take place without taking into account the populations opinion, which is especially unacceptable in cases when the head has been elected at a universal election, and not from among the members of a representative body;

the draft law does not envisage, in an event of making the decision concerning the dismissal from his post of the head of a municipal formation, the right for judicial protection (to which even representatives of some subjects of the Federation voiced their protest);

the removal of the head of a municipal formation on a governors initiative represents interference of bodies of state authority with the independence of local self-government guaranteed by the RF Constitution1;

the insufficiently specific and open list of grounds for dismissing the head of a municipal formation is unacceptable;

the possibility of regular (with one-month interval) introduction of the initiative of dismissing the head of a municipal formation, in whom de facto the deputies corps have expressed their trust, is fraught with the possibility of destabilization of the municipal formations administration.

In the text of the draft law prepared for the second reading only two important comments were incorporated (though only in compromise form): the list of grounds for dismissing the head of a municipal formation has been made more specific and close-end, and the interval for the reintroduction of the dismissal motion has been extended to two months. The issues relating to the governors role in initiating the dismissal process, the absence of judicial protection of the head of a municipal formation, and the passive role of the population in this process have remained unchanged. The draft law was approved in the second reading on 22 April, and in the third reading on 24 April 2009, virtually without any discussion.

By all indications, the final approval of the Presidents amendments can be taken for granted, and the removal of heads of municipal formations will become yet another instrument for building the vertical of power and alienating local self-government from the population. However, the analysis of discussions going on around the draft law has also led to some more general conclusions. It is evident that the proponents and opponents of these amendments disagree not only with regard to the assessment of certain particular questions, but are guided by entirely different basic principles of organizing the system of authority and determining the role of local self-government in that system. While the opponents of this innovation refer to the values of the rule-of-the-law state, the need to comply not only with the letter but also the spirit of law; and the priority of the protection of the rights and freedoms of the person, its proponents rely on the priority of feasibility (as they understand it), populist approaches and hopes for the goodwill of authorities and political structures, who thus are not going to allow any law violations and corruption. Given this difference in their most fundamental views, one can hardly have any hope for a compromise.

1 Thus, in its Ruling of 11.06.1999, No 105-O, the RF Constitutional Court pointed directly to the responsibility of both the federal legislator and the legislator of a RF subject to ensure the unconditional right of the population and of the representative bodies of local self-government elected by it to independently, without the interference of bodies of state authority and state officials, form the bodies of local self-government (paragraph 5 of Item 4 of the Declaration).

RUSSIAN ECONOMY: TRENDS AND PERSPECTIVES ON POSITION OF SMALL-SCALE ENTERPRISES IN O.Izryadnova The analysis of the situation in the small business in 2008 is the starting point for the analytical base for 2009 and is based on the following indices: (1) the number of the registered enterprises; (2) average listed number of employees; (3) turnover of small-scale enterprises and (4) investments in fixed assets.

As on December 1, 2008 the number of the registered small-scale enterprises made 282.7 thousand throughout Russia as a whole or 199 for 100 thousand of the population. As broken by regions the biggest number of the small-scale enterprises registered for 100 thousand of the population was observed in the North-Western (232.6) and Siberian (232.2) federal okrugs, and the smallest in the Ural federal okrug (91.5) Table NUMBER OF ENTERPRISES AND NUMBER OF EMPLOYEES AT SMALL-SCALE ENTERPRISES AS ON 01.01.2009, (MICRO-ENTERPRISES NOT INCLUDED) Number of employees (by-workers Number of enterprises excluded) as for 100 as percentage to the total thousand total thousand of number of the employed of people the population in the economy Russian Federation 282.7 199.1 6217.1 11.Central Federal Okrug 82.1 221.0 1678.4 11.North-Western Federal Okrug 31.4 232.6 812.7 9.Southern Federal Okrug 39.9 174.7 872.5 11.Privolzhski Federal Okrug 58.8 194.4 1406.5 10.Ural Federal Okrug 11.2 91.5 360.8 17.Siberian Federal Okrug 45.4 232.2 842.4 11.Far Eastern Federal Okrug 13.9 214.3 243.8 13.Source: Federal State Statistics Service In 2008 6.2 million of people were employed by small-scale enterprises, which made 11.4% of the average annual number of the employed in the Russian economy as a whole.

The level of the employment in the small business varied considerably throughout the territory of the Russian Federation and had a profound impact on the situation at the regional labor markets. In 2008 the highest level of employment at small-scale enterprises was registered in Ural and Far Eastern federal okrugs, and the lowest in Privolzhski and North-Western federal okrugs.

The analysis of the distribution of the registered small-scale enterprises by the kinds of the economic activity demonstrates that in 2008 about 64% of enterprises belonged to the sector of services. In industry there were 46.1 thousand of small-scale enterprises registered, at which 1 253 million of people were employed, which makes 9.0% of the total number of the employed in the industry in Russian on the whole. In the construction, the average number of the employed made 1.0 million or nearly 19% of the average number of the employed in the construction on the whole.

The prevailing part of the enterprises and workplaces in the small business belongs to the trading enterprises, to the services for the operations with the immovable property.

ON POSITION OF SMALL-SCALE ENTERPRICES IN Small-scale trading enterprises provide 14.2% of the employed in the activity wholesale and retail trade, repair of motor-vehicles and motorcycles, household appliances and the items of private use on the whole over the country with the workplaces.

On the whole the number of those employed at the small-scale enterprises throughout 2008 increased from 6069.3 thousand of people in the 1st quarter to 6262.6 thousand of people in the 3rd quarter. However against the background of the changes in the conditions for the development of the Russian economy under the influence of the world financial crisis and its spread to the real sector of the economy the constant increase in the number of the employees at small-scale enterprises that was observed in JanuarySeptember 2008 was replaced by the reduction in the number of workplaces by 45.thousand in the 4th quarter. It should be noted that the decrease in the number of the employed was observed in nearly all federal okrugs and by all kinds of economic activities and was accompanied by the reduction in the goods and services output.

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