KZBlog

While a lot of attention has been paid to the ongoing process of administrative reforms in Kazakhstan in the area of increasing Parliamentary powers, not much has been heard about the plans to reform the civil service. There have been research projects and discussion in the areas of linking government salaries to performance, reducing corruption in the civil service, and boosting the role of the private sector as well as NGOs to limit the role of the government. However a major new plan has been announced that will completely reform the government, and introduce a new precedent for government organization in the world. Starting next year, the government will be run like a corporation.

On the 6th of March, Aslan Musin, Deputy Vice-Minister and Minister of the Economy and Budget Planning led a meeting with the Senate to explain the new proposal.

Ministers will now be entirely political figures, and work with political questions. For administrative and executive questions, each Ministry will have a board of directors, which will manage the budget, pay salaries, and coordinate the strategic plan, as well as the structure and responsibilities of the ministry. In other words, it will have the same role as the board of directors of a corporation.

There will also be a General Director of each ministry, analogous to the CEO, who will be responsible for executing the plans of the Board of Directors, the development of the ministry, and carrying out the Minister’s decisions. He will also be responsible for determining the structure and responsibilities of the ministry. Exactly what a CEO does in a commercial corporation. The Board of Directors gives policy and overall plans, and the General Director executes those plans.

They plan to do away with vice-ministers (or deputy ministers). Instead the Minister will have his or her advisors and a basic administration for carrying out his activities. It is not clear what exactly the role of the Minister will be. Musin claimed that the old system made it hard to work by forcing the Minister to worry about administrative problems. Now he or she can concentrate on political questions, overall strategy, and policy formation. However, in a government ministry, it is not clear where that line between administrative and political questions lies.

On the one hand, there is a good idea here. The current system is very top-heavy and the smallest decisions have to be approved by the Minister. For example, the Minister personally signs budget plans that include details like how many pencils the Ministry will buy in the year. The Minister also signs orders to hire almost everyone working in the Ministry, including janitors and secretaries (More extremely, positions like Vice Minister or head of government companies have to be signed by the Prime Minister). In actual fact, the Minister cannot and does not review every job candidate or regulate every penny of the budget. The Minister’s signature is just a formality for many small, day-to-day operations and getting that signature can slow everything down since the Minister cannot be available constantly just to sign things. Freeing the Minister of similar day-to-day tasks is probably wise.

However, the new plan instead proposes a different head guy to approve all these plans. So it’s really mitigating the problem instead of solving it. The General Director will have a more limited scope and thus more ability to be aware of all the pencils and janitors. On the other hand, he or she will still have some big responsibilities. Furthermore, in talking about big projects that line between administrative and political gets awfully thin. According to the address of the President, the government will build one hundred new schools and one hundred new hospitals. This large-scale program will involve a number of difficult questions with political and administrative implications: Where will these schools and hospitals be built? Who will build them? What role will the central government, the ministry, and the local government play in construction, providing infrastructure, providing land? And these questions do not break down neatly into political and administrative parts that the Minister can make all the political decisions and pass it on the to the General Director to make all administrative questions. Where they will be built can depend on where proper resources are in place to handle new schools, where demand for a new school is acute, which oblasts and regions have been especially nice to the government, which regions show economic promise and thus the need for an educated workforce, or on the contrary where education indicators are particularly low…

Word among the bureaucrats is that 1) now everyone wants to be General Director because they see that he or she will have the real power, while the Minister will probably become an increasingly marginalized figure who will spend all his or her time running to the President or to Parliament to give updates and take orders. 2) It will be very easy to shut down unpopular programs and lose unwanted letters or orders by simply sending them back and forth between the Minister and the General Director. In other words, any program can be blocked by simply wasting time arguing about whose competence it falls under.

Musin also announced that akimat will be run on the same principles, with an akim, his or her advisors and administration, and then a board of directors and general director. The board of directors will be headed by the Руководитель ведомства (I am not clear who this refers to and I would greatly appreciate any help on this point) and consist of the General Director, representatives of the administration of the President, representatives of the Ministry’s or Akimat’s internal auditing service and independent directors. In other words, the President will have much more direct control over the ministries, but there will also be some independent voices. Who these independent directors will be is unknown but many believe they will be from the administration of the majority political party or members of the Parliament, indicating more centralization and control, not less. The board of directors of regional and city akimat will not have representatives of the President’s office but instead representatives of the oblast akimat.

The President will appoint general directors of the ministries and oblast akims will appoint general directors of the regional and town akimat under him. Presumably Ministers will still be appointed by the President.

Furthermore, the office of the Prime Minister is being stripped down to include the Prime Minister, the Deputy Prime Minister, their advisors, and basic administration. All other functions will be contracted out as needed, including the basic services like payroll, personnel department, and procurement/maintenance. Already these operational offices are being moved out of the building and will operate under contract. Analytical and research functions will also be contracted out. Again, the logic is to act more like a corporation.

The new system will be piloted with the Ministry of Health later this year.

I personally would love to hear from you, is there a precedent anywhere in the world for running a government like a company? Has anyone heard if government companies in Kazakhstan will also be expected to adopt corporate management structures or is it only the political wing?