2022 – The year to redefine cities as first tiers of urban governance

2022 – The year to redefine cities as first tiers of urban governance

2022—The year to redefine cities as the first tiers of urban governance is by SAYLI UDAS⎯MANKIKAR, published in Observer Research Foundation might hold some inspiring words for the MENA region’s own particular and diverse built environment. Seriously would 2022 be the year to redefine cities as first tiers of urban governance anywhere else than India? Does it really; let us find out.

A holistic restructuring of federal, systemic, and financial governance is required to empower our city governments

Nations debate over issues of climate change and pandemic response amongst others, but it is finally the cities that have the unenviable task of executing the ambitious agendas set up by the national elites. Cities find themselves burdened and crippled to deliver on these promises due to the following factors. First, the lack of adequate authority, federally, to run a city. Second, the funds allocated to cities do not quite match the duties they have to perform. And third, is the lack of capacities to plan, monitor, and execute tasks adequately.

It is time that the first responders to crisis, our cities, are no longer treated as mere urban local bodies that ensure water flows through our taps, garbage is picked up, and roads are tarred, but are actually treated as the custodians of urban governance in India.

In 2022, we must make serious federal and systemic amends to enable and strengthen cities to play out this role, and not only criticise these pale urban structures when they fail to respond to our large requirements. With the Glasgow Pact endorsing ‘the urgent need for multilevel and cooperative action’ at the local level, it was for the first time that the role of cities was officially appreciated and recognised in a COP summit. The new pact has also highlighted the need for climate adaptation through planning at the local government level. This is a cue that, globally, the way cities are being perceived is changing.  Decentralisation and devolution of power should be the axis around which federal reforms should be implemented and reimagined in cities. While we constantly invoke the 74th Amendment  of the Indian Constitution, which brought in the concept of devolution, the three tiers of government which placed urban local bodies at the lowest level, must be redefined 25 years after its conception. We have to assess the reasons why most cities were not able to implement many of these reforms.

With the Glasgow Pact endorsing ‘the urgent need for multilevel and cooperative action’ at the local level, it was for the first time that the role of cities was officially appreciated and recognised in a COP summit.

During the pandemic, even within the cities, a strong and successful model that emerged in high density population areas was ward-level management. Formation of ward committees, and the involvement of citizen voices and a local say at the hyper local level was a part of the 74th Amendment, which haven’t found resonance with many city authorities. There is reluctance, even within city governments, in passing over power to the lowest level and empowering citizens and their direct representatives.

The Second Administrative Reforms Commission, 2008 recommended that cities adopt a bottom-up approach of functioning on the principle of subsidiarity, which puts wards as the first level of governance that has people closest to it. The tasks are then pushed upwards to higher authorities when the local units are not enabled to perform them. The delegation of work is bottom-up. Such citizen involvement has been tried in Mumbai through its Advanced Locality Management (ALM) groups, and in Delhi through the Bhagidari scheme, where Resident Welfare Groups are set up to work on local civic issues. However, these were never empowered in their participation, through funds or functions. Recently, cities like Vishakapatnam have made requests to the government that the devolution should not be restricted to power but to development, where authorities of the region are able to administer all development work of that region and not be dependent on centrally-allocated funds for an infrastructure push.

The delegation of work is bottom-up. Such citizen involvement has been tried in Mumbai through its Advanced Locality Management (ALM) groups, and in Delhi through the Bhagidari scheme, where Resident Welfare Groups are set up to work on local civic issues.

The 15th Finance Commission report tabled in the Budget Session in 2021 was a ray of hope for urban governance. The issue of devolution of taxes to cities after local taxes like Octroi and VAT were subsumed into Goods and Services Taxes (GST) had attracted a lot of clamour and there was demand that a separate City GST must be constituted. But while the consideration of this demand still seems a long time away, the 15th Finance Commission has made an absolute allocation of 4.15 percent of the divisible pool—approximately INR 3,464 billion from the divisible pool of taxes—to local governments. After it is distributed, this will constitute almost 25 percent of the total municipal budgets of most cities. The Commission has also given a fiscal thrust to metropolitan governance by introducing outcome funding to 50 million metropolitan regions with population of over 150 million. Here, an outlay of INR 380 billion has been laid out for 100-percent funding for indicators related to water and sanitation, air quality, and other services.

But this is again a double whammy, considering it is still going to flow top-down from the centre to state governments, which then devolve the money to cities. There has always been a question mark on whether the amounts allocated to a city get used completely, since this will depend on the absorption capacities of cities and their ability to spend municipal funds.

The Commission has also suggested that other avenues such as city incubation grants should be used to develop smaller towns and regions in the country. This has gained significance in areas with strong political leadership or cities supported by the Smart Cities Mission, which encourages, handholds, and sets up guarantee mechanisms for private investment into the urban sector.

City governments must make their own efforts to ensure that the taxes which are within their ambit—like property tax—are paid by citizens, for which unique mechanisms need to be put in place for ensuring collections are made.

Along with devolution of financial or other powers comes transparency and accountability in its systems, the onus for which lies on the city governments. The first step to transparency will be to ensure that city budgets are put in the public domain and follow a simple format that is both easy to understand and comprehensible. City governments must make their own efforts to ensure that the taxes which are within their ambit—like property tax—are paid by citizens, for which unique mechanisms need to be put in place for ensuring collections are made. As issues like climate change gain ground, city governments must introduce tax rebates for green infrastructure to achieve their targets.

In conclusion, a three-pronged holistic approach of reimagining federal governance, reworking financial governance, and restructuring systemic governance in urban agglomerations might be the magic pill for creating strong cities. If we want our first responders and drivers of our quality of life to succeed, our political leaders and administrators will need to lend their muscle to put cities first.

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Cutting Emissions Through Fossil Fuel Subsidy Reform and Taxation

Cutting Emissions Through Fossil Fuel Subsidy Reform and Taxation

Cutting Emissions through Fossil Fuel Subsidy Reform and Taxation published on 4 July 2021, by the International Institute for Sustainable Development (IISD) is, for all intents and purposes, worth re-visiting. Here it is.

Cutting Emissions Through Fossil Fuel Subsidy Reform and Taxation

By Jonas KuehlAndrea BassiPhilip GassGeorg Pallaske 

The above image is for illustration and is of the IISD‘s

This report models the climate change mitigation potential of fossil fuel subsidy reform across 32 countries. The results show how much greenhouse gas emissions—both in per cent as well as in absolute terms—countries can save by 2030. In addition, the model also calculates the subsidy savings countries can gain from fossil fuel subsidy reform. Countries can further increase their emission reductions by adding fossil energy taxation as well as the investments of subsidy savings and tax revenue into energy efficiency and renewable energy to the scenario.

Using the Global Subsidies Initiative – Integrated Fiscal Model (GSI-IF model), this report models the impact of fossil fuel subsidy reform (FFSR) on greenhouse gas (GHG) emission reductions for the following 32 countries: Algeria, Argentina, Australia, Bangladesh, Brazil, Canada, China, Egypt, Ethiopia, Germany, Ghana, India, Indonesia, Iran, Iraq, Japan, Mexico, Morocco, Myanmar, Nigeria, Pakistan, Russia, Saudi Arabia, South Africa, Sri Lanka, Tunisia, United Arab Emirates, the United States, Venezuela, Vietnam, the Netherlands, and Zambia. In total, these 32 countries accounted for 77% of global carbon dioxide emissions, 72% of global GDP, and 72% of the global population in 2019.

The GSI-IF model uses semi-continuous simulations to forecast energy demand and corresponding GHG emissions. It considers the gradual removal of all fossil fuel subsidies to consumers until 2030, a gradual introduction of a 10% fossil energy tax until 2030, and the investment of 30% of both subsidy savings and tax revenues to energy efficiency and renewable energy from 2021, respectively 2026, onwards.

The research finds a simple country average in GHG emission reductions of about 6% by 2030 compared to business as usual, while the data shows that FFSR can reduce as much as 35% of emissions in the countries modelled. Adding emission reductions from the fossil energy tax as well as the investments of parts of the subsidy savings and tax revenues into sustainable energy would almost double the average GHG emission reductions to 11.8% by 2030. Cumulative fiscal savings from FFSR alone by 2030 total close to USD 3 trillion across the countries analyzed, with total cumulative GHG emissions abated from FFSR of 5.4 gigatonnes of carbon dioxide equivalent (GtCO2e) by 2030—equivalent to the annual emissions of about 1,000 coal-fired power plants or 3.8 billion cars. For every tonne of CO2e removed through FFSR alone, governments save about USD 546.47 on average. When considering the resources reallocated via the subsidy swap, governments can increase their emission reductions and still save USD 164 for every tonne of CO2e removed.

Read original: Download publication PDF

Related: Fossil Fuel Subsidy Reform Could Reduce CO2 Emissions Equivalent to Those of 1,000 Coal-Fired Power Plants While Saving USD 3 Trillion—New ReportPRESS RELEASEJuly 5, 2021

Public sector reform in the MENA

Public sector reform in the MENA

The Economic Research Forum published an article (see below) written by Robert P. Beschel Jr. and Tarik Yousef on the Public sector reform in the MENA region with a long and hard look on the achievable governance revolution.

Our thoughts are autocratic and authoritarian regimes here and there plagued by collateral youth bulges and ‘rentier’ organisational systems that bogged down any reach towards a working Democracy in most MENA region countries result in what is described in this article. Historically, these countries opted for Modernity, but the poor institutional quality that ensued leads to heavy bureaucracy here and absent leadership elites there.

The picture above is of the Brookings Institution re-publication of the same article.

Public sector reform in MENA region on the achievable governance revolution

May 4, 2021

Across the Middle East and North Africa, there are countries working to modernise state institutions to make them more efficient, effective and responsive. This column argues that while it is common for Arab governments to look elsewhere for reform ideas, there is a wealth of experience within the region that practitioners should consider. Lessons from public sector reform in MENA from the past two decades suggest that transformative change is possible.

Public sector reform in the MENA
Kuwait's government quits, deepening political deadlock - The Hindu

In a nutshell

  • The revolutionary impulse unleashed by the Arab Spring a decade ago may again sweep through the region once lockdowns are lifted, economies attempt to restart and the full scale of damage to jobs and livelihoods caused by Covid-19 becomes clear.
  • Even if such pressures do not materialise, governments would be wise to not let the opportunity for disruptive change presented by the pandemic to slip by untapped.
  • Arab reformers are embarking on the critical task of ensuring that their governments and public sectors can respond to the pronounced development challenges, both known and unknown, that they will be asked to address during the coming decade.

As we approach the tenth anniversary of the Arab Spring, much attention is rightly being given to the broader governance trajectory of the Middle East and North Africa (MENA) region over the last decade.

With the notable exception of Tunisia, the story is hardly encouraging. The aging autocrats are gone, but many of the heady expectations of that time have given way to the consolidation of authoritarian rule by entrenched elites. The luckiest countries have witnessed merely cosmetic changes on key issues of democracy, transparency and rule of law. The less fortunate have witnessed brutal domestic crackdowns and flagrant human rights abuses. And the truly unlucky have descended into chaos and civil war.

Beyond the public debate over democratic change, another long-standing struggle is taking place as many MENA countries work to reform and modernise state institutions to make them more efficient, effective and responsive – an agenda that is less controversial but no less urgent.

The MENA region is home to some of the largest public sectors in the world, yet the quality of service delivery is often poor. The region trails most other parts of the world (with the exception of South Asia and sub-Saharan Africa) on global indices for government effectiveness, quality of regulation and control of corruption. Even more troubling, it is one of the few places in the world that has actually lost ground on these indices over the past decade.

During the Covid-19 pandemic, MENA governments have rediscovered the critical importance of government institutions. Initially, through a combination of luck and skill, regional countries were able to keep their mortality and morbidity rates well below those of hard-hit regions in Europe, North America and Latin America.

The region witnessed many instances of effective policy coordination across traditionally conflicting bureaucratic structures; several countries also built on earlier investments and expertise in e-governance and m-governance to address challenges such as contact tracing and distance learning. Despite pressing financial constraints, governments were quick to adopt unprecedented fiscal and monetary measures to mitigate at least some of the pandemic’s economic impact on the vulnerable segments of society.

Yet the need for broader institutional reforms that go well beyond those adopted in response to the Covid-19 pandemic is immediate and palpable. As the large-scale protests of 2019 demonstrated, ‘the Arab Street’ is becoming less willing to accept the uneven quality of service delivery, or the preferential treatment of large and well-connected firms. Corruption and cronyism are increasingly being recognised and called out for what they are.

The Covid-19 pandemic has underscored the need for flexible, responsive institutions that can adapt to changing circumstances and coordinate complex policies. At the same time, the recent volatility in oil markets and external remittances has made clear that the region must urgently diversify revenue sources and make government expenditures more efficient.

The public sector challenges confronting the region over the next decade are both clear and massive. To cope with the demographic pressures that are already underway, governments will need simultaneously to expand the scope and quality of services that they provide to their citizens, paying particular attention to lagging regions and under-served communities.

They will need to educate the next generation to compete in a changing global economy. They will need to serve as an attractive destination for capital, providing the business environment that will facilitate foreign and domestic investment. They will need to extend their under-funded healthcare systems to serve neglected regions and populations better. And they will need to be agile enough to respond to a host of cross-cutting threats – from climate change and water scarcity, to global energy market transitions – that will require an integrated, nuanced and sustained response across the whole of government.

Of all the challenges that MENA governments must confront, perhaps the most politically fraught is the reality that their traditional social contract, which trades political acquiescence for public sector jobs, is ultimately a Faustian bargain. The problem with the existing social contract is not merely its lack of fiscal sustainability – although that threat is real and will only get worse with time.

The problem is that this bargain undermines meritocracy and hinders the creation of the sort of high-performing public sectors that will be necessary to address the region’s most pressing economic and social problems. It also creates perverse incentives that undermine other critical objectives, such as labour force diversification.

In a recent collection of in-depth case studies, Public Sector Reform in the Middle East and North Africa: Lessons of Experience for a Region in Transition, we take a deep look at notable examples of public sector reform in the MENA region from the past two decades.

Our assessment provides hope for the region’s future by illustrating that transformative change is possible. And change will be needed. The revolutionary impulse unleashed by the Arab Spring a decade ago and its more recent echoes in 2019 may again sweep through the region once the lockdowns are lifted, economies attempt to restart and the full scale of damage to jobs and livelihoods caused by Covid-19 becomes clear. And even if such pressures do not materialise, governments would be wise to not let the opportunity for disruptive change presented by the pandemic to slip by untapped.

While it is common for Arab governments to look elsewhere for reform ideas, we believe that there is a wealth of experience within the region that practitioners should consider. It may not align perfectly with global knowledge and practice, but neither is it wholly distinct. To the extent that MENA countries differ, it is only in certain areas, and often more by degree than in kind.

The lessons from this experience, both good and bad, will be of great value to the next generation of Arab reformers as they embark on the critical task of ensuring that their governments and public sectors can respond to the pronounced development challenges, both known and unknown, that they will be asked to address during the coming decade.

If data are new gold, governance can safeguard society

If data are new gold, governance can safeguard society

China Daily Global in an article titled ‘If data are new gold, governance can safeguard society’, perhaps domestically, but says it all about what to expect in the future relationship of China with say countries of the MENA region.

If data are new gold, governance can safeguard society

By Liu Xiaochun | China Daily Global | Updated: 2021-01-18

The Central Economic Work Conference held in December outlined certain key tasks in eight major aspects for this year. These include strengthening efforts in antitrust and preventing the disorderly expansion of capital.

It was clearly pointed out in the meeting statement that the collection, usage and management of data shall be improved.

With robust growth of the “new infrastructure” sector, particularly the application of 5G and the internet of things, digital technology will find applications in all walks of society and will bring significant change to people’s way of living.

While appreciating the positive effect that digital society may bring, it is important to fully acknowledge and evaluate the risks that interconnectivity of data may bring and pay attention to data governance.

As digital technology is highly penetrative and spreads widely, the risk of digital technology can be widely disruptive and can go beyond personal privacy. It thus requires precautionary regulatory measures to manage or pre-empt such risks.

There are key issues and risks in data connectivity, and it is important to strike a proper balance between breaking the information silo and data security.

On the one hand, it is important to clarify which part of the society will guide the connectivity of data, be it the government, technology firms or other institutions. For example, the building of smart cities will require data collection from a great number of sectors and departments. It is crucial to make clear who will be responsible for collecting and managing them.

On the other hand, how data can be categorized and managed is another emerging issue. In governing smart cities, new data of all kinds emerge every second. The idea of smart city construction, building industrial internet and digital China cannot be realized without data from all departments and organizations going online.

Yet, with all these key data openly accessible online, inadequate or improper management of these data may pose a possible threat to public security, the police, or even to social and national security.

Both governance and the internet of things across all industries should take the management of public data into account. At the same time, the arithmetic model, a key technology in artificial intelligence, may amplify potential risks in information spreading with no targeted audiences.

There is also the risk of giant internet and technology companies adopting a winner-takes-all approach in data collection. Conventional monopoly usually means taking monopoly of one particular type of products or at most, a certain industry. The new winner-takes-all approach would mean exclusive owning of all data on one particular platform by a certain enterprise.

Online platforms in fields such as e-commerce, digital payments, and delivery services may even gain access to huge amount of social data in the name of innovation or breaking up information silo. Such data may be related to personal, business or even government information.

Should such platforms or online behemoths land in major trouble, or face some unforeseen risks, massive systemic disruptions could unsettle or destabilize society. And with the growth of 5G, the number of such businesses is expected to grow.

A number of steps will likely be taken to strengthen data governance. Control of data risks should be raised as part of State governance efforts. Any arbitrary collection of personal information and data should be prohibited.

The issue of data categorization needs to be resolved through legislative efforts in this field. A number of suggestions have been made in legislation regarding personal information protection, which is very necessary.

Categorization should be made for data under digital economy.

First, special attention should be given to managing data regarding public security, finance and people’s livelihood, and how they can be made accessible on internet platforms and how such data can be used.

Second, the responsibility of data management should be specified, and ownership and usage rights to data clarified.

Third, legal liability in data use and transaction must be made clear.

Fourth, as data management is a new and emerging sector yet closely related to national security, social stability and a steady running of economic activities, a special regulatory department or mechanism should be set up with powers of oversight.

At the same time, a category-specific, more proper oversight on artificial intelligence is also needed, particularly a more targeted regulatory model for algorithms developed by various businesses.

An overhaul of personal data already collected once all the aforementioned systems are in place would be in order.

Mechanism for the oversight and management of super-giant data platforms should be set up. On the one hand, objective views are needed about the monopolies taken by super-giant digital platforms.

These platforms also bear public service functions, differentiating them from industrial or commercial monopolies. Concentration of platforms may also help add on commercial competitiveness and social efficiency.

Take third-party payments as an example. To ensure unimpeded payments, various market participants tend to gather on one payment platform. If communications across different telecom companies cannot be realized, only one telecom platform will eventually survive.

Such logic also applies to third-party transactions, which explains why even though the regulators concerned issued a number of licenses, only a few survived. And there are reasons behind why only those few did manage to survive.

First, the survivors are those that are supported by the banks’ unified payment services. Second, the companies specialized in integrated payment services has become a solution for third-party payment platforms banning one another.

Super-giant platforms will likely continue to increase as digital society grows. Concentration of multiple services in a single platform may make business sense for market share-minded companies. But it is debatable if this is the right path to digital transformation of society.

So, proper regulatory measures and oversights are needed in helping such platforms to grow with society in a responsible manner. This is why, oversight mechanisms are needed, as platform enterprises can’t achieve this on their own through self-regulation.

Meanwhile, all data collected by platform businesses are related to society’s various publics and therefore should not be treated as commercial assets.

The article is a translation of a comment from the Bund Summit by Liu Xiaochun, the deputy dean of the Shanghai Finance Institute.

Cancellation of Algeria’s elections is an opportunity for democratization

Cancellation of Algeria’s elections is an opportunity for democratization

The BrookingsOrder from Chaos dated Tuesday, June 4, 2019, published this article written by Sharan Grewal where it is reported that cancellation of Algeria’s elections is an opportunity for democratization.

On June 2, Algeria’s constitutional council cancelled the July 4 presidential elections, which were constitutionally mandated to replace ousted President Abdelaziz Bouteflika. The cancellation of elections is a win for protesters, who had rejected the “constitutional” path imposed by the regime. With their cancellation, Algeria will enter a constitutional vacuum and with it, political uncertainty on the road ahead. However, unshackling the transition from the existing constitution will also provide an opportunity for a more genuine transition to democracy.”

The cancellation of Algeria’s elections is an opportunity for democratization

Since Bouteflika’s ousting on April 2, the remnants of the Bouteflika regime had invoked Article 102 of the constitution, which necessitated presidential elections within 90 days of Bouteflika’s resignation (July 9). As also mandated by the constitution, President of the Senate Abdelkader Bensalah became the interim president, while the government at the time—led by Prime Minister Noureddine Bedoui—could not be changed.

The regime, led de facto by army chief Ahmed Gaid Salah, claimed that this roadmap was the legitimate and constitutional path forward. But as the protesters had observed, this path was also the one most likely to allow the reconsolidation of the Bouteflika regime. The figures shepherding the “transition”—Bensalah, Bedoui, and to a greater extent, Gaid Salah—were all holdovers from the Bouteflika regime. Moreover, the 90-day transitional period provided no guarantees of free and fair elections nor meaningful time for the protesters to organize politically. As the result, the protesters rejected the “constitutional” path en masse every Friday since Bouteflika’s ouster. They instead invoked Articles 7 and 8 of the constitution, which observe that political power derives from the people.

In the face of this popular rejection, only two relatively unknown candidates put forth their names to run in the July 4 presidential elections. The constitutional court on June 2 then rejected those two candidacies and declared that the elections would be impossible to hold. As a result, Algeria will not see elections within 90 days of Bouteflika’s ouster, and the constitutional path will be unmet.

These developments will likely tip the balance of power in favour of the protesters. The regime’s preferred strategy appears to be to ask interim President Bensalah to remain in office beyond his July 9 end date and task him, as the constitutional council did, with organizing elections at a later date. But the regime will no longer be able to use a shroud of constitutional legitimacy to impose this preferred roadmap. Such an extension of the 90-day period is unconstitutional.

Without the constitution, the sole source of legitimacy will be the street.

Without the constitution, the sole source of legitimacy will be the street, and the protesters are certain to reject an extension of the previous roadmap. The only solution out of the coming political crisis, as Gaid Salah himself recognized, would be through dialogue between the regime and the protesters.

The cancellation of the elections not only makes negotiations more likely, but also removes arbitrary constraints from those negotiations. With the constitutional path void, the constitution can no longer be used as a “straitjacket”—to use the words of Georgia State University’s Rochdi Alloui—to limit the possible options. Now, the regime can no longer use the constitution to prevent the removal of the 2Bs—President Bensalah and Prime Minister Bedoui—and a national unity government can instead be formed.

The United States and the international community should encourage the regime to negotiate with the protest movement, and to meet their demands. These demands likely include a revision, if not rewriting, of the constitution and the creation of independent institutions to guarantee the credibility of presidential, parliamentary, and municipal elections.

For these negotiations to be accepted and respected, the protesters will need to organize and choose leaders they find credible to negotiate on their behalf. But as important for the transition are the representatives the regime chooses. While the military cannot be ignored, it is important that it not chair or preside over the negotiations, which would legitimize the military as a political actor and as the referee of the upcoming transition.

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Sharan Grewal, Postdoctoral Fellow, Foreign Policy, Center for Middle East Policy, The Brookings Institution

Author:

Sharan Grewal, Postdoctoral Fellow – Foreign Policy, Center for Middle East Policy. sh_grewal

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