INTERVIEW “No town hall will have less than 3,000 inhabitants”. An extensive reform in local administration is taking place, but not in Romania

10 districts, instead of the current 32, and no town hall with less than 3,000 inhabitants, given that, now, 87% of communes have less than this number. This is what the reform in the local administration that is currently underway in the Republic of Moldova looks like. In an interview for the HotNews audience, the general secretary of the Chisinau Government, Andrei Buzuexplains the reasons.

The reform is justified by the Chisinau authorities through a series of major structural imbalances, from the lack of basic services to the reduced administrative capacity of small town halls. Alexei Buzu, Secretary General of the Chisinau Government, cites several relevant data in this context: 34% of households in the Republic of Moldova do not have access to water and sewerage, and of these 80% (without aqueduct) and 77% (without sewerage) are in localities with small town halls.

The budgets of these town halls depend 50-60% on transfers from the state, while their own revenues are only about 11%, says the official. In parallel, these localities are losing population twice as fast as the national average – a decrease of 32.7% in the last 10 years, compared to 13.9% nationally. At the same time, the administrative capacity is limited: 80.5% of small municipalities do not have project management specialists, and only 9.1% offer most services in digital format.

“We want to prepare better for pre-accession and cohesion funds”

– Mr. Buzu, what are the main arguments in favor of this reform and why is it being implemented now?
– Alexei Buzu: The reform of local public administration comes from several needs. First of all, in our country we have a rather fragmented public administration system. The population is declining and many municipalities are caught in a vicious circle: small and declining population, low fiscal capacity and limited institutional capacity. Fundamentally, we also have inequality: the number of citizens in cities is increasing, which is a good thing, but we have localities left behind, where local public administration does not have the capacity to provide basic services such as water and sanitation.

In order for the Romanian public to understand the problem: in the Republic of Moldova, 87% of the municipalities have less than 3,000 inhabitants. In these municipalities, own income is on average 11%, compared to about 30% in larger municipalities.

Out of 10 households that do not have water and sewerage, 8 are in localities below this threshold. This is a structural problem that we want to solve. In addition, we saw a need for rethinking the way local government works.

In other sectors there is advanced digitization, here less so. We want to prepare better for pre-accession and cohesion funds. We do not have enough capacity at the regional and local level to implement serious projects, and only through serious projects can we solve the persistent problems of citizens. The reform involves changing the administrative map, but also strengthening town halls and regional authorities, increasing the fiscal base and institutional capacity.

– What concrete data do we have about the very small town halls in the Republic of Moldova?
– 87% of the municipalities are below the threshold of 3,000 inhabitants. If we compare ourselves to other European states, we are among the countries with the smallest administrative units. We have 65 town halls with up to 500 inhabitants, 260 between 500 and 1,000, 210 between 1,000 and 1,500, 135 between 1,500 and 2,000 and 66 between 2,000 and 2,500 inhabitants. It is a significant fragmentation that creates inequities and limits the ability of the administration to respond effectively to the needs of citizens.

Financial incentives for municipalities that merge voluntarily

– How does the reform relate to the process of voluntary amalgamation?
– We have consulted on this reform with most of the local elected officials and we believe that they know best how to strengthen their capacities. There is a law that allows for voluntary amalgamation, and following consultation we have simplified the process and brought more flexibility. We have tripled financial incentives to encourage town hall mergers and increase investment in these localities.

– What exactly do these incentives entail?
– There are three types of incentives. The first is the preparation incentive, which provides resources for technical documentation, feasibility studies and other necessary analyses. The second is the development incentive, the most important, worth approximately 3,000 Moldovan lei (about 755 Romanian lei) for each resident of the merging municipalities. For example, if five town halls with 7,000 inhabitants join together, the government provides this amount for each inhabitant, money earmarked for investment in infrastructure and services. The third is an annual incentive for three years after the amalgamation to cover additional costs.

– What happens if there is no voluntary amalgamation?
– We introduced a minimum threshold of 3,000 inhabitants. No town hall should be below this threshold. If there are such cases, they will enter a process of normative amalgamation.

– Finally, what will the new administrative map look like?
– The final number of town halls is not yet clear, as the voluntary process is ongoing and differs from one area to another. We estimate that we will have a clear picture by the end of July. At the second level of the administration, we propose the reduction from 32 units to no more than 10 districts, and we will clarify their role and way of organization in order to boost regional development.

– How are Gagauzia and the Transnistrian region treated in this reform?
– There is no constitutional control in the Transnistrian region, which means that the reform cannot be applied there. In Gagauzia we encourage voluntary amalgamation, but the reform does not affect the powers of autonomy.

– What are the estimated costs of the reform?
– We are in the process of clarifying the costs, but we estimate that approximately 6.5 billion Moldovan lei will be used for incentives (approximately 1.7 billion Romanian lei – no). It is a substantial financial allocation.

“The costs of postponing the reform are higher than the actual reform”

– What risks do you see in implementing the reform?
– An important risk is misinformation. In recent years there have been divisive efforts, and some voices are trying to use this reform to mislead public opinion. There are also legitimate fears of citizens that public services will be removed with the reorganization. Our solution is digitization and the creation of integrated service centers, so that citizens' access is facilitated even in the new administrative structures.

– How will the local elections in 2027 be organized, after the reform?
– We aim to come up with a package of laws in the fall of this year, to be adopted a year before the local elections. Thus, both the Government, the Central Electoral Commission and political actors will have predictability. The elections will be organized based on the new administrative map. Reducing the number of authorities should not lead to an increase in costs, the objective being their optimization.

– How do you estimate the political costs of this reform?
– The costs of delay are much higher. Any responsible government must undertake such reforms. The citizens of the Republic of Moldova have been waiting for quality public services and a better standard of living for over 30 years. Reform is complicated and involves risks, but it is necessary and must be implemented through consultation and discipline.

– The reduction in the number of mayors and local councilors can generate dissatisfaction, to what extent do you expect these reactions?
– The number of local elected officials will decrease, but that is not the goal. We need well-trained people, and the reform aims to increase the efficiency of the system. Many local elected officials understand the need for this change and are willing to support it if communities will benefit.

– How do you respond to the opposition's accusations that the reform would politically benefit the PAS government and is being implemented intentionally on the eve of local elections?
– This argument is illogical. The reform will create stronger town halls with greater resources and competences. If the government was pursuing a political advantage, it would keep the current system, where there are many small municipalities and dependent on transfers from the center. The reform, on the contrary, strengthens local autonomy.

The reform of the administration in Romania, eternally postponed

The subject of local administration reform is also acute in Romania. In an interview for HotNews, the historian Dorin Dobrincu, one of the coordinators of the work “Regionalisation. Towards a model of good governance of Romania”, explained how “there are dozens of communes that have less than 500 inhabitants and more than 1,200 with less than 2,000 inhabitants. In their overwhelming majority, they cannot support themselves from their own funds”. The historian says that a true reform in local administration does not only mean cutting expenses, as Prime Minister Ilie Bolojan did, but also other measures such as merging municipalities or rethinking the duties of county councils. “I admit that it is not easy to change a rigid system dominated by clan interests,” said Dobrincu.