Strasbourg, 1 March 2000

Report on Local Democracy in Armenia

Rapporteurs: Mr Casagrande (France, L) and Mr Kolumban (Romania, R)

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INTRODUCTION

In 1996 a CLRAE delegation observed the first local elections in Armenia (see CG/BUR (3) 73).

On 3 March 1999 the CLRAE Bureau appointed Mr Claude CASAGRANDE (France, L) and Mr Gabor KOLUMBAN (Romania, R) CLRAE rapporteurs on local and regional democracy in Armenia as part of the procedure on this country's application for membership of the Council of Europe.

In April 1999 Mr Gabor KOLUMBAN attended the conference on "Decentralisation, keys of success" held in Yerevan and organised by the Armenian authorities in conjunction with the UNDP. On that occasion Mr KOLUMBAN had his first contacts with Mr AROUTIUNYAN, then President of the National Assembly, with a view to drawing up the report.

This report was prepared on the basis of the relevant texts and the information gathered in the course of two missions carried out in Armenia from 20 to 27 October 1999 to observe the local elections and from 27 to 29 January 2000 for the preparation of this report. The rapporteurs would reiterate their thanks to the Armenian authorities, especially Mr Khosrov M. ARUTIUNYAN, Minister of Territorial Administration, for the welcome which they received and the facilities granted them for meeting people able to inform them about the operation of the local governments (the programme of the latter visit is given in Appendix 1).

On 14 and 15 December 1999, on the occasion of his visit to Yerevan, the President of the CLRAE, Mr Alain Chénard, met with Mr Robert KOTCHARYAN, President of the Republic of Armenia, and Mr Khosrov ARUTIUNYAN, Minister of Territorial Administration, to discuss with high officials the commitments Armenia would undertake in the field of local democracy if it were invited to become a member of the Council of Europe. The Congress President took note, during the meeting, of the goodwill of the Armenian authorities to proceed with the necessary legislative reforms.

Three general observations must be made at the outset.

The legal provisions governing decentralised and devolved local administration, contained in the Constitution and the laws in force in Armenia, call for few if any critical comments regarding compatibility with the principles of the European Charter of Local Self-Government, on which the system was obviously modelled.

The Armenian authorities contacted by the rapporteurs at ministerial or parliamentary level display undeniable determination to adapt the institutions further and make improvements in the rules thereof. Several working parties have been engaged in this since the autumn of 1999, bearing in mind not only the needs identified locally by the interested parties as to reform but also certain observations made by the Congress of Local and Regional Authorities in Europe in its report on the local elections of 24 October 1999 (CG/BUR (6) 88).

While it is inescapable that the local government system still requires improvements, on balance the gravest imperfections detected by us arise essentially from the shortage of financial resources and qualified staff. Their true causes thus relate to general factors of society and the economy in Armenia, so that it will take some time yet, in these two specific areas, to lay the proper foundations for full realisation of local self-government.

The rapporteurs do not consider, however, that this should be made a requirement for Armenia's admission to the Council of Europe. On the contrary, its accession should be an occasion to offer the country the support that will enable it to build sound local government by degrees. The same remark, applicable moreover to government in general, could also be made about many other new Council of Europe members.

This is therefore the spirit prompting most of the remarks in our report, intended to offer the Armenian authorities useful pointers for shaping the course of the reforms in the short and medium term and thereby to assist in the necessary furtherance of local self-government.

Consequently, the rapporteurs are not in possession of any decisive argument for suggesting postponement of Armenia's accession to the Council of Europe on the ground of unsatisfactory compliance with the principles of the European Charter of Local Self-Government. On the contrary, they consider that since 1996 the Armenian authorities have made genuine efforts in respect of local institutions and continue to seek their further improvement through reforms, notified to the rapporteurs, which are currently under discussion.

In these circumstances, the obvious priority for the Council of Europe and the Congress of Local and Regional Authorities of Europe is to support the action in hand. This can be done even more effectively for a member state, provided that the state in question has firstly made decisive advances that have aided and hastened its admission, and accepted specific undertakings which the rapporteurs will indicate in their conclusions.

The Armenian authorities have already undertaken to ratify the European Charter of Local Self-Government. They have emphasised that they are very heedful of the rapporteurs' observations concerning essential reforms for enhancing local democracy and local administration. These concern: voting by refugees in local elections; modification of the status of Yerevan by instituting a real local authority, with more satisfactory apportionment of powers between this authority and the central government; regulations on public offices and appointments affording local government members and staff adequate guarantees; extension of the term of office of municipal ("community") councils and of heads of local government ("community leaders").

Local government must also be geared more to intensification of decentralised and transfrontier co-operation as a factor in lowering inter-state tension.

Lastly, the associations of local authorities should be recognised as natural intermediaries with the government for defining the requisite reforms or the key policies on local affairs.

1. A LOCAL GOVERNMENT SYSTEM BASED ON SOUND PRINCIPLES

Armenia's geographical dimensions (29 800 km2) and population (some 3.5 million, over 40% residing in Yerevan) do not require an overly complex and costly system of territorial administration. In essence, it is organised at two levels. The 903 communities have local self-government. The 11 provinces¹ including Yerevan which has a special status, constitute general-purpose administrative districts for organising the localised services of the central government; headed by a governor, they also facilitate co-ordination between the communities as well as between the communities and the central government.

1.1 Settled principles of local self-government, but probable revision of the procedures

The organisation of the national territory is embodied in the Constitution of the Republic of Armenia of 5 July 1995 and in various laws.

The events of 27 October 1999 prompted a plan for revision of the Constitution which could also affect local government, although it is not the main object of the proposed reform. Concurrently, studies are in hand to redraft the legislation. This ought not to cause upheavals in the situation which we observed. The proposed reforms will be mentioned as necessary and in so far as known to us.

The Constitution lays down the general rules of local government in Chapter VII "Territorial administration and local self-government", Articles 104 to 110.

This rather succinct text outlines the general structure of the territorial administration consisting of provinces and districts, the latter being either urban or rural (Article 104). It stipulates that the districts shall have local self-government (Article 105), as shall Yerevan within its constituent districts (Article 108).
The province (Marz) is a State administrative area "governed by the State government" through appointed governors who implement the government's regional policy (Article 107). Article 108 assigns a special status to the capital Yerevan, which is ipso facto a province administered by an appointed mayor.

The other articles of the Constitution relate to highly specific aspects of local government which should preferably be set out in the law.

The Law of the Republic of Armenia on local self-government of 22 July 1996, a true "general principles act" referring to subsidiary statutes, proclaims an impressive series of principles (sections 1 to 4).

Some of these, especially the ten principles set forth in section 4, could with advantage be embodied in the Constitution itself, which would afford them an additional safeguard as prescribed by the Charter (Article 2). This idea was put to the Armenian authorities, who expressed willingness to consider it. The Constitutional Court's oversight of the laws (Articles 100 and 101 of the Constitution) will in fact depend on the scope of the statutory references which it will be able to invoke in building up its case-law on local government.

In the definition of local self-government (section 3) and the statement of its principles (section 4), the 1996 law is more precise and more ambitious than the legislation of many European countries where, although there is a longer tradition of devolution and more tangible local autonomy, these principles are implicit or established by custom. In Armenia's case, the intent to be guided by the European Charter of Local Self-Government is plain.

The reality of these principles obviously depends on the actual conditions under which they are applied, and this is where considerable ground remains to be covered.

The Electoral Code of the Republic of Armenia, promulgated on 17 February 1999, comprises universal rules for all elections and specific rules for each class of ballot. Those relating to local elections were critically discussed in the aforementioned report on the local elections of 24 October 1999.

While the Code did not reveal any provision directly infringing a fundamental principle, it did contain many procedures involving more or less serious practical disadvantages in terms of administrative efficiency or due application of the principles of local self-government, inter alia: too frequent replacement of local councils and mayors (every 3 years); no general election of these authorities on one date for the whole country, because the intervals are computed according to the date of the last by-election; problem of communities with a majority of immigrants where the elections were postponed; prohibitively large deposits payable by candidates which, for instance, prevented the elections from being held in almost a third of the 97 communities of Armavir province, where deferred elections had to be staged in December.

Most of the above drawbacks are clearly realised by the Armenian authorities, who are currently discussing reforms on these various issues in the Government and the Parliament. The second part of this report will open with a presentation of the proposed reforms.

1.2 An elected local government with extensive statutory responsibilities

Armenia's administrative devolution, still strictly local, is based on principles that meet the fundamental requirements of the Charter.

The communities have legal personality, their own assets, and a budget. Their organs, namely a mayor and a council, are elected by direct universal suffrage.

The powers of local authorities are meticulously set out in the law which thus serves a very useful instructional purpose. It defines a general mandate (section 4.2).

The organisation of local government powers is founded on an essential distinction between those held by delegation from the State and those actually vested in the local authority, which are themselves either mandatory or discretionary (section 6). According to information obtained on the spot, the provincial governors ensure in particular that the local authorities fully exercise the delegated powers, ie those in respect of which they act as representatives of the central government; budget resources are primarily allocated to these functions.

The extent of strictly local functions is naturally determined by the financial resources available for carrying them out. In fact these resources are still slight and sometimes nil once the delegated central government tasks have been financed, so that the real substance of the "local affairs" on which the elected authorities may decide is extremely limited and the pursuit of truly autonomous policies by the local councils and mayors remains embryonic. This aspect will be further discussed in the second part.

The type of activities handled by local authorities is specified for each category, particularly in the definition of community leaders' powers (sections 26-38).

Three areas which our contacts deemed particularly important are substantially outside the remit of local authorities: economic action, the paramount concern of elected representatives in view of the high unemployment rate, unexploited production capacity in factories, and fluctuations of agricultural yield (1999 was if anything a good year); social affairs and apportionment of grants, pertaining chiefly to the province; town planning and issue of building permits, where the division of power is rather complicated but in the State's favour. It must be acknowledged, however, that the family-based structure of rural society and local authority staffing levels impede extensive devolution in these areas. That is why shortcomings of this type should be tackled before others, as will be explained in the second part.

The right to found inter-community associations is secured (sections 52-54). Its exercise is as yet limited although many communities would be well-advised to co-operate and those in government want to reduce what is considered undue fragmentation of local government units although this is bound up with the country's geography and social structure.

1.3 The dual status of community leaders

The community leader, under the terms of section 4(3) of the 1996 law, has a dual function as the self-governing community's executive body and the central government representative within its boundaries. This situation, which recurs in other European countries, raises no objection of principle.

A large number of powers in the very long list assigned to the mayor under the law (sections 25-38) are in the sphere of delegated central government functions.

This tends to make the local authority constituted by the mayor appear more a State organ than a local one, not only to the citizens but also to the other State institutions as they do not always clearly discern the capacity in which the mayor acts or can be approached by them.

Many proceedings for removal of mayors from office were instituted to sanction negligence or misconduct in the discharge of their functions as central government delegates.

1.4 The province, a unit of decentralised State administration

The province is not a territorial authority but a State administrative district headed by a government-appointed official. As every State is free to organise as it sees fit the presence of central government services throughout the territory, this aspect raises no comment.

Hence there is no second tier of devolution above the community except possibly the inter-community associations.

Considering Armenia's specific geographical, demographic and historical conditions, we find it perfectly acceptable during the formative period of a small independent State not to make the political and administrative structures too complex or cumbersome.

A provincial council of an advisory nature is prescribed by the law and does operate, bringing together the provincial governor and the community executives quite regularly. This makes it a good setting for advocacy of local interests before the government representative and a useful instrument of inter-authority co-ordination.

The lack of a budget from which the governor could quickly obtain resources to meet the pressing demands of certain communities is nonetheless deplored by the councillors and the governors themselves. Its introduction is hard to foresee in the short term, given the state of public finances.

It will probably become imperative in the future, however, leading to a re-examination of the province's political essence, the provincial council's appointment and above all the election of an executive body. Proper distribution of resources between provinces and communities will also require examination in order to uphold the principle of subsidiarity proclaimed in section 4(1) of the 1996 law.

Many local services (schools; social welfare) are still very much the responsibility of the provinces, whereas it would be sensible to transfer then to the communities at such time as they have adequate human resources and financial capacity to take them over.

The chief requirements of the Charter are thus fulfilled by Armenian law, which does not contain any provision conflicting outright with a principle of the Charter. The fact remains, as the Armenian authorities are themselves convinced, that the functioning of local government at present is not without defects and shortcomings that will have to be rectified.

2. A DEVELOPING LOCAL GOVERNMENT

Their comparatively recent emergence notwithstanding, the civic institutions of the Republic of Armenia are not yet absolutely settled. The statutes adopted in 1995 or 1996 were enacted in a difficult context entailing compromises whose application is proving with experience to be a source of material difficulties.

Since the autumn of 1999 work has commenced in several areas of reform concerning the Constitution, electoral law and administrative organisation. In addition, some projects long under discussion are slow to materialise owing to the complexity of the issues involved and their financial impact if implemented. Prominent among these is the one relating to the introduction of civil service regulations.

2.1 A new process of reform under way

The National Assembly's Legal Affairs Committee whose Chairman Mr Victor E. DALLAKYAN ("Miasniun" political group of the National Assembly) we met specialises in decentralisation matters and played a major part in the drafting of the new Electoral Code. At its prompting, in September 1999 a working party open to specialists from outside parliament was set up. It holds weekly meetings to consider the reforms to be made to the Electoral Code, particularly to clear up the complex problem of the refugees on which progress could be made if there was an agreement with Azerbaijan on dual nationality and an economic alternative to the assistance currently received by the refugees was found.

Another working party chaired by Mr SADOYAN ("National Democratic Union" political group of the National Assembly), assisted by German specialists, is examining the changes required in the legislation on local government. It envisages carrying out an extensive nation-wide consultation of the recently elected mayors. At the present stage of its proceedings, this body professes a markedly reformist goal, to "alter the trajectory by evolving a clear doctrine", bringing the law and the Constitution into complete harmony. One of its main aims is to achieve more distinct separation of the decentralised State administration and the local authorities, whose respective functions still overlap too much.

Mr DALLAKYAN plainly states that one of the key concerns for completing the emancipation of local authorities is "professional" training for mayors, a large proportion of whom are a long way from possessing the competence needed to discharge the duties assigned to them under the law. Their term of office should be raised to 5 years. Like many of our talking-partners, he considers that the procedure for removal from office on the ground of incompetence should be more widely applied, subject to changes in its operation.

Mr A. KHATCHATRYAN, President of the National Assembly, subsequently gave us confirmation that he expected the next session of the National Assembly to have before it the bills on local administration, probably involving a change in the status of Yerevan. The revision of the Constitution would be concerned primarily with enhancing the respective powers and the relations of the Assembly, the President of the Republic and the Prime Minister, in order to give the country greater political stability.

Meanwhile the Government is considering the same matters. It is reasonable to hope that the passage of reforms will ensue, as we observed fairly broad convergence of views between the two sides.

2.2 Necessary strengthening of local authorities' human resources

The vast majority of the leaders whom we met in Armenia pinpoint the chief weakness of the local administration in its elected and appointed heads, who have neither an official status nor training suited to their function.

Community elected representatives, mayors and councillors alike, do not receive adequate statutory guarantees or preparation for the discharge of their responsibilities.

Section 21 of the 1996 law stipulates incompatibility of the office of community leader with all other State offices (member of parliament for instance) and with any other paid employment except of a research or educational character. Though prompted by good intentions, particularly the desire to give the office of mayor professional standing, this provision has untoward effects.

The insufficient term of elective office deters those with good jobs from relinquishing them; the lack of regulated status for elected representatives precludes any assurance of rehabilitation if not elected. It would therefore be expedient that the law in preparation on the civil service prescribe guarantees for the career of civil servants who must relinquish their appointments for a time upon election as mayors.

As things stand, there are governors we met who used to be mayors, and a mayor who was formerly director of urban planning in a town, indicating that there are "bridges" between the various offices open to the civic elite.

Termination of mandate can be imposed on a community leader by the central government on the provincial governor's recommendation. However, section 22 of the law hedges this procedure with what appear to be satisfactory safeguards. Under the proposed reforms currently being debated, some parties want this power transferred to the judiciary. Terminations of mandate actually ordered are few, and are usually founded on unfitness to discharge the duties of office.

The Yerevan Public Administration College does not exclude the possibility of training mayors, but lacks the necessary resources.

The rules of office established by the law for local councillors prescribe incompatibilities (section 14), powers (section 15), responsibilities (sections 16 and 17 but no guarantees of which these elected representatives may avail themselves in the exercise of their functions (Article 7 of the Charter).

In practice, there are no discernible beginnings of proper regulations on the status of local councillors, who receive neither salary nor allowances, besides which no regulation explicitly guarantees them leave entitlement for attending a council meeting convened during working hours.

The status of the deputy community leader raises a few queries. This official has significant and extensive functions as a member of the local administration (sections 18 and 19) and is evidently a delegate of the community leader able to deputise for the latter in the event of absence. The deputy is appointed, and dismissed should the need arise, by the mayor alone without the council.

As there is also a secretary heading the local administration and holding broad operational responsibilities (section 20), we find the function of deputy community leader lacking in clarity although we were shown a well-structured organisational chart at the local council headquarters in Armavir and Achtarak.

Associations of local politicians have existed for some time and some of their managers have a good knowledge of foreign institutions. However, the associations are still in need of consolidation and fuller recognition as natural correspondents of the government and members of parliament, further considering that there is no multiple office-holding. Certain members of parliament have served as mayors, or vice versa. We met the managers of two of these associations (Association of Armenian Mayors and Public Association of Yerevan District Councillors) who are quite active in the context of the reforms under discussion and have on occasion transmitted specific drafts to the authorities.

The Association of Armenian Mayors, purporting to be the association of the member communities, is actually composed of mayors and claims full coverage of the territory. Councillors are not so well-organised, but an association of Yerevan district councillors is reasonably active. Here too, lack of resources is the main shortcoming, and the expectations vis-à-vis the CLRAE are very real, in particular with regard to training of elected representatives.

The position of community employees is perhaps more disturbing as their precarious conditions of employment are not conducive to the formation of a body of professional administrators with stability of tenure and a high standard of proficiency.

Section 18(5) provides that the government fixes the local administration's staff complement according to the population of the community, as prescribed by a decree of the President of the Republic who has in fact had an establishment table drawn up according to the size of the communities. Restriction of staff numbers is due not so much to these controls as to the narrow budgetary margin.

The legal provisions applying to employees of the communities are very incomplete. In the absence of civil service regulations, in preparation, they have no firm guarantee whatsoever. Though in that respect they are in the same position as State employees, their subjection to the community leader who is at liberty to replace them, particularly after a new election, makes them unduly dependent on the political power and complicates the acquisition of a valid professional qualification.

Basic and in-service training are provided at the Yerevan Public Administration College, but only 300 of the 10 000 or so local government employees are able to participate. Its drastic shortage of resources is compounded by the fact that it is also required to train State officials.

During our talks with heads of associations of elected representatives, the management of the Public Administration College and the Minister of Territorial Administration, we discerned a strong demand for the CLRAE to hold seminars on local administration principally for elected representatives but also open to management staff, dealing with the main aspects of local public management. It could possibly be organised in two or three Armenian towns in order to facilitate participation.

The rapporteurs are bound to support a demand of this kind, which anticipates a twofold need for more thorough knowledge not only of the issues and the instruments of local self-government but also of the European system which Armenia wishes to join.

2.3 Allocation of financial resources to the communities: a strong State presence

Irreproachable principles are stated in this area: matching of financial resources with powers (section 4(5)), and assistance to financially disadvantaged communities by means of financial equalisation (section 4(6)).

The State nevertheless retains forceful powers of intervention. Operating resources for the communities are circumscribed in law and those available for practical purposes are glaringly inadequate. The method of their allocation causes serious liquidity problems.

Financial resources in community budgets (provinces have no budgets and are entirely dependent on the central government) are identified in fairly general terms in the law on territorial administration, amplified by financial statutes which we were unable to analyse in detail.

There are several types of tax resources. Depending on the size of the community, it receives a proportion of VAT and levies its own land tax, another on buildings, and various rates. Except in a few wealthy communities where tax revenue can constitute 2/3 of budgetary receipts, taxation covers only a small slice of public spending. Property-based taxes have already evolved with extension of private ownership of plots and dwellings, but their administration raises complaints due to the extremely variable levels of property valuation. The poor cash position of many taxpayers means that the effective recovery rate is often quite low.

In most communities, the main source of revenue is thus constituted by grants from the State. The level is approved annually under the finance law. As in all countries, complicated procedures govern the calculation of the amount payable to a given authority. This is intended to ensure a certain adjustment between richer and poorer communities.

Payment of advances on grants is irregular, following the fluctuations in State funds. It may happen that at year-end the payments received constitute no more 40% of the estimates in the budget, which compels the authority to defer payment of its bills and staff salaries. We were nevertheless assured that the grant amounts carried over to the following year have been consistently paid, and the staff members likewise, and that there has never been a reduction in volume during the year.

Although borrowing is not listed among the budgetary resources (section 43), its use is not prohibited; nonetheless, it comes under stringent rules intended to limit recourse to this expedient on terms ensuring the ability of the community to defray the debt service charges. Section 41 subjects borrowing to very strict controls; it may only be employed for specified purposes and requires prior authorisation.

This close supervision, known in many European countries, is justified in particular by the fact that the burden of debt financing, via the State grants, ultimately has an impact on the national budget.

The budgetary system seems quite well designed.

Local administrations can rely on the State administration for assistance in preparing the community budget (section 42, last indent) and handling of the accounting and revenue allocation operations (section 49). In view of the situation in Armenia, this does not seem a real fetter to local self-government.

Very close deadlines are prescribed for voting the community budget, ie within three months after approval of the State budget. This sequence is due to the importance of State allocations in the community budgets. Preparation of the community budget may, however, be concurrent with the debate on the State budget, adjustments in accordance with its variations being made as soon as it is notified. For this to be possible, adequate information must have been speedily conveyed to each community.

The adoption of a three-year community development programme (section 48) makes sense, but is unevenly applied as most communities are ill-equipped to devise one. The law stipulates quarterly and annual verification of the execution of the budget by the council (section 51).

Community property provisions (section 39)

Each community is entitled to own property and dispose of it in accordance with the law, which itemises the assets of which it consists. The term "property" covers not only amenities and the corresponding public services (library, school, etc.), but also missions (recreational areas; historic buildings) and rather indeterminate entities (enterprises; organisations). Local services are sometimes provided under direct council control, frequently by contracting out to local enterprises.

The law stipulates an annual inventory submitted for approval to the local council. The make-up of local assets was significantly modified by privatisation of residential buildings and introduction of new legal entities for administering multi-occupancy blocks, termed "condominiums".

The provision requiring government approval of the list of assets owned by each community means that the government fixes the make-up of these assets when the community is instituted (see section 59), which prompts no reservation.

Subsequent changes affecting local assets, transfers or acquisitions are decided at the discretion of the local authorities, though subject to oversight by the higher authority like most other acts.

2.4 Oversight of the communities

Free self-government does not preclude central government oversight of individual officers, budgets and acts of local authorities. This is organised at the provincial level. The provincial governorate performs as much an advisory as a supervisory role in this respect, all the more important considering the often limited proficiency of local staff. In most cases the remarks directed at the communities are heeded. If they disagree, local authorities may refer any decision of the governor or the Minister to a court of law.

The governor's attendance in a non-voting capacity at local council meetings is nearly always at the request of the community and provides the opportunity to discuss projects in the public interest, usually of an economic character, and is not seen as an instrument of control. There is no procedure for dissolving the council.

2.5 Ambiguities in the status of Yerevan

The exceptional status of Yerevan is defined in Article 108 of the Constitution and section 56 of the 1996 law. Yerevan is a province where administrative authority is held by a "mayor" appointed and removed from office by the President of the Republic on the Prime Minister's recommendation. This official is really a governor who, because the province in question is a conurbation, receives the same title as a community leader without having his status or powers. Yerevan province is divided into 12 districts administered under the same arrangements as the communities.

This original structure may be assessed on a strictly legal basis but also as regards the suitability of the territorial organisation.

In the legal sense, it will be readily acknowledged that the special importance of this city in the State justifies the constitution-making authority's intention to give it a special status affording the government some control over the entity through the governor/mayor who is invited to cabinet meetings. Many capitals have a special status, especially with regard to matters of public order and security.

Each State is free to effect its territorial divisions as it sees fit, and no general principle requires a conurbation to be given the status of a municipality. Such being the case, some clarity in the rules is still necessary, whereas the Armenian legislation creates a certain amount of confusion.

The "mayor" has the functions of a governor. The 1996 law on local self-government obviously does not specify these and is confined to the fairly limited powers wielded by the mayor subject to the Yerevan council's agreement: naming of streets and public buildings; regulation of trade; conferment of honorary citizenship of Yerevan. However, this mayor does not administer a community or district and lacks the powers of a local government leader; there is no budget for Yerevan, although section 56 of the law prescribes financial arrangements to be made for it; lastly, the mayor's personal capacity differs radically from that of elected mayors elsewhere in the territory.

The criticism is in fact directed more at the symbolic inconsistency of calling a central government appointee a mayor without the creation of a genuine municipal administration encompassing the entire city area with an elected council in control of it. This is really more a matter of terminology than of legal substance. Still, the Armenian authorities should accept the implications of the current legislation and not seek a dual advantage by letting it be thought nonetheless that the governor of Yerevan is the same type of authority as the elected mayors.

At all events, Article 13 of the Charter permits certain derogations from local self-government if they have been announced at the time of ratification.

Our queries actually bear more on the second aspect: the effectiveness, for public administration purposes, of the structure thereby instituted.

Indeed, in the light of the statutes it is hard to discern how major urban functions are performed (transport, town planning, networks, education, health, etc.) when the city area is split into neighbourhood districts. The division between the State, which retains many powers (schools, town planning, hospitals, etc.) and the districts, with their very disparate resources, is far from rational in appearance. Our talks with the mayor of Yerevan and the district mayors tended to strengthen our conviction that there were real flaws in this structure.

Indeed, the Yerevan council (section 56 of the law) has no power to establish or administer public services and amenities since it has no budget, nor are these specified in the list of the mayor's responsibilities.

The division into neighbourhood districts severely hampers the apportionment of public funds within the conurbation. The difference in tax-derived wealth between districts is considerable owing to the spatial distribution of activities (banks located in the city centre, for instance). This disruption of solidarity within an urban area, which should instead be able to devise and finance amenities and services in a co-ordinated fashion, is far from satisfactory in the long run and already presents social and political problems which would be better prevented than cured. A minimum solution would be to create an intermunicipal association uniting the districts of Yerevan.

Additionally, there could be power-sharing between the governor of Yerevan province and the district mayors, under different arrangements from those prevailing in the rest of the country, for all matters relating to delegated State powers. It is not at all irregular for the governor of Yerevan to hold certain of the powers that are delegated to community leaders elsewhere; it would not detract from local self-government and would probably simplify the tasks of the various officials.

CONCLUSIONS

The Armenian legislator has made a commendable effort in defining the system of devolved local government, drawing ample inspiration from the principles embodied in the Charter, but has been compelled to take into account the characteristic circumstances of this newly founded State. The entire system of public administration is affected by weaknesses linked with economic development and slowness in making the transition from a form of government which was highly centralised politically and institutionally to one founded on political pluralism and balance between central and local authorities.

The rapporteurs consider that Armenia's prospective accession to the Council of Europe should carry a list of obligations which the country will undertake to fulfil according to a proposed time schedule. These undertakings follow not only from the rapporteurs' observations during their second visit, but also from their remarks in the report on the last local elections.

Consequently, the Armenian authorities should undertake, where local self-government is concerned:

I) in respect of conventions:
a) to sign and ratify the European Charter of Local Self-Government within one year of accession;
b) to sign and ratify the European Outline Convention on Transfrontier Co-operation and the protocols thereto within one year of accession.

II) in respect of domestic legislation:
a) to intensify preparation and enact within one year of accession a law on the status of elected representatives affording mayors and councillors adequate guarantees in the discharge of their mandates;
b) to intensify preparation and enact within one year of accession a law on the civil service affording the staff of the communities adequate guarantees in the performance of their functions;
c) to intensify work on the amendments to the Electoral Code and adopt with all dispatch a law establishing the rules for refugees' participation in local elections, particularly in communities where their numbers exceed 50% of the local population;
d) to review expeditiously the three-year interval prescribed by the Constitution for local elections, and devise a system for general election of mayors and councillors on one date;
e) to review expeditiously the financial rules of elections, specifically in order to reduce and thus render less prohibitive the deposits payable by candidates;
f) to step up the proceedings of the working party chaired by Mr SADOYAN, one of whose aims is to separate the decentralised State administration and the local authorities, whose respective powers still overlap too much;
g) to clarify without delay the status of Yerevan and its mayors. The future status should also allow better management of the conurbation, as well as greater solidarity and more even distribution of public funds within it.

The rapporteurs recommend that the Parliamentary Assembly consider these remarks when drawing up the list of undertakings which it will ask the Armenian authorities to honour.

The rapporteurs invite the CLRAE to discuss the possibility of organising if appropriate, in conjunction with the ADACS "Local Authorities" Programme, a seminar on the role of associations of local authorities in modern society.

In addition, the rapporteurs invite the Committee of Ministers to support the co-operation and assistance programmes, particularly the ADACS "Local Authorities" Programme aimed at strengthening local self-government in Armenia, and to intensify dialogue with the European Union aimed at finalising a joint programme on local self-government.

They further invite the Committee of Ministers to support any move by the Armenian Government to develop transfrontier co-operation by its communities with the local authorities of adjacent countries. The first step towards such co-operation could consist of Armenia's early accession to the European Outline Convention on Transfrontier Co-operation and the protocols thereto.

APPENDIX 1

Programme of the CLRAE delegation's visit to Armenia

¹ The rapporteurs themselves adopted the term "département" as used in the French translation of the Armenian Constitution published by the European Commission for Democracy through Law, CDL (95) 62. The "regions" or "provinces" referred to in other texts appeared to them far less compatible with the spirit of Armenian law.