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Viewing cable 08RIGA312, Could territorial reform destabilize the ruling coalition?

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Reference ID Created Released Classification Origin
08RIGA312 2008-06-04 04:28 2011-08-25 00:00 UNCLASSIFIED Embassy Riga
R 040428Z JUN 08
FM AMEMBASSY RIGA
TO SECSTATE WASHDC 4978
INFO EUROPEAN POLITICAL COLLECTIVE
UNCLAS RIGA 000312 
 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: PGOV LG
SUBJECT: Could territorial reform destabilize the ruling coalition? 
 
 
1. Summary. The adoption and implementation of the administrative 
reform which would consolidate many small local governments (527) 
into bigger regional governments (88 or 127 municipal districts) has 
become a major object of disagreement between the two biggest 
parties in the ruling coalition -- People's Party (TP) and the Union 
of the Greens and Farmers (ZZS). TP's key public arguments for the 
reform are that bigger municipalities would have more resources and 
capacity, while the ZZS states that the mergers would seriously 
complicate the access to a number of crucial public services, 
including education and health care, for rural residents. However, 
some politicians and political experts argue that those are only 
public arguments and the real reason behind the disagreement is the 
fight for the zones of influence in regions. Some experts even 
speculate that the fight might result in changes of the ruling 
coalition in the fall when the map of the future regions is on the 
Saeima agenda. Because this is about resources, it is the kind of 
issue that could be used to bring down the Godmanis government.  But 
we think it would be an excuse to do so rather than the real reason 
and continue to believe the coalition is stable for the immediate 
future.  End summary 
 
2. The large number of small local governments in a sparsely 
populated country was one of the heritages left by the Soviet 
period. Over 10 years ago the government took a decision to 
consolidate the local governments with the aim to save resources, 
improve efficiency in the work of local governments and raise the 
quality of their services. The need of the reform has been 
acknowledged by many international actors, including the World Bank. 
The implementation of the reform requires numerous changes, 
including drafting and amending numerous laws (about 100 laws should 
be amended) and practical management rearrangements, including 
changes in the local education, health and social care systems. 
Given the scope of the change, there is resistance to the reform 
among rural residents, who fear degradation in the quality of 
government services. 
 
3. Until now, no government has had the political will necessary to 
tackle such a complicated issue. The People's Party saw it as a 
chance to build political capital and set the adoption and 
implementation of the administrative reform as one of its key 
priorities after the 1006 elections when the party was asked to form 
the government.  However, TP has not been very successful, mainly 
due to strong objections from one of its coalition partners, ZZS, 
which claims to represent the desire of small local municipalities 
to remain independent. 
 
4. However, it seems that more is at play. As post was told by New 
Era Saeima faction head Dzintars Zakis, it is a fight between the 
two parties about influence and control of budgetary resources. TP 
hopes that the reform will help to strengthen its positions in the 
rural areas because many of the local governments it leads would 
remain, while ZZS objects because it many small local governments 
they are currently running would be eliminated. The media has 
reported on the attempts of both parties to find allies among other 
parties, however, no formal coalitions have been formed or common 
decisions taken. 
 
5. Comment. According to several political experts the 
administrative reform could become a stumbling stone for the 
Godmanis government. However, this is most likely to be an excuse 
for bringing down the government when politically expedient, rather 
than the actual cause.  It seems to us more likely that the parties 
will reach a compromise regarding the reform since there are many 
other issues, including economic interests, where they need each 
other's support. 
 
Larson