Bureaucratic corporatism or corporate governance?

Dosym Satpaev

One simple, but not always effective, method to fight against a hanging computer program is to reboot the computer. From the cybernetic point of view, not only computers but also political systems can be rebooted. Although the presidential message contained less information regarding political and administrative reform than about the new social promises, many people in the republic understand that solely economic improvements in the country are not enough. Fast and effective reform of government apparatus and the political system is required. Otherwise, further economic development of Kazakhstan will be impeded by the conservative and corrupt administrative system that follows the idea, “I don’t care what happens after I’m gone”.
That’s why they decided to create the Center on Studying the Topical Issue of Public Administration, supervised by the President and based on the Agency of Republic of Kazakhstan on State Service Issues. Aslan Musin, the Vice-Minister of Economy and Budget Planning, tried to explain to us everything about the Center. The Center is assigned to systematically conduct the functional analysis of the government’s activity. The Center is also expected to study international experience, conduct systematic research on important aspects of public administration and government service, make suggestions on improving public administration, assess and audit the efficiency and quality of the activities of governmental bodies, and rate the activity of central and local governmental bodies.
For those who didn’t understand the above – the new scheme for the work of ministries and departments was suggested, which should be created based on the principles of corporate governance. According to Aslan Musin, the scheme of state government will look as follows: Prime Minister – Vice Prime Minister – Service supporting the work of the Prime Minister and Vice Prime Minister – the group of advisors to the Prime Minister and the group of advisors to the Vice Prime Minister. Below follows: Minister – akims of the oblasts, Astana and Almaty – akim of the region – akim of the village. All the above, other than the  village akims, will have corporate government organized. Regarding separate ministers, the scheme of the ministries will look as follows: Minister – board of directors – internal control service – group of the advisors – service supporting the work of the minister – general director. The minister will not have deputies. The head of the department will lead the board of directors, which will include a representative of the President’s administration, the general director of the ministry, the head of the internal control service and independent directors. We can again notice the strengthening of the President’s administration, which, as well as the Security Council, became more influential than the government and the Parliament long ago.
In this hierarchy the board of directors will approve the salaries of the minister, general director and his deputies. It will also coordinate the strategic plan of the governmental body, the development program of the ministry, annual plan, structure and number of staff, financing plan and financial reports. Interestingly, the general director will be appointed by the President. The duties of the general director will be the following: creating the development program of the governmental body, producing an annual plan of the ministry, implementation of the decisions made and realization of the documents signed by the minister. The general director will be personally responsible for the implementation. An analogous scheme is suggested for the akimats; however, within the akimats, the general director will be assigned by the akims of the oblasts. The board of directors of regional akimats and city akimats will include representatives of the oblasts’ akimats rather than the President’s administration.
In general, we see the classical “government - corporation” model, which was formed in Singapore. There, some ministries were initially created as governmental companies, which were responsible not only for the development of their respective areas, but also for earning profits. Moreover, the government itself acted like an investment corporation (GIC), where Lee Kuan Yew was the Chairman of the board of directors. At that, the salaries of the management of the ministries directly depended on the economic achievements in their areas. The difference between Kazakhstan and Singapore is that initially successful administrative reform was the basis for Singapore’s economic wonder. In our country this is not the case;, there is a necessity for administrative reform here, because without it economic development will slow down, decreasing the competitiveness of our country’s economy. Obviously, our republic is in a more complicated situation, because the government decided to strike bureaucratic corporatism that has already matured. Moreover, it is not yet certain that the battle will be won by the reformers.
Lee Kuan Yew, the “father of Singapore’s wonder”, in an interview with the Russian newspaper “Vedomosti” said the most important factor in achieving administrative reform is to have a central power free of corruption. It is very difficult to achieve anything if people in high positions within the government cannot be held up as examples of moral standards, which they are gradually diffusing to lower levels of the government. However, we have a major problem with this issue, because virtually all of our elite at some point went through the “gray times” of the partially-criminal division of state assets and corrupt relations. If we are talking about moral standards, there are practically no “clear” representatives of the elite. Thus, Kazakhstan doesn’t fulfill one of the important conditions for the success of the current reform. Our elite still is not immune from corruption. Of course, our government servants in high positions don’t carry out their “business” as openly as during the 1990s; today, they prefer to control different business projects. However, the big picture has not changed. Maybe that’s the reason why Lee Kuan Yew thought that we need to seek new people, who will be honest, skillful, well-paid and don’t have any connections with the old and current systems. It is hard to judge how possible this is in Kazakhstan; administrative reform is conducted by the same people who created the current system of the government.
However, we can see some discrepancies between the different models of building an efficient public administration. While the Singaporean model emphasizes the modernization of the management apparatus, making it similar to corporate governance without democratic mechanisms, the World Bank emphasizes six main components of such governance. First - public participation and transparency. Second - political stability and absence of violence. Third – efficiency of the government. Fourth – quality of the instruments and institutes of management. Fifth – constitutional state. Sixth – containment of corruption. As we see, the World Bank assigns the highest priority to public participation, which is practically absent in the model of Lee Kuan Yew.