EXECUTIVE SUMMARY
also led to growing accident rates, disruptions to service provision, over-spending of material and technical resources, and an inefficient use of energy and water. Deterioration in the quality of services observed over recent years in the region is, as a rule, the first sign that their fixed assets have not been adequately maintained. The importance of ensuring a reliable water supply and the reduction of pollution will only increase in the context of global climate change. Some countries in the region are already experiencing an acute shortage of water (Kazakhstan, Turkmenistan and Uzbekistan). This shortage is even a problem for some regions in countries “rich in water resources” (for example, southern parts of the Russian Federation and Ukraine). Conclusions and recommendations Decentralization: at present, in most countries of the region, centralization processes are underway. Government statements concerning the legal decentralization of basic services contradict the centralization of decision-making witnessed on the ground. Legal decentralization of authority over basic services should be accompanied by both administrative and financial authority and capacities. Decentralization also requires the co-financing of basic services at the local level and tariff policies designed with due regard for people’s ability to pay. The small scale of basic service provision at the local level and the poor competencies of local managerial staff should be addressed, not through the transfer of authority to “higher echelons of power”, but rather by developing horizontal links in the form of inter-municipal cooperation and private sector partnerships.
Increase in the financing of basic services and an improvement in the investment climate: the task of attracting investment in basic services is essential to enhancing the level and quality of services. The major challenge in the region is to improve tariff regulation, increase cost recovery through user tariffs, and target state assistance to low-income households. Moreover, to improve the investment climate, it is necessary to create a system of incentives for service providers to cut expenses, modernize their operations and enhance the level and quality of services. Verification of the financial sustainability of basic services should be a central consideration when setting tariffs and schemes to support access for low-income households should be established or strengthened. Attention to maintenance: it is most important to prevent the further deterioration of fixed assets by conducting repairs and renovation, since these costs will only grow if investment is delayed. Improved multi-level governance: many challenges in basic service provision are of both local and national concern. The accessibility and quality of basic services in Eurasian countries is crucial for the political survival of both local and national elites. It is important that this should not result in centralization and the concentration of power at the state level. It must instead contribute to the development of well-bal anced policies based on the decentralization of responsibilities and resources, with a parallel creation of national mechanisms to encourage the development and modernization of services through legislative frameworks and state programmes to support local reforms.