51947 I n tern atIo n al D evelo p men t asso cIatIon IDa at worK Land Policy securIng rIghts to reDuce poverty anD promote growth september 2009 sustaInaBle Development networK contents Securing Rights to Reduce Poverty and Promote Growth 2 Nicaragua: Indigenous Peoples' Land Demarcation and Titlings 12 Kyrgyz Republic: Land Registration Spurs Incentives and Growth 14 Securing Property Rights in Armenia 16 d | IDA at WORK: Land Policy Internat Ional IDa at worK Development a ssoc Iat Ion Land Policy securIng rIghts to reDuce poverty anD promote growth The ways in which land is distributed, owned, managed, and can be exchanged, has long been recognized as fundamental for economic growth, poverty reduction, good governance, and gender equality. A number of factors, including population growth, rapid urbanization, and, most recently, rising food prices and the demand for bio-fuels are increasing demand for land and have put this issue center stage in the development debate. There is now acceptance that one of the prerequisites of a poverty reduction strategy is to improve access to land by the poor. The design and implementation of policy and institutional reforms at the country level to increase tenure security and documentation of land rights, improve land access through market and non-market mechanisms, and promote effective land use are development priorities. Land tenure is a relatively small but growing component of IDA lending, complemented by intensive policy and analytical engagement. The complexity and long term nature of land related programs requires a strong analytical base and long term engagement in programs. As pressure on land availability continues to grow, land policy lending and analysis will only become more important This document highlights two principles of land policy programs: security of tenure and the transferability of rights and land access. It showcases recent successful results and is a useful record of the increasing recogni- tion of the importance of land rights in development and poverty reduction. Juergen Voegele Director, Agriculture and Rural Development The World Bank IDA at WORK: Land Policy | 1 IDa at worK Land Policy: Securing Rights to Reduce Poverty and Promote Growth Land and property are usually the most important SECTOR STRATEGY physical assets for poor households. In low-income A relatively new field countries served by the World Bank's International IDA lending on land issues started roughly 15 years Development Association (IDA), land reform is an ago, with growth since 2000 that represents the important part of IDA's overall effort to address fruition of long-standing research and analytical work poverty and growth constraints, foster better environ- by the World Bank. As the analytical understanding mental management, and promote gender equality. of global land issues has deepened, largely through It also helps societies rebuild after conflicts and the World Bank's leadership, governments have natural disasters. Securing land rights is of particular increasingly sought projects in the sector and partner importance in a context of rapidly increasing demand institutions have been very active to serve this for land amid increased urbanization and escalating demand, including many bilateral donors, the Food commodity prices. Global experience shows that and Agriculture Organization, UN-Habitat, the actions to improve security, access, and transferabil- International Land Coalition, and non-profits such as ity of land increase the value of household assets, the Bill & Melinda Gates Foundation. generate higher levels of investment and agricultural Land sector work is still in early operational productivity, and facilitate access to credit. The land sector represents only a small share of IDA lending, but it is an area where IDA excels in supporting key policy and institutional changes by its clients by bringing attention to an issue that impedes development in general and rural poverty reduction in particular. IDA is working to translate this analysis into project support for clients who are ready to undertake reforms. However, the land sector is typically fraught with vested interest groups resistant to policy and institutional change. For this reason, achieving reform requires long-term engagement, making it an area few development assistance organizations have traditionally been interested in supporting. IDA has changed this by putting land squarely onto the global development agenda through the strength of its analytical work and convening power, its willingness to invest for the long term, and the use of successful approaches from middle-income countries. 2 | IDA at WORK: Land Policy A Strong Analytical Base To respond to demands for guidance by policy-makers and staff, the World Bank in collaboration with development partners produced a 2003 report on Land Policies For Growth And Poverty Reduction. It drew on a comprehensive review of the global experience with land rights and involved consultation with over 800 participants. The report set out the relationship between property rights, land markets, land distribution and the broader challenges of growth and poverty reduction. It showed that irrespective of important societal differences in landholding structures, secure tenure and clear property rights (whether individual or collective) are associated with higher property values, higher levels of investment, improved agricul- tural productivity, and easier access to credit. The report also showed the importance of well-func- tioning land markets for providing access to productive land assets for the poor. It also reviewed the global experience of land reform, demonstrating the logic for intervention in cases where highly concentrated and exclusionary land distribution creates a poverty/low-growth trap. Most land projects over the last ten years have sought to put into operational practice the policy principles that the report set out, and they are demonstrating important outcomes for growth and poverty reduction. phases in most IDA countries, providing models for in significantly increased demand for land. Without different promising approaches. IDA­funded land clear land rights and systems to enforce and record sector projects in Lao PDR, Cambodia, Indonesia, them such investment can create conflict, displace- Moldova, Kyrgyzstan, Armenia, Nicaragua, Hondu- ment of local residents, and corruption rather than ras, Bolivia, Ethiopia, Tanzania, Uganda, Cote helping to increase food security, generate jobs, and d'Ivoire, Mauritania, Ghana, Malawi, Sri Lanka, and provide access to technology. To avoid such India have all resulted in programs or advanced the undesirable outcomes, a number of countries started policy dialogue. These projects are providing models to think about ways of combining local land use for strengthening property rights and improving planning with demarcation of rights and a thorough households' security of tenure, making land markets review of land administration data structures as the function better, reducing the time and cost of land best way to realize the opportunities inherent in this transactions, improving land access, and making while avoiding the risks. improvements in governance and conflict resolution. Two principles of land policy stand out in the Higher and more volatile commodity prices, quest for growth and poverty reduction: demand for bio-fuels, and expected carbon pay- ments in the wake of the food and fuel crisis resulted 1. The importance of tenure security. Security of property rights and the ability to draw on local or national authorities to enforce those rights IDA at WORK: Land Policy | 3 IDa at worK: land policy are keys to increasing incentives for investment and this area, is assisting countries to realize the full for productive land use. A wide range of options, benefits from land rental as well as mechanisms to from full formal title to legally-backed mechanisms at change markets by ensuring that tenure security is the community level, can result in higher levels of high enough to facilitate long-term contracts and by tenure security. Worldwide studies have shown eliminating unjustified restrictions on the operation of significant increases in the land values of plots with such markets. more secure tenure. Measures to improve tenure In some countries, particularly in Latin America, security can also improve the welfare of the poor severe inequality in the distribution of land ownership who may have to spend large amounts to `informally' often goes hand-in-hand with under-utilization of vast secure rights, reduce the scope for manipulation tracts of productive land and deep-rooted rural (often by state representatives) and conflict, and poverty. For a variety of reasons, existing markets improve incentives for investment and resource are often unable to bring about the changes required conservation. to attain an optimum structure of production. In these For these reasons, programs to make land rights cases increased access to land by the poor can more secure have long formed a major thrust of IDA potentially increase productivity. Also, as land is often programs in this area, accounting for the largest intertwined with social exclusion and acts as a social share of resources spent in IDA's land portfolio. safety net, increased access to land can also promote equality of opportunity. The World Bank is 2. Transferability of rights and land access. exploring ways to use market-based mechanisms to Improvement of tenure security provides direct transfer land to poor beneficiaries in a number of IDA benefits only to those who have access to land. countries such as Bolivia, Honduras, and Malawi. Making land rights transferable not only further increases investment incentives but also allows the RESULTS landless to access land through sales and rental The land sector projects discussed below have markets or through public transfers. resulted in secure legal land rights for a spectrum of Furthermore, transferability that is combined with income groups, fostering growth and poverty formal title allows using land as collateral for credit reduction. and thus deepening of the financial sector in situa- tions where credit markets are sufficiently developed. The Armenia Title Registration Project (FY99) has Transferability is particularly important in dynamic successfully promoted private sector development by environments to bring about changes in land use and implementing a transparent, parcel-based, easily- allow households to shift from agriculture to non- accessible, and reliable registration system for land agricultural occupations. Studies show that land and other immovable property. By the end of the rental improves efficiency and equity in many project in FY05, the state registry system had 47 fully settings. There are fewer opportunities for land sales, functioning Information and Registration Centers but in many circumstances `thinner' land sales throughout the country. Almost all of the coun- markets enable the poor to gain access to land. try's 2.5 million privately-owned land parcels IDA, which has developed technical expertise in and buildings were surveyed. Just over 1 million 4 | IDA at WORK: Land Policy property records had been stored in the central database. The reforms have played a fundamental role in the resurgence of the economy's two leading sectors: agriculture and construction. Real estate market growth is now rapid, more than doubling since the end of the long slump of 1998-2000. If the growth rates of the past three years are sustained, market activity will shortly exceed the five percent mark, a measure considered very active by international comparisons. Project impact is also clear in terms of the use of immovable property as collateral and the decline in the real cost of borrowing. Registered mortgages rose 38 percent in 2002 and 48 percent in 2003. A $ 5.0 million land component under the Ethio- pia Sustainable Land Management Project builds on a hugely successful home-grown project that has, over a three-year period, awarded land certificates to more than 25 million parcels. In addition to having enhanced investment and productivity of land use, this has also helped to empower women (e.g. by allowing them to enforce their land rights in case of inheritance or divorce) and reduced conflict. The component is establishing ways to ensure full coverage with certificates for individual and group rights as well as a system to ensure their continued updating. While the project is focusing on areas threatened by severe land degradation, the Govern- ment has already requested the Bank and other donors to help with implementing the lessons property rights registration. The primary beneficia- learned in a nation-wide program. ries of this project have ranged from private farmers to small- and medium-sized enterprises and urban The Kyrgyz Republic Land and Real Estate property owners. Under the project, virtually all Registration Project (FY00) supported the develop- real estate units in settlement areas (i.e., ment of markets for land and real estate for more parcels with buildings) have been entered into intensive and effective use by introducing reliable the state registry--almost 1.2 million units in total, including about 600,000 units that have been IDA at WORK: Land Policy | 5 IDa at worK: land policy regularized. Outside of the settlement areas (i.e., which increased from slightly less than US$5,000 in parcels without buildings), over 570,000 parcels had 2002 to over US$30,000 in 2007. Sales markets been entered into the registry on a systematic basis also roughly doubled between 2002 and 2007, going as of June 2006. from 25,900 sales at the beginning of the period to The number of mortgages, which were virtually nil 48,100 at the end. prior to the Project, reached a cumulative annual total of 22,400 in the year 2002, the first year when most The Honduras Access to Land Pilot Project (FY01) of the registration offices were operational, and is demonstrating how land market imperfections can doubled to 45,300 in 2007. The cumulative value of be overcome to achieve improved land access mortgages registered within a one period increased through market channels. As a pilot program, the by more than 10 times between 2002 and 2007 to Pilot Project demonstrates a public-private partner- reach US$1.1 billion, roughly one-third the value of ship strategy where private sector lending institutions annual Gross Domestic Product (GDP) for the provide funds to purchase land and the project country. Most of these mortgages were short-term provides public financing for complementary invest- loans backed by immovable property as collateral. In ments and technical assistance to improve the 2007, outstanding longer-term residential mortgages productivity of the newly-acquired properties. The were valued at US$87 million, or roughly 2.6 percent targets of the pilot phase have been achieved and of GDP compared with virtually nothing prior to the surpassed. About 1600 farm families are now Project. Underlying this growth in mortgage market participating in local land markets and have activity was the growth in average property values, 6 | IDA at WORK: Land Policy established sustainable farm enterprises. ment on October 29, 2008, which merges four land One of the main successes of the project is the sector agencies into a single entity ­ The Lands good quality of the loan portfolio for land purchase Commission (LC); (ii) decentralization of deeds which, on average, has a default rate of less than five registry to all the nine regional capitals, effectively percent. Many households have paid off their debts bringing the registration of deeds closer to the ahead of schedule. Beneficiary incomes have clients; (iii) the establishment of Customary Lands increased through improved land productivity and Secretariat in 38 traditional authority jurisdictions ­ output in project sites. On average, the annual exceeding the target of 30 for the project; (iv) income of the participating households had doubled reduction of backlog of land cases in Accra courts (from US$600 to US$1,300) by the end of the project and the automation of five land courts in Accra and; in December, 2006. (iv) completion of inventory for state-acquired lands The Pilot Project is working to institutionalize and in 29 districts. Also completed is the first phase of expand the program. Geodetic Reference Network covering the golden triangle of Accra, Kumasi and Takoradi. There has The Malawi Community Based Rural Land been an increase in registration by women (more Development Project (FY04) builds on the new land than 400 percent in the three northern regions from policy adopted by the country in 2002 with IDA 2003), an increase in revenue levels accruing to land support. The project seeks to increase the incomes sector agencies, and improved access to credit of about 30,000, poor rural families by implementing because of property documentation. a decentralized community-based approach to land acquisition and farm development in four districts. By The Sri Lanka North East Housing Reconstruction November 2008, 12,656 families (406 beneficiary Program (FY05) has facilitated the reconstruction of groups) were settled on 27,998 hectares of land that 31,200 houses in the North East region over a they had acquired. Some 550 sub-projects for four-year period since its inception through the productive and social investments on the acquired provision of housing support cash grants. In doing lands have been received. After relocation to the so, it supports the return of displaced populations in acquired lands, gross margins per hectare have the North East and the regularization of land title to risen ten-fold for hybrid maize from the pre- targeted beneficiaries. It contributes to the training of relocation baseline. skilled construction workers, consequently allowing the resumption of economic activity in the war-dev- The Ghana Land Administration Project (FY04) astated region through increased construction also demonstrates the efficacy of IDA-supported activity. operations in helping a country work through a In its first 15 months, the project had implemented complicated legacy of traditional and colonial land a rapid land dispute/regularization methodology to administrations that have led to under-investment resolve a range of land tenure problems. The Land and disputes. The major accomplishments of the Task Force received some 90,000 grievances during project since it began in 2004 include: (i) the passage its first 15 months of operation, for which it launched of the Lands Commission Act 767 (2008) by Parlia- inquiries into about two thirds and resolved about IDA at WORK: Land Policy | 7 IDa at worK: land policy half, permitting issuance of title and clearing the way landless and nearly landless rural inhabitants. As of for rapid home reconstruction during the cease-fire September 2008, the land component of this project period. had transferred over 4,500 acres of high-quality Under a Multi-Donor Trust Fund Grant of US$ irrigated farmland to 5,300 beneficiaries, at a cost of 28.5 million, the Reconstruction of Aceh Land approximately US$1,200 per beneficiary. Virtually all Administration Systems has, since September the beneficiaries are from the poorest segments of 2005, helped to reconstruct the land administration the community. The project has also pioneered legal system in the tsunami-affected Indonesian province. services to poor families to resolve existing land With strong participation by non-governmental claims and prevent future problems. Land issues on organizations, it adopted an innovative community- a total of 200,000 acres affecting a comparable based approach to systematic adjudication that facili- number of poor have been resolved by the legal tated resolution of land disputes at the local level. services program. The Government of Andhra This helped to reduce the land grabbing and specu- Pradesh is planning to expand this program further in lation that were commonly observed in other tsuna- the next five years. mi-affected countries. As of March 31, 2008, 207,341 parcels had been surveyed/mapped, IDA'S CONTRIBUTIONS 166,116 adjudicated, 111,045 title certificates had Lending. been distributed to land owners, and more than IDA lending dedicated specifically to land administra- 120,000 houses were constructed on plots covered tion has been growing from zero prior to 1995 to by community land mapping techniques. some US$30 million per year in 1995-2000, US$40.0 million per year in 2001-2006, and US$60 million per The Andhra Pradesh Rural Poverty Reduction year in fiscal years 2007 and 2008. The pipeline of Project Land Component (FY03) is demonstrating dedicated land administration projects in IDA cost-effective results in facilitating land access for countries amounts to some US$37.0 million. These amounts are still only a small share of total IDA lending, though. One reason is the nature of IDA Lending with Land Administration as a Theme these projects. They are typically focused on helping develop policies and build or strengthen institutional IDA infrastructure, and the average project size tends to Land No of amount Thereof: be small in dollar terms. Another reason is that land Administration Projects US$ AFR+SAR administration has been more frequently addressed Theme Rating million in projects that were not primarily dedicated to this First theme 22 916 553 `theme'; in fact, there have been as many as 89 such IDA projects since 1995. Second or further Land components as secondary themes are 89 4,664 2,159 theme playing critical roles for achieving broader goals in rural development, irrigation, housing and urban TOTAL 111 5,579 2,712 services projects among others. In total, there have Source: ARD Lending database. 8 | IDA at WORK: Land Policy been almost 111 IDA projects amounting to US$5.6 billion that addressed land administration. Approxi- mately half of this lending was in Sub-Saharan Africa and South Asia. Dedicated land administration projects in particu- lar have generated consistently strong outcomes. Among all completed IDA projects with land adminis- tration as the primary theme, the World Bank's Independent Evaluation Group has found 95 percent to have satisfactory outcomes. Interaction between lending and non-lending activities. Land issues are deeply rooted in countries' histories and are often politically sensitive. This implies that attempts to address them need to be solidly ground- ed in empirical research, often building on carefully Land issues are deeply rooted in evaluated pilots. The Bank's strong analytical capacity and intellectual leadership has allowed countries' histories and are often operations to draw on cutting-edge research to politically sensitive. Efforts to show the importance of land issues for overall economic development. It has also helped countries address them must be solidly formulate, and build consensus around national grounded in empirical research, strategies to deal with land in a prioritized and well-sequenced manner. In some cases, such as often building on carefully evaluated Ethiopia, India, and China, demand for IDA's analytical work is equal or greater than that for IDA pilots. lending, and either constitutes a precondition for significant lending or provides the basis for countries to formulate programs which they then implement using their own or other donors' resources. Collaboration with partners. Given the complexity and long-term nature of land related institutions, work on land would not be possible without strong partnerships with a wide range of academic, civil society, and development institutions. The World Bank has been contributing to IDA at WORK: Land Policy | 9 IDa at worK: land policy recent initiatives such as the High Level Commission efforts, and used an evolving global body of best for Legal Empowerment of the Poor, the Global Land practice to offer clients high quality technical advice Tools Network and the International Land Coalition. It and strategies for success. Consider for example the also collaborates closely with FAO, the UNDevelop- use of single agency models, systematic adjudication ment Program, the International Fund for Agricultural and community-based land reform. Development, the European Community, and several regional development banks, and is collaborating Key IDA strengths in this sector. with the private sector through the International IDA operations have a unique set of advantages in a Federation of Surveyors, to organize regional sector that requires intensive policy and analytical workshops and capacity building events. engagement as well as long-term partnerships. The initial investment in land regularization New demands and new approaches. activities is generally high and the returns on the Several factors have driven IDA's success in the land investment accrue over long periods of time. This is sector in a context of growing demand for land due to the need for extensive mapping and parcel- sector interventions and IDA's ability to tailor country- by-parcel fieldwork establishing the nature of land specific responses to it. rights. For low-income countries, these investments First, the 1990s and the first part of the 2000s would often have been impossible without IDA witnessed the breakdown of state ownership and the resources. Investment in land distribution is also rapid privatization of land in the former socialist expensive and sensitive because of its targeted world. This, together with the requirements of nature. IDA programming can make these invest- European Union accession in many cases, drove a ments financially feasible. need for land administration capacity in the Bank's IDA's leadership and convening power among Europe and Central Asia region. donors has also helped to forge consensus about Second, in East Asia and the Pacific, Sub-Saha- land policy reforms in places with a complex mixture ran Africa, and Latin America and the Caribbean, of actors and interests, such as Indonesia. Land there has been a new openness of political regimes sector interventions are long-term, with planning hori- to market-driven, private sector development. This zons of 20 years the norm. Few institutions are has been accompanied by a frustration in some rural prepared like IDA to commit to this type of partner- areas with the lack of results in land reforms of the ship. Finally, IDA's ability to raise the profile of land past, and a broader recognition of the role that land issues in national strategies linked to programmatic assets play for investment and productivity. Coupled lending is a particular strength. with recognition of instances of market failures, this These strengths have allowed countries to drove the land agenda forward in country dialogues overcome inertia and vested interests in order to facilitated by IDA's analytical assistance. This same make systemic changes in technology and coverage process is now occurring in India and other parts of of land records, which would otherwise not have South Asia. The World Bank invested heavily in policy happened. dialogue and analytical work to guide development 10 | IDA at WORK: Land Policy Challenges encountered and lessons learned. analytical work. IDA is joining forces with partners to Land sector work in low-income countries faces seek lower-cost technologies and services to ensure many challenges. Policy and legal frameworks are the coverage and sustainability of its work in the often deficient, reflecting distortions from colonial or poorest areas. socialist pasts, or accommodations to armed Taking into account the above lessons, the conflicts, and prevent the establishment of clear outlook for the sector specifically in IDA countries property rights (individual or collective). Such focuses increasingly on Africa and South Asia, deficiencies impede market-based transfers and where analytical engagement over the last 10 years often facilitate the illicit transfer or control of public is now translating into a new generation of opera- land by vested private interests. Public land tions with enormous potential for contributing to institutions are generally weak technically, financially, poverty reduction. and in terms of public accountability. Providing A declaration by African Heads of State adopted low-cost services and linkages to mortgage or in July 2009 calls for formulation and accelerated long-term finance using land as collateral are further implementation of land policies by African countries, challenges. annual tracking of progress in doing so (linking to These challenges have been met by an approach other review processes such as the African Peer that stresses high-quality intellectual engagement Review Mechanism), and the establishment of a and research, heavy upfront investment in policy fund to support these activities. The World Bank is and legal reform (often through trust-funded grants, ready to work with countries on diagnosis, and will small "Learning and Innovation" credits, and pilot offer technical and financial support, to help coun- projects), long-term engagement through the tries establish systems of land administration that sequencing of projects, and the evolution of a body help protect the rights of the poor, increase invest- of best practices in each region. ment, and help shift towards a more diversified economic structure. LOOKING AHEAD In Latin America and the Caribbean region, land Generally, work in this area over the last 15 years administration activities are expected to grow in has led to a realization that titling or land regulariza- areas of rural land access (Bolivia, Honduras, tion per se is not enough to achieve sustainable Paraguay),peri-urban land regularization activities for benefits from land sector interventions. As a result, informal settlements, and attention to indigenous over the last six to seven years emphasis has been and environmentally-sensitive land areas (such as placed on policy and legal development and addressing enormous challenges in the Amazon institutional capacity strengthening. The land sector Basin) and cross-cutting themes of land gover- will require an approach that considers long-term nance. The healthy portfolio in the East Asia and engagement with 10-20 year horizons for achieving Pacific region is also expected to grow. While the fundamental objectives. privatization of land in Eastern Europe and Central Work in the sector has also increasingly recog- Asia is now largely completed, consolidating the nized and addressed governance challenges, new, private land sectors will require continued including such activities as user surveys and global operational and analytic engagement. performance standards in parallel with further IDA at WORK: Land Policy | 11 IDa at worK: land policy Nicaragua: Indigenous Peoples' Land Demarcation and Titlings Challenge Results Most of Nicaragua's indigenous and Afro-descen- The institutional and legal framework for dent peoples, with their considerable ethnic and recognizing indigenous peoples' land rights has cultural diversity, live in the Caribbean region of been strengthened and land titling is Nicaragua, known as the Atlantic Coast. Although proceeding apace. the area is rich in natural resources, almost 80 percent of its population faces extreme poverty. The Highlights: advance of the agricultural frontier, immigration, ˇ Amongotherlawsanddecrees,twocriticallaws population resettlement after the armed conflict, and were successfully passed by the National Assem- uncontrolled development have put pressure on bly: the Communal Property Regime for Indig- natural resources and land occupation patterns. As a enous and Ethnic Communities on the Atlantic result, land conflicts and inter-ethnic rivalry have Coast and the Bocay, Coco and Indio Maíz Rivers increased. For many years, the lack of an institutional (Law 445, December 2002); and the National and legal framework made it difficult for indigenous Cadastre Law (Law 509, November 2004). and afro-descendent communities to have their ˇ Thelandtitlingprocesshasthusfarprovided rights to land and natural resources formally recog- tenure security and/or use rights to those who are nized and their territories demarcated and titled. not indigenous or Afro-descendants and do not form part of the communal system but who live in Approach these territories. Law 445 also contemplates Drawing upon World Bank studies which highlighted conflict resolution processes among the communi- the connection between land tenure security and ties in the region and among these and third poverty reduction, the government moved to improve parties. the legal, institutional and technical framework for the ˇ AsofJuly2009,9territorieshavebeenduly administration of property rights in Nicaragua, demarcated, titled and registered, covering an beginning with rural areas where most of the coun- area of more than 10,000 km2. A total of 53,000 try's poor live.1 inhabitants, mainly Miskito and Mayangna, living in Recognizing indigenous peoples' land rights in the 123 communities have benefited from land Caribbean required an innovative and unique demarcation and titling. approach, taking into account traditional decision- ˇ ThetitlingofAwasTigni(733.94km2),oneofthe making and consultation structures, collective tenure 9 territories titled so far, represents a historical arrangements and communal use of natural resourc- achievement. In 2001, this community had won a es, as well as the culture and worldview of indig- case against the Nicaragua government in the enous peoples. Many community leaders have been Inter-American Court of Human Rights demanding involved in the demarcation process, which follows a recognition of its collective land rights. In Decem- participatory methodology emphasizing conflict ber 2008, with the support of the Project, Awas resolution. The demarcation itself is a challenging Tigni was finally titled. task, requiring arduous work in often remote and ˇ Another6territoriesbelongingtoindigenousand isolated areas. Afro-descendant peoples are due to be demar- cated, titled and registered by 2010. 12 | IDA at WORK: Land Policy IDA Contribution ˇ IDAcommittedUS$32.6millionequivalenttohelp finance the Land Administration Project (known as PRODEP). The rest of Project costs (estimated at US$38.5 million) is being financed by the Nordic Development Fund (EUR5.5 million) and counter- part funding from the Government of Nicaragua. ˇ InthecaseoflandregularizationonthePacific coast, where the legal framework is not yet as conducive to recognizing indigenous peoples' rights, Bank safeguard policies under the Project are helping promote progress by Nicaragua on sensitive issues such as acknowledging the Women and the poor now receive legal existence of indigenous populations and finding feasible ways to recognize their land claims. protections regarding their ownership Partners rights to real estate assets. Co-financing by the Nordic Development Fund (EUR5.5 million) Next Steps ˇ IDAispreparingtocommitanotherUS$10million in late 2009 to continue the work of PRODEP. Some of the new municipalities proposed for inclu- sion under the additional financing have indig- enous populations seeking recognition of their land rights. ˇ Anewoperation(supportedbyaDFIDtrustfund managed by the World Bank) will soon finance a multi-sectoral investment plan in four of the poorest territories. The investments in energy, transport and access to secure water will be based on territorial development plans developed under PRODEP. IDA at WORK: Land Policy | 13 IDa at worK: land policy Kyrgyz Republic: Land Registration Spurs incentives and Growth Challenge Highlights: As it emerged from Soviet rule following indepen- ˇ Access to credit greatly increased. Access to dence in 1991, the Kyrgyz Republic faced the credit increased through a new system that uses challenge of creating a system of property rights. A real estate collateral. More than 48,000 mortgages big obstacle was the lack of enforceable ownership valued at over US$1.3 billion were registered in rights, which resulted in insecurity, a lack of collater- 2008. alized credit, and high transaction costs. For house- ˇ Property sales grew. Property sales grew to holds and businesses, it was difficult to buy, sell, or 48,100 units in 2007, although due to the eco- inherit real estate, or to use real estate as collateral nomic downturn, there were only about 43,700 for borrowing. Several agencies were active in this sales in 2008. arena, but their work was uncoordinated and largely ˇ Transaction costs decreased. Land-related deficient. Information on real estate rights was hard transaction costs are estimated at less than 2 to access and retrieve. percent of property values for large estates and less than 1 percent for houses and apartments. Approach This compares favorably with an average of The IDA-financed Land and Real Estate Registration 2.7-4.3 percent in OECD countries. Project was launched in 2000 to establish an efficient ˇ Local registry offices became sustainable. cadastre system--which is a comprehensive register Fifty registration offices were opened on schedule, of a country's property that includes details of owner- with training provided to staff. Most were already ship, tenure, and location. This new property system able to cover operational costs through revenues was designed to provide the new legal framework for generated from services rendered. secure ownership, increased access to credit, ˇ Customer service improved. The project decreased transaction costs, and more efficient implemented a number of measures to reduce the buying and selling. The project set up registration opportunities for corruption, and to improve offices throughout the country, provided assistance accountability and customer service. for legislative and regulatory reforms, and conducted training for diverse stakeholders--including govern- IDA Contribution ment officials, civil society, and various organizations The Land and Real Estate Registration Project cost working in the real estate sector. US$10.95 million, of which IDA financed US$10.02 million. It was coordinated with local government, real Results estate professionals, real estate brokers, notaries, Most private properties are now registered. and lending institutions, all of which played an More than 2.5 million real estate units are important role during implementation. registered, including 661,000 units whose situation was regularized under the project. Partners The World Bank Group coordinated with other donors before the project was designed. The US Agency for International Development (USAID) had conducted a small pilot project testing techniques for the collection of data necessary for property registra- tion and had taken a lead role in drafting a Land 14 | IDA at WORK: Land Policy Registration Law. The Swedish International Devel- opment Cooperation Agency (SIDA) agreed to finance technical assistance components. Both USAID and SIDA were active on property-valuation methodologies and property tax. Under a Swiss program, aerial photographs were obtained for Bishkek and Osh, which enabled the project to produce digital maps for these cities. Next Steps A Second Land and Real Estate Registration Project became effective in late 2008 and is slated to run through 2012. It will continue to register additional types of real estate in the national registry system, More than 2.5 million real estate units are including informal urban settlements, urban parks, government properties, and pasturelands. The registered, including 661,000 units whose cadastral mapping also needs to be gradually situation was regularized under the project. upgraded. Currently, the majority of local registry operations are able to finance their current expendi- tures. However, they continue to depend on the government for capital investment, information technology, and quality control. To strengthen the Kyrgyz Republic's overall system of property rights, the project aims to continue strengthening institu- tional capacity, particularly financial management of registry operations, records management, and strategy development. IDA at WORK: Land Policy | 15 IDa at worK: land policy Securing Property Rights in Armenia Challenge ˇ Almostall2.5millionprivately-ownedlandparcels Land reform was one of the earliest reforms launched and buildings in Armenia surveyed. by Armenia and was a crucial step in moving from a collective Soviet system to a market-based private- IDA Contribution sector driven economy. Databases of property ˇ Totalprojectcost:US$10.6million--ofwhichIDA information and a registration system were created in provided US$8.0 million. the early 1990s but as Armenia progressed in its ˇ IDAdrewonitsexperienceinlandprivatizationin transition, the country needed a more reliable and other countries. transparent system for registering property. ˇ Helpedscaleupaworkingmodel(developedby the government under a USAID-funded pilot) Approach ˇ Projectbackedsmall-scaleprivatizationandthe Building on existing databases and a pilot USAID establishment of secure property rights, also project, IDA's Title Registration Project sought to: supported under IDA's first and second policy ˇ EstablishanetworkofInformationandRegistra- loans for Armenia. tion Centers throughout the country and institute surveying and cadastral mapping. Partners ˇ Createatransparent,parcel-based,easily ˇ Swedenfinancedtheupgradingofthegeodetic accessible registration system for immovable network as well as technical assistance in title property. registration. USAID provided most of the early ˇ Provideachronologicalrecordofpropertyowners technical assistance in registration. Switzerland and their rights and obligations. financed aerial photography, mapping, etc. ˇ IDAcapitalizeduponotherdonors'funding:its Results survey activities focused on urban areas, while the Property rights are now secure, the property EC addressed rural areas. market efficiency has increased, and women ˇ AJapanPopulationandHumanResources and the poor now receive legal protections Development Grant helped prepare the project regarding their ownership rights to real estate and build initial capacity within State Cadastre assets. Administration. Highlights Next Steps ˇ Registeredmortgageshavegrownrapidly:from User fees collected by the State Committee on the 38 percent in 2002 to 48 percent in 2003. Real Property Cadastre cover the cost of the registra- ˇ Taxequityhassignificantlyimproved--nearlyall tion centers' operations and maintenance. The properties are now recorded and municipalities system's financial viability is expected to further and rural communities can begin to levy property improve as the volume of transactions continues to taxes. increase, while staff costs are expected to decline ˇ 47fully-functioningInformationandRegistration now that the initial systematic registration effort is Centers (IRC) throughout the country registering completed. land parcels and buildings. ˇ Timetoregisterarealestatetransactionhas dropped from 14 days to 1 day. 16 | IDA at WORK: Land Policy IDA at WORK: Land Policy | 17 Printed on recycled paper 1818 H Street, NW Washington, DC 20433 USA www.worldbank.org/ida www.worldbank.org/sustainabledevelopment