East Asia: East Asia: Land Programs, Land Programs, Regional Challenges, and Regional Challenges, and Ways for Moving ForwardWays for Moving Forward

Li GuoLi Guo

November 19, 2007November 19, 2007

Washington DCWashington DC

Purposes of the Purposes of the presentation:presentation:

To provide audience To provide audience a) an overview of EAP’s land a) an overview of EAP’s land

programs; programs;b) regional challenges; and b) regional challenges; and c) preliminary thoughts on c) preliminary thoughts on

ways ways for moving forward….. for moving forward…..

Part A: EAP’s land programs… Part A: EAP’s land programs…

Focusing on: Types of Focusing on: Types of assistances; issues addressed; assistances; issues addressed; detailed activities; results….detailed activities; results….

Types of assistances…Types of assistances…

a) Lending services: a) Lending services:

From 1984 to present, Bank has financed 12 From 1984 to present, Bank has financed 12 lending projects on land administration in lending projects on land administration in Thailand, Indonesia, Philippines, Laos, Cambodia Thailand, Indonesia, Philippines, Laos, Cambodia (total around $450 million). Some projects are (total around $450 million). Some projects are under preparation (Vietnam, Cambodia).under preparation (Vietnam, Cambodia).

b) Policy Advisory Activities: b) Policy Advisory Activities:

From 1995 to present, Bank has supported land From 1995 to present, Bank has supported land policy dialogues in many countries, such as policy dialogues in many countries, such as Indonesia, Philippines, Laos, Cambodia, Vietnam, Indonesia, Philippines, Laos, Cambodia, Vietnam, and China. Helping client countries address land and China. Helping client countries address land

related policy and legal issues.related policy and legal issues.

Types of assistance…Types of assistance…

There is a linkage between policy advisory There is a linkage between policy advisory activities and lending services, i.e., after activities and lending services, i.e., after policy advisory activities help stakeholders policy advisory activities help stakeholders reach consensus about the land policy and reach consensus about the land policy and legal reforms, implementation of the legal reforms, implementation of the consensus, including detailed policy consensus, including detailed policy formulation and legal revision work, formulation and legal revision work,

becomes a part of lending activities.becomes a part of lending activities.

Issues are addressed in land Issues are addressed in land programs…programs…

a) Outdated and fragmented policy and a) Outdated and fragmented policy and legal framework;legal framework;

b) Inappropriate institutional arrangements b) Inappropriate institutional arrangements and inadequate services provision; andand inadequate services provision; and

c) Weak land administration and c) Weak land administration and management capacity. management capacity.

Issues: some examples…Issues: some examples…

a) Outdated and fragmented policy and legal a) Outdated and fragmented policy and legal framework:framework:

A complex array of incidental laws, ministerial and A complex array of incidental laws, ministerial and other decrees, and ad-hoc regulations (Indonesia);other decrees, and ad-hoc regulations (Indonesia);

Weak legal position of landholders in land Weak legal position of landholders in land acquisition negotiations with the state institutions acquisition negotiations with the state institutions on behalf of commercial enterprises (Indonesia, on behalf of commercial enterprises (Indonesia, Vietnam);Vietnam);

An increasing number of land disputes (Indonesia, An increasing number of land disputes (Indonesia, Cambodia); Cambodia);

Issues: some examples…Issues: some examples…

b) Inappropriate institutional arrangements and b) Inappropriate institutional arrangements and inadequate services provision:inadequate services provision:

Responsibilities for land administration was Responsibilities for land administration was split among several government agencies, split among several government agencies, without appropriate mechanisms for without appropriate mechanisms for coordination (Philippines, Laos); coordination (Philippines, Laos);

Multiple and inconsistent land valuation Multiple and inconsistent land valuation systems; the absence of national land valuation systems; the absence of national land valuation standards, among other things, leads to long standards, among other things, leads to long court battles over compensation (Philippines);court battles over compensation (Philippines);

High transaction risks, no efficient market, lack High transaction risks, no efficient market, lack of rural finance deepening (collateral), social of rural finance deepening (collateral), social conflicts, distorted private investment conflicts, distorted private investment (Indonesia, Cambodia).(Indonesia, Cambodia).

Issues: some examples…Issues: some examples…

c) Weak land administration and management c) Weak land administration and management capacity; capacity;

Average Time Required to Transfer a Property in Average Time Required to Transfer a Property in Selected East Asian CountriesSelected East Asian Countries

Country Average number of days required Cambodia 30 Indonesia 14 Lao PDR 15 Philippines 14–800a Thailand <1 (generally 2 hours) Vietnam 60 Source: Investment Climate Study

Issues: some examples…Issues: some examples…

c) Weak land administration and management c) Weak land administration and management capacity capacity

Weak local governments’ capacity to undertake Weak local governments’ capacity to undertake their new mandates such as issuing location their new mandates such as issuing location permit, land acquisition and compensation, land permit, land acquisition and compensation, land disputes settlement, land use planning, land disputes settlement, land use planning, land reform etc. (Indonesia, as a result of reform etc. (Indonesia, as a result of decentralization)decentralization)

A national appraisal authority needs to be A national appraisal authority needs to be established to support an equitable property established to support an equitable property system and increase local government revenues system and increase local government revenues from land-related taxes and fees. This is essential from land-related taxes and fees. This is essential to support decentralization (Philippines). to support decentralization (Philippines).

Detailed activities…Detailed activities…

Development of land policy and regulatory Development of land policy and regulatory framework; framework;

Institutional development, capacity building, and Institutional development, capacity building, and training;training;

Implementation of an accelerated land titling Implementation of an accelerated land titling program; program;

Development of land information system; Development of land information system;

Capacity building support for local governments; Capacity building support for local governments; and and

Property valuation…

Investment distributions…Investment distributions…

About 70%-80% project costs used for About 70%-80% project costs used for adjudication and registration activities;adjudication and registration activities;

Other components accounted for the Other components accounted for the remaining 20%-30% project cost. remaining 20%-30% project cost.

Results…. Results….

First, tenure security has been improved (e.g., First, tenure security has been improved (e.g., 70% to 80% of respondents believed that they 70% to 80% of respondents believed that they have greater tenure security, Indonesia);have greater tenure security, Indonesia);

Second, land titles improved landholders’ access Second, land titles improved landholders’ access to credit from financial institutions (loan size is to credit from financial institutions (loan size is twice bigger than non-project area, Indonesia, twice bigger than non-project area, Indonesia, Thailand) ;Thailand) ;

Third, land titles strengthen investment incentives Third, land titles strengthen investment incentives of landholders (46% vs. 24%, Thailand).of landholders (46% vs. 24%, Thailand).

Fourth, land markets become more active and land Fourth, land markets become more active and land prices were higher than those in non-project area.prices were higher than those in non-project area.

Results…. Results….

High economic and financial rates of returns (ERR: High economic and financial rates of returns (ERR: 30%-40%; FRR: 20%-30%, quite consistent across 30%-40%; FRR: 20%-30%, quite consistent across different countries).different countries).

Reduction of land conflicts… Reduction of land conflicts…

Strengthened landholders’ negotiation position in Strengthened landholders’ negotiation position in the process of land acquisition by government etc.the process of land acquisition by government etc.

Part B: Challenges… (or lessons Part B: Challenges… (or lessons learned…) learned…)

Challenge 1: Very diversified land Challenge 1: Very diversified land tenure arrangements in the region…. tenure arrangements in the region…. Therefore, there is no one-size-fits-all Therefore, there is no one-size-fits-all solution.solution.

Part B: Challenges… (or lessons Part B: Challenges… (or lessons learned…) learned…)

Challenge 2: Challenge 2:

A strong and high level of government A strong and high level of government commitment to the land program is needed commitment to the land program is needed to address issues such as inconsistency of to address issues such as inconsistency of laws and regulations, land grabbing, laws and regulations, land grabbing, corruption, civil conflicts…corruption, civil conflicts…

Challenges 3: Challenges 3:

LLand policy should be viewed as an integral and policy should be viewed as an integral element of a broader policy dialogue rather element of a broader policy dialogue rather as a string of narrowly land-oriented as a string of narrowly land-oriented technical interventions…technical interventions…

Part B: Challenges… (or lessons Part B: Challenges… (or lessons learned…) learned…)

Challenge 4: Land titling should also fit Challenge 4: Land titling should also fit within broader strategies of within broader strategies of urban and ruralurban and rural development. Otherwise, imperfections in development. Otherwise, imperfections in other factor markets may undermine or even other factor markets may undermine or even eliminate the advantages from possession of eliminate the advantages from possession of title. title.

Challenge 5: Value of traditional land rights Challenge 5: Value of traditional land rights arrangements… In some areas, compared arrangements… In some areas, compared with freehold titles, traditional tenure with freehold titles, traditional tenure arrangements may be more cost-effective in arrangements may be more cost-effective in increasing tenure security and even provide increasing tenure security and even provide a (limited) basis for land transaction.a (limited) basis for land transaction.

Part B: Challenges… (or lessons Part B: Challenges… (or lessons learned…) learned…)

Challenge 6: Active and adequate Challenge 6: Active and adequate participations from stakeholders… participations from stakeholders… Experience shows that active participation of Experience shows that active participation of all stakeholders during policy formulation, all stakeholders during policy formulation, demarcation of boundaries, and systematic demarcation of boundaries, and systematic adjudication is critical to the success of the adjudication is critical to the success of the program.program.

Challenge 7: Single land agency model Challenge 7: Single land agency model should be promoted, i.e., mapping side of should be promoted, i.e., mapping side of land and legal side of land (rights land and legal side of land (rights registration) should be unified. registration) should be unified.

Part B: Challenges… (or lessons Part B: Challenges… (or lessons learned…) learned…)

Challenge 8: Involvement of private sectors Challenge 8: Involvement of private sectors in surveying and other technical tasks can in surveying and other technical tasks can substantially speed up the process of substantially speed up the process of titling… but it is challenging to promoting titling… but it is challenging to promoting private sectors’ participation… private sectors’ participation…

Challenge 9: State land management and Challenge 9: State land management and state land registration…state land registration…

Part C: Ways of Moving Forward…Part C: Ways of Moving Forward…

A. Tailor project design to country A. Tailor project design to country circumstances through in-depth examining circumstances through in-depth examining related issues at the preparation stage, related issues at the preparation stage, project restructuring, as well as enhancing project restructuring, as well as enhancing SPN efforts during the project SPN efforts during the project implementation;implementation;

B. Build effective approaches for improving B. Build effective approaches for improving governance through supply and demand side governance through supply and demand side approaches for improved service delivery approaches for improved service delivery and better mechanisms to address and better mechanisms to address systematic corruption at sectoral as well as systematic corruption at sectoral as well as project levels.project levels.

Part C: Ways of Moving Forward… Part C: Ways of Moving Forward…

C. Better design and implement a C. Better design and implement a monitoring and evaluation system (will be monitoring and evaluation system (will be discussed later by my colleague).discussed later by my colleague).

d. Capitalize new opportunities emerging d. Capitalize new opportunities emerging with decentralization as well as technology with decentralization as well as technology advances, such as SDI and ICT in support of advances, such as SDI and ICT in support of e-governance, improving transparency and e-governance, improving transparency and service delivery. service delivery.

e. Highlight linkages between land e. Highlight linkages between land programs and broader urban and rural programs and broader urban and rural development strategies for more integrated development strategies for more integrated and effective interventions.and effective interventions.

Part C: Ways of Moving Forward… Part C: Ways of Moving Forward…

f. Promote participations from the f. Promote participations from the stakeholders as well as private sectors in stakeholders as well as private sectors in land programs. land programs.

g. Promote a single agency model… g. Promote a single agency model… (mapping and rights registration) in our (mapping and rights registration) in our client countries.client countries.

h. Introduce new initiatives, such as FIG h. Introduce new initiatives, such as FIG regional forums, dialogue with PCGIAP, to regional forums, dialogue with PCGIAP, to create a land forum across Asian-pacific create a land forum across Asian-pacific region for more efficient and effective region for more efficient and effective interventions.interventions.

Thank you. Thank you. Gli1@worldbank.orgGli1@worldbank.org