BUSINESS
More Transparency for Land Market
02 May, 2013
Georgian land market needs more transparency and secured property rights to boost agricultural development in the country, Economic Policy Research Center (EPRC), a non-governmental watchdog, reported lately, based on its land market research.
“A long-term economic development of the country, especially in the sector of agriculture, is almost impossible without the protection of property rights and establishment of a transparent system of land ownership. Lack of transparency in the protection of land ownership rights poses a serious risk to the
country and impedes the economic development of rural areas,” EPRC experts say.
Georgian land market has been and remains pretty messy due to incompetently implemented reforms started in 1992 on the dawn of Georgian independence encumbered by collapse of soviet planned economy, civil war and territorial conflict in Abkhazia. Neither government nor population had any clear understanding of market economy and property rights and the reform with no market economy concept or long-term vision was of more social than economic nature: not to aggravate the already dismal political and economic picture by social unrest against the backdrop of mass impoverishment of the population and economic hardships, the government redistributed small parcels of lands to almost entire population. This distorted the main principles of land use based on integrated large lands, the issue of separation of public and private sectors as well as the need of developing the land market were overlooked among other important factors. On the other hand, government failed to establish precise mechanisms guaranteeing ownership rights, the problem that still remains an Achilles heel of the country. Meanwhile, the process of leasing out land resources that remained under the state ownership was launched with non-transparency and violations again. After stabilization of economic and political situation since 1996 the land reform went ahead more successfully when official land registration started and approximately 2.4 million registration certificates were issued by 2004. The Rose-revolution government continued the registration process and started formation of lands cadastre system that never ended however. In 2011 the state loyal to liberal economic principles started privatization of lands and terminated lease agreements offering lessees to buy out the leased lands instead. Thus, by 2012, the state was supposed to retain only an insignificant part of land resources in its ownership and establishment of land market in Georgia has been formally completed. But regardless of performed work and efforts undertaken by the state and donor organizations, it is still hard to find out what is the total size of land belonging to the private sector in Georgia and a significant amount of land plots remains in the so called “grey zone” implying land resources belonging to neither state nor private sector or are disputable between these two. To crown the land privatization ex-powers made obligatory computerized registration demanding high payments [GEL 250-300 per hectare plus other registration - related costs] during which it took advantage over the private sector in rural regions with scarce reach on information or finances and intercepted registration of the already privately paper-registered lands on the state ownership through computerized system. A large-scale land expropriation ensued as an aftermath infringing rights of proprietors across Georgia especially in tourist zones. From the new government coming in the office term past fall EPRC expects putting the problem of land ownership to right.
“The current government has a proper degree of legitimacy and competence as well as fiscal capacity to carry out the process rapidly and efficiently, based on principles of market economy and with a broad involvement of civil society,” they say.
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