A recent agreement between the government and one of the country's leading building societies to provide loans to help owners of unregistered property acquire titles is a laudable step towards realising pride of ownership and releasing the vast economic value tied up in unregistered property.

Claude Robinson

Roger Clarke, minister of agriculture and land, and Earl Jarrett, general manager of Jamaica National Building Society, signed a deal struck last week under which JNBS will provide $10-million over a one-year period to lend to individuals who cannot meet the cost of registering their holdings.
Borrowings will be capped at $50,000 per person, which means that if all borrowers take the upper limit only 200 persons would benefit!

In that context, the initiative can only be described as modest, especially in relation to the challenge: There are some 730,000 parcels of land in Jamaica and, according to government data only 440,000, a little over 60 per cent, are registered, leaving nearly 300,000 parcels of land island-wide without titles.

In fairness, it must be seen as part of a much larger US $12-million project between government and the Inter-American Development Bank (IDB), launched about six years ago, to address critical land policy issues and loosen the red tape in registering titles.
One of the main objectives of the programme was to "clarify land tenure" for some 30,000 parcels of land in the parish of St Catherine. It should also set up the mechanisms to map the entire island more effectively so that, in the future, parcels of land would be easier to identify and register.

Victor Cummings, the junior minister in the ministry of agriculture and lands and the person with direct responsibility for the subject, says the IDB programme should be "institutionalised" as part of the routine work of the ministry by next January so the work will not end when the IDB project ends in December.
It was not immediately clear how many of the parcels in St Catherine have been 'clarified' in relation to their ownership but one media report put the figure at just 500, including some 120 titles delivered to property owners in the parish last week.

At the signing ceremony, Prime Minister Portia Simpson Miller announced a target of delivering a total of 4,000 property titles by next April. "People need land and they need the security of tenure that a title guarantees," she commented.
Given the importance that the prime minister attaches to the issue, I have no doubt she will make sure the target is reached although the cynics may want to link the flurry of activity with a much-anticipated event that only she knows about.

CUMMINGS. government usually waives the stamp duty in relation to titles for persons who acquired property under land settlements schemes as much as 40 years ago

'That event' or not, the reality is that our historic pattern of land: lack of a clear, coherent and consistent land policy ; and the high costs involved in getting a title-whether for registered or unregistered property-all contribute to the lack of a transparent land market.

Government, the private sector and the various professionals involved in land use policy and registration must do more to create a viable land market for a variety of economic and social reasons, including helping to take more people out of poverty faster than either aid or welfare.

International lending institutions like the IDB and the World Bank lend substantial sums to developing countries to help them establish systems and procedures to make it easier and cheaper for poor people to register property rights, increase security of tenure and unlock the capital tied up in unregistered holdings.

The issue of unlocking capital from the assets of the poor has been gaining currency on the international development agenda, especially through the intellectual and practical work of the controversial Peruvian economist Hernando de Soto who has influenced many policy makers and academics.
His book, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else has been much translated and quoted and was even mentioned by Earl Jarrett at the signing as a factor influencing JN's venture with the Government-IDB titling project.

Mr de Soto's main idea is that reform of legal systems to give the world's poor title to their land, ideas, and other assets is a powerful tool in the fight to eradicate poverty among the four billion people around the world who now lack the legal instruments necessary to participate in modern market economies.
Legal reform that would provide these people with title to their assets would enable them to enter the formal economy and unleash a vast store of untapped capital.
The poor, as a group, are not as poor as is commonly thought, Mr de Soto also argued in an interview posted on the website of the Asian Development Bank.

http://www.adb.org/Documents/Periodicals/ADB_Review/2003/vol35_2/Hernando_de Soto_Vision.asp.
He estimates that the poor hold assets worth up to US$10 trillion worldwide, which is much more than developing countries have received in loans or grants by developed nations or multilateral agencies. One way to think of US$10 trillion is that the United States economy, valued at more than a quarter of the global economy, is just over US$11 trillion.

Mr de Soto's Institute for Liberty and Democracy, an influential Lima-based think tank, has been involved in property system reform in Peru resulting in titles being given to more than 1.2 million families and helped some 380,000 firms which previously operated in the black market to enter the formal economy.
Mr de Soto, who originates from Peru's privileged class, has been hailed by right wing ideologues and criticised on the left for adopting a 'single bullet' approach to development thinking, and his methodology for calculating the assets of the poor is said by critics to be flawed.

The idea is clearly controversial, but it offers an interesting perspective on poverty alleviation, especially in the context of the more traditional view that government intervention and subsidy are the principal means of fighting poverty.
It is also interesting that more attention is being placed on micro-financing as a development strategy. Indeed this was highlighted recently when Bangladeshi economist Muhammad Yunus won the 2006 Nobel Peace Prize for his pioneering work in providing credit to persons unable to access the formal banking system.

The idea of empowering the poor by unlocking value from the assets they possess could very well be an important addition to the discussion about how we address the pressing problems in the country, especially in the context of the unannounced election campaign which, so far, has been devoid of substance.
In the meantime, we have to ask whether we will achieve a real dent in reducing the staggering number of unregistered parcels and so unleash the value in them.

At issue is whether those who benefit most from the status quo-professionals who charge high fees, or government which rakes in huge tax revenues-will do what is necessary to make the change.
All the stakeholders, except the consumer, make good money out of the present system: The professionals charge high fees and the government collects hefty stamp duties and other fees.

These add up to 21% of the total cost of the transaction. This is a huge burden on the poor, but it is also a disincentive for the middle class to trade property. The cost of trading a modest $6-million home could be as much as $1.3 million. And it takes up to six months.

Cummings says government usually waives the stamp duty in relation to titles for persons who acquired property under land settlements schemes as much as 40 years ago.
That's good, but what is needed, though, is not a discretionary waiver but a broader look at stamp duty as part of an overall process to reduce transaction costs and rationalise land use. Then there is the vexed question of squatting.

Cummings says the current land policy is 10 years old and out of date and is being reviewed comprehensively. It is a process in which all stakeholders should join.

Only the good die young, Rohan Bryan laid to rest

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