Fine Print

Reinventing Afghan real estate

The rapid turnabout in Kabul Bank's fortunes has led Afghans to question Western-style free-market capitalism.
Washington Post Staff Writer
Monday, September 20, 2010; 7:39 PM

Nothing quite says "nation-building" like wading into a country's laws on property rights.

The U.S. Agency for International Development recently had this to say in a request for proposals: "Extensive studies of property rights issues in Afghanistan have concluded that the current framework of laws and institutions is weak, fragmented and incomplete. There is no overarching land law or other mechanism to harmonize or override the patchwork of rules and interpretations, thus resulting in greater insecurity of land rights."

According to USAID, "Public and private institutions that can support a robust land market are weak or non-existent. Estimates suggest that 85 percent of all property transactions are informal, and that 70 percent of all urban real estate is unregistered. For agricultural land, estimates are even higher. Therefore, very few Afghans enjoy officially recognized, legally enforceable property rights that can support the long-term investment in residential, commercial, industrial and agricultural real estate required for Afghanistan's economic growth."

The agency's Land Reform in Afghanistan Project isn't its first venture into Afghan land rights. From 2004 to 2009, USAID worked to formalize land holdings, reorganizing 6.5 million documents in 21 provinces and streamlining property registration from 34 steps to three. That work "highlighted many areas that still require attention for the development of a vibrant land market," according to USAID, thus setting the stage for this new contract.

Since land is probably the most valuable asset for individual Afghans and businesses, the agency wants to put the ownership of real estate on a firmer footing to promote "buying, selling, granting mortgages, or otherwise putting land to productive use," according the proposal.

There is a certain irony in the United States attempting to improve how Afghans buy and sell land, given that a good deal of this country's current economic crisis arose from unchecked real estate speculation.

Afghanistan has some unique challenges. The insurgency is using land grievances "to exploit people's long-standing dissatisfaction with their government," according to USAID. Land disputes, studies show, make up 45 percent of cases brought before local leaders for resolution. In addition, according to the agency, "rampant discrimination against women and ethnic minorities within these [dispute resolution] mechanisms only reinforces their marginalization in society."

Meanwhile, a new Afghan Land Management Law "disregards all private ownership claims that are not backed by registered deeds," according to USAID. Because much of the land is covered by unregistered deeds or agreements, "the law may permit the taking [by the Kabul government] of privately owned land or land held in customary tenure without compensation," according to the agency. In a footnote, USAID says, "Anecdotal evidence suggests the Afghan government may claim as much as 90 percent of Afghan land, mostly in rural areas."

To manage Afghan government-owned land, the administration of President Hamid Karzai has created the Afghanistan Land Authority, which is run by a board composed of government ministers. ALA is supposed to inventory government landholdings, lease them for commercial purposes and recommend any changes in Afghan laws related to real estate.

The company that wins USAID's LARA contract will support ALA by helping with management, leasing and gathering revenue from government lands. By engaging with both government and private Afghan entities, the LARA contractor is to develop "a critical mass of public and private employees in Afghanistan who can draft laws and regulations, implement policies, and provide a broad range of land-related services such as surveying, mapping, real estate appraisal and construction."

USAID's proposal warns that although there is within the Kabul government "momentum . . . for meaningful land reform," there also are "many individuals who have a vested interest in the present system" in which local warlords and village chiefs control property.

One cannot help but think how far USAID seems to be from a statement Vice President Biden made last July on the "Today" show. "We are in Afghanistan for one express purpose: al-Qaeda. Al-Qaeda exists in those mountains between Afghanistan and Pakistan," he said. "We are not there to nation-build. We're not out there deciding we're going to turn this into a Jeffersonian democracy and build that country."

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