LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT VOLUME 2.9: EASTERN EUROPE

LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT VOLUME 2.9: EASTERN EUROPE JULY 2007 This publication was produced for review by the United States Agency for International Development. It was prepared by ARD, Inc.

This product is part of ARD, Inc. s international work in land tenure and property rights. It forms part of a 3-volume set on the subject. VOLUME 1. LAND TENURE AND PROPERTY RIGHTS FRAMEWORK VOLUME 2. LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT 2.1 East and Central Africa [East Africa: Congo DR, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Somalia, Sudan, Tanzania, and Uganda; Central Africa: Burundi and Rwanda] 2.2 Southern Africa [Angola, Lesotho, Malawi, Mozambique, Namibia, South Africa, Zambia, and Zimbabwe] 2.3 West Africa [Benin, Cape Verde, Ghana, Guinea, Liberia, Mali, Nigeria, Senegal, and Sierra Leone] 2.4 East and Southeast Asia [East Asia: East Timor, Indonesia, Mongolia, and the Philippines; Southeast Asia: Cambodia, Laos, Myanmar, and Vietnam] 2.5 Near East Asia and North Africa [Near East Asia: Egypt, Iraq, Jordan, Lebanon, West Bank/Gaza, and Yemen; North Africa: Morocco] 2.6 South Asia [Afghanistan, Bangladesh, India, Nepal, Pakistan, and Sri Lanka] 2.7 The Balkans and the Caucasus [The Balkans: Albania, Bosnia and Herzegovina, Croatia, Kosovo, Republic of Macedonia, and Serbia and Montenegro; The Caucasus: Armenia, Azerbaijan, and Georgia] 2.8 Central Asia [Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Turkmenistan, and Uzbekistan] 2.9 Eastern Europe [Belarus, Bulgaria, Moldova, Romania, and Ukraine] 2.10 The Caribbean, Central America, and North America [The Caribbean: Dominican Republic, Haiti, and Jamaica; Central America: El Salvador, Guatemala, Honduras, Nicaragua, and Panama; North America: Mexico] 2.11 South America [Bolivia, Brazil, Colombia, Ecuador, Guyana, Paraguay, and Peru] VOLUME 3. LAND TENURE AND PROPERTY RIGHTS ASSESSMENT TOOLS Prepared for the United States Agency for International Development, USAID Contract Number LAG-I-00-98-00031-00, Awareness Framework: Property Rights and Natural Resource Management, under the Broadening Access and Strengthening Input Market Systems (BASIS) Indefinite Quantity Contract. Implemented by: ARD, Inc. P.O. Box 1397 Burlington, VT 05402 For more information or assistance, please contact Peter E. Hetz, phetz@ardinc.com or Michael Roth, mroth@ardinc.com, Senior Associates for Land, Environment, and Natural Resources. COVER: Almost 90 percent of all Bulgarians own their own home. Bulgaria restituted land to former owners and their heirs, and 99 percent of the eligible land has been restituted. Photo Credit: ARD, Inc.

LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT VOLUME 2.9: EASTERN EUROPE JULY 2007 DISCLAIMER The author s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

CONTENTS ACRONYMS AND ABBREVIATIONS... iii 1.0 INTRODUCTION... 1 2.0 COUNTRY-SPECIFIC LAND TENURE AND PROPERTY RIGHTS THEMES AND DONOR INTERVENTIONS REPORT... 5 BELARUS... 9 BULGARIA... 12 MOLDOVA... 16 ROMANIA... 20 UKRAINE... 24 3.0 COUNTRY-SPECIFIC LTPR RANKINGS AND RANKING MAPS... 31 BELARUS... 33 BULGARIA... 33 MOLDOVA... 33 ROMANIA... 33 UKRAINE... 33 LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE i

ACRONYMS AND ABBREVIATIONS BASIS EGAT LTPR USAID Broadening Access and Strengthening Input Systems Economic Growth, Agriculture, and Trade Bureau Land Tenure and Property Rights United States Agency for International Development LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE iii

1.0 INTRODUCTION The demand to address property rights concerns is increasing from both United States Agency for International Development (USAID) field missions and host country governments. The increase in demand is due, in part, to a growing awareness among development practitioners of the role played by property rights (and natural resources access and use) in economic growth, governance, and conflict and resource management. USAID and its partners have learned a great deal over the last three decades about the relationship between property rights and economic growth, productivity, and, to a lesser extent, natural resource management and conflict. There are several important lessons learned from the last decade of research and policy work on property rights with a particular emphasis on land tenure. Secure property rights are a critical component of economic development and social stability. Inappropriate property rights policies and institutional structures that are not synchronized with economic, political, and environmental realities can undermine growth, erode natural resource bases, and catalyze violent conflict. Insecure and non-negotiable property rights are some of the critical factors limiting economic growth and democratic governance throughout the developing world. Conversely, strong property rights systems, which are viewed as legitimate, transparent, and negotiable, can lead to increased investment and productivity, political stability, and better resource management. In development programming, property rights are most frequently dealt with in the context of land reforms and land tenure reform. Programming decisions made in a variety of sectors that take land tenure into consideration can have profound impacts on land use and management, agricultural systems, and associated natural resources management. Too often, land tenure and property rights reforms are measured in terms of outputs rather than impacts (e.g., measuring the number of land titles which have been issued as opposed to focusing on market performance and investment increases, reduced conflicts, or improved sustainable management practices). This focus on outputs prevents USAID from fully understanding the efficacy and potential cross-sectoral benefits of its property rights reforms and programs. Issues and constraints regarding property rights vary from region to region, and they will continue to evolve over time. The most volatile of USAID-presence countries, and those that are often in the greatest need of property rights reforms, are fragile states. Since property rights are so closely linked to development agendas across the globe, there is a need to understand how these rights shift as economies move through the stages of economic growth and democratization (and, in some cases, from war to peace) and how these shifts require different property rights interventions. In light of these common concerns and issues, a Community of Practice on Land has been created by USAID in Washington to serve as a hub of information sharing. In addition, the Land Resources Management Team has been formed within the USAID/Economic Growth, Agriculture, and Trade (EGAT) Bureau to coordinate issues of land tenure and property rights programming with other USAID bureaus and operating units. In October 2004, USAID awarded ARD, Inc., of Burlington, Vermont a two-year task order, Awareness Framework: Property Rights and Natural Resources Management, under the Broadening Access and Strengthening Input Systems (BASIS) indefinite quantity contract. The task was to develop a land tenure and LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 1

property rights framework, a common vocabulary, and a set of tools that could be used to help guide USAID through future property rights programming. ARD formed a virtual team of land tenure and property rights professionals from three organizations: ARD, the Rural Development Institute (RDI), and the University of Wisconsin Land Tenure Center (LTC). Each member brought to the team strong experiences in the major areas of property rights and development programming. The team consisted of Safia Aggarwal (ARD), David Bledsoe (RDI), Jennifer Brown (RDI), Renee Giovarelli (ARD), Peter Hetz (ARD), Kathrine Kelm (ARD), Susana Lastarria-Cornhiel (University of Wisconsin LTC), Mark Marquardt (ARD), Robert Morin (ARD), Ryan Roberge (ARD), and Michael Roth (ARD, formerly of LTC). This virtual team met regularly over the course of one and half years to develop the Land Tenure and Property Rights Framework and tools: Volume 1: Land Tenure and Property Rights Framework. A conceptual tool for examining land tenure and property rights categories, constraints and interventions in USAID development programming. This volume includes a glossary of commonly used land tenure and property rights terms. Volume 2: Land Tenure and Property Rights Regional Report. This report includes the Countryspecific Land Tenure and Property Rights Themes and Donor Interventions, and a database on land tenure and property rights for each presence country. The data is drawn from bilateral and multilateral literature sources. Also included in this report are Land Tenure and Property Rights Rankings and Ranking Maps for specific USAID presence countries. Rankings are an expert assessment of major land tenure and property rights issues and constraints in USAID programming countries around the world, and an illustration of those matters within regional neighborhoods (USAID programming regions). Regional reports: 2.1 East and Central Africa [East Africa: Congo DR, Djibouti, Eritrea, Ethiopia, Kenya, Madagascar, Somalia, Sudan, Tanzania, and Uganda; Central Africa: Burundi and Rwanda] 2.2 Southern Africa [Angola, Lesotho, Malawi, Mozambique, Namibia, South Africa, Zambia, and Zimbabwe] 2.3 West Africa [Benin, Cape Verde, Ghana, Guinea, Liberia, Mali, Nigeria, Senegal, and Sierra Leone] 2.4 East and Southeast Asia [East Asia: East Timor, Indonesia, Mongolia, and the Philippines; Southeast Asia: Cambodia, Laos, Myanmar, and Vietnam] 2.5 Near East Asia and North Africa [Near East Asia: Egypt, Iraq, Jordan, Lebanon, West Bank/Gaza, and Yemen; North Africa: Morocco] 2.6 South Asia [Afghanistan, Bangladesh, India, Nepal, Pakistan, and Sri Lanka] 2.7 The Balkans and the Caucasus [The Balkans: Albania, Bosnia and Herzegovina, Croatia, Kosovo, Republic of Macedonia, and Serbia and Montenegro; The Caucasus: Armenia, Azerbaijan, and Georgia] 2.8 Central Asia [Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Turkmenistan, and Uzbekistan] 2 LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE

2.9 Eastern Europe [Belarus, Bulgaria, Moldova, Romania, and Ukraine] 2.10 The Caribbean, Central America, and North America [The Caribbean: Dominican Republic, Haiti, and Jamaica; Central America: El Salvador, Guatemala, Honduras, Nicaragua, and Panama; North America: Mexico] 2.11 South America [Bolivia, Brazil, Colombia, Ecuador, Guyana, Paraguay, and Peru] Volume 3: Land Tenure and Property Rights Assessment Tools. A collection of instruments that can be used by USAID missions to expand upon land tenure and property rights themes in their respective countries and determine how these contribute to or impede development programming. These materials include both an LTPR pre-assessment tool and an LTPR assessment tool. Both of these are aim to standardize the format and content addressed in USAID property rights assessments and facilitate development of potential programming in this area. This team was also afforded the opportunity to meet with both USAID s Community of Practice on Land and the Land Resources Management Team on various occasions. These meetings were used to critique and improve the different editions of the LTPR Framework and associated tools. In addition, various renditions of this framework and tools were used to steer land tenure and property rights assessments in four of USAID programming countries Ethiopia, Kosovo, Angola, and Kyrgyzstan. The task order was managed and supervised by Dr. Gregory Myers. For more information or technical assistance, please contract Dr. Gregory Myers, Senior Land Tenure and Property Rights Specialist EGAT/Natural Resources Management/Land Resources Management Team, USAID, gmyers@usaid.gov. Within ARD contact Peter E. Hetz, phetz@ardinc.com or Michael Roth, mroth@ardinc.com, Senior Associates for Land, Environment, and Natural Resources. LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 3

2.0 COUNTRY-SPECIFIC LAND TENURE AND PROPERTY RIGHTS THEMES AND DONOR INTERVENTIONS REPORT The Country-Specific Land Tenure and Property Rights (LTPR) Themes and Donor Interventions Report was developed to provide a profile of LTPR themes and related donor interventions in USAID presence countries. For each country addressed, the report provides a snapshot of current LTPR concerns and the donor interventions that seek to address them. The report serves to alert readers to current LTPR themes in each USAID presence country based on a common set of donor literature. Subsequent research and assessments conducted in each country will further inform this initial snapshot and provide the basis for intervention, if warranted. The report is based primarily on a desk study of donor documents. Given the limited LTPR content in many of the documents reviewed, some entries in the report are limited and others are sparse. This is an indication that many of the donor programs and/or their reports are not presently focused on LTPR concerns. It is envisioned that the Country-Specific LTPR Themes and Donor Interventions Report will be updated in its entirety on a periodic basis. Updates should mirror major reporting/country programming cycles within USAID. Thus, it is hoped that the contents of these reports will be supplemented with information provided by USAID missions and through LTPR assessments. LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 5

EASTERN EUROPE BELARUS BULGARIA MOLDOVA ROMANIA UKRAINE LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 7

EUROPE & EURASIA-EASTERN EUROPE BELARUS I. Background Summary Belarus suffers from an increasingly centralized government that restricts personal freedoms, raising concerns abroad amongst governments and international human rights organizations. These developments have isolated the country and limited the assistance and support of the international community. The economic strategy espoused by the government resembles the strategy followed by the China and Vietnam modernizations, but the similarities end there; the lack of protection of property rights and the unfavorable business environment have led to little small enterprise growth, insignificant foreign direct investment, and little reform in agriculture. The legacy of the Chernobyl catastrophe continues to impact many aspects of life. (CAS at i) Tenure Types Private ownership of agricultural land is not permitted and, under the Constitution, it is owned by the state. Citizens can own up to one hectare of agricultural land in a household plot and up to 0.25 hectares of agriculture land around a private house. This small amount of agricultural land in private ownership (about 20 percent of agricultural land) can be sold, traded, mortgaged, leased out, and bequeathed to heirs. The rest of the country s agricultural land remains held in collective and state farms; land shares do not exist. (Giovarelli and Bledsoe at 7, 8) Legal Framework Key legislation is the Constitution, the 1999 Land Code, and the Civil Code (revised in 1999). (Giovarelli and Bledsoe at 7, 10) Land Administration and Institutions The responsible agency for land registration is the National Cadastre Agency, created in 1999 under the new Land Code. (FSRR at 10) Titling and registration are virtually nonexistent in Belarus. Government institutions are heavily involved in regulating agriculture in the form of controls, fixed price quotas, and extensive trade regulations. (Giovarelli and Bledsoe at 15, 16) II. Land Tenure and Property Rights Constraints Violent Conflict/Post-conflict Instability Unsustainable Natural Resources Management/Biodiversity Loss A problem of key significance concerns the legacy of the Chernobyl catastrophe. After the explosion at the Chernobyl nuclear power plant in 1986, over 70 percent of the radioactive fallout landed on Belarusian soil, contaminating almost 23 percent of its territory. As a result, economic activity on the 261,000 hectares of arable land (about 3 percent of the total arable land) and on 36,000 hectares of forests has been banned due to the high degree of contamination. (CAS at 11) LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 9

EUROPE & EURASIA-EASTERN EUROPE III. Donor Interventions USAID Belarus has made some progress in the protection of its environment, especially in energy conservation and protection of natural resources. The areas under protection, mostly wetlands, have increased by 30 percent since 1991 and are now close to 12 percent of the national territory. Nevertheless, Belarus is still facing many environmental problems. The forestry resources of Belarus are growing in volume terms, but the present management system encourages inefficient use of raw materials and does not generate the maximum benefit in terms of income and employment. (CAS at 11) Insecure Tenure and Property Rights The Land Code that was passed in 1999 contains restrictive ownership, use and inheritance rights provisions. (FSRR at 17) The government can dictate cropping requirements and terminate use rights arbitrarily. (FSRR at 18) Inequitable Access to Land and Natural Resources Little or no land reform has occurred in Belarus to date, and only a small amount of the country's land is owned by private farmers. (FSRR at 4) Belarus is the only former Soviet country outside of Central Asia that does not allow private ownership of agricultural land; only small household plots are privately owned. (FSRR at 15) The World Bank states that economic development is limited because private entrepreneurs have difficulty accessing land. (CAS at 8) Poor Land Market Performance Almost no land market supporting institutions exist and transactions are restricted. (FSRR at 18) Only a small amount of agricultural land can be privately owned. This small amount of land can be transacted. Many farmers indicate that they would like to acquire more land, but the lack of land for sale and restrictions limits their options. Private land can be mortgaged, though it is not common. (Giovarelli and Bledsoe at 12, 15) Summary USAID assistance focuses on civil society building. USAID does not work on land rights issues. Key Institutional Arrangements Conflict or Dispute Resolution Legal and Regulatory Framework Redistribution Land Administration 10 LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE

EUROPE & EURASIA-EASTERN EUROPE Other Donors Land Use Management and Conservation Summary The World Bank had a forestry project in Belarus. Key Institutional Arrangements Conflict or Dispute Resolution Legal and Regulatory Framework Redistribution Land Administration Land Use Management and Conservation The World Bank had a Forestry Development Project that worked to create open market forestry pricing, improve forestry management, and promote conservation. The project closed in 2002. (wwwwb) IV. Information and Data Sources Giovarelli, Renee and David Bledsoe. 2001. Land Reform in Eastern Europe: Western CIS, Transcaucuses, Balkans, and EU Accession Countries. FAO (Giovarelli and Bledsoe). USAID. Belarus Congressional Budget Justification FY 2005 (CBJ). USAID/Belarus. 2002. Annual Report FY 2002 (AR). World Bank. 2002. Farm Sector Restructuring Report (FSRR). World Bank Project Database <http://www.worldbank.org> (visited 2005) (wwwwb). World Bank. 2002. Country Assistance Strategy for Belarus (CAS). LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 11

EUROPE & EURASIA-EASTERN EUROPE BULGARIA I. Background Summary All the basic rights to land exist in Bulgaria for both men and women under formal law. Almost 90 percent of all Bulgarians own their own home. The 10 percent who do not are largely minority populations. Bulgaria restituted land to former owners and their heirs, and 99 percent of the eligible land has been restituted. The restitution process was long and, for many years, heirs had insecure rights to their land as disputes were resolved and boundaries were drawn. (Giovarelli) Tenure Types Land can be privately owned, and many received restituted land in ownership. At the same time the that restitution process was ongoing, farm reorganization was occurring. In the reorganization, property shares were distributed and could be used to bid for the non-land property of the collective or contributed to the formation of a new cooperative. In 1998, 42 percent of arable land was farmed by these newly formed cooperatives, 6 percent by state farms, and 52 percent by private farmers. (Giovarelli and Bledsoe at 40-41, 46) Bulgaria is set to lift the ban on foreign ownership of land. Legal Framework The legislation on restitution was changed repeatedly, resulting in confusion and difficulties in enforcement. This law, the Law on the Ownership and Use of Farm Land Act, was passed in 1991 and amended numerous times. (Giovarelli and Giovarelli and Bledsoe at 41) Land Administration and Institutions Registration in Bulgaria is moving from a deed registration system to more of a title registration system with financial backing from foreign donors, including the World Bank and the EU. The system will change over a period of time, with both systems operating in Bulgaria for some time to come. The registration legislation takes into account these two systems and does not fully embrace a title registration system. However, both systems appear to be capturing transactions. The Registration and Cadastre Law, which was passed in April 2000, with amendments passed in 2004, represents years of negotiation and compromise. (Giovarelli) II. Land Tenure and Property Rights Constraints Violent Conflict/Post-conflict Instability Insufficient Information Unsustainable Natural Resources Management/Biodiversity Loss Land plots are very small and fragmented due to restitution, and it is not easy to lease enough contiguous plots to farm economically viable units unless all owners of the land on the former collective and state farms lease their land as a unit. The government considers consolidation a priority for rural development. (CAS at 11) Soil erosion, wetland degradation, and pollution pose problems. (CAS at 9) Insecure Tenure and Property Rights 12 LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE

EUROPE & EURASIA-EASTERN EUROPE III. Donor Interventions USAID A major area of need is in public information about the laws. The restitution law and its amendments, regulations, and interpretive decisions are incomprehensible to many land owners and heirs because it has been changed (to rectify mistakes that were made early on) so many times that few people fully understand their rights. (Giovarelli) Inequitable Access to Land and Natural Resources Inadequate access to land is not a major problem, with the exception of the Roma who were often left out of the privatization process. (PA at 15) There is unused land that has been restituted to owners who live in urban centers, and this land is available for lease. Those who worked on former collective or state farms have access to land but little security if they did not also have land restituted to them. (Giovarelli) There are two main types of farms in Bulgaria: cooperatives and private family farms. In 2000, the share of agricultural enterprises privately owned by individuals (non-legal entities) accounted for 65.9 percent (8843) of all agricultural entities; farm cooperatives accounted for 28.8 percent (3861). Household plots (individual farms) held 86.3 percent of all agricultural land, with an average size of 0.24 hectares per farm. Large farms (over 10 hectares) held only 0.2 percent of agricultural land, with an average size of 493 hectares. (Giovarelli) Poor Land Market Performance The legislative and regulatory framework for a land market is in place in Bulgaria. Notwithstanding efforts by the Ministry of Agriculture to disseminate public information regarding the restitution process, market participants do not always have sufficient confidence in title to restituted agricultural land to be comfortable engaging in transactions. Lack of appropriate and abundant land market information is a serious handicap in the development of a land market in Bulgaria. Agricultural land information regarding prices for leasing and selling agricultural land is very limited. Land valuations are not always related to land markets, and people are concerned about selling land without understanding the market and value for that land. Moreover, real estate agents in one part of the country do not have information about real estate available in another part of the country. This is particularly problematic since many people have been restituted to land in areas far from where they live and need information about the markets in other areas of the country. (Giovarelli) Summary USAID has previously supported land projects related to restitution. USAID's current focus is on rule of law and governance. Key Institutional Arrangements Along with USAID s work on rule of law, it is also working to strengthen local governments. (CBJ) Conflict or Dispute Resolution LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 13

EUROPE & EURASIA-EASTERN EUROPE Other Donors Legal and Regulatory Framework The centerpiece of USAID s work in Bulgaria is rule of law. Activities include improvements to the judicial sector, legal and policy reform, and anticorruption efforts. (CBJ) Redistribution Land Administration Land Use Management and Conservation USAID has previously supported nature conservation and natural resources management in national parks. (AR at 12) Summary Donors are working on land administration and natural resources management in Bulgaria. Key Institutional Arrangements Conflict or Dispute Resolution Legal and Regulatory Framework Redistribution Land Administration The World Bank supports the Land Registration and Cadastre Project. This project is working with the Cadastre Agency to design and implement a unified national cadastre system. Additionally, the project is working with the district courts and the Ministry of Justice to implement a new real property registration system. (LRCP and wwwwb) In 2001, the EU began funding the development of a land information system and the computerization of Land Commission information. (CAS at 15) Land Use Management and Conservation The World Bank s Wetlands Restoration and Pollution Reduction Project works with local communities and local authorities in the Persian Nature Park and the Kalimok/Brushlen Protected Site to promote the adoption of sustainable natural resource practices. The project includes site rehabilitation and recovery and the creation of sustainable land use and management plans. The World Bank also has a Lake Pomorie Conservation, Restoration and Sustainable Management Project, which works with local governments and the private sector to rehabilitate the area and create sustainable management plans. (wwwwb) IV. Information and Data Sources 14 LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE

EUROPE & EURASIA-EASTERN EUROPE Giovarelli, Renee. 2004. Land Law and Policy Consultant (Giovarelli). Giovarelli, Renee and David Bledsoe. 2001. Land Reform in Eastern Europe: Western CIS, Transcaucuses, Balkans, and EU Accession Countries. FAO (Giovarelli and Bledsoe). GTZ Web site project descriptions <http://www.gtz.de/en/index.htm> (visited 2004) (wwwgtz). USAID. Bulgaria Congressional Budget Justification FY 2005 (CBJ). USAID/Bulgaria. 2002. Annual Report FY 2002 (AR). World Bank Project Database <http://www.worldbank.org> (visited 2005) (wwwwb). World Bank. 2002. Bulgaria Poverty Assessment (PA). World Bank. 2001. Land Registration and Cadastre Project Document (Bulgaria) (LRCP). World Bank. 2001. Country Assistance Strategy for Bulgaria (CAS). World Bank Project Database <http://www.worldbank.org> (visited 2004) (wwwwb). LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 15

EUROPE & EURASIA-EASTERN EUROPE MOLDOVA I. Background Summary Agricultural land plays a particularly significant role in Moldova, where a large sector of the workforce continues to work in agriculture and a large part of the population lives in rural villages. Moldova was long renowned throughout the former Soviet Union as a producer of wines, juices, and canned fruits and vegetables. Moldova s export markets have suffered marked declines over the last decade. The country s dependence on imports of energy and lack of resource diversification make it the poorest European nation. Since 1991, the former collective farms have been succeeded by large agricultural enterprises, often managed or owned by the former director of the collective farm. During the 1990s, former workers and pensioners of the collective farms received land shares representing equal undivided common share interests in the commercial agricultural land used by the farm. In the early 1990s, it became possible to convert land shares into individual plots of commercial agricultural land. Perhaps 20 percent of entitled citizens converted shares to owned plots by the mid-1990s. In 1997, USAID began financing a nationwide program to sub-divide, privatize, and title the remaining commercial agricultural land. By the end of 2000, almost all commercial agricultural land had been sub-divided and titled under a process that took advantage of widespread public desire in rural areas to obtain ownership certificates. In 2001, the Communists returned to power in the Moldovan Parliament and began looking for ways to force reconsolidation of ownership of commercial agricultural land, but they have not yet overcome public resistance to this initiative. The privatization and titling program in Moldova has been challenged by various quarters, but remains the most significant wholesale land privatization effort in the former Soviet Union. (RDI) Tenure Types Land can be privately held in Moldova, and the country has demarcated, titled, and registered land plots for individual family farm members. Except for state research farms and village pastures, all non-forest land is privately owned. Many of these owners lease their land back to the former collective. (Giovarelli and Bledsoe at 8, 11) Legal Framework Key legislation includes the Land Code (Law No. 821-XII 1991 as amended), the Law on Real Estate Cadastre (Law No. 1543-XIII 1998 as amended), Pledge Law (Law No. 838-XIII 1996), Law on Lease (Law No. 861-XII 1992), Regulation on Contents of General Land Cadastre Documents (Approved by Gov t Decision No. 24, 1995), and Law on Normative Price and Procedures on Sale and Purchase of Land (Law No. 1308 1997). (RDI) Land Administration and Institutions Land administration is largely the responsibility of a central agency, the State Agency for Land Relations and Cadastre. (SALRC) This agency is responsible for maintaining a national registry of land and buildings, which is administered at district-level offices throughout the country. The national program to sub-divide and title commercial agricultural land in Moldova during the 1990s was coordinated with the National Agency for Geodesy, Cartography, and Cadastre (since renamed SALRC), the Moldovan agency responsible for 16 LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE

EUROPE & EURASIA-EASTERN EUROPE registering land. USAID worked closely with the World Bank-financed land registration initiative to ensure that all agricultural lands privatized under the program were registered at the village level and then immediately registered in the national land registry administered at the district level. This need to register privatized agricultural land provided the impetus for opening the national network of land registry office and for training registration staff. USAID financed much of the actual registration work for commercial agricultural land. Unfortunately, some of the most influential officials in SALRC advocate strong state control over farming, which leads them to overemphasize the importance of soil assessment and soil record keeping. (RDI) II. Land Tenure and Property Rights Constraints III. Donor Interventions Violent Conflict/Post-conflict Instability Unsustainable Natural Resources Management/Biodiversity Loss Soil erosion, wetland degradation and pollution pose problems. (CAS at 9) Forests occupy state land and are managed by state officials. Grazing lands are not extensive and are typically managed at the village level. (RDI) Insecure Tenure and Property Rights Both the Constitution and the Land Code provide appropriate protections for land owners, including protection against arbitrary expropriation of land. The legislative and regulatory framework for land relations in Moldova is under threat by those who promote involuntary reconsolidation of ownership of commercial agricultural land. Mandatory reconsolidation of land ownership would not change the size of Moldovan farms, but would strip ownership from the vast majority of current landowners who typically rely on the land rent for a significant portion of their income, but who do not have the skills or capital means to operate farms themselves. (RDI) Inequitable Access to Land and Natural Resources Moldovan farms remain huge by European standards, often measuring 1000 or more hectares, many times greater than European averages. Although the farming units are extremely large, farms are comprised of parcels leased from large numbers of owners. Thus, although ownership of land used by a 500-hectare farm might be held by 500 individuals, the farm is operated as a single unit managed by a single director. (RDI) Poor Land Market Performance Procedures have been established to facilitate the lease, sale, bequest, exchange, and mortgage of land. Fees for registration and notarization have been reduced. There are still few transactions, possibly due to the country s poor economic climate. Land leasing, especially back to former collectives is common. Lessors often lack sufficient information to negotiate effectively or enforce terms. (Giovarelli and Bledsoe at 13, 14) LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 17

EUROPE & EURASIA-EASTERN EUROPE USAID Other Donors Summary USAID has supported agricultural land distribution and titling, as well as dispute resolution, and is supporting the country s private farmers and members of rural enterprises. (CBJ) Key Institutional Arrangements Conflict or Dispute Resolution USAID is supporting land-related dispute resolution. (AR) Legal and Regulatory Framework Redistribution Land Administration A new USAID land project began in 2003. This work, the Private Farmers Assistance Program, seeks to help private farmers develop their business and transition to individual owner-operatorship. The project helps independent land owners and also members of rural enterprises. The Land Privatization Support Project works to consolidate land holdings through market-mechanisms and assist in the development and strengthening of private property rights. (AR at 5 and CBJ) USAID has also worked on agricultural land titling. (AR at 5) Land Use Management and Conservation Summary The World Bank provided assistance on land-related legal drafting and is supporting registration. The World Bank is also supporting several resource management projects. Key Institutional Arrangements Conflict or Dispute Resolution Legal and Regulatory Framework The World Bank provided assistance on the drafting of the Land Code. (CAS at 8) Redistribution Land Administration The World Bank supports the First Cadastre Project which is supporting the country s land registration system. Components include mapping, an urban cadastral services program, a rural cadastral services program, and institutional and capacity building. (CBJ) Land Use Management and Conservation 18 LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE

EUROPE & EURASIA-EASTERN EUROPE IV. Information and Data Sources World Bank projects on resources management include, the Agricultural Pollution Control Project, the Soil Conservation Project, the Pilot Water Supply and Sanitation Project, and the Biodiversity Conservation of the Lower Dniestr River Project. (CBJ) Giovarelli, Renee and David Bledsoe. 2001. Land Reform in Eastern Europe: Western CIS, Transcaucuses, Balkans, and EU Accession Countries. FAO (Giovarelli and Bledsoe). Mitchell, Robert. 2004. Land Law and Policy Consultant, Rural Development Institute (RDI). USAID. Moldova Congressional Budget Justification FY 2005 (CBJ). USAID/Moldova. 2002. Annual Report FY 2002 (AR). World Bank Project Database <http://www.worldbank.org> (visited 2005) (wwwwb). World Bank. 2002. Country Assistance Strategy for Moldova (CAS). LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 19

EUROPE & EURASIA-EASTERN EUROPE ROMANIA I. Background Summary Land privatization in Romania began early in the transition process (1991) through the restitution of land used by large cooperatives to the former owners. Almost two-thirds of the land transferred through restitution went to elderly farmers, with the remainder to younger, generally poorer households. Most farms today are small semi-subsistence units of about two hectares, run by owners with limited farming skills and with weak integration into factor and commodity markets. The government has taken action in a number of structural reform areas but some important development challenges remain, particularly with regard to further enterprise privatization, land privatization, and continued reform of the agriculture sector. (CAS at ii) Tenure Types Restitution of formerly collectively-owned land began in 1991 and land is privately owned. Initially, 30 percent of the country s agricultural land was retained and held in state farms. Legislation in 2000 permitted the restitution of this land as well, although much of this land remains unrestituted. (Giovarelli and Bledsoe at 39) Legal Framework The country s Law on Land Resources, as amended in 1998, provides final directives for leased land or shares held in agricultural companies to be converted to private land ownership. The 1998 Law on the Legal Circulation of Agricultural Land regulates land transactions. The 1996 Law on Cadastre and Real Estate Publicity establishes a unified registration system. The Law on Land Resources governs land use management. (Giovarelli and Bledsoe at 43, 50, 64) Land Administration and Institutions Because Romania was historically divided between Austro-Hungarian and Ottoman rule, there are two different registration systems. The 1996 Law on Cadastre and Real Estate Publicity outlines a procedure for converting the country entirely to the "land book" system of registration. Under the system, 170 land book offices would be established throughout the country. (Giovarelli and Bledsoe at 60) The National Office for Cadastre, Geodesy and Cartography, under the Ministry of Justice, is responsible for maintaining the information upon which registration decisions are made. Communications between this agency and the land book offices will need to be extremely timely to ensure a smooth process. (Holstein and Giovarelli and Bledsoe at 60) II. Land Tenure and Property Rights Constraints Violent Conflict/Post-conflict Instability Unsustainable Natural Resources Management/Biodiversity Loss Romania has severe environmental problems and is ill-prepared to deal with the challenges 20 LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE

EUROPE & EURASIA-EASTERN EUROPE posed by toxic spills and other environmental hazards to which Romania is prone, especially in mining areas in the Danube River Basin. Hazard mitigation management will become particularly important over the next several years, as the government completes enterprise privatization and land restitution. While the country is aligning legislation to conform to EU requirements, enforcement has been lagging behind, and environmental management is largely delegated to the enterprises that focus primarily on achieving production targets, without due consideration to environmental standards. (CAS at 27) Insecure Tenure and Property Rights The land book is supposed to provide conclusive evidence of title; however, there is a possibility that rights therein can be annulled by future court judgement, and rights not recorded in the land book may also be enforceable. These exceptions reduce the faith that owners or third parties, such as potential buyers, place in the land book. (Giovarelli and Bledsoe at 61) Inequitable Access to Land and Natural Resources Subsistence farming has increasingly become an economic safety valve for households, with just over one half of all households in Romania reporting owning farmland, even though holdings are frequently too small to be commercially viable. Nevertheless, many state farms still need to be privatized. (CAS at 6, 10) The privatization of state farms, which are chronic loss-makers, remains a critical unfinished task. These farms tie up substantial portions of arable land (17 percent in late 2000) that is the best in the country. While agricultural subsidy allocation was improved through the establishment of an input voucher scheme, the government s decision to allocate most of the budget transfers to "advanced producers" with no ceiling on the transfer per beneficiary will benefit primarily large land holders. Allocations to state farms were also allowed, which may result in slowing the privatization process. Romania is in the process of restituting a large portion of its forest land to private owners. (CAS at 27) Poor Land Market Performance The land sales market in Romania that began to operate legally only in 1998, is not particularly active. Transaction fees, in particular notary fees, are high. Also, co-owners, neighbors, and lessees have a pre-emptive right to buy such land if offered for sale. These rules have been somewhat narrowed, but remain a hurdle to land sales. (Giovarelli and Bledsoe at 47, 50) The lease market for agricultural land is significantly developed, and both oral and written contracts occur. Lessors are often urban residents or pensioners, with pensioners often holding back 0.5 to 2.0 hectares to farm for household consumption. Lease terms range from 1 to 5 years. Rents paid typically range from 10-30 percent of the crop, which suggests quite a vigorous and competitive lease market. Leasing is particularly important since a high percentage of rural land owners live in towns, and thus do not cultivate most or all of their land personally. The most significant lease restriction is the requirement that lessees who are physical LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 21

EUROPE & EURASIA-EASTERN EUROPE persons must be Romanian citizens. Additionally, lessees which are legal entities must be of "Romanian nationality" and have a representative office in Romania. III. Donor Interventions Another limiting restriction is that a lessee who is a physical person must have agricultural education, agricultural experience, or hold a certificate issued by the Ministry of Agriculture that testifies to the lessee's knowledge. This requirement adds a level of complexity to the lease transaction process, since the lessor must somehow determine that the lessee meets the standard. This requirement also manifests a lack of confidence in the workings of the market, which is premised upon private actors undertaking endeavors in which they believe they will be successful. (Holstein) USAID Other Donors Summary USAID is supporting the creation of a mortgage market, including work on related legislation. USAID is also focused on local governance and judicial reform. Key Institutional Arrangements USAID supports the strengthening of local governance and judicial reforms. (CBJ) Conflict or Dispute Resolution USAID supports alternative dispute resolution in order to relieve a backlog of court cases but there is no specific mention of land issues. (AR at 9) Legal and Regulatory Framework USAID supports judicial training but there is no specific mention of land issues. (AR at 9) Redistribution Land Administration USAID s regional Mortgage Market Development Project includes Romania and entails work on policy, laws, and regulations regarding mortgage. (CBJ) Land Use Management and Conservation USAID supported a forestry NGO that advocates for forest restitution. (AR at 4) Summary The World Bank is working on land registration and natural resources management projects. See details below. Key Institutional Arrangements Conflict or Dispute Resolution Legal and Regulatory Framework 22 LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE

EUROPE & EURASIA-EASTERN EUROPE Redistribution Land Administration A World Bank Romania General Cadastre Project is working to: (1) establish an efficient system for securing land titles that can be replicated nationwide; (2) create a general cadastre system; and (3) set up simple procedures for land transactions. (wwwwb) Land Use Management and Conservation The World Bank supports an Afforestation of Degraded Agricultural Land Project and a Romania Biodiversity Conservation Management Project that includes work on agriculture, fishing, and forestry. The World Bank also has an Irrigation Rehabilitation Project that may include some work on property rights. (CAS at 23 and wwwwb) IV. Information and Data Sources Holstein, Lynn. 2004. Discussions by Awareness Framework Team with Lynn Holstein from World Bank (Holstein). Giovarelli, Renee and David Bledsoe. 2001. Land Reform in Eastern Europe: Western CIS, Transcaucuses, Balkans, and EU Accession Countries. FAO (Giovarelli and Bledsoe). USAID. Romania Congressional Budget Justification FY 2005 (CBJ). USAID/Romania. 2002. Annual Report FY2002 (AR). World Bank Project Database <http://www.worldbank.org> (visited 2005) (wwwwb). World Bank. 2003. Poverty Assessment for Romania (PA). World Bank. 2001. Country Assistance Strategy for Romania (CAS). LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 23

EUROPE & EURASIA-EASTERN EUROPE UKRAINE I. Background Summary Land reform in Ukraine has passed through three stages. The first stage (1988 1992) gave productive enterprises (farms and industrial and trade entities) independent management and self-financing. In the second stage (1992 1999), collective ownership of farmland was transformed to common ownership (without delineation of land plots in nature). In the current third stage (2000 present), land shares of farmland are being transformed into citizen ownership by issuance of a State Act with or without delineation in nature and with the right to lease to a farm enterprise or work the land independently. (Roth and Valletta) In terms of the volume of land parcels created and legal documents issued, the second and third stages of land reform have shown significant success. In the second stage, by 1998, land under collective farms was largely transferred to the 6.9 million citizen farm members by receipt of their land share certificates, which USAID helped to create and deliver. In the third stage, the land share certificates are being transformed into State Acts. This task is the focus of USAID s Ukraine Land Titling Initiative (ULTI) project, as well as of efforts by the State Committee of Ukraine for Land Resources (SCLR) and the World Bank. There is an implied fourth stage of land reform that will need to address some or all of the existing limitations on the use and disposition of land. As of 2006, Ukraine had not fully defined the principles, institutions, procedures, or practice that will characterize its future land system. Over time, it may achieve a full system of civil law and market relations following the models of European civil law. Alternatively, it may pursue a system in which the state retains a stronger role as manager of land use and overseer of transactions and market activity. Certain decisions that will be made in the near future will have a critical influence on the direction of land policy. These include the conceptual and practical definition of the unified registry/cadastre, the draft law On the Land Market and other legislation, and the moratorium on the sale of agricultural land that is scheduled to end in January 2007. (Roth and Valletta) Tenure Types Land can be privately owned and acquired through purchase. Household plots have been fully privatized. Much of the former collective farms have been transferred to the control of private individuals in the form of land shares. Most of these shares are leased back to the collective farm. These land shares, unlike those in Russia, are being physically demarcated with owners being granted state acts in place of land share certificates. (Giovarelli and Bledsoe at 8, 13) Legal Framework The legislative and regulatory framework for land relations in Ukraine is more or less acceptable. Both the Constitution and the Land Code provide appropriate protections for land owners, including protection against arbitrary expropriation of land. A mortgage law was passed in 2003. Dershkomzen, the central agency charged with land administration, 24 LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE

EUROPE & EURASIA-EASTERN EUROPE dominates the process of drafting laws and regulations dealing with land relations, and it uses its position to attempt to broaden control over all aspects of land relations. Although laws and regulations are generally acceptable, there nevertheless persists an imbalance in favor of leasing enterprises and against land owners. (Rolfes) Land Administration and Institutions The Land Code provides that land is to be registered and land use and ownership is recorded locally at the village and district levels. A separate registration law is needed. In urban centers, a separate agency registers building (and apartment) use and ownership. Villages, towns, and cities directly control public lands and regulate use of private lands, within their administrative jurisdictions. Outside these areas, district administrations directly control public lands and regulate private lands. Dershkomzem is widely perceived to be corrupt and badly managed. Dershkomzem obstructs the land titling process by charging citizens fees for registration of land that is often not performed in fact and not authorized by law. Dershkomzem and the Ministry of Justice have for several years competed for control of the land registration process, with the result that a land registration law has not yet been adopted. Central and provincial land administrators are well trained in land measurement, but are only beginning to understand the challenges of administering a land registration system. As a holdover of the Soviet command economy, land administrators continue to overemphasize the importance of soil assessment and soil record keeping. Dershkomzem attempts to control all aspects of land allocation, land planning, land use compliance, land registration, land valuation, and land information. (Rolfes) II. Land Tenure and Property Rights Constraints Violent Conflict/Post-conflict Instability Land-related disputes in rural areas involve problems in exercising the rights of ownership and transactions. In many of these cases, citizens encounter problems with the management of the farm enterprise as lessee of their land parcel (shares) over payment of rent arrears, rental amount, or terms of the lease. Other general problems involve the boundaries and division of land parcels created from land shares, and delays or refusals by local land agencies to take actions (such as signing off on the citizens State Acts). Many problems stem from disagreement over inheritance; frequently, the name of a dead person is not removed from the list of eligible shareholders, thus depriving heirs of the ability to transform the land share into a State Act. Unsustainable Natural Resources Management/Biodiversity Loss Between 1990 and 2004, due to Ukraine s economic downturn, the use of organic fertilizers decreased ten-fold and of mineral fertilizers five-fold, resulting in positive downstream effects; however, it also led to rapid nutrient depletion and soil exhaustion. Moreover, farmers are practicing poor crop rotation practices and soil conservation techniques, and are increasingly engaging in monoculture farming. (Kobets and Kryzhanivska) Due to the implosion of central management s ability to maintain and operate the irrigation system, irrigation infrastructure suffers badly from disrepair, and the area under irrigation has LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 25

EUROPE & EURASIA-EASTERN EUROPE decreased rapidly. Out-dated drainage systems are leading to soil salinization. Poor water management is resulting in uncontrolled water drainage into the sea and lowlands, as well as an increase in pollution loads. (Kobets and Kryzhanivska) Due to a modest decrease in livestock numbers, there is adequate grazing land and a reversal of what had been a growing problem improper animal waste disposal. However, pastures in Ukraine are suffering from numerous other problems: rapid conversion of hayfields and grassland pastures to agriculture; overstocking of common village pastures; inadequate application of mineral fertilizers; lack of irrigation; and poor maintenance resulting in reduced productivity. (Kobets and Kryzhanivska) Forest land remains legally under state control, with large portions of it under lease or with use rights otherwise transferred to state logging companies and others. Local authorities have the right to utilize or assign user rights to those parcels within their territories, although the state provides few resources for management and monitoring. Forests are increasingly suffering from damage by pests and disease. Also, state forests continue to suffer from illegal logging for firewood collection and deforestation due to open access. Clear cutting and illegal conversion and development of forest land remain significant problems throughout Ukraine. Additionally, significant damage to forests has resulted from the Chernobyl disaster and pollution from radio nuclides. (Kobets and Kryzhanivska) Insecure Tenure and Property Rights There are many disputes over leasing of commercial agricultural land. The rule of law is well established and courts are generally regarded as professional and unbiased, though many judges are not yet familiar with the land law. Rural landowners are often not able to afford court fees and often find it difficult to travel from the village to towns where courts are located. Citizens call upon local mayors (chairs of village councils) and district land administrators to resolve land disputes. Most disputes involve either disagreements over rents not paid by enterprises leasing in commercial agricultural land, or disputes over official action or non-action related to privatization of such land to former workers and pensioners of collective farms. (Rolfes) Inequitable Access to Land and Natural Resources All rural families, including those whose members were not workers or pensioners of the collective farms, are entitled to receive ownership of their house (and accompanying garden), as well as of a garden plot located near the village. Urban residents typically receive ownership of their apartment, and many have received ownership of a suburban dacha house and land plot. All lands and residences are privatized free of charge, with the exception of dacha lands and lands used by enterprises that must be purchased. Villages, towns, cities, and raion administrations are authorized to sell or auction public lands within their administrative control. (Rolfes) Since the adoption of the Land Code in 2001, Ukraine has been carrying forward the transfer of ownership rights in four major categories of land: (1) the land shares, issued to rural 26 LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE

EUROPE & EURASIA-EASTERN EUROPE III. Donor Interventions citizens as common owners of agricultural fields (without specific land parcels), are being transformed into State Acts of ownership of specific land parcels; (2) citizens can also obtain the State Acts of ownership in their small parcels (housing, garden, subsidiary farm); (3) existing commercial and industrial land users can purchase the ownership rights in the land they occupy (enterprise land sales); and (4) municipal administrations can offer newly-formed urban land parcels for development at auctions and by tender. (Roth and Valletta) By 2005, 73% of agricultural land was owned by private individuals, 27% by the state, and 0.1% by private legal entities. Approximately 81% of individuals who own land share certificates had received State Acts. However, while the process of issuing land share certificates is almost completed, less than 10% of all collective farm members have left the large collective farm enterprise, and 75% of farmers who received land share certificates rented them back to farms that issued the certificates. (WB 2004) Poor Land Market Performance Under the Land Code, citizens can purchase land for purposes of private farming, subsidiary farming, gardening, for a dacha, and for residential construction. (Giovarelli and Bledsoe at 13) The moratorium on the sale of commercial agricultural land was due to expire in January 2005 but has been extended to January 2007, though there is no moratorium on the sale of other types of agricultural and nonagricultural land. Although rural citizens have experience with leasing agricultural land, they have little or no experience selling such land. (Rolfes) There is not much individual small-scale farming in Ukraine, and most holders of land shares and of State Acts lease their land to large commercial enterprises that succeeded the collective farms. Thus, reverse tenancy dominates Ukrainian land relations. Lessees are much more powerful than the owner-lessors of whom about half are pensioners typically living close to or below the poverty line and with little access to land rights information. (Rolfes) Outside of land and real estate markets working in principal cities, the land market in rural areas is very weak. Enterprises that still manage agricultural production, input purchases, and supply and distribution of agricultural commodities cannot own agricultural land or leverage it for collateral. For the majority of rural landowners locked into leases, their land is of no value for agricultural finance as land values are low and the lending will not serve the financing needs of the enterprise as a lessee that engages in production. For private independent farmers who can own land, a combination of factors detracts from the suitability of using their land as collateral, including the moratorium on sale of agricultural land, low land values that will discount land s collateral value even if the moratorium were lifted, a significant level of institutional inefficiency in transacting land and property in rural areas, and consequently high lender costs in foreclosure. Not surprisingly, the feasibility of using land as collateral to leverage agricultural finance has not been realized. While there has been growth in agricultural credit, much of this credit expansion has gone to larger-scale enterprises and not to private individual farmers. (Roth and Valletta) LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 27

EUROPE & EURASIA-EASTERN EUROPE USAID Summary USAID s ULTI project has assisted the third stage of land reform in five ways: 1) providing the technical and legal support (surveying, preparation of documents, verification of citizen rights) to transform rural land shares into State Acts (it is expected that 1.8 million State Acts will be issued and registered by the project s end in September 2006 out of the 7 million total for all rural Ukraine); 2) assisting over 14,000 commercial and industrial enterprises to acquire their land ownership; 3) carrying out programs of public education on land rights and providing free legal assistance to citizens through 26 legal aid offices; 4) helping the national government formulate policy and drafting legislation; and 5) initiating pilot projects to test a procedure of village-wide survey, issuing and registering State Acts for lands in all categories agricultural, housing and small parcels, and commercial/industrial. (Roth and Valletta) Key Institutional Arrangements Conflict or Dispute Resolution See above. Legal and Regulatory Framework USAID is supporting policy work on both rural and urban (enterprise) land privatization and supports policy reform of the State Property Fund. (AR at 5, 7) USAID helped overcome conflict between the Ministry of Agriculture and the State Land Committee over the USAIDsupported ULTI project, and registration is now performed by private sector companies. (AR at 4) USAID supported the drafting of a 2001 Land Code (AR at 4) and is helping to draft a mortgage law. (AR at 5). ULTI s legal team has provided broad legal support. Chief among its work in this area has been assistance with the drafting of the law of 2003, On the Procedure for Dividing in Nature the Land Parcels of Owners of Land Parcel Shares, and its review and comment on the law of 2004, On the Delineation of State and Communal Ownership. Redistribution USAID has financed the ULTI project to supervise and pay for subdivision and titling of commercial agricultural land in a number of Ukrainian provinces; land recipients under the project do not pay for state acts. (Rolfes) ULTI s achievements have made a significant contribution to Ukraine s land reform, not only in the volume of State Acts issued to citizens, but in demonstrating methods of land parcel formation, legal verification, and registration that are less complex and costly than alternative methods. (Roth and Valletta) Land Administration A USAID project helps local governments develop policy and procedures to sell land and increase revenue. (AR at 7) Land Use Management and Conservation USAID supports the Ukrainian Land and Resources Management Center that provides 28 LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE

EUROPE & EURASIA-EASTERN EUROPE Other Donors environmental education. The project also supports the creation of local environmental action plans. (AR at 15 and CBJ) Summary Two organizations USAID and the World Bank have historically provided the majority of assistance to the Government of Ukraine (GoU) in areas of land survey and mapping, land tenure reform, land titling, and land registration. Important complementary work is being carried out by other bilateral donors, but these efforts are less substantial in scope and focus. (Roth and Valletta) The World Bank loan to the GoU anticipated spending $195.13 million over the period 2004 2012 on seven components: institutional development and legal reform; public awareness; training; land survey works; cadastre system development; farm restructuring services; and project implementation. However, in 2006, the World Bank has renegotiated the terms of the loan. According to USAID (April 2006), the latest news is that the registry component is dead and the mapping and privatization component will be downsized to approximately $30 M. Key Institutional Arrangements Conflict or Dispute Resolution Legal and Regulatory Framework The World Bank helped to draft the Land Code, which was passed in 2001, and is assisting on the new registration law. (wwwwb) Redistribution Land Administration The World Bank s Rural Land Titling and Cadastre Development Project will establish a national cadastre and title registry system and help individuals demarcate and title their land parcels. (wwwwb and PAD at 2) The World Bank is involved in restructuring and registration projects. Land Use Management and Conservation The World Bank has an Azov Black Sea Corridor Biodiversity Conservation Project and a urban water and wastewater project. (wwwwb and CAS at 22) IV. Information and Data Sources Giovarelli, Renee and David Bledsoe. 2001. Land Reform in Eastern Europe: Western CIS, Transcaucuses, Balkans, and EU Accession Countries. FAO (Giovarelli and Bledsoe). Rolfes, Leonard. 2004. Land Law and Policy Consultant, Rural Development Institute (Rolfes). LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 29

EUROPE & EURASIA-EASTERN EUROPE Roth, Michael and William Valletta. 2006. Land Reform and Land Market Development in Ukraine: Findings of the Ukraine Land Titling Initiative (ULTI) Project Assessment and Strategies for Future USAID Intervention, USAID (Roth and Valletta). Mykola Kobets and Marina Kryzhanivska. 2006. Environmental and Economic Impact Assessment of Land Privatization in Eastern Europe and Eurasia: National Report Ukraine, USAID (Kobets and Kryzhanivska). USAID. Ukraine Congressional Budget Justification FY 2005 (CBJ). USAID/Ukraine. 2002. Annual Report FY 2002 (AR). World Bank Project Database <http://www.worldbank.org> (visited 2005) (wwwwb). World Bank. 2004. Zuschlag, Alan and Csaba Csaki. The Agrarian Economies of Central- Eastern Europe and the Commonwealth of Independent States: An Update on Status and Progress in 2003. Environmentally and Socially Sustainable Development Working Paper no. 38, Washington DC (WB 2004). World Bank. 2003. Rural Land Titling and Cadastre Project Appraisal Document (Ukraine) (PAD). World Bank. 2000. Country Assistance Strategy for Ukraine (CAS). 30 LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE

3.0 COUNTRY-SPECIFIC LTPR RANKINGS AND RANKING MAPS The purpose of Section 3.0 is to highlight and illustrate key land tenure and property rights concerns and draw attention to how these affect development and development programming. To this end, a ranking tool was developed to evaluate the severity of LTPR constraints in each USAID presence country. The LTPR ranking process then engaged a panel of LTPR specialists with both broad tenure and property rights expertise and specific geographic experience. 1 They applied the tool to each USAID presence country, the results of which are informed judgments on the severity of land tenure constraints. Country-based LTPR rankings generated from this exercise were then used to illustrate country-specific LTPR constraints in a visual format the LTPR ranking maps. The following pages provide the LTPR ranking for each USAID-presence country in the Eastern Europe region, as well as the LTPR ranking maps. Detailed explanations of the rankings for Eastern Europe were unavailable, and therefore a sample description of Rwanda is provided. Given the challenges encountered during the ranking process and the imprecision inherent therein, the ranking scores should be viewed as a first attempt to capture and illustrate the severity of LTPR constraints within a country and, more widely, in a region. These rankings will change as countries move through a transformational development process, more information is collected, and/or LTPR themes are challenged by conflict and political change. 1 A report on ranking LTPR constraints, the ranking tool, and the composition of the expert panels is available under separate cover. LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 31

EUROPE & EURASIA-EASTERN EUROPE Violent Conflict/Post- Conflict Instability Unsustainable Natural Resources Management/ Biodiversity Loss Insecure Tenure and Property Rights Inequitable Access to Land and Natural Resources Poor Land Market Performance BELARUS Final Rank 2 5 6 5 6 BULGARIA Final Rank 1 3 4 4 4 MOLDOVA Final Rank 1 4 2 2 4 ROMANIA Final Rank 1 4 4 3 4 UKRAINE Final Rank 1 3 3 2 3 LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 33

AFRICA-CENTRAL AFRICA Violent Conflict/Post- Conflict Instability Unsustainable Natural Resources Management/ Biodiversity Loss Insecure Tenure and Property Rights Inequitable Access to Land and Natural Resources Poor Land Market Performance RWANDA Final Rank 5 5 5 5 4 Land has been a historic source of disputes in Rwanda, stemming from informal tenures and untitled land, and from the post-conflict departure and subsequent return of people whose lands have been occupied by others. Many of these returnees are seeking to reclaim their land or obtain compensation, but they face conflicting and overlapping land rights upon their reentry. Infrequent but serious conflict occasionally occurs in small pockets of the country, but tensions are high in other areas. Landholdings are very small and economic opportunities for the large number of rural poor are lacking. The new Constitution provides for mediation at the sector level for most disputes, but the government is also considering promoting traditional, village level dispute resolution. Rights are protected in law, but, in practice, overlapping claims to land render these rights insecure. The law currently fails to define land rights clearly, and fears over government expropriation heighten tenure insecurity. Other shortcomings in current law include ambiguous tenure forms, non-transparent issuance of land concessions, and a command and control mentality in regulating land use and consolidation. A new draft land law seeks to address a number of these issues, with the intent to enhance tenure security by recognizing customary tenure systems and registering land rights. It also envisions that land titling will be conducted at the community level and that women s land rights will be taken into account and protected.however, these changes are relatively recent and require substantial capacity to implement, making it difficult to assess future effectiveness. In addition, it is still not clear whether the government intends for such land to be held in full ownership or as long term use rights. If these changes prove to be ineffective, the ranking for "Insecure Land Tenure and Property Rights" will be higher. Informal land markets are functioning for urban, peri-urban, and rural land, but a lack of legal clarity on the right to transfer renders most transactions extra-legal. Additionally, the written contracts that accompany these transactions purport only to transfer immovable property improvements and not the land itself. Sales, when done, are perceived to be in perpetuity, and holders deem their rights to be in full ownership. Fragmentation, erosion, and soil depletion are all serious problems; high pressure on land is creating degradation, and marginal areas are being brought into cultivation without proper management. Rwanda s forested area is under mounting pressure from population growth, unsustainable resource use, poor management, and problems related to poverty and political instability. Under CARPE, USAID and its partners are promoting and assisting with the draft legal LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE 35

AFRICA-CENTRAL AFRICA Violent Unsustainable Insecure Inequitable Poor Conflict/Post- Natural Resources Tenure and Access to Land Land Conflict Management/ Property and Natural Market Instability Biodiversity Loss Rights Resources Performance framework for land use planning, management, and zoning and broadening land access in sensitive and protected areas. However, while the new legislation is promising, enforcement and implementation are uncertain. Meanwhile, population pressure, the recent history of informal migration, and government-sponsored attacks on the DROC make disentangling LTPR institutions from political instability a major challenge. 36 LAND TENURE AND PROPERTY RIGHTS REGIONAL REPORT: VOLUME 2.9 EASTERN EUROPE

GLOBAL LTPR CONSTRAINTS MAPS FOR: Violent Conflict/Post-conflict Instability Unsustainable Natural Resources Management/Biodiversity Loss Insecure Tenure and Property Rights Inequitable Access to Land and Natural Resources Poor Land Market Performance