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Property Rights Reduce Poverty
Granting formal property rights to the world’s poor, especially in developing countries, may be the key to reducing global poverty. Peruvian economist, Hernando de Soto, believes property rights reduce poverty by empowering the disadvantaged with valuable assets which could add up to an estimated $9.3 trillion in currently “dead capital.”

Promoting property rights is particularly important throughout Africa where more than 90 percent of the land remains outside the legal system. People living in developing countries would benefit from stable, long-term property rights as they are more likely to invest time and energy into cultivating their land or exchange it with someone who would make better use of it.

Stable land ownership would also increase revenue for local governments through property taxes, but land taxes are currently non-existent in the developing world. With an increased demand for land and public investment in roads and other infrastructure, revenue from property taxes would help decentralize and empower previously impoverished residents in developing regions.

In Uganda, land constitutes 50-60 percent of asset endowment and is a valuable asset that may be the key to household wealth. As a primary vehicle for investing, cultivating and transferring between generations, secure property rights help to generate livelihoods centered on local investment. Lack of property rights disproportionately affects women in developing countries.

Traditionally, women are disadvantaged when it comes to land access, but they also have the most to gain from secure property rights. According to the OECD, increasing property rights has been shown to positively affect spending on girls’ education.

Studies also show that promoting equitable access to education could increase GDP growth by an estimated 0.2 percent each year in developing countries. If executed correctly, providing property rights would also increase the purchasing power of the world’s poor and stimulate economic growth in developing countries.

Slate magazine critiques de Soto’s theory that property rights reduce poverty by pointing out, “titling is more useful to the elite and middle-income groups who can afford to bother with financial leverage, risk, and the real estate market.” Increasing property rights in Turkey, Mexico, South Africa and Columbia have not created a healthy housing market and “wealthy land-grubbers” may be to blame.

De Soto believes that the wealthy, who don’t realize that it’s in their best interest to allow the productive power of the poor brought into the economy, are an obstacle to realizing the full impact that property rights can have on the world’s poor. For those who have doubts, property rights reduce poverty, which bolsters economic development when the poor can contribute to the economy.

Rampant socioeconomic inequality weakens economies by increasing the burden on taxpayers to cover the costs of poverty-related illnesses, which can cost billions per year, perpetuates a cycle of low academic achievement and negatively impacts the demand for a skilled labor force.

Securing property rights in the developing world is one step in the right direction toward reducing global poverty, but educating the public on why uplifting the world’s poor is beneficial for everyone is even more crucial.

Daniela Sarabia

Photo: Flickr

Ukraine Property Rights Borgen Project Edit
A project launched by the UNDP has both given poor Ukrainians access to legal aid and informed them of their property rights. Before the program was launched, millions of Ukrainians did not know their property rights. The government was inept at providing the information and knowledge to address these property right issues since some of them do not even own computers. The UNDP helped push the government to develop a pro-poor land property rights policy framework which included getting rid of fees to obtain legal documents of any kind.

Ivan Kalyta, a Ukrainian citizen, wanted to sell some of his land to raise the money to fix his home. When he discovered he would have to pay more than $500 in administrative fees to sell the land, he was quickly discouraged. Not only was Ivan not able to pay the fees, but he had no idea where to obtain the documents and legal aid necessary to sell his land.

To tackle the problem, UNDP advised Ukraine to adopt free legal aid services, which they did in 2011. According to a poll conducted by the Ukrainian Union of Lawyers, more than 24 percent of the population in Ukraine seeks free legal advice.

During the life of the project, 867 free legal aid providers were trained on land and property rights legislation and its application; 5,000 manuals and brochures on land and property rights were distributed, and over 180,000 people have received free legal advice.

The project also reaches out to the people who live in rural areas. Since most free legal aid centers are located in towns and cities, UNDP has funded a program that provides online and Skype consultations. The program runs through local libraries, and anyone needing help in a rural area need only go to the nearest library. This is what Ivan did and the program has helped him tremendously.

“The money I got from selling part of my land came in very handy,” says Ivan. “My roof is not leaking anymore. I also was able to put some money aside for medication. Life is so expensive here, I am glad it worked out.”

– Catherine Ulrich

Sources: UNDP, Global Property Guide, Legal Aid Reform
Photo: UNDP

Largest Global Anti-Poverty Organization

BRAC assists “138 million of the poorest people in nine countries in Asia and Africa,” yet few people have ever heard of the global anti-poverty organization. BRAC began as the Bangladesh Rehabilitation Assistance Committee but has expanded to multiple countries.  Though BRAC is no longer an acronym, it has become a synonym for progress.

The organization works to alleviate poverty through empowerment. It is the largest global anti-poverty organization. BRAC provides opportunities for self-improvement, such as self-employment and financial aid. Its economic programs created 8.5 million self-employment opportunities, and BRAC has issued over $5 billion in micro-loans.

Education is key to mitigating poverty in future generations. The organization created over 66,000 schools to meet the needs of primary and pre-primary children. To date, the schools have graduated over 6.1 million students.

Furthermore, the organization itself employs over 125,000 people in Asia and Africa. Many of the employees are first time job holders, and BRAC teaches them necessary skills.  “As a job-creator and employer of scale and diversity, we teach people the basics of customer service, and how to be productive employees,” said Susan Davis, President and CEO, BRAC USA.

BRAC engages diasporas for economic and social development. The organization realizes the value of local people.  Instead of Americans instructing people on how to improve their communities, the organization starts by training people from the country in need.  After successfully completing the program, trainers return home with new skill sets.  These individuals communicate their success stories and encourage others to strive for better lives.

One of BRAC’s unique strengths involves creating new markets.  The organization trains 100,000 health and other promoters to achieve self-employment.  Promoters work with “legal services (property rights), poultry and livestock services, and energy services.”  The jobs vary based on the specific needs of the communities.  Each position interacts with people to teach vital subjects, such as agriculture, family planning, and disease prevention.

The organization “has remained relatively unknown in the West…because it developed on the local level in the poorest, most remote communities of Bangladesh.”  It originated in communities and developed gradually.  Fazle Hasan Abed created BRAC “when he was overwhelmed by the sight of death and extreme poverty among refugees returning to Bangladesh after the 1971 Liberation War of Bangladesh.” He fled the corporate life and employed all of his resources to launch BRAC.  Today, his vision has improved the lives of millions of people.  Talk about a visionary.

Whitney M. Wyszynski

Source: Fast Company

Landesa Helps People Gain Property Rights

Landesa is a rural development institute devoted to securing land for the world’s poor.  The company “partners with developing country governments to design and implement laws, policies, and programs.”  These various partnerships work to provide opportunities for economic growth and social justice.

Landesa’s ultimate goal is to live in a world free of poverty.  There are many facets of poverty.  The institute focuses on property rights.  According to Landesa, “Three-quarters of the world’s poorest people live in rural areas where land is a key asset.”  Poverty cycles persist because people lack legal rights to land they use.

The company was the world’s first non-governmental organization designed specifically for land rights disputes.  Then known as the Rural Development Institute (RDI), the institute was the first to focus exclusively on the world’s poor.

Roy Prosterman founded the company out of a deep passion for global development.  Prosterman is a law professor at the University of Washington and a renown land-rights advocate.  He began his lifelong devotion to property rights after stumbling upon a troublesome article.  In 1966, he read a law review article “that promoted land confiscation as a tool for land reform in Latin America.”  Prosterman recognized the policy’s ills immediately.   He quickly authored his own articles on how land acquisitions must involve full compensation.

These articles led him to the floor of Congress and eventually the fields of Vietnam.  Prosterman helped provide land rights to one million Vietnamese farmers during the later part of the Vietnam War.  The New York Times claimed that his land reform law was “probably the most ambitious and progressive non-Communist land reform of the 20th century.”

Prosterman traveled the world to deliver pro-poor land laws and programs.  His most notable work was in Latin America, the Philippines, and Pakistan before founding the institute.  Today, Landesa focuses mostly on China, India, and Uganda.

He aims to “elevate the world’s poorest people without instigating violence.”  The company negotiates land deals with the government and landowners who received market rates.  Landesa helps people gain property rights, so people can focus on health and education efforts instead.

Whitney M. Wyszynski

Source: The Seattle Times

Women's Property Rights Success in Rural KenyaLandesa’s Kenya Justice Project has successfully negotiated women’s property rights in rural Kenya. Landesa, actively fights to attain and provide land property for those in global poverty and has successfully worked with USAID to target the progress of women’s rights in Kenya.

Recently, the Kenyan constitution was amended to grant more freedoms and political access to women. Property rights (in the form of access to land), is often taken for granted in most developed countries. But many developing countries, like Kenya, have not guaranteed rights for women. Additionally, the majority of those denied secure access to land rights are rural women farmers. Therefore, the heavy advocacy for the inclusion of women in state practices and formal constitutions is necessary for successful development and in this case, development of Kenya.

Landesa’s program in Kenya has seen success in marriage disputes as women’s written consent is necessary before property transactions are approved. Women are also increasingly able to acquire their own land to live on and farm independently of men. Another vital aspect to the progress is that women are now eligible to become elected as an elder and make larger impacting decisions, a role that was previously male dominated. More girls also attend school, which has now balanced the gender ratio of students.

Women’s access to property rights allows greater individual and political security and is a forward step in progress. Gender equality is vital to development as it “has the potential to end the cycle of poverty by enabling women to contribute to community decisions and govern family resources and money wisely.”

Evan Walker

Source: ONE