1 / 25

LAND POLICY THE TURN POINT TO THE RENOVATION IN VIETNAM

Prof. Dr.Sc. Dang Hung Vo M.Sc. Do Duc Doi Ministry of Natural Resources & Environment of Vietnam. LAND POLICY THE TURN POINT TO THE RENOVATION IN VIETNAM. Before 1986:

helena
Download Presentation

LAND POLICY THE TURN POINT TO THE RENOVATION IN VIETNAM

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Prof. Dr.Sc. Dang Hung Vo M.Sc. Do Duc Doi Ministry of Natural Resources & Environment of Vietnam LAND POLICY THE TURN POINT TO THE RENOVATION IN VIETNAM

  2. Before 1986: • Vietnam’s economy was State-subsidized, directed all the economic activities based on “ask-give” mechanism (the administrative system directly managed state-owned enterprises as well as community-owned economic organizations). • The major labour force in agriculture was agricultural cooperatives, and in industry and services it was stated-owned enterprises. • The State allocated land free to individuals and organizations after considering their requests and recovered this land if they could not use their lands properly. land had no price. • The land administration system had only function of surveying agricultural land areas for calculation of agricultural land tax (major income of the State budget from land). I. OVERVIEW (1)

  3. After 1975 (after wars in Vietnam): • Economic development became the main task of the State. • The State-subsidized mechanism had no motive power for economic development: agricultural cooperatives poorly operated, agricultural production dramatically decreased and foodless happened in rural areas; stated-owned enterprises in industry and service sectors had also no effects. In 1986: • The State of Vietnam decided to start the economy renovation policy (Doi Moi), based on the operation of the market economy under the state management (the market economy system is recognized as the major driving force for economic development). In 1994: • The State of Vietnam decided to start the industrialization and modernization of country based on the construction of Vietnam to become a industrial country in about 2015. I. OVERVIEW (2)

  4. From 1986 to now: • Land becomes the important input for economic development in the market economy mechanism. • Land policies are the turn points in the renovation process: the renovated policies for agriculture land has made Vietnam to become one of the three leading countries in rice export, the renovated policies for non-agriculture land has facilitated the industrialization process and set up the active real estate market to ensure the stability of annual economic growth. • The legal system on land was established: the first Land Law issued in 1987, the second Land Law issued in 1993 (with the first amendment in 1998 and the second amendment in 2002), the third Land Law issued in 2003 (will be amended in 2008), and a Land Code will be issued in the period 2011 - 2015 as planned. • The land administration system was reconstructed in all the administrative levels (governmental, provincial, district, communal). I. OVERVIEW (3)

  5. During 1975-1980: the average food production of Vietnam was only about 13.5 million tons/year. • During 1981-1985: the food production slightly increased to 16.5 million tons/year. • In 1986: The State of Vietnam carried out the country renovation process - 'Doi Moi' with the breakthrough in land policies - agricultural cooperatives’ lands were allocated to households for stable permanent uses, creating a new motive for agriculture production. • The first Land Law (1987) was focused on the process of land allocation to households as stable land users and issued the land use right certificate (LURC) to land users as the legal basis for land use. The agriculture land users started to enjoy land use rights and made the better investment for own land parcels. The new policy had a profound effect in raising agricultural production and productivity, mostly rice production. II. THE RENOVATED POLICY OF LAND FOR AGRICULTURE DEVELOPMENT (1)

  6. The second Land Law (1993) showed 3 typical renovated as follows: • The State concedes the price of land, and it was defined by the State; • The Land Use Rights could be legally transferred, exchanged, leased, mortgaged and inherited. • Some typical successes of Land Law 1993 implementation were: • The agriculture land consolidation process implemented very well (the land users had a smaller number of land parcels with larger area of each); • Many farms built by household or multi-household on agriculture, aquaculture, forestry with agricultural products processing; • A part of agricultural labour force in rural areas moved to non-agricultural sectors such as mechanical services, irrigation, electrical supply, transportation, pesticides supply, etc.; • The most of households got money to invest into agricultural production by mortgaging their land use right to borrow money from banks. • Land use right has been legally accepted on the market transaction. II. THE RENOVATED POLICY OF LAND FOR AGRICULTURE DEVELOPMENT (2)

  7. The Land Law 1993 showed 3 main shortcomings as follows: • The land price assigned by the State is usually much lower than the market price, making the land price “ask-give” mechanism continue to persist. • More than 50% of agricultural farms are established by rich people in urban areas through the land transfer from poor households in rural areas; the number of poor people that have no production land increases more and more in rural areas. • Vietnam started its industrialization process since 1994, but Land Law 1993 did not focus on managing non-agricultural lands and land conversion process from the agriculture sector to non-agriculture sector. II. THE RENOVATED POLICY OF LAND FOR AGRICULTURE DEVELOPMENT (3)

  8. The renovated policies for agriculture land has become the main force to improve agricultural production and productivity. in 1990, Vietnam has become one of the 3 biggest rice exporting countries in the world, and to date, it is amongst the top countries in exporting agricultural products such as coffee bean, peppercorn, shrimp, fish, etc. Rice production/productivity of Vietnam in comparison with Thailand: II. THE RENOVATED POLICY OF LAND FOR AGRICULTURE DEVELOPMENT (4)

  9. One year after the birth of the Land Law 1993, Vietnam set out a roadmap of country’s industrialization and modernization to the year 2000. This induced a series of land issues such as: • How to make more land available for the projects of basic infrastructure development, industrial zones building, and new urban areas construction? • How to satisfactorily compensate, resettle and create new jobs for the farmers whose lands were recovered to implement non-agricultural development projects? • How to settle land disputes and complaints? • How to deal with environmental pollution caused by non-agricultural projects? • How to develop the real estate market properly? Meanwhile, land management authorities lacked of a legal corridor to deal with these issues in practice. III. THE RENOVATED POLICY OF LAND FOR COUNTRY'S INDUSTRIALIZATION (1)

  10. To set up the legal tools for land administration, the land management authorities made the following activities: • The Government promulgated a number of decrees to managed non-agricultural land uses. • The Standing Committee of National Assembly also promulgated two ordinances on rights and obligations of domestic organizations using land and of foreign organizations and individuals renting land in Vietnam. 3. The National Assembly amended and supplemented the Land Law in 1998 based on these ordinances and decrees, and in 2001 respecting to decentralization of land administration. III. THE RENOVATED POLICY OF LAND FOR COUNTRY'S INDUSTRIALIZATION (2)

  11. During ten years 1993 - 2003 of implementation, the land legislation exerted positive impacts promoting the country’s industrialization, but these land policies still have several shortcomings as the follows: • Land prices defined by the State were much lower than that on the market (normally around 1/10 of market prices). Virtually, the State has continued to subsidize land prices, thus intensified the corruption in land management and speculation in land use. • Real estate market could not develop since economic organizations were kept out of land transaction, because, enterprises had only land leasehold right from the State (land leased by the State), but did not have land freehold right from the State (land allocated by the State). Up to 1998, enterprises have been allocated with land in an indefinite period of use time either to construct dwelling house for sale/lease, and to get back their investment in infrastructure. • The State gave its enterprises excessive favours such as allowing these enterprises to used land leased by the State as their own properties for capital contribution in joint venture with foreign investors. III. THE RENOVATED POLICY OF LAND FOR COUNTRY'S INDUSTRIALIZATION (3)

  12. The State allowed implementing 'exchanging land for infrastructure' mechanism based on the mechanism that investors have to invest in technical infrastructure, and the State will allocate land parcels for residential or production use with value equal to the invested infrastructure. This mechanism supported to use land as the capital for investment but unfortunately, the State caused huge loss to itself by setting a very low price of land, and helped investors to gain 'super' benefits from land. There were big obstacles in practice when the State recovered lands to lease or allocate to investment projects: (i) land prices stipulated by the State were much lower than the market prices, making users of recovered land to protest against value of land compensation and raising land complaints; (ii) many investors unfairly made benefits from this mechanism by setting up 'fake' projects to arrogate lands from other people; and (iii) many managers made corrupt use of their authorized competence recovering land to use for their own. Administrative procedures for land recovery, land allocation, land lease were not clear, complicated, burdensome and inappropriate with land use in practice. Land corruption, by this way, became more and more serious. III. THE RENOVATED POLICY OF LAND FOR COUNTRY'S INDUSTRIALIZATION (4)

  13. In 2001, the State started to implement the project 'Summarizing 10 years implementing land legislation and land policies' to put forward new land policies thus creating new dynamics for the country’s industrialization and modernization. As a result, the third Land Law was adopted by the National Assembly at the end of 2003 and came into force on July 1st 2004. The Land Law (2003) puts forward a number of new policies on land as the follows: It clearly defines a legal framework for people’s ownership regime on land, and specifies the State’s decision making authority on land use planning (the State determines land use purpose), on land recovery, allocation and lease for the projects using land which aimed at preserving national interests, community interests, national defense, security and some kinds of projects for economic development; the State gives land users the rights of land exchange, transfer, donation, inherit, mortgage, and land contribution as capital. III. THE RENOVATED POLICY OF LAND FOR COUNTRY'S INDUSTRIALIZATION (5)

  14. It provides specific regulations to solve complicated, historical induced land issues, principally by no reconsideration of all the pre-existent administrative decisions but reviewing civilian relationships on land such as land lend, land lease, house care offer, etc. to make proper judgment in accordance with the Civil Code. It fully renovates land financial systems based on 'one price of land' principle (State-defined price of land is equal to the market price of land). It eliminates land favours given to State-owned enterprises, makes up equality on land use between the domestic enterprises from different economic sectors, and makes up also economical equality between the domestic investors and foreign investors. Land parcels are put under the direct management of local authorities, the central authority is in charge of the land legislation construction and land use planning of whole country & provinces. III. THE RENOVATED POLICY OF LAND FOR COUNTRY'S INDUSTRIALIZATION (6)

  15. Land mortgage is encouraged, and land mortgage registration procedure is simplified (however, land users can not mortgage land to foreign banking organizations). Land use planning is improved to be more appropriate with the market mechanism and to assure social, economic and environmental benefits (however, it is lack of feasibility). It restricts the State’s authority in land recovery for economic development projects. The State has the right to recover land only for the development projects of urban area, industrial zones, economic zones, high technology zones; for the invested projects with the 100% foreign direct investment; and for the industrial-servicing production projects with the domestic investment at high level, otherwise investors must directly get land by transfer, by rent or by land contribution as capital. III. THE RENOVATED POLICY OF LAND FOR COUNTRY'S INDUSTRIALIZATION (7)

  16. It fully renovates the mechanism of compensation, support, and resettlement for the people whose land recovered by the State: compensation by land is prioritized over compensation by money, and if compensation by money is applied, compensation amount will be based on the market price of land; farmers whose land area is recovered over 30% of their agricultural land would have compensation by non-agricultural land and free training for new jobs; people whose residential land is recovered would be resettled at sites with better living conditions. It fully renovates whole the land administration based on: (i) moving a big part of the administrative works to land registration system operated by the Land Registration Office (public service organization), (ii) providing specific regulations to promote transparency of land use registration in LURC issuing procedure, in land transaction procedure, (iii) apply administrative penalties to State officials who broke the laws or harassed people/organizations at administrative works. III. THE RENOVATED POLICY OF LAND FOR COUNTRY'S INDUSTRIALIZATION (8)

  17. It renovates settlement mechanism of land disputes, land complaints on administrative decisions, and denouncements on land corruption based on principles that procedures must be transparent, time-limit must be fixed, authorities and responsibilities must be specific, and results must be publicized. The above mentioned land policies positively impacted on the speed up in the country’s industrialization and modernization. Domestic and foreign investments significantly increased. The real estate market rapidly expanded and had higher proportion in the economy. More industrial zones, economic zones, high technology zones, new urban areas are constructed throughout the country. III. THE RENOVATED POLICY OF LAND FOR COUNTRY'S INDUSTRIALIZATION (8)

  18. Investment by ownership in the period of 2003 - 2006 (million USD) The above table indicates that total investment in Vietnam in the period of 2003-2006 slightly increased year by year, wherein State sector’s investment increased, non-State domestic sectors’ investment decreased, and foreign direct investment (FDI) significantly increased. One can say that eliminating the “ask-give” mechanism in land does not satisfy the non-State domestic investors, creating equality in rights and obligations on land between domestic and foreign investors satisfies strongly the foreign direct investors. III. THE RENOVATED POLICY OF LAND FOR COUNTRY'S INDUSTRIALIZATION (9)

  19. Structure of GDP by economic sectors in the period of 2003 - 2006 (million USD) Structure of GDP by economic sectors shows that Vietnam’s economy development has recently moved towards an industrialized country with industry’s contribution of over 40%, service’s contribution of over 40% and agriculture’s contribution of around 19%. III. THE RENOVATED POLICY OF LAND FOR COUNTRY'S INDUSTRIALIZATION (10)

  20. Structure of GDP by economic sectors in the period of 2003 - 2006 (million USD) Structure of GDP by ownerships shows that State sector’s contribution is of about 40% and slightly decreasing, non-State sector’s contribution is of about 47% and increasing, foreign direct investment’s contribution is of only about 12% and significantly increasing. It is concluded that the land policies renovation has accelerated the country’s industrialization. III. THE RENOVATED POLICY OF LAND FOR COUNTRY'S INDUSTRIALIZATION (11)

  21. Development and implementation of the legislation system on land still be challenged by the following issues: The renovation of the four above mentioned land management tools was asynchronous: the land legislation system and land administration system were rapidly improved but not land finance system. To date, non-agricultural land use taxation has no changes compared to that of the state-subsidized economy, and the land use planning system has not been developed conformably with the market economy mechanism. Land policies and land legislation have always been developed in accordance with the country sustainable development direction. However, the real estate development policies and legislation are not synchronous themselves, there is a lot of the legal conflicts, causing difficulties in applying these laws and policies in practice. III. THE RENOVATED POLICY OF LAND FOR COUNTRY'S INDUSTRIALIZATION (12)

  22. In the land legislation system, there are some differences in the rights and obligations on land between foreign investors and domestic investors. These differences must be adjusted to be in accordance with Vietnam’s commitments joining the WTO. Land use planning system is inflexible, not conformable to the market mechanism, and lacks of a specific quantification measure to assess its effectiveness in social, economic and environmental aspects. It is popular that land use planning and construction planning and socio-economic development planning are not synchronously developed. The State controlled land prices still somewhat differ to the market prices (land use fee is about 70% of market price of land, State’s land rental payment is only about 30% of market rental price of land), while there is no legal corridor for the land valuation activities. The land price disparity keeps raising the land complaints, land disputes and existing of the “ask-give” mechanism in land. III. THE RENOVATED POLICY OF LAND FOR COUNTRY'S INDUSTRIALIZATION (13)

  23. Tax posed to land transfer is 28% of income for enterprises (from 2003) and 25% for individuals (from 2009). Tax posed to agricultural land use is waived for land area under land use area limit, and deducted for land area over land use area limit. However, tax posed to non-agricultural land use with attached properties has not been adjusted accordingly ; the current non-agricultural land use tax (no tax for attached properties) for lands of highest price is as low as 1.6 kg rice/1m2/year. This taxation for non-agricultural land with attached properties has lead to land speculation. The land administration system was thoroughly renovated towards enhancing transparency, publicity and simplicity to encourage public registration of land transactions and reduce corruption in land management. However, local authorities do not strictly observe these renovations; land use certificate issuing and land transaction registration have not been transparent, while corruption in land management is not eliminated. III. THE RENOVATED POLICY OF LAND FOR COUNTRY'S INDUSTRIALIZATION (14)

  24. land policies and legislation have become the turn points in the country’s renovation and a main motive force for agricultural and rural development. Presently, land laws and policies play an important role in the country’s industrialization and modernization. However, the current policies on land still have many shortcomings which could negatively affect the sustainable development. Policies on land finance have been insufficient to eliminate weaknesses in land management such as land corruption and speculation, and unreasonable compensation for land recovery. Land use planning has not harmonized economic development, social development and environmental protection. Land administration system has not yet provided transparent civilian relationships between the State and land users and between the land users. IV. CONCLUSIONS (1)

  25. At the end of 2007, a new 'hot fever of land-house' started to raise in big cities of Vietnam, making land prices in Hanoi and Ho Chi Minh city to go on top of the world while the average income per capita is still in bottom group of the world. This 'land fever' is expected to flare up since there is a big 'virtual demand' from land speculation. Dwelling house construction and commerce is bringing 'super' profits to investors, thus attracting huge investments into the land-house market. In 2006, the economic growth of Viet Nam is 8,17% with the inflation of 6,60%, and in 2007, the economic growth is 8,48% but the inflation is 12,63%. The 'hot fever of land-house' is one of the main reasons to increase the current inflation. An economic disaster will happen if the real estates market’s over-blow is not timely prevented. IV. CONCLUSIONS (2)

More Related