Nirj Deva on how to capitalize property for the world’s poorest populations: “It’s not inflationary, you’re not printing money — but you’ve created capital.”
“If they see the wealth in their own backyards, why should they want to come with their hands out?”
That’s how Nirj Deva, a British member of the European Parliament, vice chairman of its development committee and author of a recent parliamentary report on property rights that addresses insecurity of land tenure, feels about the absence of property rights in developing countries.
Deva, who sat down with Devex for a video interview at the Brussels high-level conference that he co-hosted in April, explained that extralegal and unregistered wealth in poor nations has a value of some $9.3 trillion — a sum 93 times larger than the total amount of aid spent in those countries over the last 30 years.
So what opportunities would a new, formalized framework in this area open up and how realistic is it that the dependencies of some countries on Western aid could eventually be broken as a result?
According to Deva, the key question is how to make those dwellings found in slums more valuable by capitalizing them. Taking the example the 13 million “slum huts” directly neighboring more affluent high-rise areas in Mumbai, India — and assuming an adjoining land value of 1,500 pounds ($2,500) per square foot — the British MEP estimated that up to 65,000 pounds ($108,000) of value could potentially be capitalized and securitized for each dwelling.
“You write 13 million title deeds and give it to them — what would happen? They have 65,000 pounds worth of capital. Sell it! It’s a piece of paper. It’s not inflationary, you’re not printing money — but you’ve created capital,” he said.
But how do we move from theory to practice in such a complex field?
Deva was “hugely optimistic” that the technical details could be settled and funding for such an undertaking found and insisted that he was “pushing at an open door” in respect to getting a firm commitment from his own government on the issue.
Asked whether property rights could be placed at the forefront of a reformed EU development policy, as suggested in the report, Deva insisted that the fact that two European commissioners [Development Commissioner Andris Piebalgs and Agriculture Commissioner Dacian Ciolos] were on board made him think that the European Commission would take the report “very seriously indeed.”
Deva even speculated that a dedicated United Nations agency could be set up to implement property rights in practice.
“The U.N. have a lot of people, expertise and infrastructure on the ground that the European Commission or the [U.K.] Department for International Development don’t have … So it might be more efficient to use the U.N. system here, with the benefit that it becomes less political: If the U.K. tried to implement property rights in China, for example, the Chinese would show us the door. But if the U.N. were to do it, it’d be a different matter altogether.”
With the drafting of the parliamentary report considered an international, cross-party and cross-sectoral effort, Deva was confident that the issue of property rights and commercial business rights could really galvanize all actors within the development community.
Should the United Nations set up a new agency to push land and property rights around the world, or how should the international community advance the cause?
The High-Level Conference on Property Rights, the first of its kind to be jointly organized by the European Parliament and the European Commission, took place on April 9th, 2014 at the European Parliament in Brussels. Devex was a proud media partner.