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Latin America Investment News on Viva Tropical

Should Panama Charge the Poor for Their Land?

Article Summary:

Panama is debating changes to its land titling process and government officials say the amendments are needed to prevent land speculation in coastal regions. But there is concern that these future changes could eliminate the exemption that exists today for local coastal inhabitants who currently are eligible to enter the titling process free of charge if their land is less than 50,000 square meters.

Photo Credit: Prensa

Original Article Text From Prensa via Google Translate :

Should He be Charging Poor People for their Land Holder?

Feeling confident that we own our house is a feeling that many of us take for granted, but just refer to the pages of this newspaper to notice the problems that many people have to go to obtain such assurance.

This problem exists because of several factors. The first thing worth a mention is the lack of rigorous drafting of land legislation legal product flexibility needed by the former dictatorial regime.

Second, there is an allocation of responsibilities confused as to which government entity is responsible for the certification process.

To solve these problems, both the previous and the current administration invested in the production of an idea: the National Authority of Land Management (Anati).

The mission is to reduce Anati under one legal framework and management control of the recognition of land ownership to remove the problems of conflict of jurisdiction.

Just as it took over 700 attempts to perfect the light bulb Edison modern, it was unlikely that the young law Anati had much success, especially when the company had to fight a strong division of responsibilities titration.

One of the most complex tasks that needed to be addressed was Anati developing a recognition system property so that it could differentiate methodically between two kinds of processes.

The first would be set up by people who are legitimately seeking to be recognized as owners of a lot.

The others are those seeking to acquire control and package a right to proceed immediately with the sale.

This task arises within a particular context: the government has a social concern to promote land tenure by those who operate an inherited context of the social movements of the mid-century.

One of the mechanisms developed to address this task was differentiated by the amount of land upon which it seeks to recognize a title.

The way it is structured the existing law, a person is considered owner requesting less than 50 square meters can make the process free, as it is less likely to be a speculator.

After three years of operating under this legal framework, the agency has concluded that this differentiation mechanism is not effective enough to eliminate speculation.

This is provided in a draft bill discussed last week by the National Land Council. Therefore, as contained in the document, it is possible to delete the exemption of the first 50 thousand square meters.

This proposal completely eliminates the risk of a free patent on the grounds that it would prevent speculation. It attaches a price to compensate the public purse in the event that the land is subject to speculation entitled.

A potential problem of this change is that such an amendment could lead to a situation where the cure is worse than the disease.

Establish a payment for such land titling, explained the lawyer Carlos Ernesto González Ramírez and former Minister of Housing, Carlos Dubois, can affect those most in need of certainty over their property, workers in the primary sector.

In his essay on property rights, The Other Path, the Peruvian economist Hernando de Soto and Enrique Ghersi seek to explain how these barriers to entry formal titles affect the poorest in society. The trial has received favorable comments show a very common scenario in developing countries of Latin America.

The paradox is this: for a worker to develop, you need financial resources to invest. Agents financial resources allocation are largely banks.

Banks to secure your loan, require the creation of capital guarantees as in the case of a failure to pay contractual, support can quickly turn into liquid assets.

Therefore, the primary sector workers, by not having that initial capital, are excluded from the formal economy.

De Soto and Ghersi point in his essay a possible resolution to the paradox.

For economists, the problem is not the lack of capital, but the lack of recognition, as these workers live in areas over which they have certain rights.

Banks, on the topics of risk, can not accept domain testimonial evidence, but require a deed to be enforceable against third parties before a court of justice.

To Ghersi and De Soto, the government must find a way to formally recognize, and for those who simply treated, as many titles for these workers to participate in the formal economy.

There is a risk that some of these investments have been unsuccessful, but on average, the benefit would be one of social progress and economic improvement.

The key, as would the leftist thinker Slavoj Zizek, is not doing something about the problem urgently, but think, urgently, in a solution.

This solution could possibly include any exemption for low income citizens, which economists said Peruvians must not be excluded from the formal economy, but also include elements of accountability and rigor in the process, as suggested by the former Minister Dubois, to ensure social justice pursued by the Government.

Link to Original Article:

From Prensa

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