Clelia Rontoyanni, a World Bank expert says that Albania should follow examples applied by other ex-communist countries whose property compensation schemes also include long term treasury bonds and shares in state-owned enterprises other than cash
TIRANA, Oct. 3 – World Bank experts have suggested that Albania needs to change its property restitution and compensation scheme by applying other financial instruments. Clelia Rontoyanni, a World Bank expert who compiled the latest World Bank property document on Albania says that Albania should follow examples applied by other ex-communist countries whose property compensation schemes also include long term treasury bonds and shares in state-owned enterprises other than cash. In a recent interview for daily Panorama, Rontoyanni says that Albania can benefit from this international practice to give a solution to numerous compensation requests it cannot financially afford. According to her, unclear property titles, remains a key barrier for Albania to attract more foreign investment, hampering Albania’s economic growth prospects. “Access to land and buildings with clear property rights remains a problem limiting investments in Albania, for both domestic and foreign investors. It is very important that this is taken into consideration because Albania’s economic growth prospects would further improve if barriers for the growth of small and medium sized enterprises, often under domestic ownership, would be lifted,” says the World Bank expert. “Despite several attempts at reform, immovable property rights in Albania are not adequately secure and represent an important governance challenge. Problems have resulted from incomplete first title registration, the lack of accurate cadastral records, and, in many cases, the absence of reliable evidence of ownership. Although Albania has adopted legislation calling for restitution or compensation for owners whose property was expropriated under communism, implementation is incomplete,” says the World Bank issue brief called “Governance in the protection of immovable property rights in Albania: A continuing challenge.” Insecure land title and unclear procedures for obtaining construction permits pose a major constraint to investment. A survey conducted in 2008 as part of the World Bank’s Investment Climate Assessment found that insecure property rights and access to land were considered to be severe or very severe obstacles by over 20 percent of firms respectively. In Albania, rapid internal migration after the collapse of the 45-year communist regime resulted in informal occupation of land and unauthorized construction on a mass scale, thus compounding the problems associated with the incomplete transfer of property. The insecurity of real estate property rights affects a large share of Albanian citizens, particularly vulnerable groups. The lack of clear legal titleءnd the resulting informality of property transactionsذrevent property occupiers (including those with lawful ownership rights) from entering the formal property market or using the property as collateral to obtain access to credit. The World Bank suggests that the current problems are not intractable and can be addressed through a coherent policy aimed at a comprehensive and pragmatic solution, based on broad political and societal support. Such a solution would need to address some important inconsistencies and gaps in the existing legal framework to remove current bottlenecks holding back the key processes of title registration, legalization, and restitution and compensation. An acceleration in the payment of compensation to expropriated owners is urgently needed to ensure credibility of the law, stem the flow of legal challenges, and remove obstacles to the completion of the legalization process. At the same time, this may require revisiting the legal provision to pay compensation at current market values, which is not in line with international practice, say the World Bank. Only a hundred ex-property owners benefit for 2011 Last August, Albania’s Property Restitution and Compensation Agency (AKKP) announced 107 winners who will benefit from 670 million lek (USD 6.7 million, Euro 4.8 million) from this year’s fund to compensate former owners. AKKP said it examined 1,012 requests for compensation, the latest dating to a decision made on September 23, 1994. The property restitution and compensation process in Albania started in the early 90s soon after the country’s communist regime, which had seized private property, collapsed. Financial compensation for expropriated owners started in 2005. Since then, the Agency has awarded 3.75 billion lek (USD 37 million) for expropriated owners during the communist regime.
