CREATING THE CONDITIONS FOR INNOVATION IN URBAN LAND ASSEMBLY: THE CASE OF LAND POOLING AND READJUSTMENT IN VIETNAM ROBIN RAJACK, HOA THI MONG PHAM, CHANDAN DEUSKAR AND HOA THI HOANG Paper prepared for presentation at the “2015 WORLD BANK CONFERENCE ON LAND AND POVERTY” The World Bank - Washington DC, March 23-27, 2015 HOA THI HOANG

Structure of Narrative: The Evolution of LPLR in Vietnam – Rural land consolidation – More Rapid Urbanization and the Emergence of an Urban Land Market – Increasing Contentiousness of Urban Land Management and Land Acquisition – The glaring financing gap for urban infrastructure – Application of Voluntary Land Contributions and other Elements of LPLR in Vietnam – Consistent World Bank messaging advocating the adoption of LPLR – A Growing Openness to Learn from International Experiences – Piloting LPLR with donor facilitation – Creating Legal Provisions to Enable LPLR

What is Land Pooling or Land Readjustment? LPLR is a land assembly technique whereby land parcels with different owners are combined into a larger, contiguous land area for more efficient development

Key Advantages  Political  Reduced financing  No displacement  Voluntary association

Rural land consolidation Study found that reducing rural land fragmentation by 50% was associated with an increase in productivity by 5 to 7% Beginning in the late 1990s, a policy and program of rural land consolidation - concern that land fragmentation especially in the Northern and Central areas was undermining agricultural productivity Land consolidation programs were launched in 1,613 out the total of 3,630 communes in Northern Vietnam, affecting approximately 3.2 million households. The village was the basic unit for deciding on land consolidation options

More Rapid Urbanization and the Emergence of an Urban Land Market Source: Vietnam Urbanization Review based on World Development Indicators, World Bank, 2011

Increasing Contentiousness of Urban Land Management and Land Acquisition Doi Moi reforms – transition to market economy more than 5 million ha of unused land (62% of total unused land in the year 2000) were converted into land for specified purpose by end of 2006 there were 1,206 projects country-wide with 132,463 ha allocated of land where no investment had been made Corruption : Transparency International’s 2013 Global Corruption Barometer found that land management was perceived to be the second most corrupt sector in VietnamGlobal Corruption Barometer

The glaring financing gap for urban infrastructure Ho Chi Minh City - 59% % Quang Nam - 34% Quang Ninh - 90%

Application of Elements of LPLR Sites Voluntary Land Contribution for Rights of Way Participatory Planning Issuance of Land Use Certificates Local Level Steering Committee Road construction in Viet Tri City√√√√ Road construction in Lang Son City√√√√ Road expansion in Ben Tre City√√√√ Residential area renovation in Vinh, Hai Duong, Tan An Cities √√√ Low income area Upgrading in HCMC, CanTho, HaiPhong, Nam Dinh (VUUP) and 6 cities in MDRUUP, including CanTho and 5 more cities √√√√ Rural farm land consolidation in Northern Vietnam √√√

City Value of Voluntary land Contributions (exchange rate of approximately) HCMCVND bill. or about $27.2 mil Can ThoVND69.6 bill. or about $3.4 mil Hai PhongVND 25.6 bill or about $1.3 mil Nam DinhVND 2.36 bill or about $0.12 mil Total VND 650 bill or about $32 mil Approximate Value of Voluntary Land Contributions under the MDR-UUP

Consistent World Bank messaging advocating the adoption of LPLR Vietnam Urbanization Review 2011 Land Policy Note 2012 Vietnam Land Governance Assessment Framework Report, 2014

A Growing Openness to Learn from International Experiences Gujarat, India Bhutan Japan

Lessons from Gujarat LPLR is a land assembly tool not a solution for all urban development challenges The participatory process of LPLR creates a new record of land ownership which becomes more relevant than outdated and incomplete official records Assembling land and establishing rights of way for infrastructure through LPLR is a valuable outcome in in own right and low income housing or even infrastructure construction, can come later if funds are not immediately available Even though LPLR requires involving a larger number of stakeholders than compulsory acquisition, its inherent equity in the distribution of costs and benefits leads to less resistance and thereby typically faster overall delivery

Lessons from Bhutan It is possible and sometimes beneficial to do LPLR through a pilot before developing dedicated legislation as was the case in Bhutan Using donor funds for LPLR usually means adhering to social and environmental safeguards Truncating problematic sections of a redevelopment where landowner resistance is high can be a suitable solution to allow implementation to proceed Even when financing is not yet mobilized to build the planned infrastructure, it is advantageous to physically clear the rights of way Tenants and squatters need to be properly compensated if they reside in LPLR project areas The will and consent of the affected people can be more relevant than a court ruling so trust building between government and affected people is very important

Piloting LPLR with donor facilitation Tra Vinh - The site covers 33.5 hectares and lies between the old city center and a new administrative center. Can Tho - The first site proposed by the city covers 22 hectares, close to Bun Xang lake Vinh Long - does not have an infrastructure investment project ; selected 4 proposed sites, one covers 34 hectares close to the city center

Can Tho

Creating Legal Provisions to Enable LPLR Land Law of 2013,Article 146 states that : – Where the communities develop or improve their facilities for public purposes based on the contribution of the citizens or the support by the State, the voluntary contribution of land use rights, the compensation or support shall be agreed upon by the communities and the land users. Supporting Decree: September 2015?