Speeches & Transcripts

Property, a solution can be found only through compromise

March 10, 2012

Kseniya Lvovsky, World Bank Country Manager Albania


Interview of Kseniya Lvovsky, World Bank Country Manager for daily Shqip, March 10, 2012

1. In the recent report about property issues, the WB offer several recommendations, which have been objected by the owners association. Can you say briefly what are some of your proposals and where were you based in preparing this report?

The report “Governance in the Protection of Immovable Property Rights in Albania: A Continuing Challenge” focuses on identifying elements for a sustainable and comprehensive solution to improving security of property rights. Based on analysis of the situation, views of different stakeholder groups and international experience, some of the key report recommendations are:

  • Speed up payment of compensation to restitution claimants
  • Speed up resolution of legalization applications.
  • Speed up title registration, improve accuracy of IPRO records, and complete systematic registration in urban and high-value areas.
  • Ensure consistent implementation of urban planning law and improve issuance of construction permits.

While these recommendations reflect broad consensus, different Albania stakeholders have, understandably, different views on the details of the implementation. Some of these stakeholders, for example, representing the interests of the expropriated owners, have concerns about applicability of experiences other former communist countries of Europe, which are currently EU members and candidate countries, to Albania. The World Bank, however, as an international institutional, believes that it is important to share relevant international experiences with the countries that are tackling similar issues, to inform the public and the government in their search of a sustainable solution.

2. The reality shows that the process of restitution and compensation has not progressed with the right pace. What are some of the factors that block the normality of the process?

The issues related to property rights in Albania are complex, reflecting a bitter history of communist repression, a turbulent post-communism transition, political polarization, and challenging political economy.  The report identifies several obstacles such as: a shortage of funds is delaying the settlement of compensation claims by restitution claimants; the promise to pay full compensation at current market rates is unaffordable and inconsistent with international experience; a shortfall in the payment of legalization fees by applicants is holding back progress in legalization and depriving the budget of revenues to pay compensation; insufficient coordination and cooperation between responsible agencies (IPRO, ALUIZNI, AKKP) delays processes.

At the same time, several important steps that the government has recently taken to accelerate progress are encouraging. These include  preparing a series of legal amendments to increase the security of property rights, which are now in parliament;  improve the operations of the IPRO and  deliver better services including through public notaries.

3. Keeping in mind the complexity of the process, it seems like the property issue will never find a solution, at least for the 5 coming years. There are thousands of files expecting solution, bills that count hundred millions of euros and a small public budget in front of this enormous challenge. Does the World Bank consider to design a special project to help resolve this project, based on the best experience from the region (former communist countries)?

Currently, the World Bank is supporting a project on land administration and management which is helping to improve the speed and quality of services provided by the Immovable Property Registration Office (IPRO) and to complete the first registration and titling processes in selected urban locations. Our program does not include any other projects on property rights, legalization or compensation issues.

Experience from other European countries, which have had to deal with similar issues, suggests that solution can be found. Some countries, for example,  have adopted the current market value approach, similar to Albania, but have fine-tuned its implementation as to balance several considerations, such as affordability for the state budget and the impact on equity, growth and poverty reduction. In Macedonia and Montenegro, the market value is applied to the state of the property at the time of confiscation. It is important to remember that a solution to compensation does not affect only the owners, who are very important stakeholders and must be compensated fairly and timely.  It affects all Albanian taxpayers, who will ultimately pay the compensation bill,  and all Albanian citizens because the compensation funds comes from the same pot - state budget - that finances  schools, hospitals, roads and other social services. The report mentioned above is meant to share lessons of other countries’ experiences with Albanians to help them develop an approach that is right and fair for the society at large. We are working on the second edition of the report that incorporates extensive feedback on the first issue that was made publicly available during a workshop in Tirana in September 2011.