A quiet revolution in Baruta

March 29, 2004

While the controversial land bill receives all of the attention, in Baruta, in the outskirts of Caracas a quiet revolution is taking place that would make Peru Hernando De Soto proud. De Soto has been arguing that the success of capitalism lies in the defense of property rights above everything, something uncommon in Latin America.


In the Baruta district of Caracas, the Planning Office has been organizing and registering the land and the property in the barrios which are built on municipal land. The idea is to give out title to some 15,000 families of the District. Baruta has already given title to some 190 families to their property. By doing this, each of the new owners would be able to borrow against the property. Even when the land involved is private, the municipality has negotiated with the owners in order to be able to transfer title to the property.


 


The idea is that in exchange for acquiring full property rights to the property, the owners also assume their responsibilities; paying municipal taxes and services and the municipality assumes the responsibility of providing all services.


 


One of the criticisms of the land bill was that those receiving the land had possession of the land but received no title. Economists believe that you need full property rights in order to be able to leverage the property borrowing money form banks and other financial institutions.


 


While Governments going back to Calderas in the 70s have discussed such projects, this is the first case of a municipality actually sitting down and doing the required registry and planning in order to distribute the land. Hopefully, other municipalities will soon join. Venezuela is a country with 80% urban population. Moreover, the Government, either central or municipal owns 57% of the land in the country.

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