How to make the most of land resources

According to the State Agency for Land Resources, 50.7 percent of land in Ukraine is private or communal property and the remaining 49.3 percent (29 Million hectares) belongs to the state. The same agency says that 29.8 Million hectares has to be divided into communal and state-owned. However, not a single square meter of land is registered as communal property, which means that nearly a half of Ukrainian lands is private property. Additionally, a considerable amount of land is leased, so the state’s actual share is smaller than 49.3 percent. Sixteen years after independence, Ukraine still has no regulatory norms in relation to the land market. The laws “On the Land Cadastre” and “On the Land Market” are still pending adoption while the moratorium on selling agricultural land is in effect. The shadow land market is a beehive of activity: poor peasants sell off their land entitlements; private firms secure court rulings in their favor and then seize land plots “on legal grounds”; village councils arbitrarily alter the status of hundreds of hectares of land from “agricultural” to “wasteland” and then sell it.

The situation in cities is none the better: with the absence of definite zoning plans, city councils lease or sell for a song lucrative (and very large) land plots to private entities and put the tiny rest on auction. Billions pour into officials’ pockets instead of local budgets.

While the country has to live without land legislation, financial groups and other clans of all colors and calibers are dividing the most precious treasure – land. Experts say: when the political leaders finally get down to the long-awaited land laws, there will be no more land left to sell.

What do the politicians think? How are they going to make the most of land resources in the interests of the state? When are they going to build legal frameworks for land relations instead of ignoring the problems that may plunge Ukraine into economic stupor? Is there a risk of land re-privatization? Which is better for the country: to sell land or to lease it? Will non-residents have more rights?

The ZN put forward these and other questions at a roundtable conference with representatives of the political parties and blocs running for parliament. The Regions Party was represented by Candidate of Economics, Associate Professor Irina AKIMOVA. The Yulia Tymoshenko Bloc was represented by members of the Kyiv Rada Volodymyr BONDARENKO and Olexandr BRYHYNETS. The Our Ukraine - People’s Self-Defense was represented by Board Chairman of the Construction Chamber Volodymyr POLYACHENKO and ex-chairman of the Verkhovna Rada Committee on Housing and Communal Services Olexiy KUCHERENKO. The choice of the interlocutors was not accidental: each is engaged in drafting the land strategy of his/her respective political party.

The “Detonator” for the Countryside

ZN: We started our conversation with agricultural lands. Some prefer more conveniently located areas to build their country houses. To others such lands are gold mines. Since there is no land cadastre, eight out of ten lease contracts are entered into effect with violations. Vast areas of plowland are sold in the shadow economy. There are private companies that own 200,000 hectares of farmland and are preparing it for resale or construction development.

Two important laws – “On the Land Cadastre” and “On the Land Market” are still “in the works”. Are your parties going to extend the moratorium on selling agricultural land or adopt these laws as soon as the new parliament starts working?

O.K.: In 1917 the Bolsheviks seized power with two key slogan words – “war” and “land”. We don’t have a civil war today, but the situation in the country is extremely complicated and the land issue may become a “detonator” for a social outburst in the countryside. As the first deputy chief of the OU-PSD campaign staff in the Kyiv region, I have traveled a lot for the last four weeks. Every time I was meeting with villagers, my hair stood on end. I can imagine what’s going on in other regions. It’s an issue of national security. One of our big failures in 2005 was the failure to react adequately to the numerous unlawful acquisitions of land.

It’s an issue of great social importance. The unreasoned privatization left ordinary citizens empty-handed. The overwhelming majority of city residents became owners of their apartments (but only de jure). Village residents were supposed to become owners of the land that formerly belonged to kolkhozes, but they never did. All they got were pieces of paper called “land ownership certificates” – a perfect way to swindle peasants! A graphic example is the 200,000 hectares you’ve just mentioned. I think those who have grabbed that land are simply waiting for the day Ukraine joins the EU, knowing that then they will make heaps of money on it.

Our political force and the President confirm the intention to lift the moratorium and to solve the problem of land ownership, at least. Parallel to that, it’s necessary to enact the land cadastre and provide other normative attributes that can help land owners to protect their property. We have lots of other problems. The land cadastre office in the village of Kozin [30 km south of Kyiv – A.B.] has been robbed twice in the last three weeks, and now all the important documents are missing.

If we don’t change the land registration and accounting system, we may soon have two or three legal owners of one land plot and inevitable conflicts among them. We know how those “land raiders” can defend their property rights in court. The sooner we institute the land property right by lifting the moratorium, the sooner we’ll cut this Gordian knot.

ZN: When are you going to lift the moratorium and adopt the key laws – this year or next?

O.K.: We can’t do without the laws “On the Land Cadastre” and “On the Land Market”, because we need a simplified and transparent procedure of issuance of land property deeds. We also need an extensive “enlightenment program” to explain to the peasants why they should think twice before selling their land vouchers.

ZN: It may take years to pass these bills, and “the interested” will buy up the last remaining land.

O.K.: What’s there left to buy? We’re talking about the land that has already been formally distributed.

ZN: But in practice it’s redistributed in the shadow land market.

O.K.: This practice will continue until we lift the moratorium. The question is: who else will vote for lifting it? Yulia Tymoshenko says that her bloc has a different opinion…

ZN: Well, if the parliament doesn’t pass these two important bills, what is the pro-presidential political force going to do – wait for a presidential decree?

O.K.: It’s a very difficult question. Political forces allied in a coalition should be unanimous on management principles and ways to solve serious social problems rather than proclaim some ephemeral program of economic development, no matter who develops it – Akhmetov or Tymoshenko. The land issue is one of the cornerstones. If there’s no unanimity on it, I’d be skeptical about such a coalition.

V.B.: Let me explain something. We in the Tymoshenko Bloc believe that we need at least four laws, not two. We talk about the land market and the land cadastre but we leave out the areas that have to be reserved for nature conservation. Before we distribute land among owners, we have to reserve some land for new roads, pipelines, and other necessary things.

Take, for instance, the new circular road around Kyiv: some sections of this road will have to occupy the land that is already someone’s property. It was decided to lay it through forest areas that don’t belong to anyone, but then too many trees have to be felled. It’s a big mistake not to keep land in reserve for such and other strategic purposes.

There are also environmental problems. [Kyiv Mayor – A.B.] Chernovetsky and his clan, who only care about their own pockets, decided to cut the nature conservation zone in Feofania [Kyiv’s south-western suburb – A.B.] by 650 hectares and the city hall said yes. One arbitrary decision – and the reserve area on Zhukov Island lost more than 1,600 hectares!

In the first place it’s necessary to calculate how much farmland Ukraine needs and how much land near rivers can be allotted for recreation areas. Then the rest could be sold. Besides, there are poor old people who have nothing but their vouchers and can’t live their last years decently just because they can’t sell their vouchers.

Therefore, before establishing the land market, it’s necessary to make a comprehensive inventory of land with fixed limits, systematize all documents, define the state-owned land reserve, and delimitate the nature conservation reserve.

O.K.: That’s right, but it takes some time. It would be good if we managed to adopt the necessary laws in less than five months. The poor old people can’t wait for three or five years. Meanwhile, we see numerous widespread breaches of the active moratorium. Unfortunately, land plots are seized on legal grounds.

V.B.: When a single old woman dies in a village and no one turns up to claim the heritage, the village council chairman applauds: her voucher can be given to someone else. Local authorities are obviously interested in the physical decrease in the number of single shareholders.

ZN: Maybe it’s necessary to adopt two more laws – “On Land Inventory” and “On Land Zoning”?

V.B.: Normally, the inventory should precede the cadastre. As to the zoning, I would specify the part that pertains to nature conservation areas, especially on river banks – they are in greatest “demand”. There is also the communal zoning, the agricultural zoning, and other categories.

Agricultural lands are under the parliament’s control, but there are violations here as well. For example, the agricultural land that belongs to the collective agricultural enterprise Khotivsky is located next to Feofania. Andrei Ivanov and company bought up the vouchers from former workers of Khotivsky and the Kyiv City Rada altered the status of that land from “farmland” to “pasture”. It’s logical to expect the “pasture” to be categorized as “plots for construction”.

The land of the collective agricultural enterprise Sovky, which is now within the city limits, has been shared among former municipal officials and their protégés. The same has happened to the gardens of the Academy of Agricultural Sciences near Feofania and Kitayeve… Lyudmila Suprun’s husband personally managed this process in favor of Olexandr Tkachenko and other leaders of the parliament.

ZN: Back in December the parliament overrode the President’s veto and extended the moratorium on selling agricultural land. How much lawmaking work has the Tymoshenko Bloc done since then? When do you expect the parliament to adopt the laws in question and lift the moratorium?

V.B.: I think it has to take a couple of sessions – the texts are ready. I took part in drafting one.

We turned down the idea of selling land in rural areas by way of privatization and we still believe that first it’s necessary to reserve land for state needs and nature conservation.

ZN: Before the OU-PSD and the Tymoshenko Bloc started running for parliament, their leaders talked of agreements, representation quotas in the future government, and the like. Kucherenko stated the land issue as one of the priorities. Is it agreed between your blocs which laws will be adopted before you lift the moratorium?

V.B.: We don’t have cardinal differences on that score. We only differ on the tactics of solving the land problem. I don’t think that Our Ukraine will be against the laws that we propose.

O.K.: I’ve said before that we support the idea. It’s just a matter of time.

V.B.: Yes, and we will lift the moratorium after we pass at least four bills. Did you know that Kyiv has no land inventory as such? One version of it was last seen in the office of the former chief architect Sergey Babushkin, but now its whereabouts are unknown. Another version is kept in the General Planning Department of the [research institute – A.B.] Kyivproekt, and the newest version – in the Kyiv Architecture Department…

O.K.: Since Kyivproekt is now a private organization, one of these versions doesn’t belong to the municipal authorities.

ZN: Mrs. Akimova, what is the position of the Regions Party that you represent?

I.A.: I think we all are of the same mind on that score and there can hardly be any big differences. Yes, it is necessary to lift the moratorium next year in order to let the market of agricultural land develop freely. I don’t think there is any serious risk of “shadow schemes”. Besides, such schemes are widespread even now when the moratorium is in effect.

Parallel to that, it’s necessary to polish and pass the law on the land cadastre. There are disputes among government agencies about who should be authorized to register land plots and certificates, but that’s a technical matter and it’s pointless to use it as substantiation for prolonging the moratorium.

There might be some technical flaws in the law on cadastre, but it’s better to make corrections after lifting the moratorium than to put off this procedure endlessly.

There is another important question. Must there be limitations on land ownership for residents and non-residents? At present, the maximal size of the land plot that a resident of Ukraine can possess is 100 hectares. Controversial arguments about “social justice” or physical inability to manage such big pieces of land stall the natural process of concentration of agricultural land.

That’s why, besides lifting the moratorium on selling agricultural land, we have to decide whether to lift or preserve the limitations on the size of private plots of land.

ZN: What about the rights of non-residents?

I.A.: Actually, we are moving toward a total ban on land ownership by non-residents. It’s a complex issue and it demands serious consultations. It’s not right to make a decision on it within a narrow circle of professionals and present the public with a fait accompli.

Let’s have a look at other countries. The older members of the EU have no limitations, following the principle of free flow of capital and workforce. The neophyte members have different approaches. For example, in Hungary a non-resident has no right to own land if he has lived in the country less than three years. When he has, then he gets this right.

The Czech Republic, Slovakia, and Lithuania have temporary limitations. They have postponed the issue for seven years. But you should see that they all are moving in one direction, gradually lifting all limitations on land ownership by non-residents. I think Ukraine should follow suit. I’m against lifting such limitations without reaching public consensus and expert consultations. But if we want to join the European community, we have to reckon with the fact that free movement of capital also implies free ownership of land in other countries.

ZN: The Communists are against lifting this moratorium. Will you sacrifice it in case you have to ally with them in a ruling coalition?

I.A.: My position is this: the only force that can facilitate the investment-based economic development is the force of competition. Paraphrasing the motto of our political opponents, I would say, “One law for all – the law of market”.

A developed market of land is indispensable for the development of free competition, so regardless of which political force the Regions Party may ally with, it will consistently push for lifting the moratorium on selling agricultural land.

O.K.: I have one remark about non-residents. Sooner or later this issue will arise and will be solved in their favor, but I don’t think it’s the right time today to address it. Otherwise, before Ukraine joins the European Union, its lands may factually fall into possession of Russians.

ZN: You are both fibbing because Russians are already privatizing Ukrainian lands through Ukrainian “firms of straw”…

O.K.: There’s no way banning it as long as they act via residents. But if it’s about a non-resident legal entity or natural person from a foreign country, then different laws work.

I’d like to point to the political aspect. There is some logic to what the representative of the Regions Party says, but I can’t imagine how the coalition of the Regions Party and the Communists or the Progressive Socialists will approach this issue. I think the potential partners should come to terms right now and tell their voters how they are going to smooth away their principled stance.

I have a professional question. What do you say to the painful issue mentioned by my colleague Bondarenko: the requisition of the illegally acquired lands? How firm is your stance?

I.A.: We use our neighbors’ experience. Their experience shows that in case of public necessity the government may redeem land plots or other property at the market price. The main question here is how to evaluate the market price of that property.

ZN: What mechanism do you suggest?

I.A.: One of the simplest and most effective mechanisms is the auction. I don’t rule out quite a few problems on the way of putting this mechanism into practice, mainly due to our imperfect judiciary. That’s why we need to consider the legal aspects in order to forestall any likely conflicts with owners.

O.K.: Do you mean you are ready?

I.A.: We must be, because the issue of investment in infrastructures concerns the community of any town or village. The main thing is to protect the people, which is possible only with an effective system of conflict settlement and adequate property evaluation.

VB: I know about at least two huge latifundia owned by representatives of different political forces. One is the company Nafkom that owns thousands of hectares in a dozen oblasts, growing sunflowers, corn, and some other crops. I wouldn’t mind it if the company used the land rationally and paid taxes, but it rents the land from poor peasants for a sack of grain a year…

Olexandr Tkachenko from the Communist Party has a similar latifundium that occupies vast areas in the south of the Kyiv oblast, the Cherkassy oblast, and others. Ex-President Leonid Kravchuk and his men who founded Nafkom are there as well. They don’t want land to become private property, because then they would have to pay taxes. They prefer to sweat those huge plantations that formally consist of land plots owned by poor peasants…

We hear scary stories about foreign moneybags who will buy our land and take it away. They won’t – just because it’s immovable! We simply need to adopt laws to equate foreign and Ukrainian owners of land.

We don’t have to be afraid of non-residents. The Constitution grants equal rights to citizens of Ukraine and other countries as well as stateless persons. There must be equality in land issues as well.

ZN: Cities today are surrounded by privatized, shared land plots allocated for cottages and mansions. On one hand, cities have to grow and expand; on the other – local communities’ interests should be properly expedited. Do you know any settlement in Ukraine that has a general plan of its development?

V.P. — In theory, every town and city has one. In practice, those general plans of urban development are not implemented, including in the capital

I can tell you that under the first general plan for Kyiv, the towns of Kniazhychy, Vyshgorod, part of Irpin and a number of other satellite-towns were to be developed as areas within the territory of the capital city. I have never wanted elite four-five storey houses to surround Kyiv.

А.К. — In my opinion, Kyiv should not try to expand its territory, at least not now. The city authorities should prove their capability of governing this megapolis. So far they have not. But they continue to tell us tales about Brovary, Vyshgorod, Vasylkiv – based, I am sure, on the first general plan you have mentioned.

It is all nonsense. They should remain satellite-towns. New York, Chicago, other large cities develop in this fashion…

V.P. — I will continue, with your kind per mission, as I disagree with my colleague on this.

So, elite four-five storey houses are being built around Kyiv. And politicians speak of the construction boom. What boom? In and around 1986, 23 million square meters of residential houses were built in Ukraine per year. The housing was not of the top quality, of course, but the population had enough apartments to live in.

At present, we build as little as 9 million square meters, half of which is individual housing, and the other half – apartments for the rich. The major problem for the state today is the absence of affordable housing for the population, and land is the key issue. For example there is no land available for development in Kyiv. All of it has been misappropriated, seized, siphoned off…

ZN: People have realized that construction is a very lucrative business…

V.P. — They have, indeed. Large landowners and speculators seize lands to re-sell plots later with profit. Until it is too late, the state should put an end to these processes and develop sound public policy and strategy in two related sectors – land and construction. If we wait for another two years, it will be too late.

ZN: How can it be done? Who should be in charge of bringing order into these sectors – central authorities or local governments?

V.P. — We need a dictate of the general plan. That’s what they have in Moscow. Once it is in place and operating, no mayor would be able to manage the state-owned land arbitrarily, as Omelchenko and Chernovetsky have been doing for years.

The general plan alone can dictate what to build and when. And a competition, an auction or tender will decide what company to contract for it.

This approach allows civilized countries to prevent, for example, monstrous sky-scrapers from rising in the centre of Paris, Prague or Sophia. Not a single European architect would agree to it. In this country, the Institute for General Urban Planning is private: you can pay money ad build whatever you like. We have 25-storey houses in Khreshchatyk, and unless we stop this insanity, we could have taller buildings there soon…

In the Soviet times, Shcherbytsky [First Secretary of the CPU Central Committee] examined and approved the general plan; Political Bureau of the CPU central Committee discussed it at a special session, and no one dared to disobey the general plan thus approved.

А.К. — Several years ago when I headed Zaporizhzhia Oblast Administration I accompanied President Kuchma on his visit to Uzbekistan. Omelchenko was also a member of the delegation, and he had a model of Maidan reconstruction downloaded in his laptop. On the plane Kuchma and Omelchenko discussed this model, literally in their lap.

ZN: Yet Omelchenko and Chernovetsky always assured the public the capital city had a general plan.

V.P. — It is not so. One can come to the Institute for General Urban Planning and change the development type of a site from industrial to residential, or from a park zone to residential one. What other arguments do you need?

I think the general plans of urban development should be approved by the Cabinet of Ministers so that no mayor could modify this official document at their discretion.

V.B. — I agree; the Cabinet’s role is to supervise the zoning and development of the country’s territories, providing the necessary regulatory framework. What we have, however, is a situation whereby every administrative unit with an elected council designs its own general plans. What is the result? In Kyiv, for instance, there is no place for city cemeteries but it cannot possibly locate such objects in the territory of another administrative unit.

А.B. —I know how they address this issue in China: all local governments comply with the central authorities’ decisions. In Europe, on the contrary, several communities work together to address a common issue. We understand Brovary will never volunteer to lose its autonomy and join Kyiv. They will benefit from remaining a distinct unit that, nonetheless, belongs to the zone of the megapolis. Thus we need a mechanism that would urge all communities to work for one specific project, for example, a land one.

There should be a body on top responsible for this work, maybe, the Cabinet of Ministers.

I.А. — The Party of Regions shares these concerns but our approach is different.

First, I do not understand how you can pin your hopes on the central government. Wasn’t seventy years of the Soviet experience enough to dispel your illusions? Today we know that local and regional authorities are in the best position to decide what their respective regions and communities need and how they should develop. Thus I do not see why the Cabinet of Ministers should get involved in the approval or supervision of general plans.

International best practices show that land should be categorized, or zoned, according to the type of its present or future use. We should know what land remains under environmental conservation, say, as a natural reserve of local or national significance; what land is of agricultural use, what land can be developed either today or tomorrow. Put differently, the global general plan that I mean will describe the land use in both territorial and temporal terms.

The next step is to develop clear and transparent procedures. If the land plot is agricultural, the plan should indicate if its designated purpose can ever be changed and prescribe transparent procedure for its possible transfer into a different category. Most issues relating to regional programmes should be addressed by local and regional councils. I want to reiterate that they are in the best position to do so.

ZN: Don’t you think, ladies and gentlemen, that if your proposals come to pass the bulk of land corruption will shit from the local level to the Cabinet of Ministers?

V.P. — These are different things. I risk speaking about unpopular things but the issue is too critical.

We studied foreign legislation and practice in this field. In Moscow, for example, land is not subject to sale. Therefore they do not have problems that we face now. A person can only lease land, and if the city needs to build a bridge or a road in a certain place – the land tenants have nothing to do but accept the municipality’s decision.

Second, civilized municipalities do not sell land per se but an investment project with clear calculations, feasibility studies, restrictions and established bid price. They regularly take stock of and inspect such investment projects. If the project is dormant, Moscow government increases lease payments manifold. As a result, the project is assigned to another investor who completes it properly. That is why I have been arguing for years that large cities should introduce land lease and sales of transparent investment projects, and they should have general plans, of course.

ZN: Does it mean urban land sale should be prohibited?

V.P. — When is comes to large cities – yes. Our political force has already registered a draft law on state support of affordable (social) housing which makes a relevant provision. I know the President is going to convene a special meeting to discuss land and construction issues.

A working group in the Presidential Secretariat drafted a presidential decree that would formulate the main principles of housing policy in Ukraine. The President intends to give special priority to addressing the housing issue. He will commission the Cabinet of Ministers to develop and approve general plans. The draft decree also provides for allocating land plots for social housing construction free of charge.

ZN: I wonder who will implement this decree after the elections…

V.P. — Why do we keep asking such questions? Why don’t citizens in Geneva or Paris ask them? We wouldn’t either, if at least once somebody went to jail for their disrespect of law!

A role-play for all

ZN: When your party was in power it did not manage to implement this “creative” idea. Yet let us return to land, or rather, to each represented political forces’ stance over land.

Since you mentioned the recent initiatives of the OU honorary leader, President Yushchenko, I would address the next question to you: why didn’t Viktor Yushchenko and his team implement their ideas and proposals while the two “orange” governments were in office?

Why did President Yushchenko veto the draft law on auctions to lease urban land, prepared and submitted by the YTB faction? Land is leased out for a long term and for a ridiculously low price anyway. Why did president Yushchenko issue a decree to limit the development of historical zones in Kyiv and then revoke it two months later? Is there logic in what your team does, particularly at the local level, participating in land distribution, for example in the capital city? Won’t the presidential decree on social housing become yet another election ploy to be forgotten on 1 October 2007?

V.P. — On the one hand, if the draft law on affordable (social) housing was registered with the Rada, it is more than just a “creative idea” or an election ploy. On the other, I am no longer optimistic about my ability, as an authoritative and well-known construction professional, to resolve all problems once I get to Parliament. I remember it took me six attempts to push through a draft law requiring that a potential developer should produce their passport to city council officials when applying for land allocation… and that was only after the Elita-Centre scandal.

А.К. — You asked about Kyiv. I can tell you honestly on my behalf and on behalf of Olexiy Kucherenko: the organization of Kyiv city has a lot of grave problems. Some of our representatives in the city council have not lived up to our expectations and we are planning to replace them after the next local elections.

ZN: And yet what is you bloc’s position in respect to land issues. Over the 18 months of Chernovetsky’s tenure Kyiv has lost more than 1000 hectares of land that was sold for a song. Why does the president keep silent? As Mr. Poliachenko said, the process could become irreversible a couple of years from now…

А.К. — Why do you blame it on the President? Is a negligent mayor entitled to embezzle the city’s wealth?

I can give you another example: head of Pereyaslav-Khmelnytsky District Administration, “Our Ukraine” member, developed guidelines for tenders to lease land on her on initiative. The YTB faction in the district council endorsed her move and the council approved the document. Kyiv government and its head are a huge problem for us, citizens. I understand why the President vetoed the law on auctions to lease land – to avoid allegations of interference in local self-government jurisdiction.

ZN: The President has the right to legislative initiatives.

V.P. — And we should also remember about the provision, confirmed by the Constitutional Court some time ago, compelling the President to appoint an elected mayor head of the city state administration.

А.К. — I fully agree with the esteemed journalists in that concerned citizens and the media should be asking questions like this. However, we can only elaborate on the OU position. If you need additional information about President Yushchenko’s views on this score, you’d better ask his Secretariat.

The Kyiv government is represented by Mayor Chernovetsky, elected by voters, and a group of individuals controlling the joint stock company called Kyiv City Council. Volodymyr Poliachenko, alas, is a minority shareholder thereof.

ZN: Still, can you explain why the OU honorary leader rescinded his decree on limiting development in the centre of Kyiv?

V.P. — It was the President’s mistake. I will ask Viktor Yushchenko to reconsider his decision. His strategy vis-à-vis the development of the Kyiv city centre should be consistent. There should be a strict zoning and planning approach to this area.

The decision to repeal the decree was erroneous.

ZN: Who lobbied for this erroneous decision?

V.P. — I do not know.

А.К. — You should understand that all the permits on land allocation, issues for bribes, are, strictly speaking, legitimate. They have all the required stamps, minutes of the City Council session and its decisions to allocate a land plot in question. It is hard for me to analyze the reasons but the decree could be in conflict with the decisions made by the previous administration. My guess is some constitutional provision prevented the president form intervening into the relations regulated by the law on the capital city.

V.B. — I think the President revoked his decree on limiting development in the centre of Kyiv because Petro Yushchenko and Oles Dovhy co-chair a commission in charge of preserving historical heritage in Kyiv. The first telegraph was destroyed but the commission failed to react properly saying there was no telegraph in the territory of the Kyiv Fortress Reserve, although the reserve managers insist it was there…

Soon we will see what project is launched there by whom, and understand why Yushchenko repealed his decree.

ZN: How can corruption be combated under the circumstances? An anticorruption agency will hardly save us from the Party of Regions’ appetite for land in Kyiv and in the Crimea.

I.А. — I anticipated questions about the so-called “land grabbing” and corrupt practices of land allocation. It is another side of the coin. We are now trying to address this issue in a different way. The best way to do away with corruption is…

А.К. — to assume a leading role in it…

I.А. — …to introduce a clear and transparent decision making models. As for local self-government, the only effective preventive instrument is a political institute of rotating power and a fear of not being elected again. The same pertains to the central authorities. This is where the media and civil society are to play a crucial role. If adequate procedures exist but are not followed, the media and civil society should expose the perpetrators and draw public attention to irregularities. And then courts should step in.

А.К. — Civil society, freedom of the press and other abovementioned tools represent an abstraction for today’s Ukraine. We do not have them. I am fully aware of the large capital desire to buy everything that is there for sale, and even more. I also know where this large capital is concentrated – in the Party of Regions and some other political forces.

That is why, supporting Ms Akimova in general, I also agree that our future is with local self-government. Right after the new Rada is elected, it should adopt a number of essential laws, first, to change the local election system (proportional system does not work at the local level); second, to address the issue of local referendum as a toll of changing local authorities. This will require a simplification of the referendum procedures, primarily, of its registration, by excluding local authorities from the process. If we in Kyiv elected a wrong man we should have an opportunity to replace him in a year.

I.А. — I do not support such referenda.

V.B. — The party of Regions representative has just said that the major instrument regulating the behaviour of those in power is their realization that next time they can be voted out of office. I do not think it is a valid, persuasive argument. One year will suffice for a public servant or elected representative to reap a rich harvest and never worry about the next term. I have appealed to the conscience of the leaders of Kyiv Civil Activists, but they are not interested in their voters’ problems. They are not politically accountable as they represent a dubious political force …

А.B. — In this context, the country needs strong, well-established and responsible political parties, as well as clear legislation, including a law on limiting construction in historical centres of Ukrainian cities and towns. A lot of other binding laws should be adopted and enforced so that local administrations could not disregard them.

ZN: You all speak about legislation to be adopted in the future but the problem is that the state has only got 25 million hectares of land in its disposal. While you are making laws, there would be no subject for them to cover – primary land market in Ukraine will cease to exist…

I.А. — I would like to continue what I was saying about political responsibility at the local level. This morning the party of Regions presented its programme of developing local self-government and reforming housing-and-municipal economy. We underscored the need for returning to the majority elections in small communities of up to 10 thousand members. The issue is open to discussion, of course. The reasoning behind our initiative is that locally elected representatives are close to their voters and should be personally and politically accountable to them.

One more thing about the local referenda. We spoke about land zoning and general plans, some issues here could be addressed through legislation, others – through decisions of local communities. The mechanism of local referenda is indispensable for that.

ZN: Don’t you think there is a threat of going too far with referenda, for example, asking people about a desirable interest rate on bank loans or deposits? These are issues of national security. Is it sensible to seek local communities’ opinion on location of an NPP or a site for mine utilization?

I.А. — We do not propose to use the mechanism of local referenda on every occasion.

ZN: You do not but if people get this unrestricted opportunity, they will use it.

I.А. — Naturally, no one is totally insured against making wrong decisions but this mechanism allows the resolution of disputes in democratic countries. For example, Austria held a national referendum that decided against the production and use of nuclear power in its territory. Whether it is good or bad is a different question. We are building a democratic country and should be prepared to use its mechanisms.

ZN: The Party of Regions has all the necessary instruments to stop misappropriation of land in Kyiv, the Crimea and other attractive regions of Ukraine (we mean it is part of the ruling coalition and has its prime Minister in office) but it did nothing to stop these processes. On the contrary it took a lead in them at the local level. Ms Akimova, what future projects can we discuss with you?

I.А. — First, it is no secret that the influence of all parties, including the Party of Regions, has weakened since the snap elections became a probability. Normal political life has been paralyzed since spring. Second, you’d better address questions regarding our party leader directly to him. I will not shield anyone from deserved or undeserved criticism. As a novice to the current political processes, I see my function as developing the party’s constructive position. I think it is more important today than finding out who is guilty, of what and why.

ZN: A year or two will elapse and your party’s comprehensive strategy of future development will be useless – there will be nothing to develop.

I.А. — Do you suggest launching another re-privatization?

ZN — We suggest putting an end to the current lawlessness.

V.B. — I can help Ms Akimova to answer. You will remember a story of inter-party relations in the Kyiv City Council. You saw those shameful video reports of fights when some councilors protected Chernovetsky in the presidium, and the others were beaten up. Unfortunately, representatives of the Party of Regions took Chernovetsky’s side. I can tell you why they did so. At that very time, sessions of Kyiv City Council passed six to eight resolutions on land allocation for churches of Moscow patriarchy. Mr Omelyanenko, leader of the Party of Regions faction in the city council, took a most active part in the process.

Vasyl Horbal and his Kyivmiskbud-1 also obtained numerous land plots. So did Mr. Prognimak whose interests lie to Zhukov isle. Similar information is available on almost every member of the PR faction. The YTB members never voted with them for land allocation. We have always stood for land auctions, which local authorities reject while non-transparent schemes enable them to abuse power.

What does the municipal prosecution office do? We filed petitions to challenge every illegitimate decision on land allocation. The prosecutor office send a protest to the city administration but withdraws it is a couple of days for further investigation, which is never completed. It is a game that makes you feel desperate. Now we know that the prosecution authorities are also involved in land division schemes.

As for courts, a team of a hundred lawyers led by the daughter of Kivalov, infamous for his role in vote-rigging during the 2004 presidential elections, represent Kyiv Mayor’s interests there. It is an octopus that has coiled around and controls all judicial processes. Outright corruption in the system of state power bodies, local self-government, prosecution authorities and courts is one of the key reasons of chaos in land relations.

What shall we do with it all? Re-privatization could be a solution but bona fide developers should not suffer. They were forced to pay enormous bribes to those people in order to obtain land and start the construction. So we have to think of other effective methods, first of all, of combating corruption.

ZN: How can this be stopped?

V.B. — Moratorium should be imposed on land allocation in the capital city until the land issue is regulated at the legislative level. That is why we discuss the general plan and transparent land allocation for specific projects complying with the general plan. Yet excessive profits in construction business drive corruption: the city authorities issue land use permits to businessmen for kickbacks, and the latter, having invested USD 7 million into the construction of houses in Pechersk, make USD 70 million. Farsighted authorities would construct houses in Pechersk themselves, earn USD 70 million and invest this money into ten projects of social housing. Yet this is a mode of operation of a different city administration, in a different city and at a different time.

ZN: We understand that YTB faction in Kyiv City Council has the strongest public position. How is your political force going to promote it, given that your election list includes such recognized large landowners as Bohdan Hubsky and Kostiantyn Zhevago? They are known to have their own lobbyists in councils at all levels.

V.B. — I cannot say anything about Hubsky as I do not know if he is a large landowner. We have not been colleagues long enough for that: “Reforms and Order” Party has joint YTB in the spring. However, it is true that any large landowner, irrespective of their name or party allegiance, is interested in using land without paying for it. Therefore our political force insists on making people masters of their land as soon as possible provided, of course, that the necessary laws we discussed before are passed and enforced.

ZN: What about the land tax? How much will the would-be landowners have to pay?

I.А. — In many developed countries, land tax is not a vital source of local budget revenues. Moreover, our neighbours even face a challenge of evaluating land and tied constructions for tax purposes.

In this regard, one can observe several new trends in Europe. First, the majority of the population is exempt from the land tax – it is levied only from the upper-middle class and the wealthiest people. So the share of those subject to property tax is well under 50%. Second, the tax rate is not high.

ZN: What might Ukraine be faced with if the land tax would be established quickly and without giving it a good consideration?

I.A. – First of all, Ukraine might be faced with problems with appraising the land and apartments. Secondly, with strong social tension in case the tax rate is determined according to the market evaluations. Most of the citizens wouldn’t be able to pay this tax. A question about changing the property’s profile might also arise. That’s why we should resolve such matters with special prudence.

It is necessary to establish a tax on land and property. But it is too early to talk about this tax until an actual land market is developed and the mechanisms of land appraisals are clearly defined.

V.B. – I have another question to the Party of Regions’ representative. Not so long ago the Cabinet of Ministers (Resolution of the Cabinet of Ministers # 1/045 from August 1 2006) decided that the landowners are free to manage with green plantations on their plots to their own discretion. And during one night thirty two140-year old oaks and two pines have been cut down in one of the Kyiv districts. Is it lawful? Is it the way the Party of Regions solves the problem of developing the green zones?

ZN: And what can you say about the liquidation of the institute that should define the boundaries and compose the lists of historical monuments? On the one hand, we see that the President is revoking his decree on limiting the development of city center’s historical zones. On the other hand, Mr. Yatsuba is destroying the only in Ukraine institute that has a license to carry out this kind of protective activity, and Mr. Yanukovych allows cutting down the trees. The land has become a politically-capitalistic instrument that (along with public procurement sphere) unifies the businesses of all colors.

I.A. – I would like to talk about the resolution of the Cabinet of Ministers. This is a question of land zoning. This is a question about giving or not giving a permission to undertake some particular actions in one or another zone. For instance, according to the Australian laws, the landowner has the right to cut down green plantations with industrial purposes but under the condition of their future recovering.

That’s why it is necessary to define a distinct procedure that would allow or not allow this to occur in particular territory. In my opinion, it is possible to include this procedure in Ukrainian land legislature.

ZN: There should be a centralized power in the country for that. Your have mentioned a lot of international examples. If we try to put aside the central power then we see that all political forces have had opportunities to solve many land questions at the local levels: the Party of Regions – in the Eastern and Southern regions of the country, and BYuT and OU – in the Western region. Can you give an example of town or village where the land question has been solved wisely, through transparent procedure, without corruption and according to the local community’s interests?

I.A. – I think that there are such examples. However, none of the political forces can honestly say that they don’t have any problems in their parties. The top question today is what program are we preparing for the future? Yes, we should consider the mistakes from the past but we should look into the future. The matter I have been talking about is a trend for the future rather than attempt to justify somebody…

ZN: So, are you intending to change your party?

I.A. – I am a rational person and understand that the party consists of individuals with their own opinions. I have always supported and will support market economy. Shall I be able to prove my points of view to my colleagues? I don’t build castles in the air regarding this matter as I think that one person is not able to change everything. But my stance today is to bring openness and transparency into politics.

ZN: This is a problem: they delegate people that speak for openness and transparency in one voice. However we can’t be sure that exactly these people would form the politics of their parties in the future. The only thing we can do is to hope that the land businessmen which would gather at the other roundtable wouldn’t develop Ukrainian lands in their own way...

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The land matters in Ukraine are regulated by 34 laws (including the Land Code), 40 laws from adjacent spheres and a number of other bills.

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Almost one third of the world’s black earth resources and one fourth of European farm lands are concentrated in Ukraine. Altogether, 20% of Ukrainian farm lands is degraded and underproductive.

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According to the State Agency for Land Resources, the average cost of Ukrainian agricultural land is around 12 thousand Hryvna per hectare.

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• The land certificates have been received by 6.8 million citizens or by 98.68% of those that have the right to that. The average size of a single plot is around 4 hectares. On the whole, it is 27.2 million hectares of agricultural land plots.

• According to the information from July 1 2007, 6.1 million citizens (89%) have received the state acts on the right to the land plot in exchange of their land certificates.

• The total value of the lands distributed by the state for free is around 210 billion Hryvna.

• In 2007 61% of those that have the right to the land plots have concluded 2.3 million treaties on land plots’ leasing.

• The average level of a land rent is 137.3 Hryvna for the hectare per year.

• According to the treaties concluded in 2007, the total sum of the land rent payments is 2.3 billion Hryvna.

• 77.5% of the land rent payments are payment in kind.

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According to the State Agency for Land Resources, the state and local budgets have received 3.85 billion Hryvna from none-agricultural lands’ sales. Nevertheless, the total number of leased and sold land plots is much bigger than the number of land plots sold through the auctions. This might be the evidence of the abuse of power on the local level.

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Total land fund of Ukraine is 60.35 million hectares. According to the information from July 1 2007, 7.4 million hectares (12%) of the total land fund are the lands of cities, towns and villages.

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29.8 million hectares of Ukrainian state and municipal land funds are to be distributed. The estimated cost of works on that project is around 500 million Hryvna. On the present moment, local self-government bodies of power and executive bodies of power have passed 751 decisions on distribution of 2.7 million hectares of land funds and have ordered 332 projects on state and municipal land distribution.

The law on land distribution is practically forceless today. According to this law, land distribution should be conducted by local self-governments which don’t have enough funds for that. Besides, local councils are not interested in it because part of their lands would go to the state land fund after the process of land distribution is finished and they would have to deal with municipal land only.