July 25, 2016 Print

The right to own property is one of the foundational principles of modern democracy and society, but more than 90 percent of the land in Egypt today is owned by the government — and the lack of options for private land registration has pushed more than 60 percent of the Egyptian economy into informal markets and slums. A recent study by Cairo-based Atlas Network partner the Egyptian Center for Public Policy Studies (ECPPS) examines the extent of the problem and lays out an agenda for transparency and reform (link in Arabic).

“The legislative framework is one of the main problems that limit individuals’ ownership of land, due to the immense authorities it assigns to the Ministry of Defense in managing desert land affairs,” an English translation of the ECPPS study brief explains. “There are 70 laws and executive orders governing the exploitation of desert land in the republic.”

The land ownership process in Egypt lacks the transparency, clarity, and due process necessary for a functional market economy, the study reports. For instance, if somebody wants to register property ownership, there are “eighteen separate government entities responsible for the completion of seventy-seven procedures.” Even if those are all successfully completed, the full registration period must last “no less than six years and up to fifteen years.” The complexity of property registration and the laws governing it inhibits both the ability and desire of ordinary citizens to register property at all.

Even after land is successfully registered, the Ministry of Defense has broad and insufficiently clear powers related to land access, including “the authority to disarm the ownership of desert lands and real estate built on it or temporarily seize them for necessary security affairs and the safety of antiquities.” The minister in charge of land reclamation also has the power to “specify land areas included in the land reclamation plan and regions available for urban development, in cooperation with the ministry of defense, in addition to banning the use of these areas from being exploited for other purposes than the specified one” — making it difficult land owners to respond to changing market conditions.

ECPPS has developed several recommendations for reform, calling for the government to foster transparency by developing “a map of the planning of new desert lands and make it available to the public,” as well as “specifying areas dedicated to agriculture, manufacturing and other activities where the price of land shall be equal to cost of provided services.” The Egyptian government can also foster transparency by “automating property registration reform and reconsidering its legislative framework to make it easier for citizens to own lands with affordable prices.”

The ECPPS study and subsequent work on land access reform has received significant media attention within Egypt, including coverage on the CBC Extra television channel, as well as being featured in Bloomberg News article.

“Mahmoud Farouk, executive director of the Egyptian Center for Public Policy Studies, said the state still largely ‘cripples the market for no good reason,’” Bloomberg News reported. “Although things have loosened up, ‘closing off supply when demand is growing raises prices’ and encourages unlicensed and illegal construction, he said in an interview in Cairo.”

A lack of clearly defined and easily accessed property rights are a problem not only in Egypt, but also in economies throughout the world, Peruvian economist Hernando de Soto has explained in his best-selling book The Mystery of Capital and numerous subsequent commentaries.