The Great Asian Land Grab

How a World Bank program helped displace tens of thousands of urban poor.

MAY 13, 2011
BY MIKE ECKEL
Foreign Policy

PHNOM PENH, Cambodia-The murky waters of Phnom Penh's largest lake were once visible out the back window of Cham Pothisak's tin-roof-and-plywood shack. Today, a manmade sand dune taller than the home itself menaces like an ocean wave, filling up his crawlspace basement with putrid water and his family's life with clouds of mosquitos.

It's squalid shelter at best, but in Cambodia, where 80 percent of the population depends on agriculture, logging, or fishing for their survival, land is wealth, and Cham said he has documents proving ownership to the 60-square-meter plot he bought 11 years ago. But now, along with thousands of others, he faces eviction in what may be the largest forced relocation of Cambodians since 1975, when the Khmer Rouge emptied virtually the entire capital. This time once again, it's the arbitrary power of the state at work: The government turned over some of Phnom Penh's priciest real estate, including Cham's land, to a close associate of Prime Minister Hun Sen. Developers are already moving in, pouring sand into Boeung Kak lake to fill it up, flood out shantytown homes, and prepare the site for construction. "It's like they're coming to kill us. They're taking our lives," Cham said. "We're angry but we can't do anything against them. It's like the Khmer Rouge all over again. We're helpless."

It wasn't supposed to be this way. About a decade ago, the World Bank began a program to codify property rights, with the goal of building system akin to what landowners enjoy in the West. The program was meant to make sure that people like Cham could defend their property from arbitrary expropriation. But the initiative has backfired. Instead of helping landowners, it has in many cases actually contributed to their displacement, forcing out residents who may well have had legitimate, longstanding claims to their lands and homes.

Cham's predicament is emblematic of the difficulties of bringing property rights to the developing world. Many development advocates, including at the World Bank and elsewhere, argue that property rights are a vital component of economic growth; they allow landowners to take loans, mortgage their assets, and plan economically for the future without fear of being kicked off their plot. But getting to that point is often messy in regions where overlapping claims are difficult to prove, the laws of the land are rarely enforced, and the wealthy and powerful are easily able to corrupt the system. Usually it's the poor who pay the price.

Cambodians have it worse than most, however, due mainly to the Khmer Rouge, the ultra-Marxist regime led by Pol Pot, one of the 20th century's most notorious tyrants. The Khmer Rouge, whose four years of misguided communist dogma and stunning brutality in 1970s formed the plot of The Killing Fields, outlawed private property and destroyed land records as they sought to create an agricultural utopia. Millions were uprooted from villages and cities, marched into the countryside and forced to build canals, plant rice, cultivate fields, and otherwise help create the Khmer Rouge's vision of a classless society. As many as 2 million perished from executions, starvation, disease or the violence spilling over from the war in neighboring Vietnam. In the aftermath, the thousands of Cambodians who had lost their land struggled to survive as refugees within their own country, squatting wherever they could.

The Khmer Rouge didn't last long; in 1979, Vietnam invaded the country and installed a puppet regime. But their dark legacy lives on, perhaps nowhere more than on the issue of land. The slow transition back to Cambodian rule eventually put power in the hands of Hun Sen, the current prime minister and a wily former Khmer Rouge military commander. Pushed by foreign lenders, including the Asian Development Bank, his government passed a law in 2001 laying the groundwork for a formal system of property titles or deeds to replace the ad-hoc mechanisms that had been built up over the years. The World Bank offered to help, setting up a $24 million Land Monitoring and Administration Program (LMAP) to build a system of hard paper titles and centralized registries. Germany, Canada and Finland also provided support for the effort.

Beginning in the early part of the decade, government surveyors began going house to house in 13 provinces nationwide, asking occupants to prove they owned the property. That proof could vary widely -- anything from a collection of bills to a family record book to transaction receipts that might include the fingerprints of buyer and seller. When the lands in question were marginal, far-flung, or otherwise undesirable, the system appeared to work; the World Bank says that more than 1 million titles were issued under LMAP. But when business interests were tied up with the land claims, for example, in prime areas for logging, sugar, rubber plantations, or real estate development, the system ran into trouble. Landowners whose traditional forms of documentation had been previously considered sufficient found they couldn't apply for titles. Others were left in the dark with little explanation about how the titling process was supposed to work. Then, after losing their claims, they had no avenue to appeal. Landowners who ended up being evicted often received minimal if any compensation, according to the Housing Rights Task Force, an alliance of Cambodian and foreign NGOs.

Land prices, meanwhile, have soared in Cambodia over the past decade. For the well-connected, and even for some members of the fledgling middle class, the boom has been sweet, yielding new capital and income. But it has also fueled what advocacy organizations describe as an epidemic of land-grabbing, with as many as 500,000 people arbitrarily kicked off their lands nationwide in recent years, squeezed into deeper poverty.

At Boeung Kak, where Cham lives, the land rights debacle has played out with particular dysfunction. This 330-acre bowl of sewage-filled water, trash-littered marshes, and muddy shorelines -- right in the middle of the crowded, chaotic capital -- was home to more than 20,000 people as of 2006. In May of that year, villagers and homeowners in the area were notified that the area was to be surveyed, the first step toward determining property rights, and government teams began interviewing landowners. Seven months later, however, Cambodian authorities began claiming the land, bit by bit, as the state's own.

In February 2007, the government granted development rights to a local company called Shukaku Inc., which is reportedly led by Lao Meng Khin, a senator close to Hun Sen. Shukaku wanted to build luxury villas, hotels and high-rent office space; the government offered a 99-year lease for $79 million. Then, in 2008, authorities proclaimed the land was "State Public," under Cambodian law, rendering all the current residents illegal squatters. By August, developers had started pumping sand into the lake. Homes flooded, sometimes overnight, and thousands of residents were forced to pick up and leave. They were offered government compensation, around $9,000 per household, as well as replacement apartments -- either far from the city in poor provinces, where work is harder to come by, or in temporary housing in the city with an open-ended promise for more permanent housing someday. If this didn't convince residents to leave, they faced a different form of persuasion: men, some carrying weapons, began going house-to-house "inviting" owners for one-on-one talks to convince them to give up their land, village residents say. Some carried signs saying "You Must Sell," according to residents.

The World Bank and many foreign embassies publicly called for a halt to all evictions in 2009, and shortly afterward, the government pulled out of LMAP, citing what Hun Sen complained were the bank's "complicated conditions." By December 2010, the government said that more than 2,000 families had agreed to move; their homes are being gradually demolished. Much of the lake has been filled in, and the lake's ecology all but destroyed. About 10,000 people are still fighting the evictions. They argue that the compensation on offer is far below the $3,000 per square meter rate they estimate land is selling for in central Phnom Penh. Tep Vanny, an activist who faces eviction from her own house on the lake's east side, says, "It's a way to keep the people poor, and for them to stay in power."

The government's actions appear riddled with inconsistency and dubious legal rationales. For example, the June 2008 announcement that the lake region was classified as "State Public Land" was never recorded in the national land registry, and the declaration offered landowners no redress, according to the World Bank's own internal inspection report. The 2001 property law also forbids leasing public land to private companies for longer than 15 years -- and even then, the companies are not allowed to make major changes to the plot. This, activists argue, explains why the government abruptly re-classified the lake as "State Private Land," instead of "State Public Land," in August 2008 -- a key distinction. "It does seem that the government changes the rules to fit its narrative," Bret Thiele, of the Centre on Housing Rights and Evictions, wrote in an email.

Neither Shukaku officials nor Lao Meng Khin responded to written requests for interviews. National and city government officials, including the Phnom Penh governor, officials at the land ministry, and the government's chief spokesman, also either refused to answer receive numerous phone calls or refused to answer any questions about Boeung Kak or the standoff with the World Bank. In a statement released March 24, the city government accused Boeung Kak residents of being "illegal land grabbers."

It's no surprise to see the government of Cambodia behaving badly; the country ranked 154th on Transparency International's most recent Corruptions Perceptions Index. It's the World Bank's role that is perhaps most troubling. Before the government abruptly pulled out of LMAP in 2009, more than 1.2 million titles were issued, which the World Bank argues is a strong measure of the program's success. The bank has also claimed that more titles and strong property rights result in better and more productive farming. But in the report compiled by the bank's inspection panel, dated Nov. 23, 2010, and released in March, inspectors said the program was flawed in its design, violated bank social and environmental policies and safeguards, and may have actually made it easier to evict land owners. The report said that despite problems noted as early as 2006, the bank's Cambodian management team didn't take complaints seriously until 2009. Even worse, a 2006 report commissioned by the German government's aid agency, GTZ -- which worked closely with both the bank and Cambodian land ministry officials -- warned that LMAP was having an adverse effect and predicted some of the very problems that played out in Boeung Kak, according to a consultant with first-hand knowledge of the report.

On March 8, the day the bank's inspection panel report was released, World Bank President Robert Zoellick publicly criticized the Cambodian government for its disrespect for property rights and demanded it stop forced evictions. The bank's Cambodia management team, meanwhile, in an addendum to the report, gave the government an ultimatum, threatening to "(review) all current and proposed support" if it does not cooperate. Currently, the bank has $343 million of funding for 16 ongoing projects. The bank set a 60-day deadline, expiring May 8, for the government to respond to its demands. It has since extended that deadline until Monday, May 16.

Remaining land owners and activists are now holding out for the government to set aside a 15-hectare plot at the lake so they can build replacement houses there, plus possibly more compensation, a position endorsed by the bank. Government officials have so far refused the demand, and protests by residents were broken up violently by riot police on April 21. As of Thursday, May 12, according to Tep Vanny, there has been no movement by the government toward an agreement.

Ironically, the aim of bringing some measure of a transparent, predictable land tenure to Cambodia ended up contributing to thousands being kicked out of their homes. The result is that many Cambodians end up feeling even less secure in their land rights than they ever did before.

For aid agencies and institutions intent on finding ways to reduce poverty, the lessons are as numerous and nettlesome. Giving a farmer or a fisherman or tailor or a shop clerk a piece of paper that proves they own the land they live and work seems like such a simple concept. But that piece of paper is only as good as the system of rules and laws that recognize its value. In a country like Cambodia, where rules and laws are often seen more as a nuisance than a code of common principles, that piece of paper can end up doing exactly the opposite of what it was supposed to do. And like always, the rich get richer, and the poor get poorer: It's only the way it happens that is any different.