Evidence of Economic and Social Gains
The Property and Business Formalization Program is expected to make a major positive impact in the country’s economy. Evidence from other countries where a similar program has been implemented from one point to major economic gains and improvement of welfare of the poor. For instance;
- With an investment of USD 18.2 million in the Property and Business Formalization in Peru in between 1982 and 1996, the poor obtained USD 9.4 billion in net benefit between 1996 and 2002, which is equivalent to an annual rate of return of 173%.
- The results of the 1946 reforms in Japan designed to provide poor citizens with property, far exceed even the most optimistic projections. Within four years, approximately 50% of land was formalized, and by 1952 (6 years later), farmers income had increased by 80%
- In Taiwan, newly titled rice farms increased their production by 60% between 1953 and 1963 while the income of their owners increased by 150%.
- In South Vietnam, where between 1993 and 1998 the government granted rights of 20 and 50 years for annual and multi – annual harvests, respectively, annual production increased by 2.3% where farmers had these rights, and the overall percentage of the population below the poverty line decreased dramatically from 58% to 37%.
- In China, property formalization carried out between 1980 and 1990 helped to increase the gross agricultural output by 86%. This extraordinary success does not include the benefits of technical reforms such as the green revolution.
- A recent three – year survey of a commune in the Ukraine has shown that 3 million members who were given title to their land earned an income 81% higher than that received by the 3.7 million people in the commune who were not titled.
- In Russia, only 5% of the agricultural land has been tilted in favor of the holder over the same period. Yet today, this same 5% produces 50% of Russia’s agricultural output while the remaining 95% Of The untitled Land Produces the Other 50%
Expected Benefits for Tanzania
In Tanzania, the following benefits are expected from implementation of the Program
- Improved business environment
- Increased legal ownership of property and access to capital by property owners.
- Expansion of the legal economic sector by reducing the size of the extralegal sector through empowerment of its stakeholders to use their assets to accumulate capital and participate fully in the expanded formal market economy, both locally and internationally.
- Increase income for the Government from the new tax payers.
- Economic growth and reduced individual household poverty through participation of a large number of citizens in the formal sector of the economy
- Good governance through provision of reliable information about market behavior, property status and the extent of the rule of law.