The paper looks at concepts of land management and suggests a working definition for the purposes of this paper that is consonant with the responsibilities of Commission 7, Cadastre and Land Management, of the International Federation of Surveyors. The paper takes as read the significance of land and property in a national and an individual context, both in established market economies and in the former socialist command economies.

The framework for land management is viewed in the pragmatic context of the requirement in transitional economies for the development of an appropriate market economy oriented infrastructure for land to be optimally managed, whether rural, urban or for that matter, marine.

These issues are considered in the context of the transition of the countries of Central and Eastern Europe and the Commonwealth of Independent States from centrally planned to market economies. In conclusion, the paper looks at the contributions that Commission 7 can make in this area of its responsibilities.

 Concept and working definition of land management

 It is not intended to deal with definitions and demarcation at any length. The potential breadth of land management, however, is such that, if only for the purposes of this paper and in the best cadastral traditions, the most basic necessary information on the "parcel" under consideration should be defined, together with a sufficient indication of the parcel’s general boundaries.

 Land management, as an area of concern, has no generally accepted international definition, other than that it relates to the management of the land. A definition in its own terms does not, however, move us much farther forward. In the broadest sense, in which land is taken to include land covered by water and sea, land management can be seen as virtually all-encompassing.

 The Commission 7 paper on developing a framework to study the linkages between the environment and rural land management put forward in the FIG Melbourne Congress in 1994 by Sue Nichols included the following interpretations as reflecting the perspective of the Commission at that time:

"Land: any portion of the earth over which rights of ownership, stewardship, or use may be exercised, including: the earth’s surface, water covered lands, water and mineral resources, as well as features and resources attached to the earth whether they be natural or artificial. (Barlowe, 1986)

"Management: the process of making decisions about the allocation and use of resources to meet defined goals and objectives."

The paper went on to reflect the specific concern of the Commission at that time with rural land management. The Commission’s terms of reference were broadened following the 1994 Congress to include land management in general. This reflected the situation that many, probably most, land management issues do not distinguish significantly urban, rural or other boundaries.

 Commission 7’s responsibilities therefore have included, since 1994, all of those issues relating to:

 frameworks, or infrastructure for land management, and those issues of policy and provision generally legislated, instituted, or otherwise provided for by government and the public sector of one kind or another

implementation, or execution of land management, whether the land in question is held in the private sector or the public sector.

The two, of course, are, or should be, closely related in a circular fashion, with analysis of public and private sector experience of the framework being built into modifications of that framework to allow the specific objectives of land management at the national level to be realised.

 For the purposes of this paper, the particular/primary concern is how a framework for land management may be expected to look, and particularly at how the respecification process is likely to be identified in the transition from a centrally planned to a market economy.

 Significance of land management

 If there is general agreement, it is that land, on the basis of Barlowe’s definition, is of great significance in political, social, economic and environmental terms, at all levels ranging from the individual up to the global. What is true for land must be true for its effective management.

 There is no need to repeat or respecify these views in detail here. They apply in different ways both to socialist, centrally planned economies and to democratic, market economies, notwithstanding their divergent philosophies.

 The long-standing socialist perspective, with all of its social, political and economic implications, was reiterated in an article in The Moscow Times of 14 July 1995 (Bershidsky, 1995):

`"Land cannot be bought and sold." said Victor Shevelukha of the Communist Party. "None of us created it, so it does not belong to you or me."`

`"It is individual owners and families, caring for their land and its future, who will manage land most effectively." (Hugonin). The argument is that as it is their land individual owners will obviously care for it, look after it, far better than people who are simply paid to do so."`

 The challenge in transition from the former to the latter, is in identifying and providing the framework or infrastructure that is needed to cope with the new management criteria created and developed out of the market-driven economy.

 Frameworks for land management: privatization and the establishment of markets

 Under a centrally planned regime production expectations are determined according to technical capability and centrally planned requirements; inputs, credits, raw materials and such like, being farmed out in accordance with calculated guidelines/norms/coefficients. This is in essence a complex, but conceptually quite straightforward, mathematical exercise; at least once the planners are in possession of all of the necessary detailed information affecting production capacity. The incentive under such a decision making process is for professionals to produce ever more detailed information to refine the accuracy of the input information, as there is no obvious criterion for making a judgement about whether such additional refinements are economically efficient. The requirement rather was whether the development of such an information base was technically possible and could be afforded, the latter decision relating more to global requirements rather than to the financial criteria

 relevant to the individual case in point. The result has been that raw information bases, cadastres and soil classifications for example, have developed to a far more detailed degree in centrally planned economies than under a market-based decision making system.

 This contrasts markedly with the situation under a market economic framework where the onus is far more on the owners and those responsible for the management of resources to decide on what information is necessary and worth paying for in order to reach a satisfactory decision.

 This difference between centrally planned and market economy attitudes to information invariably results in a very interesting set of tensions in this area; the idealism of decision-making in an information-saturated environment meets with the pragmatism of decision-making in an information-sufficient environment. Pragmatism will carry the day in a market economic context, leading to a very sharp rationalization of the data collected for cadastres.

 The processes involved in land privatisation may be politically difficult, are often far lengthier than originally expected and are invariably professionally challenging from a broad surveying perspective. This is the case whether the absolute title (freehold or equivalent) is being privatized, or a state leasehold system of long leases (typically 49 years or more) is being created. Approaches in this context continue to be under review as elections result in policy reviews but, typically, the former approach is found in much of Central and Eastern Europe; the latter in the member countries of the Commonwealth of Independent States. Privatization by restitution is the process of restoring land to previous owners or their successors in title. It is a common approach with both rural and urban land in Central and Eastern Europe. The other approach to privatization arises where there is no intention to restore previous ownership. There are variants to this approach which are commonly found in areas where the state’s ownership of land has lasted for several generations. In these areas, for example, in much of the Former Soviet Union (with the notable exception of the Baltic States), records of prior ownership are insufficiently documented and, in any case, restitution of the old ownership patterns would be politically unacceptable. The variants include physical division of land and property holdings, with allocation either on the basis of given criteria, or through forms of auction, tender or looting. In several countries beneficiaries are compensated through a voucher system giving the recipient freedom to use the voucher in auctions or tenders.

 The result of the privatization process, whichever route or routes are followed, is to create a radically new land tenure pattern. A relatively small number of owning units is replaced by many; or, if a state leasehold approach is adopted, a vast leasehold management system needs to created. The potential orders of magnitude involved are illustrated in the agriculture sector by Romania. By 1962, after a period of enforced co-operativisation, 9.3mn ha of agricultural land was farmed under 4,500 agricultural production co-operatives. By 1989 the area of land under the co-operatives was approximately 10 mn ha. Under the restitution law, Law 18/91, there are slightly less

 than 5 mn claimants of this land with an estimated 20 mn land parcels to be dealt with. The enormously challenging processes that result, in the first instance, of registering claims, adjudication, division, survey and recording, are areas where the measurement

skills of surveyors have had a very strong involvement and the transitional economies are no exception. The new parcels and their ownership need to be properly documented as the basis for an effective system of recording of ownership, an important prerequisite for an effectively functioning market.

 In those countries where the shift is towards a state leasehold system similar processes are likely to be followed for the division and demarcation of parcels. The state’s continuing legal interest then has to be protected by effective management of the newly created leases. This is likely to prove a far more expensive option, in direct costs and in broader economic terms, than privatization of absolute (freehold equivalent) title in the first instance. The political decision (whether as an expediency or ideal) to create state leasehold systems may well be reviewed when the extent of these costs and the lack of benefits become apparent.

The development of properly functioning land markets, whether in urban or rural areas, is vital in these economies. The development of the market economy processes of buying, selling, leasing and mortgaging of the land will result in the rearrangement and amalgamation of land holdings in more efficient hands as the land market develops. Property ownership and the development of the land market will encourage individuals and groups to base their management decisions upon market criteria of relative value and relative costs and returns. Hand in hand with these should be the development of appropriate access to credit through a commercial banking system.

 In urban areas residential accommodation may have been restituted to the original owners. Alternatively, as is often the case where the state constructed blocks of flats or where restitution is not deemed an appropriate policy, occupiers have been given the right to buy and have bought. Functioning residential property markets, whether for rental or purchase, facilitate the mobility of the population. This mobility is essential given the rapid changes in the economies of the countries concerned.

 Commercial properties for office and retail uses, and industrial properties are also being restituted or privatized. These processes are often more time consuming in the commercial and industrial sectors of the property market because of the short term political implications for communities than is the case for residential property, particularly as far as privatization is concerned. The Moscow Tribune of 17 November 1995 carried a report on the problems faced by Rybnisk Motors in northern Russia (Charlton, 1995). Rybnisk, Russia’s largest air-engine producer, has worked at 25% capacity for months and, according to the article, its engines do not meet current safety standards.

"Supporters of the rapid changeover to free markets want the government to stop propping up Rybnisk and other old state industries. Their opponents say the human costs of privatization are too high....

"At stake at Rybnisk Motors are Russia’s military and civilian aircraft industry, thousands of jobs, and a city of 100,000 people relying on the factory to pay for its schools, hospitals and other social services."

In several of the transitional economies agriculture is, however, expected to be in a better position to lead the way in the stabilization and recovery of GDP than industry and services. Restitution and division of agricultural holdings often extending over thousands of hectares in such countries may well have created uncertainty of ownership and a land tenure pattern of very small, often dispersed, parcels. In such countries the development of a functioning land market, whether through sale and purchase, letting or other means, has a particularly important rationalisation role to play during transition as a part of a successful land and agrarian reform.

 The requirements for the successful privatization of land and property and the creation of a market in these assets include:

title to all parcels of land should be soundly based in law within adequately defined boundaries and should be properly recorded, whether dealing with absolute (freehold equivalent) title or state leasehold

transactions in land should be recorded in such a way that legal title and other significant legal interests can be subsequently proven with reasonable speed and at reasonable cost

access to capital finance based upon an effective mortgage system should be available through a commercial banking system

access to insurance should be available through commercial insurers

statute and other law should not impose undue statutory or fiscal constraints on transactions, whether sale/purchase, leasing or otherwise

statute and other law should provide reasonable certainty in the use rights and potential use rights conferred by ownership of land

expertise should be available to advise on legal, valuation and other issues affecting the land

It is important, also, that there should be a reasonable degree of consistency in national policies in this area. The ownership of land and property is effectively an investment decision; investment is based upon knowledge and confidence.

 Frameworks for land management: public and private sector management requirements

The process of transition has important implications for the management of land and property. One of the underpinning beliefs of the socialist regimes was that land itself could not have a value ascribed to it for the purposes of exchange. There is some uncertainty at the time of writing this paper how land and property will be viewed in some of the transitional economies. Critically, however, there does not seem any general movement by the transitional economies away from a market approach to the management of the economy. In a market economy land, of course, has a value and it is treated and accounted for as a valuable asset, whether it is owned or leased, whether by private individuals, companies, or the state in one form or another. Land, whether as a state, or a private, or a legally shared resource, has to be used efficiently. Rather than relying upon more and more (expensive) information to manage a centrally planned economy, these new market economies will increasingly show that management depends upon understanding markets and how they work. This replaces the concept of science and a total information environment with one of judgement and an adequate information environment.

 The pre-transition situation of effective land ownership by the state, by definition, was one where there was no incentive for efficient use of the land resource in market economy terms; no real necessity perceived for observing and developing legal precision in the transaction (between largely state organizations) and administration of land. In many of the transitional countries there remain very large amounts of land and property presumptively owned by the state. In the process of transition this has presented and continues to present a considerable challenge in resolving where ownership of properties lies, whether through the process of restitution, of clearing title prior to privatization, or of proving where ownership and responsibility lies between the various levels of government and the various agencies of government.

 Moving more specifically to the issues of land and property management, it is difficult to predict future levels of public land ownership, not least because of uncertainties at the political level in some countries. Even where there is certainty in policy, state and quasi-state owners are in the process of trying to resolve this issue, with ministries and other agencies responsible for finance, military, transport, education, environment, forests, privatization, municipalities and the utilities assessing their land needs and responsibilities and trying to identify their existing ownership. Likely scales of remaining public ownership are expected to be considerable, although actual levels may not yet have been resolved as ownership has not yet been proven. Some of these land rights will be anything but straightforward to document and manage. The power utilities, for example, have particularly complex problems relating to ownership of their main distribution networks. The issue of how to deal with way leaves and easements following the restitution of farming lands in some countries into millions of distinct parcels is one aspect. The power utilities may also be major land owners in their own right, with power stations, transformation stations, rest houses, a wide network of administrative buildings, residential flats and mining complexes.

 The nature of the problems of the public sector landowners can be looked at generically. The problems connected with privatization and restitution are expected to continue to be a major issue. Once these problems are resolved, the stewardship and management of the land and property assets of these agencies in the context of a market economy will need to be faced in order to ensure the most efficient use of what is one of the most significant economic assets in the transitional economies. This requires a sound understanding of the principles and application of law, economics, valuation and management relating to land and property; areas of study that in some cases have been almost completely lacking in the transitional economies. As emphasized, these problems will be as much the case in a system where absolute ownership of the land is privatized as where a state leasehold system is instituted. The latter, where it is adopted, will impose a considerably greater burden on the public sector land management requirement.

 Quite apart from the issues of state ownership and management of resources, the state's responsibilities extend to the definition and implementation of the policy framework in relation to land and buildings. Issues relating to privatization, taxation of real property, compulsory acquisition and compensation for public schemes, the treatment of property assets in company accounts and so on all require to be dealt with in this context. The development of an appropriate framework poses complex problems resulting from the reorientation of land management during transition. The "axis" in land matters during socialist times emphasized the horizontal in orientation; the land was considered typically as a separate entity from the buildings. This had, and still has, implications for administrative organizations in the transitional economies and, for example, for taxation policies, which follow this trend. In most market economies this axis is tilted through ninety degrees, emphasizing the vertical. Particular emphasis in market economies is placed upon land parcels, with the buildings attaching to, and considered as a part of the land. With this reorientation comes an important change in emphasis on legal precision. Allocation of resources is a critical issue under a market economy and the ownership of resources and of rights is valuable. As a result laws and legal development are typically very closely defined, from the definitions sections in legislation to contesting specific meanings of specific terms in the courts.

 The private sector situation in any given country is in some respects the obverse of the public sector, since as far as privatization is concerned, the land and property is in many cases being transferred from public to private ownership. Once in private ownership the land and buildings will need to be managed to fulfil the requirements of the owners, be they individuals, corporate or other legal entities. This will require a similar background of knowledge to that identified under the public sector.

 Frameworks for land management: the professional skills requirements

 The knowledge and skills required to enable land and property to be successfully valued and managed are those that equip the appointed professional to make or advise upon the choices open to the owner, whether in the public or private sectors; choices that are an inherent function of a market economy. The adviser needs to be able to offer advice from a position of knowledge, having considered the appropriate alternatives and evaluated their relative merits. The adviser must be able to present the advice clearly, concisely and competently.

 The knowledge base therefore comprises the legal system and the law governing relationships between parties and all aspects of land and property ownership (including privatization procedures and proofs of ownership, transfers, other legal interests, mortgaging and use). It requires an understanding of the economics of markets and market economies and of the principles and practice of all types of property valuation

in the respective country. In addition the understanding of the integrative framework for land and property management, including aspects as diverse as building construction and the environment, must be developed to piece together the constituent knowledge base. This requires an understanding of the principles of management, together with a knowledge of why and how governments develop legislative, fiscal and functional frameworks in their efforts to achieve national land policies, and of why and how land and property assets can be effectively managed within such frameworks in order to achieve the aims of the owners. The skills required of the land and property valuator and manager include critical skills of analysis, report writing and presentation, and computer use.

This theoretical view of requirements is not, of itself, enough. The practicalities of the property market and of land management need to be experienced in transitional economies as much as they do in the market economies in order to develop the necessary practical skills. The situation in transitional economies is considerably complicated in practice by the problem of access to information. This is a general point, but it is also of specific importance as far as valuation is concerned. The availability of information on transactions is far more limited than would normally be the case for two reasons. Firstly, the shortage of transactions and the novelty of the market place a high commercial value on real market experience. Secondly, the taxation system very often discourages the disclosure of actual sales values. Such sales are often very heavily taxed nominally but, on the other hand, tax collection is very weak. The result is that normative values are used, often for example, historic depreciated replacement cost of the buildings are declared for sales of buildings.

 Frameworks for land management: the development of the required skills

 Having looked at how land and property markets are developing in the transitional economies of Central and Eastern Europe and the Commonwealth of Independent States and at the nature of the requirements that will have to be met, the experience of development of the required skills can be reviewed in selected countries.

 Valuation is the function required for the assessment of the money value of a property under certain circumstances. The valuation may be carried out for any of a number of purposes. These include those defined by statute (privatization, taxation, compensation, accounts, etc.), and those for other purposes (sale/purchase, renting, mortgage, insurance, development, division on inheritance/divorce). Valuations form an essential element in general land management decision-making. It is normal for those requiring valuation/appraisals of these kinds in market economies to require that the valuer has an appropriate qualification, usually an appropriate first or second degree with a period of supervised professional experience leading to membership of an appropriate professional association.

It is common in the established market economy countries of the West to have a government valuation service to provide capacity for the various statutory valuation requirements noted earlier. In principle such work can be undertaken by the private sector and this, broadly speaking, is the approach adopted in the privatization process in several transitional economies. For sale and purchase, leasing and other related valuations reliance is placed upon private sector valuation capabilities.

 There is no background in the formerly socialist countries in these areas of valuation and land management, either in academic or professional terms. There is, however, a great demand for valuation services, initially for privatization purposes. This demand has been met in several countries by short courses. These are often of as little as three to five days, attendance at which has led in cases such as Bulgaria to licensing by the relevant Privatization Agency as a licensed valuer. There is a recognition that these courses are only adequate as a stop-gap measure and there are active moves to develop longer term courses and academic departments in this area. In the relatively advanced case of Poland, for example, it was noted as early as mid 1992:

"...there is keen interest in the property market and that the number of transactions is increasing, although the professional and information structure is rudimentary. This is still true. It is now clearly understood that property is valuable and that it is a scarce commodity and can be traded, but the infrastructure to do so is only emerging slowly.

"But there is progress. 2,000 people have passed through training courses in property valuation and this number is expected to double by the end of the year. With the great lack of trained lecturers, and the shortage of people with direct experience in the property market available to teach, many courses are of uneven quality." (Healey & Baker Research Services, 1992)

The trend has been for valuation courses to be offered initially by commercial organizations with bilateral and multilateral assistance. The university sectors of the transitional economies have been severely affected by the contraction in the national economies. The modern business orientation of valuation courses, however, makes them a commercially attractive venture for universities and astute faculties have recognized this and taken advantage of it. The courses are, as a result, in many cases progressively taken over by the universities, often with bilateral and/or multilateral assistance. The nature of the assistance develops into training of the trainers, with technical visits in each direction to develop long term capability in those areas where there are shortages of skills. The short courses become the basis for longer courses. These are often one year postgraduate courses and/or options introduced into the latter years of full time undergraduate courses. To date the emphasis has remained on property valuation and there has been only limited development of broader land and property management courses. This is, no doubt partly a function of the lack of appropriate available expertise, of the cost of mounting such courses and of the difficulty of packaging long term courses into a financially self-sufficient framework.

The need has, however, been established in several countries and such courses are under active consideration for funding.

 Frameworks for land management: the role of professional associations

 There are often two or more professional associations representing valuation interests in the transitional economies. In Bulgaria, for example, two main associations lay claim to valuation expertise, the Bulgarian Association of Business Appraisers, which is mainly concerned with the appraisal of whole businesses but which has a real estate appraisal section numbering a few hundred, and the National Association of Valuers of Real Estate, currently numbering around two hundred. In Romania there are also two main associations. The Romanian National Association of Valuers, like the Bulgarian Association of Business Appraisers, is mainly concerned with business appraisal but has a few hundred members registered in its real estate section. This association is open to graduates in relevant disciplines who complete a one week training course with a supervised case study. The Society of Technical Experts of Romania on the other hand has around 1,100 members in its land and construction specialities. The Society dates from the socialist era, and its main involvement is in court valuations on construction issues using legislated formulae rather than market valuations. By contrast with the Romanian National Association of Valuers it has a restrictive entry with the majority of members aged over 60 years and the youngest aged 43.

 The example of Poland indicates the way in which the role of professional associations might develop more generally. Poland introduced a national examination and licensing system for valuers in 1992 to replace the earlier regional ‘voivodeship lists’. By 1994 there were around 6,000 property valuers on these lists which were expected to be abolished in 1995 (information on whether this occurred in 1995 was not to hand at the time of writing this paper). In 1994 there were around 3,000 active valuers, of whom 1,000 had already passed the national licensing exams. The licence is only required for the central and local government work which is the most significant proportion of all valuation work in Poland. It is expected in Poland that the banks (security valuations) and privatized companies will become more significant employers of valuers’ services than central and local government as the economy expands, notwithstanding the government's intention to introduce a market value based local property tax. Some banks already require licensed valuers to undertake continuous professional development courses, an example being the Polish Development Bank. There has been tension between the valuers' professional federation in Poland and the Ministry of Physical Planning and Construction as the latter has controlled the valuation profession.

 Turning back to the introduction and the perception of quality as a function of a professional association; there have been, and are likely to be further, significant developments in the areas of quality and quality management identified as well as in the initial education requirements reviewed above. Standards of entry in educational terms are likely to become progressively demanding as appropriate courses develop. Although the professional associations have not yet had great input into course design, this is likely to come, and is already a feature in some of the Central and Eastern European countries. Continuing professional development requirements already exist in Poland and these are likely to spread elsewhere. Professional indemnity issues, for example, already form a part of the statutes of the Polish Federation of Valuers'

 Associations and of Federation of Hungarian Appraisers. There has also been recognition that professional ethics are an important issue to be dealt with when advising on land values. The first standing committee established by the National Association of Valuers of Real Property in Bulgaria, for example, was the Association’s Committee on Ethics. The Polish Federation's statutes also draw attention to the objective of the Federation to organize activities for the association regarding the formulation of principles of professional ethics and ensuring that those principles are respected."

The development of professional associations in the area of valuation and land management also has an important international dimension. Several bilateral initiatives have been important in promoting the development of these associations. These include a wide range of initiatives, from training courses through to provision of copies of relevant statutes. The United Kingdom, Germany and the USA have been particularly supportive. The UK’s Royal Institution of Chartered Surveyors, for example, has attempted to secure EU Phare funding for a link program to include a nominated association from each of Russia, Poland, Romania, Latvia, Lithuania, Bulgaria and the Czech Republic. It is understood that this initiative has now received support from Brussels but is still awaiting signature before implementation can start. Multilateral initiatives have also been forthcoming through the International Federation of Surveyors (FIG), the European Group of Valuers of Fixed Assets (TEGOFOVA).

 Frameworks for land management: conclusions

 The re-orientation of the transitional economies towards a market economy is likely to remain a feature of their economic policies, irrespective of political uncertainties about who will own what land and property and whether it will be in absolute ownership (freehold equivalent) or leasehold. This re-orientation demands major changes in the legal framework. It has created a requirement for professional advice related to land and property and how to manage it in a market economy that is likely to expand dramatically as the re-orientation takes effect and as the economies stabilize and move towards economic growth. The skills required in this area are very different from those used in administering land and property under a centrally planned regime, a fact that introduces serious institutional as well as training challenges.

 The development of the necessary skills will be an essential contribution to the economic development of the transitional countries; land and buildings represent one of the most significant elements of national wealth and the effective mobilization of this capital is vital for economic growth in a market economy. The establishment of appropriate quality standards in the exercise of these skills through the formation of professional associations is also essential if investors are to be sufficiently reassured to risk capital in investment in a relatively risky environment.

 The development of skills and of professional associations in the countries of Central and Eastern Europe and the Commonwealth of Independent States has been rapid. There remain, however, great challenges for the development of these new professions, in terms of establishing educational and training capability in the necessary

skills, of exchange of ideas and skills with colleagues from elsewhere, and of development and support for professional institutions.

 These areas of development are specifically encompassed by FIG’s Commissions 7, 8 and 9, and more broadly under Commission 2 in educational terms. They present a great challenge and opportunity to these commissions, to which they have already started to respond. There are several initiatives of relevance to encourage and assist in these developments. Commission 7’s responsibilities clearly extend into this area; the present meeting is itself an indicator of this. There are particular challenges in encouraging and supporting fellow professionals in the countries of Central and Eastern Europe and the Commonwealth of Independent States who are active in practice and in education in the fields of interest of Commissions 7, 8 and 9, and these challenges need to be actively addressed during the coming years.

 References and bibliography