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Simeon Mitropolitski

Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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4 October 2000

Selling Land In Russia Is Like Selling Your Soul

© 2000, IRED.Com, Inc., Simeon Mitropolitski

The land in Russia isn't yet a matter of business as it is in Western Europe or the United States. It is still a matter of faith like someone's soul, like the country's soul, like the love you feel towards your mother. Good people don't sell their souls so the majority of Russians prefers to live in hunger due to the inefficient collective farms rather than sell the land into the private hands.

If you ask Russians what was the greater crime and treason in their history: (1) killing at least 5 million Ukrainian farmers under communism in the 30s, or (2) selling Alaska in 1867 to the USA, don't be surprised by the majority of answers. For the Russians the selling of Alaska was a real crime because selling the land was selling their souls. The indiscriminate killings in Ukraine haven't been seen so tragically because the land remained within the state borders. And when you have land, Russians believe, you can always populate it. When you sell it, it is forever - as if you make territorial concessions to another country. Not only the leftist politicians, like communists, in Russia object the privatization of the land. The same view is shared by some anticommunist right-wing intellectuals like the world-famous writer Alexander Solzhenitsyn.

It seems that this point of view isn't highly appreciated by the actual Russian government, which hopes to find support among the center-right majority in the State Duma (the lower house of parliament in Russia). On 2nd October the Russian government decided to withdraw from parliament the compromise plan on land privatization (the Land Code) and instead to push for a more radical market option. The draft proposal that was withdrawn by the government didn't allowed free reselling of the privatized farmland. Instead of this, if approved, it could have permitted the land to be used only as a guarantee for bank credits for farmers. The killed draft also referred the issue of free selling of farmland to separate legislation, which is so far unwritten.

So the government decided to push for a more radical version of the Land Code that allows the free trade of farms. The minister of economic development and trade, Mr. German Gref, has asked a team of experts to propose a new draft for the Land Code. The main topics in it will be the privatization, the property rights issue, the land evaluation and the ways of transferring land from farming to residential purposes.

The new Russian constitution from 1993 allowed local citizens to own land. In fact, so far the only land they could have called their own were the small parcels attached to their houses. The farmland in most of the cases is managed by the successors of the former Kolhoz (highly inefficient collective farms created by communists in 20s and 30s) in order to control the population *. In some exceptional cases the farmland is rented by private companies. Lead only by profit motivations, they quickly turn to be competitors to their own landlords (Kolhoz, local state administrations), so the most of these contracts end after the first or the second year.

The same problems that go along with the farmland privatization in Russia can be found in the field of the privatization of the lots for residential and commercial developments. The first lots in the country were sold by auctions only two years ago and this practice has been experienced so far only in 4 Russian regions plus Moscow (Russia counts 89 regions including the capital city). The first lot in Moscow was sold by auction only at the beginning of this week but the experts believe that the local authorities won't repeat this experiment any time soon. The problem isn't that the city collected less money than its rulers had expected in their brightest dreams. Quite on the contrary, the real problem is that once sold, this land couldn't be rented several times as previously had been possible for political and not economic reasons.

In Russia even the most sacred beliefs have pragmatic explanations. Those who oppose the free trade of farmland and the land for development, talking about the soul of the country, usually are the same who profit from this situation. They prefer to maintain the status quo, i.e., to guarantee for themselves the right to steal the common property using their political power.


* - Most of the Russian rural population now supports the collective farms system. Without the political oppression of the past, it guarantees its members unlimited opportunities to steal the property without any of the responsibilities that ensue from the private property rights. That's why Russian farms can't accumulate the much needed investments to grow the per acre production of average European farms. The banks approve loans to farms only to the amounts the government can guarantee the lenders for refinancing by the state budget.

See also:

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See also the directory of companies providing real estate services in, and general real estate information of Russia.

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