Schafer supplied some fascinating evidence. According to him, less than 5 percent of Iraq's cultivatable agricultural land is "freehold" (owned with clear title). Ninety-five percent of the cultivatable land in Iraq is therefore "dead" (illiquid) and cannot be used as security for a bank loan. "Iraqi farmers who lack clear title can't get (bank) loans," Schaefer said. That limits economic creativity, particularly in a population demonstrably successful at small business operations. Schafer believes that 95 percent of family homes in Iraq also lack clear, secure title.
"Prime Minister Maliki needs to go on television," Schaefer advised, "and say: 'Citizens of Iraq, 95 percent of the property in this country is not legally in your name. You don't have title to your own land or your own houses. We're going to change that right now.'"
This reform would launch a liberalizing political and economic revolution, with the democratic Iraqi government empowering the people of Iraq. For maximum payoff, Schafer said, Maliki's government should support title reform with a mortgage program that provides wholesale money to banks and permits them to do mortgage lending for individual Iraqis, thus "jumpstarting" Iraq's sclerotic banking system.
Property rights reform also provides a political tool for assuaging sectarian and ethnic fears among Iraqi citizens, Schaefer said. Good title "means Iraqis can protect their houses with the law on their side."
This is nation-building at a subtle but fundamental level: moving from the rule of the gun to rule of law. Consider the case of Sunni Arabs who have abandoned property in Shia Arab neighborhoods. "Anyone who loses a home, but has solid title, will have legal recourse to regain (lost property) through the courts," Schaefer said. The law becomes a nonviolent option preferable to gang or militia-inspired retribution.
Schaefer thinks the Iraqi city of Kirkuk offers a perfect opportunity to link title reform to an economically productive housing construction program. Saddam Hussein "Arabized" the city by forcing Kurds to move away. Now, returning Kurds are evicting Arabs. Some 40,000 homes are in dispute. Schafer's solution: Build 40,000 new homes in Kirkuk. "Displaced Kurds have a choice -- their old home or a new one," Schafer said. "They can have their former home once an Arab family moves into one of the new houses." This defuses the ethnic clash, and Schafer noted, "the economic impact of the construction program will be enormous."
Schafer's suggestions aren't pie in the sky -- they are pragmatic, wealth-generating alternatives to ethnic violence, tyrant-imposed poverty and cowardly despair. |