CAR LAND REFORM AND MARKET DEVELOPMENT PROJECT

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					CAR LAND REFORM
AND MARKET
DEVELOPMENT
PROJECT
ANNUAL REPORT YEAR 1




20 October 2006

This publication was produced for review by the United States Agency for International
Development. It was prepared by Chemonics International, Inc.
CAR LAND REFORM
AND MARKET
DEVELOPMENT
PROJECT
ANNUAL REPORT YEAR 1




Contract No.116-C-00-05-00026




The author’s views expressed in this publication do not necessarily reflect the views of the United
States Agency for International Development or the United States Government.
         LAND REFORM & MARKET DEVELOPMENT PROJECT
                            USAID Contract No. 116-C-00-05-00026

___________________________________________________________________________

                                        ANNUAL REPORT
                                            YEAR I

__________________________________________________________________________




                                        Submitted to:
                                    Suhrob Tursunov, CTO
                           U.S. Agency for International Development
                                    U.S. Embassy Building
                                       10 Pavlov Street
                                 734003 Dushanbe, Tajikistan



                                        Submitted by:
                                  Chemonics International, Inc.
                                 1133 20th Street NW, Suite 600
                                    Washington, DC 20036


                                         October 20, 2006




 Land Reform and Market Development Project          Land Reform and Market Development Project
              28 Logvinenko Street                             94/5a Tursun Zade Street
           720033, Bishkek, Kyrgyzstan                       734001 Dushanbe, Tajikistan
Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                 Page 2 of 57




                                      1. Highlights of the Year
Kyrgyzstan:
   •   The project created model contracts for sales, leasing, and other common forms of land
       transactions to support a more open and liquid market.
   •   6 Pilot AOs completed the first stage of developing clear and transparent management for
       distribution of land currently held in the Land Redistribution Fund (LRF).
   •   The project completed an economic, social and environmental study for future use of the
       LRF and presented draft recommendations to USAID.
   •   11 cities adopted zoning regulations and began implementing planning and zoning
       processes; the project trained judges and prosecutors on new zoning regulations.
   •   The GOK adopted national appraisal standards.
   •   The project developed and conducted professional courses for appraisal of vacant and
       agricultural land.
   •   The project assisted in creating and officially registering the Demilgechi (Rural Activist)
       NGO.
   •   The project strengthened two NGOs by providing accounting, business planning and
       management training.
   •   The project prepared amendments to the Land Code and other land related legislation
       and presented them to the GOK.
   •   The Jogorku Kenesh adopted amendments to the Land Code regarding legal zoning.
   •   The project conducted a national public information campaign using mass media and the
       demilgechi network; the weekly project-supported television show was recognized as the
       second most popular broadcast on Kyrgyz television.

Tajikistan

   •   The project provided support and assistance to the creation of an official government
       working group to review policy options and draft amendments to land reform legislation
       related to tenure security/freedom to farm, creation of a land market, creation of an
       appropriate land administration system and a mortgage market.
   •   The project developed draft amendments to key legislation to be used by the official
       working group.
   •   The project assisted in establishing five legal aid offices using local NGOs, conducted
       TOT, and produced information materials for farmers.
   •   The project delivered legal aid and information to farmers via 5 partner NGOs.
   •   Project-supported legal aid centers, through direct assistance of the project's legal aid
       lawyer, were successful in several precedent-setting court cases.
   •   The project created a rural activist network (Tashabbuskor) with 20 participants.
   •   The project developed and implemented a mass media campaign using national and local
       TV/radio stations and newspapers.
   •   The project conducted an assessment of the legal and institutional framework for urban
       zoning.




       Land Market Development in Kyrgyzstan                Land Tenure Reform in Tajikistan
                28 Logvinenko Street                            94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                      734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909               Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                  Page 3 of 57




2. DETAILED ACTIVITY DESCRIPTION: Land Market Development in Kyrgyzstan

2.1: Rural Land Market Development in Kyrgyzstan

2.1.1 Introduce Market Mechanisms in the Management of State-owned Agricultural Land

2.1.1.a. Facilitate Passage of the Model Regulation and Propose Additional Policy
Recommendations to Improve Management and Productive Use of LRF land

Results expected: Model regulation passed. Strategy for future use of LRF lands developed and
agreed upon by USAID and GOK stakeholders.

Relevant performance indicators and targets:
Key laws and regulations on land policy enacted.
Target: Model regulation on LRF land passed by July 2006;

Stakeholders: USAID, other donors, GOK, Ministry of Agriculture, Gosregister, Jogorku Kenesh,
Aiyl Okmotus.

Project Resources: COP Kathrine Kelm, DCOP Chynara Arapova, Sr. Policy Lawyer Gulzat
Namatbekova, , ST Land Lawyer Steve Dobrolivic, ST Researcher/Economist Jeff Dorsey,
Working Group on Land Policy

Activities:

Activity 1: Passage of model regulation.

In November 2005 project specialists analyzed the draft Model Regulation on Management of
LRF Land, prepared primarily by Gosregister—the overseer of the LRF at the time. With
Gosregister specialists, we prepared an action plan to promote the draft Model Regulation.
Project specialists simultaneously finalized articles on the definition of auction steps, auction
mechanisms, and procedures of LRF land allocation to the poor.

Having coordinated and incorporated the amendments by relevant ministries and agencies, in
March 2006 we submitted the draft Model Regulation to the Government of the Kyrgyz Republic
for further consideration and approval. The title of the draft regulation was changed to “Model
Regulation on Procedures and Conditions of LRF Land Allocation”, based on comments by the
Ministry of Justice. Progress on the draft model regulation was slowed a bit due to the
replacements of two Ministry heads, including the Minister of Agriculture, Water and Processing
Industry.

The Project initiated a pilot program in cooperation with Gosregister, Ministry of Agriculture, and
the Aiyl okmotus to increase understanding of the Regulation and test its activities. The
Government supported the initiative through the Decree “To Conduct the Pilot Program to Test
New Principles of Management and Use of LRF Land as Stipulated in the Draft Model
Regulation” of June 1, 2006, №282-р. Ten Aiyl Okmotus throughout the Kyrgyz Republic were
selected for the Pilot program. The results of the pilot program will determine the Working
Group’s direction in making necessary amendments and additions to the draft Model Regulation.



       Land Market Development in Kyrgyzstan                 Land Tenure Reform in Tajikistan
                28 Logvinenko Street                             94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                       734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                  Page 4 of 57


At the end of June 2006, the Land Use Commission of the Jogorku Kenesh (JK) conducted a
field session to present the Deputies of JK with the Draft Model Regulation and initial results of
the Pilot program. The deputies expressed support for the draft Model Regulation concept and
recognized its importance to LRF land management reform. The group decided that work on the
draft Model Regulation would be continued in September upon the Deputies’ return from summer
holidays, and that we should start to incorporate amendments and additions to the current
legislation for adoption. Due to the changes in government ministry staffing and the
terms/conditions of the Pilot program, the project could not meet its target for the adoption of the
Model Regulation (July 2006). However, the draft is presently (end September 2006) with the
Government pending consideration and enactment following the completion of the pilot program,
anticipated sometime in March 2007.
.
Activity 2: Development of policy on future use of LRF lands.

To develop our strategy for future use of LRF lands, the project needed to increase its
understanding of the economic, social and environmental implications of the current LRF system.
In April-May 2006, the project worked with Jeff Dorsey, a ST Economist and Research Manager
to work with local experts in sociology, economy and environmental issues to develop a survey
on LRF land use for two types of respondents: local administration (e.g., AO heads, land
surveyors, economists, et al) and lessees of LRF lands. SIAR, a local research company, was
selected to administer the survey to over 500 respondents in 49 AOs throughout the Kyrgyz
Republic between June-August 2006.
In August 2006, Mr. Dorsey and the local specialists reconvened to make an initial analysis of the
survey results. Based on preliminary results, we identified four possible strategy options:
       1. Leave LRF in state ownership; improve local administration of the LRF;
       2. Transfer the LRF to municipal ownership at a designated time in the future;
       3. Privatize LRF lands in need of substantial investment and transfer the remainder to
          municipal ownership at a future time;
       4. Privatize LRF lands immediately through public auction.

The project also conducted an analysis of the current LRF related legislation with Steve
Dobrilovic, a ST Legal Specialist with significant experience in land reform issues. Together with
Mr. Dobrilovic, we prepared a preliminary action plan for development of future LRF land
strategy.

In September 2006, the analysis of environmental and social aspects was completed, as well as
draft plans for each strategy option. The final report and recommendations will be completed by
the end of October 2006.
2.1.1.b. Guide, Train, and Advise Communities and Local Councils in Improving
Management and Use of the LRF

Results expected: Regulation adopted by July 2006. New model regulation implemented in 6 to
10 Aiyl Okmotus by end of year 1.

Relevant performance indicators and targets:
   • Number of training and information seminars for local officials and citizens on land use
      planning (rural).
      Target: 80 training and information seminars on LRF procedures (for local governments
      and farmers) conducted within 2 months of enactment of a new regulation;


       Land Market Development in Kyrgyzstan                 Land Tenure Reform in Tajikistan
                28 Logvinenko Street                             94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                       734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                   Page 5 of 57


   •   Number of local governments trained in new land policies and procedures.
       Target: 95% trained on new model regulation on LRF within 1 month of enactment.
   •   Number of Strategic Plans for land use and management development with citizen input.
       Target: 6 to 10 Strategic Plans developed with citizen input and participation.

Stakeholders: USAID, other donors, GOK, Ministry of Agriculture, Gosregister, Aiyl Okmotus,
NGOs, rural farmers

Project Resources: DCOP Chynara Arapova, Sr. Policy Lawyer Gulzat Namatbekova, Training
and Outreach Team (Iskender Bainazarov, Almasbek Toktomametov, Joldoshbek Dadybaev,
Talgar Soondonbekov), NGOs

Activities:
Activity 1: Implementation of regulation in pilot Aiyl Okmotus
After coordinating with all stakeholders (Gosregister, Ministry of Agriculture, heads of AO) the
project decided to test all activities outlined in the draft Model Regulation through a pilot program
in 10 AOs. The AOs were selected based on five criteria: (1) LRF land availability; (2) regional
dvision; (3) interest and willingness of AO representatives to participate; (4) status of systematic
registration and (5) professionalism of the Demilgechi working in the region. The AOs ultimately
selected can be seen in the chart below.
In June 2006, the Government issued the Decree “To Conduct the Pilot Program to Test New
Principles of Management and Use of LRF Land as Stipulated in the Draft Model Regulation” of
June 1, 2006, №282-р in order to perform all activities stipulated for in the Model Regulation. The
Decree instructs Gosregister, the Ministry of Agriculture and the USAID Land Reform and Market
Development Project to test the Model Regulation activities in 10 AO, and make
recommendations for improvement of the draft Model Regulation based on the results.


       Aiyl okmoty                             Head of aiyl          Demilgechi
       (oblast, rayon)                         okmoty
  1.   Kok-Jar, Osh oblast, Nookat             K.Turabyev            Mamatalieva Bukalcha
       rayon
  2.  Kyzyl Oktyabr, Osh                       B. Alaichiev          Alibaeva Maksuda
      oblast,Uzgen rayon
  3. Yrys, Jalalabat oblast,Suzak              K. Bakiev             Naserdinova Rano
      rayon                                                          Alimjanov Vakhit
  4. Burgondu, Jalalabat oblast,               Khaliev Abduganiy     Kamchibekova Bermet
      Nooken rayon
  5. Uchkorgon                                 Madazimov Abbas       Aliev Uldash
      Batken oblast, Kadamjay rayon
  6. Tiup                                      M. Ryskulov           Orozbekov Tenizbay
      Issyk-Kul oblast Tiup rayon
  7. Akdobo, Issyk-Kul oblast,                 M.Usupbaev            Moldokmatov Omurbek
      Djetiogyz rayon
  8. Jergetal, Talas oblast, Talas             Duishenaliev          Nadyrbekova Baktykan
      rayon                                    Kushtarbek
  9. Nurjanov, Talas oblast, Talas             Tuganbaev Emil        Murataliev Janbolot
      rayon
  10. Min- bulak, Naryn oblast, Naryn          J. Omuraliev          Surapov Bolot
      rayon
       Land Market Development in Kyrgyzstan                  Land Tenure Reform in Tajikistan
                28 Logvinenko Street                              94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                        734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                 Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                    Page 6 of 57


Before the start of pilot program meetings were held with the Governors of Osh, Jalalabad,
Batken and Naryn oblasts, and the Deputy Governor of Issyk-Kul oblast to inform them of the
goals, objectives and stages of the pilot program.
                                Public hearings were also held to familiarize specialists of AO,
                                Deputies of Ail Kenesh (Council) and local citizens in 10 AO with
                                the pilot program. The meetings were held as follows: Nurjanov
                                (April 11 – 38 participants), Jergetal (April 12 – 44 participants),
                                Kyzyl-Oktyabr’ (May 23 – 41 participants), Kokjar (June 5 – 69
                                participants), Yrys (June 6 – 55 participants), Burgondu (June 7 –
                                54 participants), Minbulak (Nuje 15 – 61 participants), Akdobo
                                (July11-30 participants), Tup (July12 - 27 participants),Uch-Korgon
                                (August 22 - 19 participants).
                                In each AO where public hearings were held, we created working
                                groups consisting of Heads of AO (Chairperson of working group),
                                land surveyors, specialists of GIPROZEM (State Institute for
                                Design and Land Survey), Gosregister, Demilgechi and Project
                                coordinators.
Public hearings in Jergetal Aiyl Okmotu


Pilot activities were divided to six stages:
1. Inventory
      •   Preparatory works (study of rayon annual reports in light of land-improvement
          examinations; study of land inventory materials, and map-case handling,
      •   Inventory of Land Redistribution Fund lands (LRF);
      •   Creation of planning and cartographic basis in electronic format

2. Preparation of the draft Strategic Plans
   To prepare the Strategic Plans, the working group studied the following:
     • Demand of socially oriented subjects (schools, hospitals, etc.) and vulnerable layers of
        population (as per data from National Statistics Committee, Social Protection Organs
        and local self-government organs) for land plots
     • Demand for given LRF land plots in previous years (e.g., number of applicants, lease
        pay rate)
     • Low-yield land, listing measures needed for improvement,
     • Zoning of LRF land (economically attractive lands, zones needing investment, low- or
        no-demand land zones)
     • LRF land use plans per year.

3. Public hearings (present the draft Strategic Plan to local public)
    • Finalization of the draft Strategic Plan incorporating comments and recommendations
         of local population

4. Approval of the draft Strategic Plan by local aiyl kenesh
    • Conducting Aiyl Kenesh session

5. Delivery of the State Act on Perpetual LRF land Use Right, and approval of the Strategic Plan
    • Delivery of computer equipment with all cartographic programs and Strategic Plan to
         AO
       Land Market Development in Kyrgyzstan                   Land Tenure Reform in Tajikistan
                28 Logvinenko Street                               94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                         734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                  Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                                 Page 7 of 57


       •     Delivery of Strategic Plans in Russian and Kyrgyz in printed brochures.

6. Auctions
    • Assistance with organizing and conducting auctions on LRF land according to the
         Strategic Plans
    • Monitoring of Strategic Plan implementation and observance.


The stages of pilot program implementation in each of the 10 AOs are presented in the table
below:


№          Implementation stages                                           Aiyl Okmotus



                                                    Nurjanova




                                                                       Burgondd




                                                                                                                     Uchkorgo
                                                                                                Minbulak

                                                                                                           Akdoboo
                                         Jergetal




                                                                                  Oktyabr
                                                                       Kokjar

                                                                                  Kyzyl

                                                                                  Tyup
                                                                Yrys


                                                                       u




                                                                                                                     n
1                                        +          +           +      +    +     +      +      +          +         +
      Inventory

2     Preparation of the draft           +          +           +      +    +     +      +      +          -         -
      Strategic Plans

3     Public hearings (present the       +          +           +      +    +     +      -      +          -         -
      draft Strategic Plan to local
      public)
4     Approval of the draft              +          +           +      +    +     +      -      -          -         -
      Strategic Plan by local aiyl
      kenesh

5     Delivery of the State Act on       +          +           -      -    -     -      -      -          -         -
      Perpetual LRF land Use
      Right, and approval of the
      Strategic Plan

6     Auctions                           Planned for Year 2



Throughout the course of the pilot program we uncovered some LRF land use issues that require
reform:
1. There are significant differences between data on LRF land size and borders among various
   state agencies and local administration and what actually exists in reality
2. No agency has been accurately recording and monitoring LRF land since privatization
3. LRF land has not been mapped and borders have not been clarified
4. No State Act determining the clear size and location map has been delivered
5. LRF land has not been zoned
         Land Market Development in Kyrgyzstan                             Land Tenure Reform in Tajikistan
                  28 Logvinenko Street                                         94/5a Tursun Zade Street
               720033, Bishkek, Kyrgyzstan                                   734001 Dushanbe, Tajikistan
    Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                            Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                  Page 8 of 57


6. Few auctions have been conducted; the auctions that have been have violated many
   procedures.
7. LRF land has not been transparently allocated through lease and use mechanisms
8. Local specialists have little or incorrect knowledge of LRF land allocation procedures

In light of the above, the project had to carry out all inventory works from the beginning–
inventory of land, mapping, etc. Since Giprozem has only two survey devices and few specialists
know how to inventory land this work took more time than planned. In addition, coordination with
various agencies to clarify the exact size of the LRF and to identify the origins of discrepancies
among data also took longer than planned.

However, despite the fact that we only started working on the Pilot program in Spring 2006, we
anticipate completing all planned activities by the end of 2006, except stage six – Auctions. The
project plans to provide assistance with organizing and conducting auctions on LRF land lease in
Spring 2007, following the proper procedures.


Intermediate conclusions of the Pilot program:

  1. Inventorying LRF land in each AO is well worth it. Inventorying allows for clarification of
     LRF land size under AO control by identifying discrepancies in official data on LRF land
     size between state organs and local self-government organs (National Statistics
     Committee, Gosregister, Aiyl okmotu, Agrarian Development Department);
  2. The AO leaders must understand the importance of LRF management for the fair
     allocation of land plots for lease. Otherwise, auctions will be conducted unfairly (or not at
     all) and LRF land will mostly be provided through direct allocation. In some cases, illegal
     construction has occurred on LRF lands, diminishing its quality and value. With
     appropriate LRF land management such problems and legal violations can be avoided.
  3. Local self-government authorities should be authorized to decide LRF land allocation
     methods and procedures and monitor and oversee LRF land use. This comprehensive
     approach would allow local self-government authorities to regulate LRF land management
     issues taking specific local features into account. (e.g. decision of lease term – in the
                                                                  South, LRF land is generally
                                                                  leased for no more than 5 years
                                                                  based on local Kenesh decisions
                                                                  but there is no such restriction in
                                                                  the North).The recommendations
                                                                  to the draft Model Regulation
                                                                  propose to modify the Land Code
                                                                  and the draft Model Regulation to
                                                                  stipulate that terms of LRF land
                                                                  lease can be less than 5 years.
                                                                  However, concrete lease terms
                                                                  will be established by local
                                                                  keneshes.



       Public hearings on the draft Strategic Plan of LRF
       Land Use in Burgondu AO

       Land Market Development in Kyrgyzstan                 Land Tenure Reform in Tajikistan
                28 Logvinenko Street                             94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                       734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                 Page 9 of 57


A concrete example of the Pilot program (Burgondu AO):

At the beginning of the pilot program Gosregister data showed that Burgondu AO (Jalalabad
oblast) had 410 hectares of land for which the AO was annually charged for land tax and social
contributions. While completing the inventory it was shown that there were actually only 347
hectares of land, 63 hectares less than initially thought. The reason for this was that individual
land shares were distributed to people (42 hectares of perennial plants and 21 hectares of
hayfield) however in the Gosregister records, these hectares remained classified as LRF land.
Gosregister agreed with the results of our inventory and prepared the State Act of Perpetual Use
for only 347 hectares of LRF Land Use to Burgondu AO. Therefore, all payments and taxes will
be revised.

Activity 2: Information campaign and training
Pilot program success hinges on providing information to the local population. The demilgechi
play a big role in this activity. The draft Model Regulation on LRF Land was one of the main
topics discussed during a quarterly meeting of Demilgechi in November 2005. Project specialists
developed an informational booklet- “How To Increase Efficiency in LRF Land Use?” and a
brochure “What You Need To Know About LRF Land” to explain the tasks and activities
dedicated to LRF land management improvement.




                                      How to Increase Effective Use of LRF Lands
                               This brochure details the typical problems concerning the use of
                               LRF lands, presented a model analysis of the situation and
                               proposed mechanisms for the rational use of LRF lands. It was
                               prepared for use in the pilot villages so the stakeholders can
                               develop mechanisms for rational use of LRF lands and successfully
                               implement those mechanisms. This brochure was prepared in both
                               Russian and Kyrgyz.




       What You Need to Know about LRF Lands
   This brochure explains the problems related to legal use of
   LRF lands. The brochure consists of the 25 or so most
   common questions and answers in accordance with existing
   land legislation.

   It consists of three parts:
        The specifics of LRF lands. The brochure gives clear
        answers to the following questions: What is LRF land; how
        is land assigned; and who manages LRF lands.
        The specifics of LRF land allocation. What are the
        procedures for allocation of LRF lands; what are the terms
        of LRF land leases; and how many hectares of the LRF
        lands can be leased.
        Payments. Who determines the lease payments for the
        LRF lands; and who gets the money.
       Land Market Development in Kyrgyzstan                Land Tenure Reform in Tajikistan
                28 Logvinenko Street                            94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                      734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909               Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                Page 10 of 57



Between February and September 2006, the project conducted more than 112 round tables and
meetings with local citizens using these brochures. More detailed information is presented in the
“Demilgechi Network Activity” section below.

Because the draft Model Regulation has not yet been enacted, a large-scale mass information
campaign on the Regulation has not begun. However, we have started to inform the public about
pilot program implementation stages through radio and television spots, as well as round tables
and meetings.

2.1.2 Stimulate Effective Land Markets

2.1.2.a. Facilitate Passage of Amendments to Land Code and Law on Management of
Agricultural Land. Recommend Additional Policy Changes to Eliminate Impediments to an
Active Land Market.

Results expected: Facilitation of land transactions by removing legal barriers and simplification
of transaction mechanisms.

Relevant performance indicators and targets:
   • Key laws and regulations on land policy enacted.
      Target: Passage of land-related legal amendments by July 2006.
   • Number of land transactions concluded.
      Target: 25% increase in total number of land transactions in Year 1

Stakeholders: USAID, other donors, GOK, Jogorku Kenesh, Gosregister, Ministry of Agriculture,
NGOs, Aiyl Okmotus,

Project Resources: COP Kathrine Kelm, DCOP Chynara Arapova, Sr. Policy Lawyer Gulzat
Namatbekova, Working Group on Land Code Amendments, Training and Outreach team, OKO,
LARC, demilgechi.

Activities:

Activity1: Legal advocacy
Project specialists conducted a detailed analysis of all changes united under the “Green Book”.
The “Green Book” is a compilation of modifications to the Land Code and the Law on
Management of Agricultural Land.
Following this analysis, we met with specialists of Gosregister, Ministry of Agriculture, and the
Land Use Issues Commission to form a working group to develop a uniform approach to adding
and modifying provisions to the Land Code and the Law on Management of Agricultural Land.
On June 28, 2006 the Land Use Commission of the JK decided to create a Working Group on
developing the Draft Law “On Introduction of Amendments and Additions to the Land Code of the
Kyrgyz Republic” and the Draft Law “On Introduction of Additions and Amendments to the Law
on Putting into Force the Land Code of the Kyrgyz Republic”. The project also made a
preliminary agreement with M. Salymbekov, Deputy of the JK and Chairperson of Land Use
Commission that the Commission would lobby for the enactment of the draft laws.



       Land Market Development in Kyrgyzstan                Land Tenure Reform in Tajikistan
                28 Logvinenko Street                            94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                      734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909               Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                Page 11 of 57


The Working Group consists of specialists from the Activity Support Unit of the Agrarian-
Industrial Complex and Ecology Committee and Land Use Commission, specialists of the State
Agency on Registration of Rights to Immovable Property, the Prime–Minister administration and
project specialists. The Working Group also engaged specialists in specific fields (e.g.,
appraisers, local self-government specialists, bankers, international consultants, etc.) throughout
the discussions.

The Working Group made the following modifications and additions in the Land Code:
   1. Land titling procedure: provisions were added to the Land Code stipulating the direct
      allocation of land – without auctions, as auctions are sometimes unnecessary;
   2. Legal regulation of servitudes: servitude titles were modified due to a new approach for
      servitude classification. Free-will is not always possible when the court decision obliges
      the other party to conclude a servitude agreement, as stipulated in current legislation
      (article 406 Civil Code). Therefore, the new approach is based on the interest of an
      individual that benefits from the servitude;
   3. Seizure of land plot: it is proposed to eliminate “non-payment of land tax and social
      contributions”, as a reason for the seizure of land. Imposing a penalty in these cases
      should be executed by authorized organs judicially. It is also proposed to include a list of
      cases of land seizure for state and municipal needs. This addition to the Land Code will
      unambiguously define exceptional cases of land seizure for state and municipal needs
      and thereby strengthen and systemize the most common cases to avoid unjustified land
      seizure and state- and municipal-level corruption.
   4. Improvement of land market regulation: information on the normative price for land plots
      will be used from the cadastre in only 2 cases: for taxation and calculation of the state
      duty. In all other cases the market value of a land plot should be used;
   5. Other changes regarding editing the text and harmonizing with other statutory acts.

On July 25, 2006 the Law “On Management of Agricultural Land” was amended based on
proposals from various USAID projects under the “Green Book”. Some modifications based on
“Green Book” recommendations are particularly worth noting, including:
       - Eliminate restrictions concerning exchange of land plots within the territory of one AO;
       - Eliminate restrictions concerning selling part of a land plot;
       - Bringing inheritance issues into conformity with civil and land legislation;
       - Eliminate restrictions regarding giving a land plot as a gift.

Further additions and amendments to the Law “On Management of Agricultural Land” are being
developed based on the continuing work with the “Green Book” and will be completed in year 2.


Activity 2: Public awareness
To inform people of the latest news on land reform and land market development, we have been
making use of all types of mass media: radio, television, web-site, and printed materials.


Television
The project has been regularly collaborating with the ZAMANA studio of the NTRC . We have
worked with two journalists: Erkingul Mambetakunova in the South (Batken, Osh, Jalalabad) and
Akylay Abdyldaeva in the North (Chuy, Talas, Naryn, Issykul).




       Land Market Development in Kyrgyzstan                Land Tenure Reform in Tajikistan
                28 Logvinenko Street                            94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                      734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909               Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                  Page 12 of 57



                                               We are proud to note that the TV program “Demilge
                                               Program in Action” was rated the second most
                                               popular TV program in Kyrgyzstan in 2005 in a
                                               survey conducted by NTRC. In addition, Ms.
                                               Mambetakunova, received a special award and was
                                               named “Journalist of the Year 2005”.

                                               In “Demilge Program in Action”, the journalists
                                               highlighted Demilgechi activities, namely concrete
                                               problems and solutions. A typical program covers 2-
                                               3 success stories with real people relating their own
                                               problems and how they solved them.

 Journalist Akylay Abdyldaeva at work

In addition, the journalists, together with Project specialists, prepared news segments on the pilot
program (activities in pilot AO on testing the draft Model Regulation), and highlighted all the
important project events such as the adoption of the national Appraisal Standards, zoning
seminars, etc. The programs are mostly broadcast in Kyrgyz, except the news segments, which
are broadcast in both Kyrgyz and Russian.
As the programs were broadcast on the National TV, all of Kyrgyzstan is covered as well as
bordering villages in Uzbekistan, Kazakhstan and Tajikistan. On average there were 7-8
programs per month. In one year we had 63 programs, and 17 of them were broadcast twice.
Themes of the programs varied, ranging from concrete assistance with contracts legalization to
the solution of land plot border conflicts and the rational use of LRF land. Some topics are
presented below:
     •   A Disabled Woman Could Legalize Her Documents and Retire;
     •   12 Individuals Received Land Shares (Osh oblast)
     •   Conflict On Leased Pasture Borders Is Solved
     •    Allocation of Land Shares to 195 Villagers of Jolokot Village From a Land Plot (39.9
         hectares) Illegally Transferred to Karakol City Municipality
     •   19 Hectares of Land Were Allocated for Housing Building
     •   Dispute on Pasture Issue Was Solved (52 individuals involved)
     •   Purchase and Sale of a Land Plot
     •   LRF Land Lease
     •   Rational Use of LRF Land
     •   Demilgechi Assisted Two Women to Solve a Dispute – Result – Concluded Contract
     •   Demilgechi Assisted Villagers to Prepare Documents for Restitution of Land Plots Along
         Kokart River (Jalalabad oblast) Seized Illegally
In total there were 100 topics on actual Demilgechi achievements.




       Land Market Development in Kyrgyzstan                  Land Tenure Reform in Tajikistan
                28 Logvinenko Street                              94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                        734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                 Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                  Page 13 of 57


Radio

                                            The project has been actively cooperating with “Land
                                            and People” radio program of the NTRC since
                                            December 2005. The program enjoys comparatively
                                            high ratings; per NTRC data, the total number of
                                            listeners is around 1 750 000, including listeners from
                                            remote regions. The audience is mostly rural citizens
                                            with permanent working radio. Four times a week at
                                            6:30 am you may listen to a 10-minute radio program on
                                            dissemination of land legislation, practical
                                            implementation of land rights and legal support to land
                                            reform broadcast in both Kyrgyz and Russian. The
                                            program editors are: Kadyr Khalilov (Kyrgyz version)
 Joldoshbek Dadybaev, Information and       and Irina Eginbaeva (Russian version).
 Training Coordinator, gives interview to
 Kadyr Khalilov for “Land and People”
 radio program.


During the reporting period, project specialists, consultants and demilgechi gave 68 interviews in
Russian and Kyrgyz:

   •    Legal Problems of Land Use - 30
   •    About Seminars and Round Tables – 9
   •    Activities Per Project Components – 11
   •    Project Publication Presentations - 3
   •    Demilgechi Activities in Pilot Villages – 9
   •    Demilgechi Regional Centers – 2
   •    Answers to Questions – 4


The most interesting legal topic interviews are periodically repeated in the information –
analytical program “Express-Kabar” on the NTRC. After almost every broadcast, the studio
receives phone calls from all over the Kyrgyz Republic, asking questions about the topics or
praising the broadcasts. On average the program receives 55 calls per month. Callers are
provided with the Project address and contacts.



Web - site
In April 2006 we launched an official Project web-site www.landreform.kg

The site features published information on Project events like conferences, seminars, meetings,
and is meant for a wide range of viewers, On the web-site one can find Project information
(activities, components, staff, positions, and contacts) and project publications in electronic
version. Available publications include:




       Land Market Development in Kyrgyzstan                  Land Tenure Reform in Tajikistan
                28 Logvinenko Street                              94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                        734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                 Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                  Page 14 of 57




                                                               •    Important Issues of Land Market
                                                               •    Introduction of Land Zoning to
                                                                    Kyrgyzstan
                                                               •    State Registration of Rights to
                                                                    Land Plot and Transactions
                                                               •    Land Plot Seizure
                                                               •    Mandatory Payments for Land
                                                                    Plot Use
                                                               •    Agricultural Land Plot Market
                                                                    Value Appraisement
                                                               •    Appraisal of Vacant Land Plots
                                                               •    Strategic Plan of Jergetal Aiyl
                                                                    Okmotu’s LRF Land Use
                                                               •    Strategic Plan of Nurjanov Aiyl
                                                                    Okmotu’s LRF Land Use
                                                               •    Rules of Construction and Land
                                                                    Use of Batken City
                                                               •    Collection of Standard
                                                                    Transaction Agreements
                                                                •    National Appraisal Standards
                                                                •    LRF Land


Since the launch, over 10 346 users have visited the site (per site statistics):

      •   Users from abroad: 4123 (39,85%),
      •   Users from Kyrgyzstan 3748 (36,23%)
      •   Users from Russia 2135 (20,64%)

As a concrete example, the Project received personal thanks from Kubanychbek Ashiraliev, who
is working on his Ph.D in Vassera University (Japan, Tokyo). Mr. Ashiraliev has been actively
using the web-site to obtain informational materials of the Project. In August 2006 he paid a
special visit to our Bishkek office to express his gratitude.

In the near future we plan to create some new parts of the site:
“PROJECT ACHIEVEMENTS”, “NOVELTIES IN LAND LEGISLATION”, a page highlighting
“DEMILGE” program, and an “INFORMATION” page with data on forthcoming seminars,
meetings, conferences, and schedule of land reform and market development related programs
on TV and Radio.

Information materials:

At the beginning of the project we met with the Demilgechi and identified that they need updated
information on issues relevant to their consultations. We tried to compile this information in a
brochure: “Important Issues of Land Market”.

The brochure consists of the 20-26 most frequently asked questions on the following subjects:

      •   Land Legislation and Ownership Right
      •   Transactions With Agricultural Land Plots
       Land Market Development in Kyrgyzstan                  Land Tenure Reform in Tajikistan
                28 Logvinenko Street                              94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                        734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                 Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                     Page 15 of 57


      •       State Registration of Rights to Land Plots
      •       Mandatory Payments
      •       LRF Land Use
      •       Main Issues of Pasture Lease

The brochure is geared towards for rural citizens and, therefore,
critical to Demilgechi during consultations. In December 2005 the
project published 5000 copies in Kyrgyz and Russian.

In spring 2006, with Demilgechi assistance, we identified a list of
topics to be covered in detail. For instance, in spring 2006 the
Governor of Talas oblast issued a resolution to seize land for
debts, thus, people badly needed information on “when the state
shall have a right to seize land?”

Having studied a range of significant issues we developed 3
brochures:
          Mandatory Payments
          Seizure of a Land Plot
          State Registration of Rights to Land Plot and Transactions

These brochures were elaborated to address requests of rural citizens and situation on the spot.
The brochures are in an FAQ format featuring 15-34 concrete questions and answers that refer
to specific legislation in easy comprehensible language. Schemes and basic land tax rates by
regions are attached to the brochures. As the number of people interested in land use issues
increases, so does demand for the publication. The project has published 7000 copies in Kyrgyz
and 3000 copies in Russian.
In addition to brochures, project specialists have drafted and issued a series of leaflets to better
address farmer’s problems. Information leaflets focus on two key issues:

1. Procedures covering concrete seizure cases based on such reasons as:
          •    Incorrect Use of Land (from its authorized classification)
          •    Non Use of Agricultural Land for 3 Years
          •    For State and Public Needs
          •    Non-Payment of Land Tax
          •    Irregularity of City Planning Conditions

2. Lease of land in state and private ownership:
          LRF Land
          • Allocation Without Auction
          • On Commercial Bidding
          • On Investment Bidding
          Pastures
          • On Commercial Bidding
          • On Investment Bidding

Information leaflets are in Kyrgyz and Russian with a contract attached so that a farmer can
formalize a transaction on the spot.

       Land Market Development in Kyrgyzstan                     Land Tenure Reform in Tajikistan
                28 Logvinenko Street                                 94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                           734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                    Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                     Page 16 of 57


3.1.2.b. Develop National and Local Tools to Stimulate Rural Land Markets
Results expected: Development of a liquid, transparent rural land market

Relevant performance indicators and targets:
   • Number of land transactions concluded.
      Target: 25% increase in total number of land transactions in Year 1

Stakeholders: USAID, other donors, GOK, Ministry of Agriculture, Gosregister, Aiyl Okmotus,
rural residents

Project Resources: COP Kathrine Kelm, DCOP Chynara Arapova, Sr. Policy Lawyer Gulzat
Namatbekova, Training and Outreach Team, demilgechi, LARC, other NGOs.

Activity 1: Use of model contracts for transactions.
In January, the Project concluded a contract with LARC to develop a collection of model land
transaction contracts. These contracts will help farmers to conclude land transaction contracts in
accordance with the legal framework. In February, the final version of the collection was
prepared in both Kyrgyz and Russian and delivered to the printing office. There are 700 copies in
Russian and 700 copies in Kyrgyz and each collection contains a CD with all the information
concerning land transactions. This collection is essential for the work of Demilgechi, lawyers from
                                                    LARC, the heads and specialists of aiyl
                                                    okmotus, notaries and judges.

                                                        Presentation of the Collection took place in all
                                                        seven oblasts of the Kyrgyz Republic with the
                                                        participation of oblast heads (Governors of
                                                        Osh, Jalalabad and Talas oblasts participated
                                                        in presentation), judicial bodies, notaries,
                                                        LARC lawyers, Gosregister, heads of AO and
                                                        other stakeholders. Every Demilgechi, head of
                                                        AO, and local Gosregister office now have
                                                        hard copies and CDs of the Collection in both
                                                        languages. Anecdotal evidence suggests that
                                                        Kyrgyz contract samples are most in demand.
 Collection of Standard Agricultural Land Transaction
 Contracts is a big help for farmers

Ordobaev Beishen Sydykbekovich– the head of Alamidin Gosregister:
«The problem we often face is that farmers do not know how to complete agreements correctly
and what documents they need to enclose with the contract. As a result, the specialists of
Gosregister have to refuse state registration and the farmers must complete new agreements.
After the publication of the collection of standard land transaction contracts, I think that this
problem will be solved. The fact that this collection has both Russian and Kyrgyz versions
ensures that the contents of the agreements will be understood by everyone. Another advantage
of this collection is that it includes agreements of the most common deals and especially that it
contains instructions for concluding these agreements».

Approximate data by Demilgechi says that 1300 transactions have been concluded based on the
Collection.


       Land Market Development in Kyrgyzstan                     Land Tenure Reform in Tajikistan
                28 Logvinenko Street                                 94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                           734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                    Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                 Page 17 of 57




Activity 2: Development of land auctions.
Per our Year 1 Work Plan, we have created information
brochures for people on the private land auction procedures.
Purchase and Sale of Private Land through Auctions
These booklets were created to show people the
advantages of legal transactions with private agricultural
land. The booklets contain the following sections:

•    Procedure of Organization and Conducting of Auctions
•    Advantages of Auctions
•    Benefits for Buyer and Seller
•    Restrictions to Transactions
•    Requirements to Buyers and Lessees
•    Scheme on how to organize and conduct auctions




The main purpose of the booklets is to attract farmers’ attention to possibilities for improvement
of land relations. The project has published 7500 copies in Kyrgyz 2500 copies in Russian. In
autumn 2006, the Demilgechi will hold round tables on the subject and identify people interested
in auctions. The auctions will first be conducted in 2-3 of the pilot AOs, together with LRF land
auctions.


Activity 3: Agricultural land appraisal.
This activity has been completely fulfilled and results are presented below under Appraisal
component.


3.1.2.c. Provide Legal and Consulting Services to Farmers and Rural Communities

Results expected: Local government inclusive of citizens and businesses in decision making on
administration of state-owned land

Relevant performance indicators and targets:
   • Number of complaints of improper administration of land by local government.
      Target: 25% reduction in complaints from baseline in Year 1;
   • Number of disputes resolved within local communities.
      Target: 2000 disputes resolved in Year 1;
   • Number of citizens receiving assistance on land dispute issues.
      Target: 20,000 citizens received assistance in Year 1;
   • Number of NGOs strengthened through project activity (strengthened NGOs will have a
      trained staff, a strategic and business plan, and management systems in place).
      Target: 1 NGO strengthened in Year 1;
   • Number of legal aid centers actively serving citizens with legal problems.
      Target: 15 centers in year 1;


         Land Market Development in Kyrgyzstan               Land Tenure Reform in Tajikistan
                  28 Logvinenko Street                           94/5a Tursun Zade Street
               720033, Bishkek, Kyrgyzstan                     734001 Dushanbe, Tajikistan
    Tel: +996 (612) 901-900 Fax: +996 (612) 901-909              Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                       Page 18 of 57


   •   Number of volunteer rural activist trained by the project working in rural communities.
       Target: 50 rural activists working in rural communities in Year 1 (5 more than baseline of
       45)

Stakeholders: USAID, GOK, Aiyl Okmotus, demilgechi, local NGOs, rural residents

Project Resources: DCOP Chynara Arapova, Sr. Policy Lawyer Gulzat Namatbekova, Training
and Outreach Team.

Activity 1: Creation of legal entity for the Demilgechi network.

This activity has been completely fulfilled as the Demilgechi network is now registered as a legal
entity – Public Association (PA) - with the Ministry of Justice. The official name of the
organization is PA “Aiyl Demilgesi”.

The decision to create a national independent Public Association to unite Demilgechi interests
and provide support in settling socio-economic problems of rural citizens was taken at the first
Demilgechi quarterly meeting on January 26, 2006 in Osh.
The Founders of the Public Association are 40 Demilgechi from 6 oblasts (Osh, Jalalabad,
Naryn, Talas, Issykul). A constituent assembly was conducted in compliance with the law. The
Charter of PA “Aiyl Demilgesi” was discussed and approved, all management units were defined
and all administrative issues resolved during that assembly.
Ainur Madraimova was elected Executive Director of PA “Aiyl Demilgesi”. In March 2006 PA “Aiyl
Demilgesi” received State Registration of Legal Entity Certificate №22937-3300-ОО, and was
                                                                 registered with the tax inspection
                                                                 and local Social Fund
                                                                 departments. To obtain republic
                                                                 status the Association created
                                                                 subdivisions in Batken, Osh,
                                                                 Jalalabad, Talas, Issykul and
                                                                 Naryn oblasts. During the third
                                                                 Demilgechi quarterly meeting on
                                                                 May 30, 2006 in Issykul, the
                                                                 Demilgechi discussed the issues
                                                                 of PA “Aiyl Demilgesi” branch
                                                                 offices in every oblast and
                                                                 approved the Regulation on
                                                                 Branch Offices. The branch
                                                                 offices were registered in the
                                                                 oblast justice department, tax
                                                                 inspection and local social fund
                                                                 department.
       Demilgechi Bakyt Nurjanov and Kanybek Baitikov – head of
        Beshtash AO discuss the prospects of further cooperation


Directors of the branch offices are – Karamat Orozova (Batken), Salibay Nurbaev (Osh),
Abdulkhashim Ermatov (Jalalabad), Bolot Surapov (Naryn), Bakyt Nurjanov (Talas) and Jenish
Urumov (Issykul).


       Land Market Development in Kyrgyzstan                       Land Tenure Reform in Tajikistan
                28 Logvinenko Street                                   94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                             734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                      Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                     Page 19 of 57


Demilgechi Activities

Demilgechi play an important role, assisting rural citizens with understanding the specifics of
Kyrgyz legislation and resolving problems through round tables, thereby providing the rural
population with necessary and accurate information. This enables rural people and local
administration to meet to find a joint solutions for local problems.

In total, 45 Demilgechi work under the “Demilge” project (excluding the Demilgechi of Chuy
oblast), 16 of whom are women.

Quarterly Demilgechi meetings were held to update training materials and exchange best
practices and lessons learned. During these meetings Demilgechi not only shared experience in
resolution of significant issues but also received training on the main issues in land reform,
including:
November 28-30 (Osh)
      •   The Draft Model Regulation Оn LRF Land Management
      •   Topical Questions On Land Issues (Questions and Answers)

January 24-30 (Osh)

      •   Organization Of Work To Increase Efficiency of LRF Land Use
      •   Presentation of “What You Need To Know About LRF Land?” Brochure
      •   LRF Land Disputes
      •   Discussion Of The Draft Pilot Program and AO Selection Criteria

May 24-27 (Issykul)

      •   Demilgechi Activities in Chuy Oblast
      •   Organization and Conducting Legal Activities in AO
      •   Discussion of Land Problems by Region
      •   Success Stories: Solutions and Presentations

                                                    It is worth noting that although the Demilgechi had
                                                    a break in funding (about 3 months), during the
                                                    bidding for the new project, they did not stop
                                                    consulting with people in their communities. One
                                                    Demilgechi, Rano Nasreddinova, noted that local
                                                    people and the head of AO himself are
                                                    accustomed to turning to her when they have land
                                                    disputes. This may happen during the day, in the
                                                    evening, on a work day, and even on weekends.
                                                    As Ms. Nasreddinova says: “I live in this village
                                                    and its my job to be Demilgechi!”



Demilgechi – Rano Nasreddinova during the round table




       Land Market Development in Kyrgyzstan                     Land Tenure Reform in Tajikistan
                28 Logvinenko Street                                 94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                           734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                    Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                 Page 20 of 57



All Demilgechi have places to work and information corners; they are mostly housed within AO
buildings, schools or in NGO-rented rooms. Each Demilgechi conducts monthly round tables on
issues deemed particularly important at that time. The goals of the round table are to facilitate
and enable joint resolutions to rural problems involving land. The table below summarizes the
number of round tables conducted between November 2005 and September 2006:

№        Region                          Quantity
1        Osh                             96
2        Jalalabat                       98
3        Issykul                         69
4        Naryn                           64
5        Talas                           51
6        Batken                          48
         Total                           426

Since the illegal allocation of LRF land has been prevalent throughout Kyrgyzstan, the
Demilgechi conducted 112 round tables on “Efficient Use of LRF Land”. This equated to 26% of
the round tables conducted during the reporting period. Other round table themes have included:
     •   Pasture Lease and Its Specifics                             22
     •   Women Rights to Land                                        26
     •   Land Lease                                                  20
     •   Efficient Use of LRF Land                                   112
     •   Mandatory Payments of Land Users                            38
     •   Creation and Activities of Cooperatives                     19
     •   Land Legislation Novelties                                  61
     •   Inheritance                                                 3
     •   Senior School Pupils are Future Land Users                  6
     •   Credit Sources                                              4
     •   Standard Contracts with Agricultural Land                   30
     •   Registration of Land Transactions                           14
     •   Allocation of Land for Individual House Building            14
     •   Exchange, Purchase and Sale of Land Shares                  11
     •   Basis for Land Seizure                                      12
     •   Developing Low-Yield Land                                   6
     •   Solution of Disputes in Land Use                            14
     •   Rights and Obligations of Farmers                           6
     •   Servitude – Right to Use Others’ Land Plot                  8


7,567 persons took part in 426 round tables, 2,816 (37%) of them were women.

In addition to round tables, Demilgechi consult daily with the local population on a variety of
issues. Demilgechi record the number of consultations, number of consulted people, and
questions/solutions in a special journal.




         Land Market Development in Kyrgyzstan               Land Tenure Reform in Tajikistan
                  28 Logvinenko Street                           94/5a Tursun Zade Street
               720033, Bishkek, Kyrgyzstan                     734001 Dushanbe, Tajikistan
    Tel: +996 (612) 901-900 Fax: +996 (612) 901-909              Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                 Page 21 of 57


№        Oblast                        Total                      Women
1        Issykul                       2780                       1108
2        Osh                           2749                       1189
3        Batken                        1611                       588
4        Talas                         1383                       398
5        Naryn                         2316                       781
6        Jalalabad                     2455                       832
         Total                         13294                      4896

It is important to note women’s interest in the solution of water and land disputes, as they
comprise 36.82% of all individuals seeking assistance.
Since the beginning of the project, each Demilgechi has achieved significant results in solving
problems and assisting people. The majority of problems stemmed from a lack of knowledge in
drafting documents, namely agreements that had primarily been made orally and not registered
with Gosregister. The Collection of Agricultural Land Transaction Contracts (especially the
electronic version) has significantly eased Demilgechi work, allowing for the quick and efficient
preparation of necessary documents. Contracts include transactions such as lease, purchase
and sale, power of attorney, inheritance and lease.
Often conflict situations stem from the fact that land size on Certificates on Private Ownership
differ from the actual size. Demilgechi helped to clarify and redraw land borders. The awareness-
raising activities of Demilgechi continued to contribute to decreases in tax, social fund, and lease
payment debts of farmers.
In total in Year 1 Demilgechi provided assistance to 14,491 citizens. This figure is divided per oblast
below:

     1. Batken oblast                     3161
     2. Jalalabad oblast                  2341
     3. Osh oblast                        6261
     4. Issykul oblast                    1002
     5. Naryn oblast                      982
     6. Talas oblast                      744
     Total                                14,491


Breakdown by problems:
     •   513 farmers obtained Private Ownership Certificates
     •   473 individuals received land shares
     •   2937 villagers received social insurance certificates
     •   2565 private owners clarified the size of land plots
     •   75 farmers were assisted with purchase and sale of their land share
     •   3105 villagers were assisted with filling out documents
     •   813 individuals paid land tax debt in the amount of 1,185, 845 som
     •   522 individuals paid social fund debt in the amount of 666, 340 som
     •   233 farmers were assisted with servitude disputes
     •   28 individuals were assisted with legalization of inheritance
     •   529 individuals were assisted with LRF land lease
     •   774 individuals were provided with land plots for individual building
     •   232 individuals resolved pasture disputes with Demilgechi assistance
     •   87 poor received LRF land for lease
         Land Market Development in Kyrgyzstan               Land Tenure Reform in Tajikistan
                  28 Logvinenko Street                           94/5a Tursun Zade Street
               720033, Bishkek, Kyrgyzstan                     734001 Dushanbe, Tajikistan
    Tel: +996 (612) 901-900 Fax: +996 (612) 901-909              Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                  Page 22 of 57


     •   46 cooperatives were created with the help of Demilgechi
     •   74 individuals were sent to LARC for consultation
     •   259 individuals received a credit in the amount of 4,260,454 som;
     •   285 villagers paid debts to Water Users Associations in the amount of 167,243 som
     •   500 individuals paid lease payment debt in the amount of 2, 607,100 som
     •   292 individuals were assisted with resolution of disputes over LRF land lease issues
     •   47 individuals were assisted with exchange of land shares
     •   16 villagers received private land for lease
     •   9 individuals were assisted with obtaining low-yield land for development
     •   19 conflicts on road use were solved
     •   2 families were assisted with land plot division after divorce
     •   1 villager received a land plot of 0.2 hectares for small and medium business
         development
     •   1 villager was assisted with property appraisal with the help of a local appraiser
     •   54 other problems

In total in the reporting period Demilgechi provided consultations and assistance to 27,500 rural
citizens.


Activity 2: New Chui oblast Demilgechi activities
The project decided to expand the Demilgechi network during Year 1. Demilgechi had been
working throughout Kyrgyzstan, with the exception of Chuy oblast. With the initiation of the
Demilge program in Chuy, we are now covering all Oblasts of the Kyrgyz Republic.
The first step in initiating the program in Chuy was selecting potential Demilgechi. In December
2005, we selected 20 candidates based on recommendations from international partner-projects,
NGOs working in rural area and AO representatives. On December 26-28 the project conducted
a training for all 20 candidates in basic land law and presented Demilgechi activities. Based on
their performance, we then selected 8 candidates out of 20 to work as Demilgechi in 8 pilot Chuy
oblast villages.
Eligibility requirements were:
    • Demilgechi should live in village
    • Have leadership potential
    • Be communicative and mobile
    • Have experience working with people
    • Have knowledge of land legislation desirable
    • Have knowledge of survey procedures
    • Have good organizational skills.


The Demilgechi working in Chuy oblast are:

№         Name                          Village       Aiyl Okmotu         Rayon
1         Maksat Jumataev               Erektuu       Saryook             Jail
2         Nurlan Uzakbaev               Panfilovka    Panfilov            Panfilov
3         Jyldyzbek Majitov             Mramornoe     Ala Archa           Alamedin
4         Chynyk Takyrbahsev            Baitik        Baitik              Alamedin
5         Sveta Ismailova               Kyzyltuu      Kyzyltuu            Sokuluk
         Land Market Development in Kyrgyzstan                Land Tenure Reform in Tajikistan
                  28 Logvinenko Street                            94/5a Tursun Zade Street
               720033, Bishkek, Kyrgyzstan                      734001 Dushanbe, Tajikistan
    Tel: +996 (612) 901-900 Fax: +996 (612) 901-909               Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                   Page 23 of 57


6         Janyl Tologonova              Jerkazar      Uzunkyr              Yssykata
7         Nasyikat Arykshaeva           Ivanovka      Ivanovka             Yssykata
8         Asylgul Saparbekova           Otogon        Syntash              Yssykata

All Demilgechi have organized information corners, have conducted interviews of villagers and
(with a Coordinator) have prioritized problems and solutions for their communities. They have
also drafted tentative work plans for the current year. Since Chuy oblast Demilgechis are new,
round tables were conducted with the participation and supervision of a project specialist..
In their first year of work Chuy oblast Demilgechi held 153 round tables and meetings for 3,066
people.
With Project assistance, Chuy Demilgechi solved 404 problems:

     •   107 individuals legalized documents for private agricultural land plots
     •   22 villagers were assisted with calculation and payment of social contributions
     •   4 farmers legalized inheritance documents
     •   41 individuals reached agreement with AWU for irrigation supply on preferential terms
     •   7 individuals were assisted with allocation of land plots (private land)
     •   45 land owners solved irrigation problems for 150 hectares
     •   48 were assisted with completing land transaction contracts
     •   22 individuals were included on the list for land allocation
     •   44 villagers resolved land plot boundary disputes
     •   14 individuals were assisted with legalization and receipt of architectural plans for building
         on individual land plots
     •   20 individuals from 5 farms resolved debts to the social fund
     •   1 farmer was assisted with preparation and completion of documents for 50 000 som
         credit
     •   9 individuals were assisted with receiving a loan from “Habitat-Kyrgyzstan” Foundation
     •   18 farmers were assisted with calculation of mandatory payments for land
     •   J. Niazaliev and A. Uzakbaev recovered losses caused by damage in the amount of 2000
         som.

We plan to include Chuy oblast Demilgechi in the national PA “Aiyl Demilgesi” at the beginning of
2007.

2.2 Urban Land Market Development
2.2.1 Market-based urban land use planning (zoning)


Results expected: Improved implementation of market-based zoning regulations in the eleven
pilot cities, increased investment in urban land as a result of a more predictable regulatory
environment in the eleven pilot cities; strengthened local capacity to implement legal zoning
regulations and to introduce market-based urban land use planning tools in the remaining cities
of Kyrgyzstan; improved cognizance among judges and prosecutors on zoning issues.
Activities:

An important achievement during Year 1 in the zoning component was the enactment of the Law
“On Introduction of Amendments and Additions to the Land Code of the Kyrgyz Republic” of
January 20. 2006, № 7.
         Land Market Development in Kyrgyzstan                 Land Tenure Reform in Tajikistan
                  28 Logvinenko Street                             94/5a Tursun Zade Street
               720033, Bishkek, Kyrgyzstan                       734001 Dushanbe, Tajikistan
    Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                Page 24 of 57


The Law introduces new provisions to the Land Code on legal zoning, on elaboration and
enactment of “The Rules of Construction and Land Use”, on fair and transparent land titling
procedures and the further use and construction on titled land.

Activity 1: Completion of pilot activities.
The enactment of “The Rules of Construction and Land Use” in Batken and Uzgen has been
completed. Please see below for a brief timeline on the enactment of the rules in these cities:


                            Uzgen
                            February 3, 2006 – “The Rules of Construction and Land Use of
                            Uzgen” were approved at the session of Uzgen City kenesh.

                            March 9, 2006 - “The Rules of Construction and Land Use of Uzgen”
                            were registered by Osh oblast Justice Department.

                            April 14, 2006 - “The Rules of Construction and Land Use of Uzgen”
                            were published in “Osh Janyrygy” oblast newspaper.




                           Batken
                           March 29, 2006 - “The Rules of Construction and Land Use of Batken”
                           were adopted at the Session of Batken City Kenesh.

                           April 17, 2006 - “The Rules of Construction and Land Use of Batken”
                           were registered by Batken Oblast Justice Department.

                           April 28, 2006- “The Rules of Construction and Land Use of Batken”
                           were published in “Batken Tany” oblast newspaper.




The project published the adopted Rules of Uzgen and Batken as informational brochures, 700
copies each.

Corrections to the Rules of Tokmok, Jalalabad, and Cholpon Ata have been. The project is
finalizing the Rules of Osh, incorporating local deputies’ comments and recommendations. The
stages and terms of amendments are presented in the following table:




       Land Market Development in Kyrgyzstan                Land Tenure Reform in Tajikistan
                28 Logvinenko Street                            94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                      734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909               Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                  Page 25 of 57




      City       Date of the Rules            Registration in          Date of            Issue of a
                   enactment or                  Justice            publication in         brochure
               approval of a revision        Department Date      local newspaper
Revision of the Rules
Tokmok           Session of Tokmok              Registered in       Published in        700 copies of
                City Kenesh on April            Chuy Oblast        “Chuy Bayany”          the rules
                      26, 2006                     Justice        oblast newspaper       published in
                                              Department on       on June 14, 2006         Russian
                                               May 23, 2006
Jalalabad            “The Rules of             “The Rules of        Published in        700 copies of
                  onstruction and Land       Construction and     oblast newspaper        the Rules
                 Use of Jalalabad” were         Land Use of       “Akyikat” on July         were
                 adopted at the Session       Jalalabad” were         28, 2006           published in
                    of Jalalabad City           registered in                            Kyrgyz and
                   Kenesh on May 24,         Jalalabad Oblast                              Russian
                          2006.                    Justice
                                              Department on
                                              June 20, 2006.
Cholpon Ata      Revision of “The Rules        “The Rules of         Published in       700 copies of
                  of Construction and        Construction and     oblast newspaper       the Rules in
                 Land Use of Cholpon-           Land Use of            “Issykul            Russian
                  Ata” were adopted at          Cholpon Ata”        Kabarlary” on            were
                     the Session of          were registered in     July 25, 2006         published
                    Cholpon-Ata City           Issykul Oblast
                   Kenesh on July 14,              Justice
                          2006                Department on
                                                July 5, 2006.


Osh

The revised text of “The Rules of Construction and Land Use of Osh” was submitted to Osh city
local self-government bodies and city services for their consideration. Maps for the revision are
currently being corrected by the Osh city Architecture Department. Approval of the revision is
planned for October - November 2006.

Activity 2: Implementation of zoning.
For zoning implementation in 11 cities with the adopted Rules we have performed the following
works:
       Monitoring and analysis of the current legal zoning implementation
       Seminars for deputies, architects, and entrepreneurs
       Writing “Construction Development Plans” (strategic plans).

Monitoring of current legal zoning implementation in 11 pilot cities

The monitoring of city administration activities in 11 cities with adopted legal zoning was
performed twice in 2006: in February – March (for 2005) and in August – September (for first half
of 2006). The indicators for the first half of 2006 were compared with comparable data for the first
half of 2005 to gauge improvements in legal zoning implementation following the adoption of the
Rules.
       Land Market Development in Kyrgyzstan                  Land Tenure Reform in Tajikistan
                28 Logvinenko Street                              94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                        734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                 Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                 Page 26 of 57


The 18 compared indicators were:

     1. Availability of the construction and land use commission and number of
         commission members
     2. Number of commission sessions
     3. Conducted public hearings
     4. Frequency of the construction and land use commission sessions
     5. Number of modifications to the Rules
     6. Number of applications for provision of a land plot for construction, including:
             • From natural persons
             • From legal entities
     7. Decisions to provide land plots (total), including:
             • From architecture organs
             • From Gosregister organs
     8. Land plot plans prepared for commission consideration
     9. Land plot plans prepared for secondary market cases
     10. Issued requirements to facades
     11. Issued permissions for new profiling of objects
     12. Issued permissions for temporary objects
     13. Land plots provided for ownership through auctions, number:
     14. Total amount (thousand som)
     15. Land plots provided for lease through auctions, number:
     16. Total amount in (thousand som)
     17. Land plots provided for lease or ownership through direct allocation, number:
     18. Total amount in (thousand som)

In general, the comparative analysis demonstrated very promising results. Income from land plot
sales by auction (ownership right and use right) has increased significantly. For instance, in
Tokmok the city has generated 2,038,800 som in the first six months of 2006, compared to
518,300 som in the first half of 2005. The figure for the first half of 2006 already exceeds the
2005 yearly total of 1,779,500 som.

We are also pleased to report that transparency in sales of land plots for ownership or lease is
also increasing. During the first 6 months of 2006 there were been 40 auctions, whereas in all of
2005 there were only 47 auctions (8 of them in the first half). Income from sales by auction and
direct sales in 2005 was nearly equal; however, in the first half of 2006 auction income exceeded
direct selling income by 6 times (187,000 and 20,700 respectively).

In Osh, the number of authorizations issued for construction and modification of land plot plans
and ‘requirements for facades’ in the first six months of 2006 increased 1.5-2 times.

In Cholpon Ata, all indicators are almost the same as in 2005, except the most important one –
income from land sales by auctions has increased by 3 times more than in first part of 2005 and
by 1.5 times more than in 2005 as a whole. In short, the process of legal and transparent land
plot allocation is increasing, leading to a significant growth of economic efficiency of the public
finance sector.

Similar trends have occurred in Balykchy, Jalalabad and Karakol. Indicators of local architecture
and construction department activities using new legal zoning procedures have either remained

       Land Market Development in Kyrgyzstan                 Land Tenure Reform in Tajikistan
                28 Logvinenko Street                             94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                       734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                  Page 27 of 57


at the same level or significantly increased (KarakolK 1.5-2 times more than in the first half of
2005 and exceeded indicators for 2005 in total). We can note a sharp move forward in sales of
land plots. In Balykchy and Jalalabad, there was significant development of both sales by auction
and direct sales, while in Karakol there was only progress for direct sales (155,000 som in
comparison to 42,800 som in 2005). These figures demonstrate that new procedures and
technologies do not hinder but rather stimulate investment activity.

Talas and Batken cities have not provided income data, so it is difficult to interpret the Rules’
effect on the economic efficiency. However, the number of documents issued by city
administrations as well as by architecture and construction departments show progress.


       Land plot investment in Kyrgyzstan cities*

          City             Investment amount in the first half of 2006 in comparison to:

                      First half year of 2005, %           Year of 2005 in total, %
     Balykchy                         369,1                                 231,6
     Cholpon Ata                      225,7                                 150,2
     Jalalabad                       No data                                147,5
     Tokmok                           402,0                                 117,1
     Karakol                          677,4                                  88,0
     Uzgen                            89,3                                   58,9

   *Note: Osh, Karabalta, Naryn and Batken cities have not provided data for land plot sales

Thus, the monitoring of the city-planning system based on legal zoning principles and
technologies proved successful in most cities. Land investment in the first half of 2006 grew 2-6
times (353% on average) in comparison to 2005 in all cities, except in Uzgen. In 4 out of 6 cities
that provided information, income from land plot sales in the first half year increased in
comparison to 2005 on an average of 32%.

Clearly, the introduction of “The Rules of Construction and Land Use” contributed to the growth
of investment flows.



Seminars for deputies, architects and entrepreneurs

For Year 1 we planned 25 seminars in 11 pilot cities and in Bishkek. At present, we have
conducted 21 seminars, 19 in pilot cities and 2 in Bishkek. The list of seminars held in pilot cities
is presented below:




       Land Market Development in Kyrgyzstan                  Land Tenure Reform in Tajikistan
                28 Logvinenko Street                              94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                        734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                 Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                      Page 28 of 57


     №               Seminar place                   # of participants      Conducting date

1.          Tokmok                                   20                  November 24, 2005
2.          Naryn                                    20                  November 29, 2005
3.          Balykchy                                 18                  November 30, 2005
4.          Cholpon Ata                              10                  December 1, 2005
5.          Karakol                                  16                  December 2, 2005
6.          Karabalta                                17                  December 7, 2005
7.          Talas                                    25                  December 8, 2005
8.          Osh                                      15                  December 19, 2005
9.          Jalalabad                                20                  December 20, 2005
10          Tokmok                                   21                  January 16, 2006
11          Cholpon Ata                              18                  January 27, 2006
12          Uzgen                                    20                  February 20, 2006
13          Batken                                   22                  February 22, 2006
14          Balykchy                                 19                  March 15, 2006
15          Karakol                                  16                  March 16, 2006
16          Cholpon Ata                              15                  March 17, 2006
17          Tokmok                                   24                  April 4, 2006
18          Bishkek                                  15                  May 17, 2006
19          Osh                                      15                  June 15, 2006

During these seminars we provided trainings on:
        • Legal zoning technologies;
        • Land entitlement and construction permission procedures;
        • Correction of legal zoning and ecological restrictions map;
        • Changes in legislation.
        • Discussion of the revised “Rules of Construction and Land Use”.

Two important seminars in Bishkek

                                             On September 21, 2006 the project conducted a
                                             seminar for the Bishkek City Council deputies to present
                                             the brochure “Legal Zoning: Introduction of Ownership
                                             Right to City-Planning”. The seminar hosted 26 out of
                                             43 deputies of the City Council, including commission
                                             chairpersons and the City Council Chairperson –
                                             Nurjamal Baibolova. Entrepreneurs and representatives
                                             from the Architects Union also participated in the
                                             seminar – 30 people in total. The seminar resulted in a
                                             decision to prepare and adopt a resolution obliging the
                                             Bishkek City Administration to start elaboration of “The
                                             Rules of Construction and Land Use in Bishkek” and
Nurjamal Baibolova, Chairperson of Bishkek   therefore, introduce legal zoning. It is expected that
City Kenesh, and A. Vysokovsky, Zoning       this resolution will be introduced at the October session.
Consultant, during the seminar

On September 25, 2006, the project held a second seminar to present a concept for a “Standard
Investment Package for Developers” for entrepreneurs and construction industry players. All 23
attendees were from the business community.

        Land Market Development in Kyrgyzstan                     Land Tenure Reform in Tajikistan
                 28 Logvinenko Street                                 94/5a Tursun Zade Street
              720033, Bishkek, Kyrgyzstan                           734001 Dushanbe, Tajikistan
   Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                    Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                 Page 29 of 57


In total 400 persons participated in seminars in Bishkek and the 11 pilot cities.

Preparation of “Construction Development Plan” (strategic plans)

Per our Year 1 work plan, we provided technical assistance in the practical application of the
Rules of Construction and Land Use to two specific cases: one in Tokmok and another in
Cholpon Ata.

      1. Tokmok

Purchase of rights to land plot. At the beginning of 2006 R. Tairova purchased a single house on
a land plot of 0.098 hectares (Tokmok, 66 Shamsinskaya Street). The owners planned to
demolish the house and build a one story car servicing center on the property. The current Rules
of Tokmok forbid the construction of car servicing buildings in Public and Business Centre - Ц-1
zone. Car repair stations are allowed only in Communal K-1 zone. The project recommended a
course of action for obtaining necessary permission and assisted the owner in preparing
documents and permit applications. At present, the owner has:
        • Submitted her application to the Tokmok City Administration describing her intention to
          build a car servicing center on the purchased land;
        • Received a statement from the Architecture and Construction Department of Tokmok
          City Administration citing “The Rules of Construction and Land Use of Tokmok” and
          requiring public hearings to be conducted on the matter regarding possible amendment
          to the City Rules;
        • Participated in public hearings and received a favorable decision from the Land Use
          Commission

Based on the favorable outcome of the public hearings and statements from the Architecture and
Construction Department and the owner, the Commission has proposed to move forward
amendments to the current Rules. In addition, due to the problematic situation on central
expressways (many car servicing stations have been built) the Commission decided to
recommend the consideration of this issue at the next City Council session and make necessary
modifications to the Rules.

      2. Cholpon Ata

A private entrepreneur, V. Shentsov, has a land plot of 1,200 square meters with an unfinished
construction (Cholpon Ata, 40 Kurortnaya Street). He planned to use this land to build a guest
house for tourists and obtained permission by the State Architecture and Construction Control for
construction. In the course of construction, he decided to purchase a neighboring land plot of 800
square meters to expand parking and add additional space.

The owner received a recommendation to move forward with the purchase, considering the fact
that the plot belonged to municipality and was free from other third-party claims. On February
16, 2006 Mr. Shentsov sent a request to the local self-government authority stating his plan to
purchase the additional plot. The Cholpon Ata Architecture Department, together with
Gosregister, concluded that the plot could be purchased through a direct sale.

The Construction and Land Use Commission held public hearings with the participation of the
City Council, the Cholpon Ata rayon Architecture Department, Gosregister specialists and city
services. Having clarified some issues, the Commission also determined that a direct sale was
possible. This decision was duly documented in the protocol and submitted to the City Council.
Based on the protocol, the City Council issued a decision to transfer the land plot for ownership,
       Land Market Development in Kyrgyzstan                 Land Tenure Reform in Tajikistan
                28 Logvinenko Street                             94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                       734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                     Page 30 of 57


the Architecture Department made a land plot plan, and Gosregister completed a purchase
contract. At present, construction is being coordinated with the Cholpon Ata Architecture
Department to obtain all necessary permissions.

In both of these cases, “The Rules of Construction and Land Use” played a key role in the
successful results for land entitlement.

Activity 3: Specialized legal training.
To have the legal zoning system working to its fullest extent, it was important to introduce “The
Rules of Construction and Land Use” as a statutory act in judicial and prosecution practices while
considering land issues.
                                                     On May 15, 2006 we conducted a specialized
                                                     seminar in Bishkek for judges and prosecutors:
                                                     “Introduction of Legal Zoning System in
                                                     Kyrgyzstan”. Seminar participants included
                                                     representatives of the Supreme Court and General
                                                     Prosecution, judges of inter-rayon courts from
                                                     across Kyrgyzstan and prosecutors from all towns
                                                     where the Rules of Construction and Land Use
                                                     were adopted; 75 persons in total. Land titling
                                                     procedures and implementation were discussed in
                                                     detail at the seminar, as well as ways to ensure
                                                     investment-construction plans comply with
                                                     legislation.
Seminar for Judges and Prosecutors


As a result of the seminar, the participants agreed to put the Rules into practice. All legal zoning
materials and current Rules were provided to judicial and prosecutorial training centers as well as
to all participants.

Activity 4: Attraction of green field investment.
    To implement this activity the project prepared the following documents:

        “Standard Investment Documents” Concept with description of its application;
        “Standard Investment Documents” Package for entrepreneurs.

The Concept describes international investment standards and investment package methods
while taking the Kyrgyz context into account. The Concept specifically cites the American
experience – oriented at protection of large investments and the observance of a balance
between owners/buyers (investors)/community interests. The American system of investment in
construction, based on legal zoning principles and its main regulatory document – The Rules of
Construction and Land Use, is carefully articulated in the Concept. However, investment
conditions in Kyrgyzstan are also considered.

The analysis shows that the land market in Kyrgyzstan is nascent. The majority of land plots for
commercial purposes do not have the necessary documentation for immediate investment. It
means that conditions for investment essentially differ from the western ones.

One of important problems for the investor is that local self-government bodies have limited
budgets for regular urban planning activities such as allocation of land plots, systematic

        Land Market Development in Kyrgyzstan                    Land Tenure Reform in Tajikistan
                 28 Logvinenko Street                                94/5a Tursun Zade Street
              720033, Bishkek, Kyrgyzstan                          734001 Dushanbe, Tajikistan
   Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                   Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                               Page 31 of 57


development of land surveys with the purpose of involving it in the land market. Due to this,
investors are compelled to take a risk and to pay to complete all of the necessary documentation;
i.e., to invest in something that does not yet belong to him.

Considering the above, in the Concept we have suggested what documents and steps should be
included in the investment package:

   1. Preparation and definition of a land plot is made at the expense of local self-government
      bodies or the applicant in the form of the Projected Object Scheme (Plan of a land plot);
   2. The Projected Object Scheme (Plan of a land plot) is based on the Rules of Construction
      and Land Use and contains rules of land plot use and construction development,
      including types and parameters of allowed use;
   3. The Projected Object Scheme (Plan of a land plot) contains all necessary technical
      information for construction, including preliminary specifications for connection to
      engineering networks;
   4. A set of these documents allows an investor to calculate the financial cost of the project
      and construction and to weigh possible risks.

However, this package of documents does not yet guarantee protection of an investor. It needs
legal strengthening of procedures protecting an investor and allowing a balance between private
and public interests.



Activity 5: Eminent domain regulations

As an additional way to stimulate investment and effective land use, our zoning team and team of
lawyers developed modifications to the Land Code concerning eminent domain regulations.
These modifications were discussed and coordinated with the Project lawyers and independent
appraisers.

On September 18, 2006 the modifications were discussed by the Working Group for introduction
of these amendments and additions to the Land Code. After discussion the proposed eminent
domain regulations (with some corrections) were introduced to the draft law On Introduction of
Amendments and Additions to the Land Code.

The new articles are to be introduced to the Land Code as “Seizure of land plots for state and
municipal needs”, “Conditions of land seizure for state and municipal needs”, “Procedure of land
seizure for state or municipal needs” and “Repurchasing price for land plot seized for state or
municipal needs”.

For instance, we propose a new version of article 68 of the Land Code describing a list of
exceptional cases of land seizure for state and municipal needs. With this we would like to
legislatively define and systemize the most common land seizure cases in order to decrease the
risk of unreasonable land seizure and corruption by state and municipal authorities.

Remembering that seizure of land for municipal and state needs is possible only with
compensation, the new article 68.3 stipulates the requirement for payments for land plot seizure
– the repurchasing price. The repurchasing price can be defined by the parties under “voluntary”
seizure or based on court decision under “compulsory” land plot seizure.


       Land Market Development in Kyrgyzstan               Land Tenure Reform in Tajikistan
                28 Logvinenko Street                           94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                     734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909              Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                    Page 32 of 57


For relevant land plot appraisal this article stipulates the repurchasing price parameters. The
repurchasing price of a land plot is composed of:
      • Market price of a land plot and of immovable property on it;
      • Loss of profit due to premature termination of third party obligations (i.e. lease payments)

In addition, the article foresees the possibility of allocating another land plot or other immovable
property, subtracting the value of the other property from the repurchasing price calculation.

Activity 6: Educational seminars for non-pilot areas

This activity had three goals:

          •    Familiarize specialists, administration and people living in settlements with principles
               and technologies of city-planning regulations;
          •    Evaluate the situation taking place in settlements while continuing to provide
               technical assistance in elaborating and adopting the Rules;
          •    Train local specialists and local self-government employees to independently
               elaborate the Rules.

In Year 1 the Project, in cooperation with the Public Association “Urban Development” (UDA),
conducted 11 seminars on zoning issues in towns and villages not participating in the pilot
project.

№        Seminar place                                             Conducting date
1.       Kant city,                                                April 27, 2006
         Issyk Ata rayon, Chuy oblast
2.       Karasuu city                                              June 16, 2006
         Karasuu rayon, Osh oblast
3.       Sokuluk village                                           June 21, 2006
         Sokuluk rayon, Chuy oblast
4.       Tash-Kumyr town                                           July 11, 2006
         Nooken rayon, Jalalabad oblast
5.       Mailisuu town                                             July 12, 2006
         Bazarkorgon rayon, Jalalabad oblast
6.       Tyup village                                              July 18, 2006
         Tyup rayon, Issykul oblast
7.       Teplokluchenka village                                    July 19, 2006
         Ak Suu rayon, Issykul oblast
8.       Kyzyl Suu village                                         July 20, 2006
         Jety Oguz rayon, Issykul oblast
9.       Kochkor village                                           August 8, 2006
         Kochkor rayon, Naryn oblast
10.      Bokombaevo village                                        August 9, 2006
         Ton rayon, Issykul oblast
11.      Lebedinovka village                                       August 16, 2006
         Alamudun rayon, Chuy oblast

During the seminars we discussed key notions and technologies of city planning under the legal
zoning system, drawing maps and city-planning regulation of rights of owners to land use, land
plot allocation procedures and the issuance of construction permits and the experience of
introducing legal zoning to other cities.
          Land Market Development in Kyrgyzstan                 Land Tenure Reform in Tajikistan
                   28 Logvinenko Street                             94/5a Tursun Zade Street
                720033, Bishkek, Kyrgyzstan                       734001 Dushanbe, Tajikistan
     Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                Tel:+992 (372) 24-86-23
  CHEMONICS INTERNATIONAL INC.                                                   Page 33 of 57




                                                  A brochure featuring short methodological guidelines
                                                  on the introduction of the legal zoning system was
                                                  designed especially for the seminar. The brochure
                                                  also featured the main legal and city-planning
                                                  regulations in simplified versions. Seminar
                                                  participants included representatives of local self-
                                                  government bodies, town and village Kenesh
                                                  deputies, specialists of Gosregister and Architecture
                                                  Departments and other town services and
                                                  entrepreneurs; 200 persons in total.
                                                  As a result of the seminar, the project realized that
                                                  most municipalities are willing to start legal zoning.
                                                  We are currently considering the idea of conducting
                                                  further consulting work on the introduction of legal
                                                  zoning through UDA and elaborating the Rules for
Seminar in Non-Pilot Town                         villages in Year 2.



  Activity 7: Public information and outreach

  During the reporting period, project specialists conducted an information campaign to highlight
  the principles, possibilities and rights under a legal zoning system.

  This included:
        • Regular interviews on state radio in the “Land and People” program;
        • Publication of “Legal Zoning: Development Stages” in “Obustroistvo i Remont” (Repair
            and Comfort) magazine (February 2006);
        • Elaboration and dissemination of 3 brochures (1200 copies);
        • Participation in “Open Kyrgyzstan” TV program (“Pyramid” TV Company) on the subject
            of “Land Policy in Kyrgyzstan” (March 2006);
        • Presentations on legal zoning to journalists (newspapers, radio, television) including
            the inclusion of journalists in seminars on legal zoning for prosecutors and judges,
            entrepreneurs and deputies.

  We plan to expand this activity in Year 2.


  Special attention to Bishkek.
  In Year 1, the project met several times with the Bishkek City Administration to renew zoning
  activities in Bishkek. This built on accomplishments achieved in 2005 under the predecessor
  USAID project. A compulsory condition for the renewal of Bishkek zoning is the finalization of a
  Memorandum of Understanding (mOu) between USAID and the Bishkek City Administration. In
  spring 2006 we began negotiations with the City Administration and submitted a draft MoU for
  their review. After we did not hear back from the Administration for several months, we met with
  Nurjamal Baibolova, Chairperson of Bishkek City Kenesh in August 2006. During the seminar
  explaining the goals of legal zoning, the majority of deputies and the Chairperson decided to
  consider the legal zoning issue at the next session (autumn 2006). We are currently negotiating
  this issue with the City Kenesh.

          Land Market Development in Kyrgyzstan                  Land Tenure Reform in Tajikistan
                   28 Logvinenko Street                              94/5a Tursun Zade Street
                720033, Bishkek, Kyrgyzstan                        734001 Dushanbe, Tajikistan
     Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                 Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                              Page 34 of 57



2.2.2 Professional development of real estate appraisers
Results expected: National appraisal standards approved by the GOK; National appraisal
standards universally applied; and appraisers have access to future professional development.


Activity 1: Advocate passage of National Standards.
One of the most important achievements of the Project thus far has
been our contribution to the enactment of the six National Appraisal
Standards by the Government of the Kyrgyz Republic with Decree of
April 3, 2006, № 217:

   1)   “General Concepts and Principles of Appraisal”,
   2)   “Professional Ethics”,
   3)   “Real Estate Appraisal”,
   4)   “Equipment and Machine Appraisal”,
   5)   “Business Appraisal”
   6)   “Requirements for Appraisal Report Development”

For wider dissemination and applications, the standards were united
under one specific brochure.


Activity 2: Uniform application of national standards.

Two national conferences were held to examine the role of appraisal standards. These
conferences were conducted with the participation of the Standards authors: appraisers from all
regions, deputies of JK, representatives of Gosregister, Goskomimushestvo (State Committee on
Property), Goskomarhstroy (State Committee of Architecture and Construction), Gosfinnadzor
(State Financial Inspection), Gossudekspertiza (State Judicial Examination),
Bishkekglavarkhitektura (Bishkek Department of Architecture and Construction) and the Ministry
of Justice.

To present and discuss the draft National Standards, we conducted a conference on “Prospects
for the Development of Methodology of Independent Appraisal Activities in Central Asia” in Osh
on March 16-17, 2006. The Conference boosted the promotion of the National Standards and as
a result, the Government approved the National Standards just two weeks after the Conference.

The second conference was held in Bishkek on April 20, 2006, after the approval of the National
Standards, where we presented the newly approved Standards for 65 participants. The adopted
National Standards must be uniformly applied by all appraisal agents.




       Land Market Development in Kyrgyzstan              Land Tenure Reform in Tajikistan
                28 Logvinenko Street                          94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                    734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909             Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                      Page 35 of 57



                                                           Each speaker emphasized the
                                                           importance of the National Standards of
                                                           Appraisal, and noted the methodological
                                                           and technical support from the Project.
                                                           Moreover, participants expressed their
                                                           wish to cooperate further with the Project
                                                           in developing the National Standards.
                                                           Specific Conference resolutions included
                                                           proposals to complete the work on
                                                           elaboration of intellectual property
                                                           appraisal standards and to prepare a new
                                                           standard of mass appraisal of immovable
                                                           property for taxation purposes.

     At the Conference on the adoption of National


Adoption and introduction of the National Standards was discussed during meetings with Mrs.
Gulmira Kempirbaeva, head of the Sectoral Policy Development Department of the State
Committee on Property (Goskomimushestvo), who is responsible for the state regulation of
appraisal activities in the Kyrgyz Republic, and with Mr. A. Kebekov, head of the Real Estate
Market Development Department of the Gosregister. In the course of the working meeting we
agreed upon the project’s specific role in regards to the appraisal of agricultural land and its
general role in helping to achieve a state policy on the development of independent professional
appraisal in the Kyrgyz Republic. Joint efforts for the promotion and support to the Law on
Appraising Activities have been planned.

The key issue for this law is to introduce a provision on public regulation of appraisal activities by
independent professional organizations, thus preventing possible corruption during state
regulation. The introduction of the National Standards brings tough new requirements for quality
control. This question was a topic for discussion during our meeting with the Board of the
Association of Kyrgyz Appraisers (OKO). The necessity of quality controlled by public
professional organizations was supported by the members of the Board – all heads of leading
appraisal firms in Kyrgyzstan.

Activities of the OKO Expert Council and an internal review of appraisal reports can contribute to
increasing the professionalism of appraisers and guaranteeing quality control.



Activity 3: Professional development courses
To enhance the professional development of local appraisers, courses on agricultural land
appraisal and appraisal of vacant land plots were designed and implemented.
3.2. Increasing qualifications for agricultural land appraisal:
Per the Year 1 Work Plan, in spring 2006, Project specialists prepared methodological materials
on defining the market value of agricultural land plots. Materials were assembled in brochures
covering the issues facing local appraisers independently appraising the market value of
agricultural lands.


       Land Market Development in Kyrgyzstan                      Land Tenure Reform in Tajikistan
                28 Logvinenko Street                                  94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                            734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                     Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                    Page 36 of 57


                                             Issues included:
                                             • Identification of agricultural immovable property as
                                                 the object of market relations and appraisal;
                                             • Requirements of international appraisal standards to
                                                 the cost type being defined and meaning of market
                                                 value for an objective property appraisal;
                                             • Peculiarities of pricing in the agricultural land market
                                                 and necessity of considering specifics conditions
                                                 and factors influencing the price for plots under such
                                                 categories of land;
                                             • Methods to define a price and best practices in
                                                 applying the comparative, profitable and expenditure
                                                 methods in appraisal of agricultural plots of land;
                                             • Peculiarities of appraisal of those land plots under
                                                 the right of the third party (lease agreement, pledge,
                                                 servitude, etc.);
                                             • Requirements to composition and appearance of
                                                 appraisal reports taking into consideration specifics
                                                 of agricultural plots of land.


Materials were prepared in accordance with generally adopted appraisal principles, specified in
the International Standards. At the same time, all practical appraisal examples were base on the
data reflecting economic, social and nature-climate conditions of Kyrgyzstan.




                                         In April we held two seminars for practicing appraisers: in
                                         Bishkek (38 appraisers from the North) and in Osh (35
                                         appraisers from the South). The main goal of the seminars
                                         was to reveal peculiarities of agricultural land appraisal,
                                         demonstrate specifics of conditions and factors influencing
                                         the price for agricultural land plots, explain major
                                         informational requirements for determining a market price,
                                         familiarizing participants with best practices in various
                                         appraising situations and establishing standards for appraisal
                                         reports.

Seminar on Agricultural Land Appraisal


The participants praised the seminars conducted in Bishkek and Osh. Kanatbek Shamshidinov
from Cholpon Ata said that he learned more during one day of training than he had during all
other courses. Jianaly Batyrbekov from Osh noted that the seminar helped him to find a solution
to a concrete practical task in appraising a land plot with a garden which he had not been able to
resolve.




       Land Market Development in Kyrgyzstan                    Land Tenure Reform in Tajikistan
                28 Logvinenko Street                                94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                          734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                   Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                      Page 37 of 57


Implementation of practical work


                                              For implementation of the Governmental Resolution
                                              we invited 7 certified appraisers from leading appraisal
                                              firms of Kyrgyzstan to conduct agricultural land
                                              appraisals in the 10 pilot AOs. After a working
                                              meeting with appraisers, we defined plans and the
                                              volume of work (2 land plots per AO: arable and non-
                                              arable land).

                                              The seminar was held in two stages:
                                                    •   Individual work with each appraiser and a
                                                        general summary session to evaluate the
                                                        quality of the reports as a whole;
                                                    •   Practical field work to apply best practices to
                                                        four plots in Tyup AO, Tyup rayon, Issyk-kul
                                                        oblast, which allowed this difficult material to
                                                        be explained and learned more efficiently.


Field Work

                                              In the field we met with rayon Gosregister and AO
                                              specialists and studied soil maps, lease and
                                              purchase-sale data. In parallel to the meetings with
                                              appraisers, we had a meeting (June 29) with
                                              Gosregister specialists, and discussed coordination
                                              issues in appraising agricultural land plots under the
                                              pilot project.

                                              There we met with Mr. A. Asakeev, Head of Tyup
                                              rayon Gosregister office and with Mr. K. Sagyndykov,
                                              Chief Tyup rayon Agronomist; examined purchase
                                              and sale and lease transactions for land, analyzed a
                                              link between demand to products, prices for services
                                              in agribusiness, quality characteristics of land plots
                                              and their remoteness from rayon center.

 In Tyup rayon Gosregister office


In general, the quality of reports was of a high level, particularly the reports by appraisers of
Reveal Ltd. (Bishkek city) and Al-Star Ltd. (Bishkek city).




       Land Market Development in Kyrgyzstan                      Land Tenure Reform in Tajikistan
                28 Logvinenko Street                                  94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                            734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                     Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                   Page 38 of 57


3.2. Increasing qualifications in the field of vacant land plot appraisal:
1. Preparation of methodical materials

In June, the project prepared materials on issues
regarding the appraisal of vacant land plots for
development and construction. We also prepared
methodical materials for the seminar on appraisal of
vacant land plots. These materials were put in a 68-
page brochure.

Emphasis was placed on defining market prices for
vacant plots of land, as this is of principal importance for
making investment decisions, coordinating private and
public interests, and calculating just compensation in
the seizure of land for public needs.
The materials specifically addressed the following
issues:
   •   Analysis of the most efficient use of vacant land
       plots;
   •   Public regulation of land use;
   •   Market justification of developed land property;
   •   Investment cost estimates;
   •   Calculation of funding needs and builder’s profit;
   •   Application of the ‘remainder technique’ and ‘money flow discounting technique’ in
       definition of a market price for a vacant land plot.
The materials were prepared in accordance with the generally adopted appraisal principles,
specified in the International Appraisal Standards 2005 and the National Appraisal Standards,
adopted by the Government of the Kyrgyz Republic.
Conducting training seminars
Two seminars were conducted for 45 practicing appraisers at the end of June 2006. The main
goal of the seminars was to reveal peculiarities of appraising vacant land plots subject to land
development, to explain the basic requirements for analyzing the most efficient land use, to
familiarize participants with the current city-planning and land survey documentation regulating
building up and other land plots use, demonstrate the best practices of vacant land plot appraisal
and applying the traditional ‘remainder technique’ and more modern appraisal procedures based
on ‘money flow discounting’. Each participant received a brochure on “Appraisal of Vacant Land
Plots” published by the project.
The participants praised the seminars conducted in Bishkek and Osh. Nina Ignatenko, a leading
Kyrgyzstan appraiser from Bishkek, said that she had obtained knowledge of new tools for
solving issues regarding investment-attractive lands and calculating just compensation in the
seizure of land for public needs.
However, at the same time the seminar material turned out to be too difficult for some appraisers,
who had not received initial knowledge at the basic courses conducted by OKO.


       Land Market Development in Kyrgyzstan                   Land Tenure Reform in Tajikistan
                28 Logvinenko Street                               94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                         734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                  Tel:+992 (372) 24-86-23
  CHEMONICS INTERNATIONAL INC.                                                  Page 39 of 57


  Activity 4: Public information and outreach.


                                                            A key element to promote the National
                                                            Appraisal Standards to be used in day-to-
                                                            day practice is insight into the main
                                                            provisions. The National Appraisal
                                                            Standards must be introduced to the
                                                            public so they understand their relevance
                                                            and importance. The project participated
                                                            in a press-conference dedicated to the
                                                            adoption of the National Standards of
                                                            Appraisal (April 19) in “Akipress”
                                                            Information Agency. The Standards of
                                                            Property Appraisal adopted by the
                                                            Government were presented during
                                                            press-conference and the press-
                                                            conference panel members took
    Press-Conference on the occasion of the National        questions on the application of these
    Appraisal Standards’ adoption                           Standards in regulating property relations
                                                            and protecting property rights. The press
  conference was broadcast on three national channels. Appraisal issues also appeared on the
  “Land and People” radio program, which highlighted the enactment of the standards and the role
  of appraisal in ensuring the functioning of an efficient land market.

      Cooperation and support to Association of Kyrgyz Appraisers (OKO)



                                        During Year 1, the project awarded two grants to OKO to
                                        support their activities The first grant funded the conference
                                        on “Prospects for the Development of Methodology of
                                        Independent Appraisal Activities in Central Asia”. As a result
                                        of this conference, the Government approved the National
                                        Standards. The second grant funded the organization and
                                        implementation of the International Congress of CIS
                                        Appraisers “Role and Place of Independent Appraisal in Land
                                        Market Development”.

                                        Expert-appraisers from Belarus, Ukraine, Moldova,
                                        Kazakhstan, Tajikistan and Kyrgyzstan, deputies of Jogorku
                                        Kenesh, the head of the expert group under the Committee on
                                        Budget and Finances of JK, heads of Gosregister,
                                        Gosfinnadzor, Goskomimushestvo, scientific researchers and
                                        post-graduate students of the Kyrgyz State Construction,
                                        Transport and Architecture University (KGUSTA), and Institute
                                        of Innovative Professions and Kyrgyz Russian Slavic
Deputy of Jogorku Kenesh at the         University all participated in the conference.
Congress



          Land Market Development in Kyrgyzstan                 Land Tenure Reform in Tajikistan
                   28 Logvinenko Street                             94/5a Tursun Zade Street
                720033, Bishkek, Kyrgyzstan                       734001 Dushanbe, Tajikistan
     Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                Page 40 of 57


All of the speakers noted Kyrgyzstan’s leadership on appraisal activities among CIS countries,
evidenced by the adoption of the National Appraisal Standards, creation of the professional
appraisers education system and availability of qualified training materials. An important aspect
of the Congress was a discussion of relations between government and appraisers, the
correlation of the state and public control, and the development of the legislative framework of
the appraisal activities, which is a significant aspect for promotion of the Law “On Appraisal
Activities”.

Delegations from Belarus, Kazakhstan and Moldova decided to develop their own national
standards and discuss the issue of creating a uniform certification centre for CIS. A session of
the Presidium of CIS Appraisers Council took place during the Congress, where they decided
that the Kyrgyz Appraisers Association (OKO) will chair the CIS Appraisal Council.

In Year 1, the Project has enjoyed great success in achieving its goals in this area. This is
reinforced by the adoption of the National Appraisal Standards which is not only a significant step
in the development of appraisal but in Kyrgyzstan’s development on the whole. We are proud of
the job done in promoting and introducing the standards and training of appraisal activities
agents.

For further development of appraisal activities in Year 2 we plan:
        Promotion of the Law “on Appraisal Activities”
        Creation of Expert Commission (Council) on control over the National Standards
        observance
        Elaboration of commentaries and methodological references to the National Standards
        Further training and capacity building of appraisers.




       Land Market Development in Kyrgyzstan                Land Tenure Reform in Tajikistan
                28 Logvinenko Street                            94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                      734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909               Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                               Page 41 of 57



Tajikistan
Highlights

   •   The project provided support and assistance to the creation of an official government
       working group to review policy options and draft amendments to land reform legislation
       related to tenure security/freedom to farm, creation of a land market, creation of an
       appropriate land administration system and a mortgage market.
   •   The project developed draft amendments to key legislation to be used by the official
       working group.
   •   The project assisted in establishing five legal aid offices using local NGOs, conducted
       TOT, and produced information materials for farmers.
   •   The project delivered legal aid and information to farmers via 5 partner NGOs.
   •   Project-supported legal aid centers, through direct assistance of the project's legal aid
       lawyer, were successful in several precedent-setting court cases.
   •   The project created a rural activist network (Tashabbuskor) with 20 participants.
   •   The project developed and implemented a mass media campaign using national and local
       TV/radio stations and newspapers.
   •   The project conducted an assessment of the legal and institutional framework for urban
       zoning.

Overview

The Land Reform and Market Development Project office in Tajikistan opened in November,
2005 with all professional staff hired and project activities underway in December 2005. The
COP, Kathrine Kelm, arrived in January, 2006.

Due to the numerous donors and other organizations involved in land reform activities, a
significant amount of project time focused on coordination and cooperation. These efforts have
resulted in important progress related to the legislative component of the project and have also
had an impact on the farmer education/legal aid component.

First, the Project worked closely with the ADB and other donors on the Farm Debt Resolution
Strategy. Cooperation with other donors on this topic is the best way to address the issues and
complete the deliverables under the legislative drafting component- beginning with changes to
the Land Code and Civil Code. Several events in 2006 led to positive changes in the GOT’s view
of the need for land reform. In May and June, the Donor Coordination Council sent two letters to
address land reform issues and request a formal high level working group to amend land reform
legislation. The USAID Country Director and Project COP attended all meetings and offered the
Project’s expertise as the lead donor in assisting this working group. The Working Group on
Structural and Land Reforms was created in August and has requested assistance from the
Project to draft amendments to land legislation, starting with the Land Code.

Second, the Project took over the lead role in coordination of donors and other groups involved in
legal aid. There are more than 90 legal aid offices throughout the country that, unfortunately,
work independently from each other. The Project is working to improve awareness and
coordination amongst the various groups. A map denoting the names and locations of all legal
aid offices was created and published in June and a National Conference is scheduled for
October 2006. The large number of legal aid centers requires coordination of efforts in order to
avoid duplication or contradictions in support and advice provided to rural citizens.


       Land Market Development in Kyrgyzstan               Land Tenure Reform in Tajikistan
                28 Logvinenko Street                           94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                     734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909              Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                  Page 42 of 57


The Project opened 5 legal aid centers using partner NGOs and began training for farmers on
land reform and other relevant topics. There are two centers located in the north (Istarafshan,
Khojand) and three located in the south (Kurgan-Tube, Kabodian, Kulyab). Each NGO conducts
three on-farm trainings per week and maintains regular business hours at their offices for
individual consultation. The NGO staff provides information on farmer’s rights and assists
farmers in completing formal requests and legal documentation to obtain Land Use Certificates,
set up individual Dekhan farms etc. In addition, the Project staff and grantees advocate farmers’
rights within the state structure. To date, the Project staff or project partners have been involved
in more than 10 important court cases, all with successful results.

In August, the Project began the rural initiator (Tashabbuskor) activity, modeled on the Kyrgyz
Demilgechi program. Staff from the Kyrgyz office are assisting the Tajik program in developing
the Tashabbuskor network. At the end of Year 1, 20 Tashabbuskor have been trained and began
activities in their respective villages.

The mass media campaign began in March 2006 and is an integral part of the dissemination of
information to farmers. There are weekly TV and radio programs in Tajik addressing farmer’s
rights and other issues. The Project receives regular phone calls from farmers requesting
assistance, based on information broadcast through the mass media programs. In addition, the
Project published an article in an Uzbek language newspaper. Since TV and radio programs
cannot be broadcast in the Uzbek language, the Project will reach Uzbek speakers through the
print media.

Finally, in June, Alexander Vysokovsky, the urban planning consultant, visited Tajikistan to
conduct an urban planning assessment. He visited four cities to review the legislation related to
urban development and planning and to assess local government structures and their
capacity/interest in developing general urban development plans, urban planning regulations and
training of national and local government officials in urban planning and market-based land use
planning issues.


4.1 Legislative Drafting

Results Expected: (i) development of market-oriented land reform legislation and policy,
development of new laws, regulations and amendments to existing laws; (ii) Increased capacity
of GOT agencies to properly implement land reforms and draft appropriate new land legislation;
and (iii) improved implementation of land reforms and promotion of a viable rural land market.

Relevant performance indicators and targets:
   • Number of laws and regulations on land policy enacted.
      Target: Key legal regulations (and laws) drafted by the end of Year 1.


Activities:

Activity 1 Working Group Strategy/ Donor Coordination

It is striking how many donors in Tajikistan are involved in some way with land reform activities.
Organizations such as USAID (through Chemonics, ARD/CHECCHI and ABA/CEELI), the World
Bank, the Asian Development Bank, ACTED, Swedesurvey, the European Commission, UNDP,
UNFAO, UNIFEM, GTZ, Did, CECI, SDC, and OSCE all include some form of assistance within

       Land Market Development in Kyrgyzstan                  Land Tenure Reform in Tajikistan
                28 Logvinenko Street                              94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                        734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                 Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                               Page 43 of 57


the broad context of ‘land reform’. The large number of players in the field makes coordination
essential.

In 2005, the UNFAO sponsored a coordination group on land reform activities as well as funded
a State Land Committee (SLC)-sponsored working group tasked with drafting amendments to
land related legislation (UNFAO WG). The funding for the UNFAO WG ended in late 2005, with
no concrete amendments to legislation. This Project took over the coordination role for legal aid
centers but was unable to continue the UNFAO WG due to the lack of interest of members, who
would no longer receive payment to attend the meetings.

As a result, the Project helped to develop an alternative Working Group strategy, resulting in the
creation of a high level official Working Group, a more ideal outcome. (Details of the new
Working Group are described in detail in Activity 2 Legislative drafting, below.)

The Project also continued coordination with other organizations involved in land reform. Of
special note:

    •    Since December, the Project assisted the EC Food Security Program team to develop
         appropriate conditionalities related to land reform. Although the GOT initially resisted the
         conditionalities, there is now agreement on the main steps that need to be taken. These
         conditionalities reflect Project recommendations and are listed in the table below:

        Land Reform
        The process of land reform shall be expedited and security of land tenure shall be strengthened
        by amending the Civil Code (Article 142), Land Code and other relevant land reform laws,
3.1.a   regulations, and internal processes;
        • To conduct farming activities of choice, devoid of interference by government agencies or local
          authorities
        • To transact land use rights granted by way of Land Use Certificates, by sale, lease, gift or bequest,
          for farming purposes to other Dekhan farmers or associations thereof
        • To use their land use rights, granted by way of individual Land Use Certificates, as collateral for
          securing of loans for farming purposes from licensed financial institutions
        • To have their land use rights withdrawn by government (central or local) only for construction of
          public infrastructure and to receive fair compensation in advance, while having access to the courts
          to resolve disputes arising
        • To have all existing debts on farms and the interest thereon made ineligible from any future liens on
          land use certificates, whether outstanding or refinanced
        • To have land withdrawals by individual Dekhan farmers from collective Dekhan farms granted (by
          the authorities) within two month of receipt of formal application and to have the Land Use
          Certificate granted within a further three months, and with access to the courts for failure to meet the
          target time.

    •    In April, the Project participated in the USAID Commercial Law Project- sponsored
         seminar on the draft Law on State Registration of Rights in Immoveable Property. The
         seminar was held for the working group that drafted the law and was organized in order to
         review the draft and also to provide sound arguments for creating a unified registration
         system. It was the strong view of this Project that USAID not support the current draft
         because it creates a fragmented registration system rather than a system that unifies
         legal registration and mapping of all land and immovable property. International best
         practice shows that a unified registration system is more efficient, cost effective and
         provides better support for a fully functioning land market. The Project also helped to
         coordinate responses from other donors, resulting in the draft law being put on hold and


       Land Market Development in Kyrgyzstan                             Land Tenure Reform in Tajikistan
                28 Logvinenko Street                                         94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                                   734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                            Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                                     Page 44 of 57


          the creation of a working group tasked with reviewing options and drafting a new
          Registration Law. This Working Group is currently supported by Swedesurvey.


    Activity 2 Amend Existing Laws/Regulations

Since the Project began, there have been some challenges in addressing legislative drafting in
the form and comprehensive manner required. Initially the Project worked with the UNFAO legal
drafting group but funding for the group ended in December 2005. In the interim, the Project
attempted to cooperate directly with the State Land Committee (SLC) and other relevant
institutions such as the Ministry of Justice (MoJ). While some deliverables have been completed
in cooperation with the SLC and MoJ, such as amendments to the Law on Dekhan Farms and
Decree 522, we concluded that the current process was not as effective as it could be. The SLC
and the MoJ did not show a real commitment or devote sufficient time or personnel resources to
amending legislation. 1 In addition, the SLC never agreed to sign the Memorandum of
Understanding with USAID that defines the roles and form of cooperation between the SLC and
this Project.

Furthermore, in repeated attempts to address some of the main areas in need of reform such as
creating a land market, addressing farm debt and using Land Use certificates as collateral, the
SLC refused to engage in debate or discuss appropriate amendments stating that those topics
are “areas for the Independent Commission”. 2 Likewise, the Ministry of Justice only focused on
its own set of issues related to land reform, resulting in a fragmented and uncoordinated effort.
Therefore, the Project looked for alternative ways to address key policy issues and complete the
legislative drafting component in the manner necessary to bring about real reform.

Although some drafting work has been done on various laws and decrees, as noted above, there
can be no significant progress on land reform until the impediments in the Land and Civil Codes
are addressed. Any work on lower laws or decrees will have no real effect on the reform process
because the principles in the higher governing laws remain unchanged. It should also be noted
that any significant change in land reform also requires policy level debate and decisions, not
simply changes to legislation. In addition, the discussions on land reform issues need to be
addressed in a comprehensive manner, not only according to the narrow interests or authority of
specific government institutions.

In early 2006, a series of significant events and meetings took place that opened up a new
opportunity for the issues of land reform to be addressed at the requisite high level. Under the
rubric of the Farm Debt Resolution Strategy, the World Bank (WB), Asian Development Bank
(ADB) and other donors in the Donor Coordination Council (DCC) met to discuss land reform
issues.

The WB and ADB began sending joint missions to Tajikistan, on a quarterly basis, to review
progress on the Farm Debt Resolution Strategy. During the March mission, the GOT was
informed that future lending for the cotton sector will hinge upon progress with land reform. The
Project is now involved in the planning stages for these missions and provides information on the
main land reform issues that need to be addressed. We have also stressed that this Project has
the technical expertise and resources to assist the government in meeting the donor
requirements.

1
  As noted under Activity 1, one of the main reasons for the lack of interest is that UNFAO paid working group members for
meeting to discuss legislation while USAID does not make such payments.
2
  The Independent Commission is the structure set up to implement the Farm Debt Resolution Strategy.
          Land Market Development in Kyrgyzstan                               Land Tenure Reform in Tajikistan
                   28 Logvinenko Street                                           94/5a Tursun Zade Street
                720033, Bishkek, Kyrgyzstan                                     734001 Dushanbe, Tajikistan
     Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                              Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                 Page 45 of 57



In order to increase understanding and support amongst other donors, the Project and ADB
donor coordination unit gave presentations to the Donor Coordination Council (DCC) and the
Principal’s Group (ambassadors and resident representatives from the main donors). Based on
these presentations, the DCC wrote two letters to the President’s office addressing land reform
issues and requesting the creation of a formal high level working group whose tasks include
amending land reform legislation. The first letter reflects the recommendations of the Project
which are:
            • improving land tenure security
            • the creation of a land market, including using Land Use Certificates as collateral
            • the establishment of a unified registration system

In response to this letter, the Deputy Chairman of the IC made a presentation to the donor
community on 9 June 2006 that incorporated all of these aspects, including the creation of a
unified registration system, which, until then, had never been acknowledged at such a high level.
A second letter from the DCC requested the creation of a formal working group tasked with
drafting the necessary amendments to land legislation.

It is important to note that, for the first time, there is a unified donor stance on what steps the
government needs to take regarding land reform. Many donors, including the EC Food Security
Programme and WB/ADB are placing conditionalities on progress. USAID has indicated its
support of the process and the Project has offered technical assistance and legal expertise
necessary for the GOT to fulfill donor requirements.

Finally, the Independent Commission (IC) issued Decree #8, dated 21 July 2006, which
established the official Working Group on Structural and Land Reforms (IC WG). The Project was
included in the list of members of this working group and now has the lead role in providing
technical assistance for drafting amendments to land related legislation.

The Project feels the IC WG is the best mechanism to achieve real progress on land reform and
legislative amendments. The IC WG has the specific mandate to review all land reform legislation
and members from the relevant government institutions. While the goal behind the IC WG is to
introduce a mortgage market, the Project members, as well as other donors, stress the fact that
there must first be tenure security and a land market before a mortgage market can work.

At the end of September 2006, the Chairman of the IC WG approached the Project to ask for
specific TA in drafting amendments to legislation. Due to some organization and personality
issues within the IC WG, progress was slower than anticipated and the 31 October 2006
deadline for producing the first set of amendments was rapidly approaching. The Chairman
requested our assistance in organizing a work session outside of Dushanbe, where the lawyers
from the WG could focus on amendments to the Land and Civil Codes. This drafting session is
scheduled for the first week of October. The Project will field an international land reform lawyer
who, in addition to the COP and local Project lawyer, will provide guidance on policy discussions
as well as drafting amendments. Draft amendments to the Land and Civil Codes will be produced
and presented to the wider IC WG by the end of October, 2006.

Activity 3: Amend or append relevant regulations to allow for quicker and more widespread
distribution of land use right certificates to all eligible persons.
Activity 4: Amend relevant laws, regulations and decrees to reduce the power of central
government and local hukumats to take land away from private farmers.


       Land Market Development in Kyrgyzstan                 Land Tenure Reform in Tajikistan
                28 Logvinenko Street                             94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                       734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                  Page 46 of 57


The Project was informed that the draft amendments to Presidential Decree 522/1996 were
adopted in August. However, we still have not seen the official publication of this document.
Nevertheless, the Project feels that it should now focus efforts on the IC WG and drafting
amendments, starting with the Land and Civil Codes. Once the fundamental changes to the
concept of land tenure security (including reduced power of hukumats) and a land market are
changed in the Codes, other legislation and decrees will be changed accordingly.


4.1a Develop regulations for private sales of land use rights and for market-based
valuation of land; develop regulations for distribution of non-land property

Results expected: Regulations drafted.

Activity1: Development of amendments to regulations for private sales of land use rights and for
market-based valuation of land
Activity 2: Engage working groups, as necessary.

The activities foreseen in this section will be part of the issues and materials submitted to the IC
WG. The concept of creating a land market will be included in the upcoming IC WG review of the
Land and Civil Codes, scheduled for early October 2006. Once the fundamental changes to the
Land and Civil Codes are drafted, other legislation to facilitate the land market can be addressed.
We expect the issue of a land market to be discussed in earnest as part of Year 2 activities.

Activity 3: Land Valuation

This activity, involving an assessment of real estate valuation in Tajikistan, will occur in Year 2.
Since the concept of creating a land market is still under discussion and the fundamental
changes to the Land and Civil Codes have not been drafted, proceeding with the land valuation
component would have been premature in Year 1.


4.1.2 Farmer Education/Legal Assistance to Farmers

The main objective of this component is to assist farmers in Tajikistan to acquire access to land
and defend their property rights through the law, with the following end-results in view:

   •   Increased awareness by farmers of their land rights and increased capacity to realize
       those rights
   •   Facilitation of the debt resolution process through provision of legal services to farmers
   •   Resolution of farm debt cases to favor as many farmers as possible
   •   Increased access to land by farmers
   •   Strengthened land tenure rights
   •   Increased productivity of land; and
   •   Promotion of a rural land market.

4.1.2a Select Strategic Areas for providing education and legal assistance to farmers

Results expected: Strategic areas selected.

Relevant performance indicators and targets:
   • Four (4) strategic areas for legal assistance and education to farmers selected

       Land Market Development in Kyrgyzstan                  Land Tenure Reform in Tajikistan
                28 Logvinenko Street                              94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                        734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                 Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                   Page 47 of 57


        Target: A total of four strategic areas selected by mid February 2006.

Activities:

Activity 1 Establish selection criteria for strategic areas.

This activity has been fully completed.

The process for selecting strategic areas and partner NGOs for project activities was completed
in early 2006. The project issued an RFP in March, with nine NGOs responding. Seven of the
respondents met the qualification criteria. Discussions were held with USAID at the end of March
to present the initial results of the tender and review USAID priorities based on the location of the
qualified respondents. Based on these discussions, the project put more emphasis on the cotton
growing raions in Khatlon and Sughd and 5 partner NGOs were selected.


4.1.2b Coordinate with relevant NGOs and projects involved in rural outreach and/or legal
aid

Results Expected: The project will facilitate the formation of a new coordination group or
participate actively in an existing group that has been designed to coordinate legal aid and
information to rural citizens.

Relevant performance indicators and targets:

    •   Number of NGOs and donor projects participating in rural outreach coordination group
        Target: 5 NGOs and donor projects participating in rural outreach coordination group.


Activities:

Activity 1 Form a new coordination group or enter into an agreement with an existing
coordination group.

As mentioned in Section 4.1, the UNFAO sponsored a coordination group on land reform
activities throughout 2005. With the gap in UNFAO funding, our Project took over the
coordination role for groups involved in legal aid and the participants agreed to meet
approximately every other month. Meetings were held in Dushanbe in April, June and August at
the Project office, with a national conference scheduled for October, 2006. Participants include
USAID, ACTED, OSCE, DfId, UNTOP, UNFAO, SDC and several local NGOs. Some of the main
issues covered include:
    1. Completing a map of Tajikistan where all legal aid offices with addresses and contact
         numbers are shown. The map was published in May 2006, with more than 90 offices
         listed, through co-funding from USAID, ACTED, OSCE, DfId and SDC. The map will be
         updated in late 2006 and printed as a calendar for distribution in 2007.
    2. Coordinating a national database for recording data on land-related cases. In April, the
         SDC presented initial information on a database purchased from the LARC NGO in
         Kyrgyzstan. The database will be offered free of charge to all who would like to use it.
         However, to date there has been no final presentation of the SDC database. Therefore,
         one of the topics at the National Conference in October will be whether to wait any longer
         or agree to move forward with an alternative database design.

       Land Market Development in Kyrgyzstan                   Land Tenure Reform in Tajikistan
                28 Logvinenko Street                               94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                         734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                  Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                 Page 48 of 57


   3. Awareness/Coordination of mass media activities. Each group made a brief presentation
      of what, if any, media activities are currently being funded. There was general agreement
      to discuss cooperation on future activities, such as farm debt and debt resolution media
      campaigns. Again, the issue will be explored in more depth during the October National
      Conference.

Activity 2 Design logbook/database format to be used by legal aid offices.

As noted above, the Project began discussions on a national database with the coordination
group. SDC offered the coordination group members use of its database at the April meeting.
However, the database was not finalized as of September and the project will move forward with
organizing an alternative database at the October National Conference.

4.1.2c Education and Training

Results expected: Local governments, NGO and volunteer rural activists trained.

Relevant performance indicators and targets:
   • Number of local governments trained in new land policies and procedures.
      Target: 50% of local governments within our strategic work area trained within 4 months,
      and all remaining local governments within our strategic work area trained within 9
      months of enactment of amendments or new regulations/laws.
   • Number of NGOs strengthened through project activity; strengthened NGOs will have
      trained staff, a strategic and business plan and management systems in place.
      Target: One Tajik NGO trained and strengthened by the end of August 2006.
   • Number of volunteer rural activists trained by the project working in rural communities.
      Target: 15 rural activists working in rural areas by the end of September 2006.

Activity 1 Prepare education/information plan.

In order to prepare the education and information plan, the Project conducted an informal survey
in Khatlon and Sughd regions in February, 2006. The Project staff visited several farms and
interviewed farmers to assess their level of awareness on the land reform process.
Approximately 200 rural citizens from various districts were interviewed, including farmers from
both collective farms as well as from farms that had already gone through the reorganization
process. The results of the questionnaire were tabulated and showed that around 70% of
interviewed farmers were not aware of their rights or about the process of land reform. More than
90% of farmers had not received any training or information on land reform. A summary of the
results of the questionnaire show that the main problems for farmers are:
    - Lack of information about land reform
    - Their knowledge about land reform is very low
    - The procedures to obtain a certificate are difficult
    - The cost to obtain the certificate is not known
    - Farmers do not know where to apply to obtain a certificate
    - Farmers do not have resources to pay the expenses to obtain the certificate
    - Farmers do not have adequate resources to plant crops
    - Farmers are not able to obtain credit
    - Lack of technical expertise for farming
    - Broken irrigation systems, no access to water
    - Farmers do not know about legal aid centers of other organizations


       Land Market Development in Kyrgyzstan               Land Tenure Reform in Tajikistan
                28 Logvinenko Street                           94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                     734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909              Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                Page 49 of 57


In addition, the project gathered and reviewed materials prepared by other organizations. The
Project staff, with the assistance of the DCOP from Kyrgyzstan, reviewed both the questionnaire
results and the available materials and concluded that new materials should be developed. The
assessment of the materials indicated that many of the reports and other materials contain old
information or do not target the correct audience, address the issues directly relevant to project
activities or use terminology or language easy for rural citizens to understand. The Project
focused its initial materials on addressing the land reform process and presented the information
in clear and simple Tajik language.

Activity 2 Information dissemination.

In Year 1, the main method to disseminate information was through the direct farmer education
campaign and mass media. Both activities are described in more detail below. Information
materials were designed, published and disseminated through NGO partners and the
Tashabbuskor network. To date, more than 10,000 information materials of all types have been
disseminated through NGO partners to farmers and interested rural citizens. Samples of our
brochures are shown here with topics such as:
    1. Reorganization of agriculture enterprises and organizations in Republic of Tajikistan
    2. General information on creation of dekhan farms
    3. Rights and obligations of dekhan farms and its members
    4. Creation of dekhan farms and registration land use rights




       Land Market Development in Kyrgyzstan                Land Tenure Reform in Tajikistan
                28 Logvinenko Street                            94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                      734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909               Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                 Page 50 of 57


Activity 3 Training of NGO partners, and
Activity 5 Direct Farmer Education Campaign.

In April, the project selected five NGO partners and issued grants to open legal aid centers to
provide legal assistance and conduct trainings for farmers. Our NGO partners cover the following
districts:




Sughd Oblast

1. NGO - Saodat                                     4. NGO - National Association of dekhan farms
     Kanibadam                                      of Republic of Tajikistan
     Matcho                                              Kulyab
                                                         Hamadoni
2. NGO - Citizens right                                  Farkhor
     Istaravshan                                         Vose
     Ghonchi
     Zafarabad                                      5. NGO- Association of dekhan farms
     Shahristan                                          Bokhtar
                                                         Kolkhozobod
Khatlon Oblast                                           Kumsangir
                                                         Jomi
3. NGO - Shahnoza                                        Vakhsh
     Kabadian                                            Khuroson
     Jilikul                                             Sarband
     Shartuz                                             Yovon
     Nosiri Khusrav

       Land Market Development in Kyrgyzstan                 Land Tenure Reform in Tajikistan
                28 Logvinenko Street                             94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                       734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                   Page 51 of 57


Prior to beginning their work, all NGO members (coordinators, lawyers, trainers and assistants)
attended a three day TOT. Topics included:
    • Training of trainers- effective outreach
    • Participants in land reform relations
    • Main issues in land reform
    • The steps for creating a dekhan farm

After the TOT was complete, the NGOs began full-time training and consultation activities in their
respective regions. Each NGO conducts three on-farm trainings per week and maintains regular
business hours at their offices for individual consultation. The NGO staff provides information on
farmer’s rights and assists farmers in completing formal requests and legal documentation to
obtain Land Use Certificates, set up individual Dekhan farms etc. In addition, NGO lawyers have
provided legal assistance and even representation in court (see Legal Aid, below, for more
details)

In order to ensure the quality and accuracy of legal information provided during the trainings,
Project staff conducted regular monitoring visits to each NGO. The two legal aid centers in the
north have a stronger and more organized team and the overall level of training and
consultations were of better quality than in the south. The three centers in the south were initially
not as well organized or knowledgeable; thus, in June, the Project provided additional training
and support for ‘hands-on’ training and guidance. The additional training improved the quality of
legal aid and also improved the organization and management of the NGOs.

Since May 2006, more than 6,200 farmers have been trained, approximately 3,000 of the
recipients were women.


Activity 4 Training of rural activists (Tashabbuskor).

In July, the Project began the initial task of setting up the rural activist program called
Tashabbuskor, modeled after the Demilgechi network in Kyrgyzstan. The Project’s information
training assistants identified lists of Tashabbuskor candidates from both Khatlon and Sughd
regions.

In August, Project staff conducted training for Tashabbuskors in Kurgan-Tube and in Khojand.
The training was divided into three parts: (1) the process of land reform in Tajikistan, (2) training-
of-trainers (TOT), and (3) introduction of partner NGOs and their work. After the training, the
Project visited each Tashabbuskor and respective Jamoat to conclude cooperation agreements
and introduce the Project’s goals to the local government. The Project has been conscious of the
need to inform Chairmen of each Jamoat of Tashabbuskor activities and receive their consent.


Activity 5 (included with activity 3, above)


Activity 6 Mass media campaign.

In March, the project signed a contract with the national TV and Radio Company. The agreement
provides for two journalists who focused on producing a series of programs entitled “Your Rights
to Land”. The programs cover the activities of the legal aid centers and “Tashabbuskor” (rural
initiators), as well as other project initiatives. The journalists spend a significant amount of time in

       Land Market Development in Kyrgyzstan                   Land Tenure Reform in Tajikistan
                28 Logvinenko Street                               94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                         734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                  Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                  Page 52 of 57


the field, interviewing farmers to understand their problems and questions, then conduct office or
studio interviews with local governments, State Land Committee staff or our own Project staff to
respond to the farmer’s problems. The Project has consistently received phone calls from
farmers asking questions or requesting assistance—this is directly attributable to this mass
media campaign. The farmers are either referred to one of our legal aid centers or assisted
directly by the Dushanbe office staff.




Cooperation through Radio

Radio broadcasts of our program “Your Right to Land”
began in late March 2006. Since then 27 new programs
(and an additional 27 rebroadcasts) have aired on the
national radio station. The programs air on Mondays at
14:30 and last 20 minutes. They are then rebroadcast in
the evening. The programs are in Tajik, and coverage
includes the entire Republic of Tajikistan.




                                    Cooperation through TV

                                    TV broadcasts of our program “Your Right to Land” started in
                                    April 2006. Since then 23 new programs (with an additional 14
                                    rebroadcasts) have aired. In addition to the National TVT
                                    station, the Project signed contracts with two local TV stations
                                    in Sughd Oblast. The program is broadcast on Fridays
                                    beginning at 18:20 and lasts 10 minutes. The language of the
                                    program is Tajik.



Activity 7 Training of local governments.

Although the main activity for training local governments will begin once the relevant legislation is
passed, partner NGOs have nevertheless included local governments in their public information
activities. To date, 287 representatives of local Hukumats have been trained.


4.1.2d Legal Aid to Farmers

Results expected: Legal aid centers operating and actively informing and assisting rural citizens
in matters related to land.

Relevant performance indicators and targets:
   • Number of farms reorganized in Tajikistan with participation of local citizens.
      Target: 40% of farms reorganized are completed with local participation by the end of
      Year 1.
       Land Market Development in Kyrgyzstan                  Land Tenure Reform in Tajikistan
                28 Logvinenko Street                              94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                        734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                 Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                 Page 53 of 57


   •   Number of citizens receiving assistance on land dispute issues and debt resolution
       problems.
       Target: 1,500 citizens assisted by the end of Year 1.
   •   Number of disputes resolved within local communities.
       Target: 500 disputes resolved by the end of Year 1.
   •   Number of land transactions concluded.
       Target: 100 lease contracts logged by the end of Year 1.
   •   Number of complaints of improper administration of land by local government.
       Target: 25% reduction in number of complaints logged by the end of Year 1.
   •   Number of legal aid centers actively serving citizens with legal problems.
       Target: 4 centers equipped and trained by the end of April 2006.
   •   Number of farms in which individuals receive legal documentation describing the size and
       physical location of their parcels.
       Target: 2 farms within 6 months after adoption of necessary regulations and/or laws.


Activities:

Activity 1 Legal Aid Offices.

In the previous section, the methods for farmer training and public information using our NGO
partners were reported. In this section, the Project would like to highlight some of the specific
cases where our staff and/or NGO partners have provided legal aid and consultation.

Farm Restructuring Process

In Year 1 the Project participated in the farm restructuring process for those farms located within
the project’s strategic areas. Our partner NGOs provided information to farm members prior to
the general meeting, attended the general meeting and provided follow up assistance to farmers
in completing the appropriate documentation. In total, seven large farms received assistance,
resulting in 312 newly created Dekhan farms.


              Farm                    District/Region                 Number of newly
                                                                   formed Dekhan farms
           IRAM                      Kanibadam/Sughd                       31
        Bogi Kalon                   Istaravshan/Sughd                     83
         Obiborik                    Istaravshan/Sughd                     32
        Istaravshan                  Istaravshan/Sughd                     57
           Itorchi                   Istaravshan/Sughd                      2
          Vahdat                       Jilikul/Khatlon                     13
         Davlatov                    Hamadoni/Khatlon                      94


Individual Consultations:
During the reporting period the Project’s legal aid centers have provided 1,980 individual
consultations for farmers (495 of them women). These consultations covered problems such as


       Land Market Development in Kyrgyzstan                 Land Tenure Reform in Tajikistan
                28 Logvinenko Street                             94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                       734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                      Page 54 of 57


land taxation, receiving payment for farmer’s agricultural products, inheritance issues and how to
create dekhan farms.

Legal representation:

The Project and partner NGOs have been very active in representing the interests of farmers in
court. To date, our NGO partner lawyers have participated in more than 10 court cases or
appeals to government structures involving issues such as illegal withdrawal of land use rights,
contract payments for cotton, division of non-land farm assets, etc. Examples of the cases and
the outcomes are listed below.



                                                         Dekhan Farm “ Saodat”: For over two years, the
                                                         Project’s legal aid lawyer, Nodira Sydikova, has
                                                         represented the interests of the women-owned
                                                         dekhan farm “Saodat” whose land rights were
                                                         unjustly taken away after donors helped install an
                                                         irrigation system, increasing the value of the land.
                                                         The case has been through numerous court
                                                         proceedings and appeals, culminating with a final
                                                         review in June by the Supreme Economic Court,
                                                         who decided in favor of the women. As a result of
                                                         the verdict, the Land Use Certificate issued to the
                                                         women was re-instated and the current illegal
                                                         user must vacate and return the land to the
                                                         rightful users.


“Saodat” members admire their new irrigation system

The Saodat case is important for two reasons: first, the rights of women to land are extremely
weak and subject to revocation at the whim of the local government and second, there are
numerous examples of land rights being revoked and reassigned to more ‘favorable’ users once
the farmer makes improvements and increases the value of the land. Therefore, the continued
support for the women of the Dekhan Farm “Saodat” helped to set important precedents in the
Tajik legal system.


                                          Dekhan Farm “Haiem”. The Project’s partner NGO in Kurgan-
                                          Tube “Association of Dekhan Farms” , with the support of the legal
                                          aid lawyer, defended the rights of the Dekhan Farm “Haiem” in
                                          Khatlon Oblast. The owner of “Haiem” asked for support in
                                          obtaining payment for the 2005 crop of cotton from the cotton
                                          futures company “Samar”. The NGO lawyer assisted the farmer in
                                          submitting the proper documents to the court and represented the
                                          farmer during the court process. Prior to the completion of the
                                          process, the director of the futures company agreed to compensate
                                          the farmer in a combination of cash and other agricultural inputs.
                                          The director paid $200 cash that day but has subsequently not paid
                                          the remaining cash or provided the inputs. The NGO lawyer is now
                                          in the process of submitting a complaint to the court to obtain an
                                          order for immediate compensation, as per the settlement.
The chairman of Haiem in our local legal aid office

       Land Market Development in Kyrgyzstan                      Land Tenure Reform in Tajikistan
                28 Logvinenko Street                                  94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                            734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                     Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                      Page 55 of 57



Kabadiyan Association The Chairman of Kabadiyan Association
requested assistance from NGO “Shahnoza” in order to collect an
outstanding payment of $24,490 for 88 tons of cotton sold to the
Joint Stock Company “Kubod” more than 3 years ago. The lawyer
from NGO “Shahnoza” submitted a claim to the Khatlon Economic
Court to recover the payment owed to the Kabadiyan Association
and represented the Association’s interests during the court session.
The Khatlon Economic Court found in favor of the Kabadiyan
Association and ordered the company to pay the full amount owed.
Currently, the NGO lawyer has issued the documents to execute the
decision.



                                                                          Legal representation

Although the 2 cases involving payment of cotton contracts have not been fully executed, the
Project is confident that additional pressure will result in the final payment. Due to the current
high profile nature of the cotton sector, the issue of cotton debt and the disadvantages farmers
face having to deal with corrupt cotton investors, the Project hopes to set important precedents
within the Tajik legal system, encourage farmers to seek redress of their rights through the courts
and begin to hold futures companies accountable for their contractual obligations.


Dekhan Farm “Rahmonov”: In April, 2006 the chairman of Dekhan Farm “Rahmonov”
contacted the Project office in Dushanbe to assist him in completing the necessary requests and
documents for distribution of non-land property from the former Sovkhoz. Repeated attempts to
obtain his rightful share were ignored and, after hearing our radio program, the farmer sought our
help. At the end of June, the farmer came to our office and was very pleased to announce he has
received a tractor.




                                               In May 2006, Ms Kurbanova applied to the NGO “Citizen’s
                                               Rights” to defend her land share rights in a divorce
                                               proceeding. After the divorce, her husband took away her 0,
                                               58 ha land share and didn’t allow her to work on the farm.
                                               Ms Kurbanova’s many complaints to the chairman of the
                                               Dekhan Farm “Nurmahmad” were ignored. The lawyer from
                                               “Citizen’s Rights” submitted Ms Kurbanova’s claim to the
                                               Istaravshan District Court and represented her interests
                                               during the proceeding. The court ultimately found in favor of
                                               Ms. Kurbanova and the land has been returned to her.



Ms Kurbanova is once again able to work her land




       Land Market Development in Kyrgyzstan                      Land Tenure Reform in Tajikistan
                28 Logvinenko Street                                  94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                            734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                     Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                Page 56 of 57


Activity 2 Coordinate with World Bank project.

The Project has met with the local World Bank project director and the Washington based team
regarding the World Bank Cadastre Project. The Cadastre Project is behind in its implementation
schedule and a monitoring mission will be conducted in October 2006, at which time the Project
will meet for an update on the situation and develop a strategy to either coordinate with the WB
Project or simply move forward on our own.

Activity 3: Conduct land titling pilots

The original plan defined in the Year 1 work plan was to conduct the titling activity once new
regulations were issued to improve the farm restructuring process. To date, no new regulations
have been issued. Therefore the Project has postponed this activity pending results of
reorganization activities conducted in conjunction with the World Bank project as well as results
from the new IC Working Group tasked with drafting land reform legislation.


4.1.2e Engage NGO partners and subcontractors in delivering training, legal aid, and
public awareness

Results expected: NGOs and local service providers strengthened and legal aid and training
delivered in a cost-effective way.

Relevant performance indicators and targets:
   • Number of NGOs strengthened through project activity.
      Target: 1 NGO strengthened.

Activity 1 NGO strengthening

Throughout Year 1, our five partner NGOs have received substantive training on land reform
issues as well as administrative training on accounting, report writing, etc. Whenever a
weakness was identified, either in administrative or substantive works, Project staff met with the
NGOs for ‘hands-on’ training and assistance.


4.2 Urban Development

4.2.1 Market-based land use planning (zoning) assessment

Results Expected: Identification of steps/reforms calculated to promote the creation of a viable
urban land market through the development of market-based land use and appraisal capacity.

Relevant performance indicators and targets:
   • Assessment of the legal and institutional framework for zoning in three municipalities
      completed and submitted to USAID by June 30, 2006.

Activities:

Activity 1 Conduct an assessment of the legal and institutional framework for zoning in three
municipalities.


       Land Market Development in Kyrgyzstan                Land Tenure Reform in Tajikistan
                28 Logvinenko Street                            94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                      734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909               Tel:+992 (372) 24-86-23
CHEMONICS INTERNATIONAL INC.                                                  Page 57 of 57


In late May- early June, the urban planning consultant Alexander Vysokovsky visited Tajikistan to
assist the Project in conducting an assessment of the legal and institutional framework for
zoning. The assessment was designed to evaluate and recommend improvements regarding the
current legal and institutional framework for zoning, the capacity of local specialists, the political
will of officials to implement zoning principles, the procedures for allocating land, obtaining
construction permits and investment project approvals and the availability and accessibility of
data to prepare zoning regulations.

Although the assignment initially called for an assessment of 3 cities, the Project reviewed 4
cities in order to take into account geographic and population considerations and ensure that a
broad spectrum was covered. In June, the Project’s urban planning lawyer from Kyrgyzstan
visited Tajikistan to assist in the review of Tajik urban planning legislation.

The assessmentg explained that legal zoning is (1) a technique providing for an open, public
establishment of urban planning regulations of using land plots and other immovable property in
various places in a city (in zones), and (2) the procedures for using these regulations to receive
land use rights approvals for construction. Zoning aims to balance private and state interests.

The study made the following main conclusions:
   • Introduction of legal zoning in Tajikistan will rationalize use of land in cities and stimulate
       market reform in real estate and construction, develop a modern system of registration,
       improve access to land plots and reduce corruption in the construction permitting
       process.
   • Despite the unavailability of private ownership for land, the legislation of Tajikistan does
       not hamper the introduction of the system of urban planning regulation on the basis of
       legal zoning. The state provides private entities with the right of land use with the
       elements of the right of disposal, which determines the availability of some kind of a
       market activity.
   • The authorities of the four cities included in the study (Dushanbe, Khojand, Kurgan-Tube
       and Istarafshan) are ready to cooperate to introduce zoning, as they realize this is the
       only practical way to modernize the system of urban planning management.
   • Until now, due to the lack of financing, the bodies of land management, architecture and
       construction in the cities have been working ineffectively. General plans of cities are
       either out of date or do not exist, there is lack of professionally prepared specialists, and
       no cadastre maps. No inventory has been conducted nor has any registration of
       developed and provided land plots.
   • In these conditions, creating maps of existing land use in city territories requires a lot of
       time, as well as human and financial resources compared with Kyrgyzstan, where zoning
       activities have been going on for several years. The basic technical problem is connected
       with the lack of new topographical maps of 1:2000 scale and the fact that these maps are
       considered ‘secret’. Cartography organizations are ready to work if they have financial
       support.
   • The state bodies of land management and urban planning have some reservations
       regarding the development of a legal zoning system, although on the whole their
       representatives do agree it is necessary. Therefore, a governmental decree establishing
       a pilot project in the cities with tasks given to the State Land Committee and the State
       Committee of Architecture and Construction will be required to implement the project.




       Land Market Development in Kyrgyzstan                  Land Tenure Reform in Tajikistan
                28 Logvinenko Street                              94/5a Tursun Zade Street
             720033, Bishkek, Kyrgyzstan                        734001 Dushanbe, Tajikistan
  Tel: +996 (612) 901-900 Fax: +996 (612) 901-909                 Tel:+992 (372) 24-86-23