Capitalise land and review land valuation

Experts discussing solutions for land management at the forum

One of the two thematic discussions at the Vietnam Socioeconomic Forum 2022 was also devoted to Strengthening institutional reforms and perfecting land policies – Important solutions for socioeconomic recovery and development.

Former Deputy Minister of Natural Resources and Environment Dang Hung Vo emphasised, "If the land is capitalised, the country will overcome the middle-income trap."

Vo said Vietnam is entering a new stage of development from now until 2045 with the goal of becoming a high-income industrialised country by overcoming the middle-income trap.

However, the experiences of newly industrialised economies in Asia like South Korea, Singapore, and Taiwan reaffirm that this is not easy to achieve.

They took advantage of high-quality human resources and technologies as the driving force, with land management and use being the major capital generators for development investment. They considered foreign direct investment as a source of capital, in addition to utilising the value of the land.

“When the hidden capital in the land is exploited and generates value for society, the economy can develop by itself. Therefore, the amendment of the Land Law and related regulations must focus on capital exploitation to increase land value. At present, the added value of land is pouring into investors' pockets, not into the state budget," emphasised Vo.

Vo recommended clarifying the concept of the market price of land. The solution is to put the definition of the market price according to international standards into the revised Land Law, establish a market land price database, and use data processing software to estimate the land value.

“In industrialised countries, if the state's land price frame is equal to about 70-80 per cent of the market land price, it is fine. We should also follow this good practice,” said Vo.

Regarding land valuation and finance, Minister of Natural Resources and Environment Tran Hong Ha said that these issues are still far apart in both theory and practice.

If the problem of land valuation can be solved openly, transparently, and equally, the relationship between the state, the market, and society will be improved. The relationship between the state, the people who have land, the people whose land has been acquired, and the enterprises will be smoother.

"So we can completely change from administrative orders to gradually combine the market status and economic tools with administrative management. Therefore, we can overcome the current problems, such as speculation for rising prices and inefficient use of land," Minister Ha said.

The minister added that in managing large resources such as land, it is necessary to update information, evaluate, and monitor land data.

"We need to do the digital transformation of the land sector as soon as possible. With the data, we will monitor resources closely, enabling people to access land information in a public, fair, and open way and contributing to the reform of administrative procedures," said the minister.

Speaking about the change of land use purpose and financial management, Minister of Finance Ho Duc Phoc said, "This is a big loophole that the 2013 Land Law could not fill. It creates a large loss of land rent and also causes some errors. Therefore, the management of land use purposes must be very strict."

For land price determination, Minister Phoc said that there are five methods of determining land price, however, they are not really consistent or accurate because of some loopholes.

Government proposes delay to submission of draft amended Land Law to NA The Government has proposed a delay to a submission of the draft Law on Land (amended) to the National Assembly (NA) until the Party Central Committee issues directions on reforms of land-related policies and laws.

PM urges thorough consideration, prudence during Land Law revision Prime Minister Pham Minh Chinh on August 24 requested thorough consideration and prudence during the revision of the Land Law, which deals with a wide scope and relates to many other laws.