Reprivatization

Reprivatization refers to the process of restoring to its former owners properties seized by a government, or to the process of compensating previously uncompensated former owners. This is often a component of larger privatization schemes. The term is most often used in the connection with privatization in former Soviet Bloc countries or in reference to settlements concerning the property of murdered or displaced European Jews.

Reprivatization is often sought by members of the old nobility or their descendants who desire the return of the traditional family home for sentimental and/or financial reasons; by Holocaust survivors, their descendants, or survivors of persons who died in Nazi death camps and whose property was confiscated by the Nazis or by later Communist states and disposed of in various ways; and by corporations or other parties whose property was nationalized. It is very difficult to work out a one-size-fits all regime for property restitution, and it is often pursued on an ad hoc basis in the courts with varying degrees of success in different jurisdictions.

A significant barrier to reprivatization is created by larger political questions, which vary by country. In Eastern Europe, there is frequently a desire to avoid the inflammation of ethnic tensions and the ostensible reversal of Potsdam conference policies; see Federation of Expellees.

Outstanding reprivatization issues can sometimes be a barrier to foreign investment, as investors are wary of investing in a property to which the title is disputed or faulty.

Reprivatization by country

Poland

Unlike the industrial sector, Poland's agricultural sector remained largely in private hands during the decades of communist rule. Most of the former state farms are now leased to farmer tenants. Lack of credit is hampering efforts to sell former state farmland. Currently, Poland's 2 million private farms occupy 90% of all farmland and account for roughly the same percentage of total agricultural production. These farms are small—8 hectares (ha) on average—and often fragmented. Farms with an area exceeding 15 ha accounted for only 9% of the total number of farms but cover 45% of total agricultural area. Over half of all farming households in Poland produce only for their own needs with little, if any, commercial sales.

Ukraine

Reforms in the more politically sensitive areas of structural reform and land privatisation are still lagging. The parliament has approved a foreign investment law allowing Westerners to purchase businesses and property, to repatriate revenue and profits, and to receive compensation in the event that property is nationalized by a future government. Outside institutions—particularly the IMF—have encouraged Ukraine to quicken the pace and scope of reforms and have threatened to withdraw financial support.

See also

• land reform
• nationalisation
• restitution

External links

• International Centre for Policy Studies paper on reprivatization issues