1. Catalysts for Awakening “Dead Capital” A Land Grant Approach To Spark Community Action Presentation by Mark Frazier Openworld, Inc. www.openworld.com

2. I. Aim Review challenges facing current initiatives Identify a “grassroots up” opportunity for transparent land registries Explore strategies for catalyzing widely replicable, self-funding initiatives

3. II. Background A huge untapped pool of “dead capital” exists in developing countries because of flaws in land titling/registry systems Hernando de Soto estimates >US$9 trillion in property values cannot be accessed as collateral because of unclear ownership

4. II. Background Problems of past top-down approaches: –Costs are high when building automated systems –Vested interests fight change (e.g. corrupt administrators and courts) –Many poor communities distrust government initiatives –Overlapping and conflicting claims exist in many neighborhoods

5. III. Opportunity The alternative – Reward grassroots action to awaken dead capital… …and create “open world zones” to showcase transparent land markets and fund further rewards)

6. III. Opportunity Cornerstones of the approach: 1.Offer “microvoucher” rewards for immediate learning and job benefits as reasons for neighborhoods to act 2.Link the rewards to each neighborhood’s success in recording lot boundaries (with affordable digital cameras) and in adopting “good neighbor” agreements 3.Fund completion of official surveys and registry systems with revenues from “land grant” areas benefiting from special incentives to awaken dead capital

7. III. Opportunity 1.How will the grassroots land registry initiative work?  Offer “microvoucher” rewards for immediate learning and job benefits as reasons for neighborhoods to act

8. The Microvoucher opportunity: Microvouchers build upon the success of microlending and microinvestment, which are now helping tens of millions of entrepreneurs launch or grow businesses Microvouchers (or microscholarships) will enable individuals in large numbers to access valued online learning and certification resources (typical microvouchers range from US$20 – 100) III. Opportunity

9. The Horizon Lanka precedent: A private microscholarship fund was established in 2004 to help a “bootstrap” rural school in a rural Sri Lankan farming village Microscholarships are enabling poor students to learn ICT and language skills Recipients of microscholarships have received US$30 on average to create “eLessons” and prepare work-study research projects Students have launched microenterprises producing graphic designs and web sites for the world market Success has won world recognition including offers by Intel Chairman Craig Bennett to fund university education of the first wave of Horizon Lanka graduates III. Opportunity

10. What kind of online learning and certification resources are immediately available? Brainbench: web-based tests and certifications in 1000+ vendor neutral ICT and business skills National Technological University: 40 U.S. universities are offering short courses via Distance Learning MIT’s OpenCourseware Initiative has 1200 courses for free (except for Internet access costs) CNet Online Courses …And thousands of others III. Opportunity

11. Microvouchers can help prepare recipients for a new “grassroots” global sourcing era that especially favors small and new ICT firms in the region…

12. III. Opportunity Examples of eBay-style markets for sourcing of “remote services”…

13. III. Opportunity The next wave of ICT opportunity: online markets open to freelancers and other small/new entrepreneurs –Software development, testing and maintenance services –Secretarial services –Graphic art and design services –Web-based research services –Tutoring and mentoring services –Transcription and editing services –Web page design and development –Help desks, technical support, and customer support centers –Electronic publishing –E-learning course development –Software translation and localization –Computer-aided design and geographic information systems –Indexing and abstracting services –Translation services –Multimedia editing and animation services –Image processing and claims processing –Remote security systems

14. III. Opportunity 2.How will the grassroots land registry initiative work?  Link the skill and job-creating rewards to each neighborhood’s success in recording lot boundaries (with affordable digital cameras) and adopting “good neighbor” agreements

15. III. Opportunity Recording lot boundaries and “good neighbor” agreements can be done by increasingly affordable digital cameras, and uploaded to GIS databases

16. III. Opportunity Key factors influencing levels of Microvouchers include: –The number (or percentage) of households in the neigborhood taking digital images of their lot boundaries –The number recording video clips affirming “no contest” boundary claims with their neighbors –The number accepting “good neighbor” agreements to mediate or arbitrate, rather than litigate, current and future disputes –The number agreeing to contractual homeowner association convenants, enabling the neighborhood to self-provide needed services

17. III. Opportunity 3.How will the grassroots land registry initiative work?  Fund completion of official surveys and registry systems with revenues from development of“land grant” areas benefiting from special free zone incentives to awaken dead capital

18. The formula for sparking rapid value gains in pilot land grant areas: Affordable internet Valued skills Welcoming business climate + Attractive land grant sites_______________________________________________________________________________________________________________ = Rapid investment inflows III. Opportunity

19. What are investors looking for? Favorable business climates whose benefits are easily accessible to small and large firms alike Outstanding value, reliability, and capacity in key utilities (especially telecommunications and power) Comprehensive business support services, especially for companies that seek to expand in regional and global markets; and Access to valued technical and business skills needed to compete in the global market. Private developers are building free zones and business parks around the world in response… San Isidro Free Zone Brno Science Park Sofia Business Park (Dom. Republic) (Czech Rep.) (Bulgaria)

20. III. Opportunity Example: Sofia Business Park – market value of private park now reported at US$150 million Example: Cefin Logistics Park – Austrian developer paid US$90 million for rights to develop land grant site Example: ZonAmerica – land values jumped 20x following designation as a free economic zone Even a 5-10 percent share of the land grant value rise can provide an enormous budget for key stakeholders – including microvoucher funds for cooperating neighborhoods and public sector Land Titling/Registry initiatives What kind of asset gains can be realized through inflows of private investment when the competitiveness elements come together?

21. IV. Strategy for Success Key strategic question -- How can Microvouchers stimulate maximum response to awaken dormant land values?

22. The Kyrgyzstan precedent: –USAID engaged Openworld and the Academy for Educational Development to offer $100,000 in microvouchers to communities seeking to spread language, business, and ICT skills through eLearning –Competition announced in July, 2005 (50 communities responded) –Awards were given in September, 2005 to four Cybercafes and NGO telecenter operators to ensure “quickstart” launch –All of the chosen applicants committed “Land grant” areas for future private sector led Business Park, eTourism, and eAgriculture development –Success has prompted USAID decisions to double the number of Microvoucher recipient communities, and ITU decision to fund 16 more eCenter projects IV. Strategy for Success

23. 1.Prepare a standing offer of microvouchers for communities interested in grassroots land registry 2.Provide orientation briefings and provide toolkits to communities interested in promoting Public-Private Partnerships to implement the project 3. Hold competition to select exemplary communities based on their willingness to: –Offer “quickstart” facilities (e.g. cybercafes) as Internet access sites for microvouchers –Convey “land grants” for subsequent development by the private sector of business parks or other ICT-enabled projects –Adopt eGovernment titling/registry reforms that improve the value of these land grant areas 4. Help the chosen localities find global private partners to assist in quickstart and expansion area development (with a portion of the development revenues to sustain the ongoing Microvoucher fund and titling/registry initiatives) Key elements for fast-track Microvoucher Award strategy can include:

24. IV. Strategy for Success Leveraged Land Development Partnerships Full Development Area (Phase III Greenfield Concession) Development funded By National or Global Investment Partners Expansion Area (Phase II Greenfield Concession) Development funded By National or Global Investment Partners Quickstart Site (Phase I) Local Investor Private Risk-Taking Capital Private Risk-Taking Capital Local Government Inputs (transparency-enhancing Titling/registry solutions plus land grants for development) Local Government Inputs (transparency-enhancing Titling/registry solutions plus land grants for development) Asset Gains Are Shared for Sustainability Catalysts Microvouchers

25. IV. Strategy for Success Towards A Self-Funding Cycle To win these benefits, communities commit prime land grant sites for Land titling/registry innovations Private sector develops Agro, Tourism, or Business Park projects on the local sites, with a setaside share to assure sustainable Microvoucher funding and further Land Titling/Registry development Donors offer Microvoucher funds* as a way to spread valued skills and market opportunities in chosen localities

26. IV. Strategy for Success introduces market-sensitive systems to spread skills mobilizes new private sector investment stimulates new jobs and exports puts idle lands to productive use Helps fund eGovernment solutions in land titling/registry and adoption of other market- friendly reforms Anticipated benefits of grassroots land registry strategy --

27. Further Information We look forward to exploring how best to make results happen! Openworld, Inc. 1717 K Street N.W. Suite 600 Washington, DC 20036 mfrazier@openworld.com www.openworld.com