Russia opens tough capitalist frontier

A revolutionary wind is blowing across Russia, and through the streets of this ramshackle provincial town near Moscow: Most people are about to become individual landowners - something that has never happened before in Russian history.

But the subject of Russia's new land code, likely to be signed into law this week by President Vladimir Putin, elicits little more than indifference or a cynical snort from most people here.

"What will change?" asks Svetlana Fyodorova, a pensioner about to come into ownership of an 800-square-meter plot near Kolomna, where she has had a dacha and garden for almost 30 years. "The government will just make us pay higher taxes, and probably some businessmen will figure out how to steal our land from us. No one needs this."

Backers insist that the country needs the new code to become a true market economy. But the powerful Communist Party opposes laws that allow land sales.

In Russia, land is a volatile symbol, with the concept of communal ownership deeply rooted in history. In czarist times, most agricultural land belonged to peasant communes. Later, the Soviets saw private property as a hallmark of capitalist greed. Since the Soviet era, all land has been owned - at least in theory - by the state, although lower levels of government, companies and individuals have been granted perpetual rights to use land for specific purposes. But there has never been legislation regulating land sale.

Over the past decade, a shadow-land market has sprung up. Thousands of apartments, dachas, and commercial properties change hands every month - but the transactions have been largely illegal and greased by official corruption.

Now, millions of Russians who formerly had practical possession of the land their home or dacha sits upon will be able to register it as their own personal property. That means they may sell it, or put it up as collateral for a mortgage or loan. But it also means that they will have to declare the real price of the land and pay taxes accordingly.

"This law can launch a construction boom, which will decisively pull our economy out of its stagnation," says Viktor Pleskatchesky, head of the State Duma's property committee. "We are now set to cross the last hurdle to building a real market in this country."

The new code covers only residential and commercial lands. Fearful of a communist-led political backlash, the Kremlin separated agricultural land, forests, and wilderness from its original draft. Over the summer, the Kremlin quietly piloted through parliament a limited code that affects only 2 per cent of Russia's land resources, mainly residential, urban and dacha plots. That means that house dwellers - that's about 20 percent of Kolomna's 150,000 population, for example - will now own the land their home sits on. Russia's many urban apartment residents, who typically keep a dacha or at least a "kitchen garden" in the country, can now own the garden or the land under the dacha.

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