No
Free Lunch
By
Cielito F. Habito
Seasoned
analysts tell us it is too early to rejoice unduly over the framework
peace agreement recently signed between the government and the Moro
Islamic Liberation Front (MILF). The devil is in the details, former
Presidential Peace Adviser Jess Dureza warns. Former Regional Board
of Investments Chair Ishak Mastura points out that prospects for
private investments are clouded by legal risks and uncertainties, as
a new Basic Law for the new Bangsamoro entity will have to replace
the Organic Act creating the Autonomous Region in Muslim Mindanao
(ARMM). Asian Development Bank’s Philippines Country Director
Neeraj Jain believes that investors will wait until there is clarity
in the fiscal regime (translation: revenue and expenditure sharing
arrangements between the national government and the autonomous
Bangsamoro). Indeed, a thorny path lies ahead as the exact nature of
Bangsamoro’s autonomy is fleshed out. Some prefer to describe it as
a land mine-ridden path, i.e., that a misstep in the detailed
negotiations could still prove fatal.
Still,
spirits are high and hope springs eternal, as should be the case.
Both sides need to proceed on the course with good faith and a
positive outlook; anything less won’t do. I am confident that
insiders in Muslim Mindanao and outsiders who know enough about the
area and its people would affirm that there is much more reason to be
optimistic than otherwise. For anyone with the broader interests of
Muslim Filipinos at heart, hence those of all Filipinos in turn, the
way to go would be to capitalize and build on the positives, and work
hard to address the negatives in the Bangsamoro equation.
I
have written much on the prospects for Mindanao being the primary
growth driver for the entire Philippine economy, and I continue to
assert so. It is more than a prospect, in fact. We had already seen
Mindanao’s overall economic growth exceed (and therefore drive)
that of the entire Philippine economy in recent years. Based on 2011
data, only ARMM and the Zamboanga Peninsula performed below par. But
this was largely before a new reformist regional government led by
interim ARMM Gov. Mujiv Hataman had begun to make a difference on the
mood and economic outlook for the region. Major investments have in
fact entered in the past year alone—in telecommunications (EA
Trilink Corp.) and in agribusiness (Del Monte Corp.), to cite a
couple—apparently emboldened by the positive directions the region
is now taking.
There
is good reason indeed why investments would pour into Muslim Mindanao
now and in the years ahead, as it is actually endowed with key
ingredients for a prime investment area. It possesses superior
agro-climatic conditions, being largely typhoon-free and blessed with
extremely fertile soils. In fact, certain crops such as cassava,
white corn and coffee attain better yields in the Muslim areas than
elsewhere in the country. The region is also blessed with an
abundance of other primary resources, including marine products and
minerals. It still has large tracts of idle lands. And wage rates,
both official and de facto, are lower compared to most of the rest of
the country.
On
top of the region’s inherent assets described above, Bangsamoro
possesses a vast scope for economic growth and diversification owing
to Mindanao’s link to BIMP-EAGA
(Brunei-Indonesia-Malaysia-Philippines East Asean Growth Area)—a
linkage that is of greater significance and potential for Muslim
Mindanao relative to the rest of the country. I like to call
attention to the fact that while Muslims comprise the minority ethnic
and religious group in the Philippines and even in the whole of
Mindanao, they comprise the majority in Southeast Asia. This gives
Bangsamoro the potential edge in meeting the regional market’s
particular demands for goods and services.
But
the thorns (land mines, for others) need determined attention for the
above advantages of the region to be translated into a vibrant
economy attractive to investments from within and without. On the
downsides of the investment climate, long-time Mindanao expert Fermin
Adriano cites the results of various surveys on the foremost
impediments to private investments in Mindanao’s conflict-affected
areas. These are the unstable peace and order situation, land access
and tenure security issues, inadequate and poor infrastructure, poor
local governance performance (including graft and corruption), and
the highly unskilled labor force in the area.
Given
the unique environment in Muslim Mindanao, and in particular the
urgent need to help Bangsamoro succeed, there is a strong argument
for extraordinary measures and incentives that the autonomous
government must be prepared to provide, with the necessary policy
support from the national government. Apart from focused fiscal
incentives, enticements could include an effective investment
guarantee and insurance scheme, creative financing mechanisms that
may include government equity participation in promising joint
business ventures, and labor market flexibilities attuned to local
cultures. Assistance in gaining access to land, e.g., from the
regional government or by LGUs, whether individually or as allied LGU
clusters, is also important.
The
task ahead is not only to promote but to also facilitate investments
in Muslim Mindanao. I am confident that whoever eventually takes the
helm of the new Bangsamoro government will do what it takes to ensure
that investor interest, which is running high, will turn into actual
entry of investments that will boost jobs and incomes in the
long-troubled region at the soonest possible time.
*
* *
No comments:
Post a Comment