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No Free Lunch

Rebuilding the Marawi economy

/ 05:32 AM November 17, 2017

We all know that rebuilding Marawi City after the recent hostilities there means much more than physical reconstruction. More daunting would be rebuilding lives and livelihoods. In the face of the city economy’s recent history, this task will be extremely complex and tricky.

The immediate concern is to restore economic activity, which the months-long fighting put to a standstill. Clearly, restoring and sustaining the lives of the city population hinge on restoring their jobs and livelihoods. Until this is done, it is incumbent on the state to provide for their subsistence. Like it or not, this will mean outright subsidy by the government and Filipino taxpayers for the displaced Maranaw’s basic human needs of food, clothing and shelter. Failure in meeting those needs would only fuel further disenchantment with the government and the Philippine state, for which esteem has already been eroded with the common sentiment that it was the government and its bombs that destroyed their homes. But this disenchantment did not start there; it has a much longer history rooted in age-old injustice in many forms, which had been the real origin of the decades-old Bangsamoro conflict. All this had been exacerbated by a history marked by a breakdown in governance and rule of law, abetted and
reinforced by dark forces driven by greed for money and power.


Herein lies the formidable challenge in rebuilding the Marawi economy. The reality is, whatever the city economy was like before the conflict broke out had been borne out of decades of evolution of what International Alert calls the “shadow economy” that has flourished in Mindanao. This is the
underground economy built on drugs, guns, kidnapping for ransom and smuggling. While accurate data can never be obtained, this shadow economy is estimated to be of a magnitude that rivals, and likely well exceeds, the size of the visible legal economy there. How else, some observers had pointed out, can one explain the proliferation of expensive high-end motor vehicles in the streets of Marawi, even as it lay at the heart of the poorest region of the country?

In the 2013 study “Out of the Shadows: Violent Conflict and the Real Economy of Mindanao,” International Alert told of how as early as 2006, the US government suspected Marawi to be at the center of the drug trade in the Autonomous Region in Muslim Mindanao. The study documented activities of various players in Mindanao’s illegal underground economy, which, even while data were spotty, allowed them to piece together an elaborate network of a shadow economy of mind-boggling magnitude. For many years, the criminal activities of seven municipal mayors in the province of Lanao del Sur, known as the Lucky Seven Club and reportedly financed by an Iligan-City-based businessman, have been open knowledge in the area. Their criminal activities included drugs, car theft, robbery and kidnapping. Perpetuating the network are allies in the police and judicial system who have kept such activities beyond the clutches of the law. The Duterte administration’s war on drugs may have disrupted, albeit not stopped, these activities, and recent high-profile killings in the area suggest so. The discovery of caches of large amounts of cash and drugs amid the Marawi ruins indicates that the shadow economy had been alive and well in the city up to the eve of the Maute siege. Indications are that substantial numbers of Maranaw down to the poorest segments of society drew their livelihoods in this massive shadow economy. It was the Marawi economy that they had always known—and the forces behind them remain very much around.


Against this background, the challenge of rebuilding the Marawi economy looks daunting indeed. Well-meaning ideas range from spurring micro and small enterprises to attracting large business conglomerates to invest in the city and surrounding areas.

But faced with competition from efforts to reentrench the shadow economy, coupled with underlying mistrust for the government and Manila-based big business not uncommon in the area, it is going to be tricky terrain on which to rebuild a local economy, to say the least.

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TAGS: physical reconstruction, rebuilding Marawi City
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