More fun in Mindanao

“Mindanao is the future of the Philippines,” remarked my daughter last week. She was marveling at the futuristic new city hall rising in Tagum City, Davao del Norte (“looks like Singapore,” she said), the wide highways we traversed to get there, and the great natural wealth visible in the lush agricultural crops around. It struck me how she could make this observation on what was only her second visit to Mindanao. She had formed her first impression of Mindanao several years ago when a friend invited her to their place in Bukidnon, and was deeply impressed then at how well endowed our southern regions are.

I told her I could not agree with her more. As my current work involves helping uplift the economies of erstwhile conflict areas in Muslim Mindanao, I assured her that much more would be coming especially once these areas achieve lasting peace and draw stronger interest from business investors. For anyone who lives in or has traveled in Mindanao, the island region’s superior natural endowments relative to the rest of the country are readily apparent. But beyond what it has, key trends in the outside world also give Mindanao much headway in securing a prominent place in the country’s economic future. These key global trends are being impelled by at least four forces, namely: technological change, changing resource availabilities, evolving market preferences and growing regional economic integration.

Rapid advances in biotechnology (manipulation of individual genes) and nanotechnology (manipulation of individual atoms and molecules) are conditioning the nature of both products and markets in the world economy. Biotechnology, particularly genetic engineering, has been touted to revolutionize agriculture and dramatically boost productivity. However, this has generated a backlash of concern over food safety and environmental considerations, which has created a special and rapidly growing niche market for organically grown farm products. Mindanao’s traditional comparative advantage in agriculture, and its growing capacity in organic agriculture, will be among the strengths that could be harnessed to respond to these technologically induced global economic trends.

Meanwhile, changing resource availabilities also condition the supplies of and costs of producing both primary and manufactured products worldwide. Among these changes is the prospect of declining oil resources based on projections that the peak of the world’s finite oil reserves is about to be (if not already) reached. They also include shifts in the availability of mineral supplies, depleting fisheries and tightened labor markets due to aging populations abroad (subject of last week’s column). Mindanao’s rich natural resource endowments, especially its minerals and marine resources, will be prominent in its response to changing world market conditions induced by such resource shifts in the world economy. The general trend toward business process outsourcing (BPO) due to escalating labor costs in advanced economies is also an opportunity that Mindanao has begun to cash in on, with a growing number of Mindanao cities hosting BPO firms.

Market preferences in world markets are shifting over time, partly in response to some of the above trends. Last week, we pointed out how aging populations abroad have spurred rapid growth in demand for geriatric products and services. Similar rapid growth is seen in demand for organic products, especially in wealthier markets that now place a significant premium on “natural” products. In addition, rapid growth in the giant economies of China and India is spurring new demands for food, apparel and a wide range of consumer products. It has also created a corresponding high-growth segment in the international tourism market. Demand for horticultural products (fruits, vegetables and beverages—the crops that are most prominent in Mindanao) has been surging in developed countries of the West, and within Asia itself. Growing Muslim populations in Western countries, the Middle East and Asia are also rapidly expanding the demand for halal products, which Mindanao is well positioned to meet. All these trends bode well for Mindanao as it is well positioned to meet the shifting preferences of world and regional markets.

Finally, increased regional economic integration holds great opportunities for Mindanao. Deliberate moves toward stronger regional economic integration especially within the Association of South East Asian Nations (Asean) have been ongoing for decades and are shifting to high gear. In this context, it is significant to note that while Muslims comprise a minority in the Philippines and in Mindanao, they make up the majority of the aggregate population in Southeast Asia. Thus, Asean integration is of particular significance for our minority Muslim population especially in Mindanao, as it increases the opportunity for economic activities geared toward Islamic markets, such as halal industries and Islamic finance. Beyond economic integration, Mindanao is also the logical front liner to the social, cultural and political dimensions of our closer integration with the broader Southeast Asian community, as it best embodies the Philippines’ commonalities with its Asean neighbors.

I haven’t even begun to talk about the great tourism potentials in Mindanao, which I had my family sample firsthand for the first time last week. Everyone’s now mouthing our new tourism slogan, “It’s more fun in the Philippines.” Well, we discovered that family vacations could be even more fun in Mindanao.

I think my daughter had it right: our country’s future is in Mindanao.

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