Mindanao’s promise

The government’s agreement with the Moro Islamic Liberation Front has raised hopes that enduring peace will finally be attained in Mindanao. And beyond this is the tremendous economic impact that the agreement can bring the country.

Investors have avoided Mindanao for decades, despite its abundant natural resources and available manpower, because of the troubled peace particularly in the Autonomous Region in Muslim Mindanao. The ARMM, which will be replaced by the Bangsamoro, accounts for 27 percent of Mindanao’s land area, which, in turn, is about the size of Luzon. However, the ARMM is the poorest of the regions, contributing less than 1 percent to the Philippines’ gross domestic product. The National Capital Region has the biggest share of the country’s GDP (35.7 percent in 2012), followed by Calabarzon (17.4 percent), and Central Luzon (9.2 percent).

To many investors, a problem in the ARMM is a problem in Mindanao. The political uncertainty there has daunted investors from putting up factories and other job-generating businesses on the whole island. This, hopefully, is about to change. As the influential Makati Business Club has pointed out, peace in Mindanao will make it “a truly vibrant and essential part of the Philippine economic engine.”

Bring peace to the island and things will change for the better, economically. In January 2013, British financial giant Standard Chartered Bank released a study saying that a final peace agreement between the government and the MILF would augur well for the economy of Mindanao. “We believe that a complete peace deal will accelerate economic growth in the ARMM over five years, and that this will spill over to the larger Mindanao island group,” the Standard Chartered study said, adding that “a peace deal could narrow regional disparities and place the Mindanao island group on a faster growth trajectory.”

A Bangsamoro economic plan was actually tackled during the multisectoral Mindanao Summit held also in January 2013. Economic Planning Secretary Arsenio Balisacan then pointed out that if the government could achieve and sustain peace in Mindanao, the region was bound to surpass the growth of the whole of Luzon: “Mindanao will boom. It will grow faster than Luzon because the peace and order problem is the only one constraining it. If you get that [out of the picture], I’m very positive it will grow much faster than Luzon.”

With the Framework Agreement on the Bangsamoro then in place, Balisacan added, investors could start looking at the region and plan for the long term. Eventually, this could give birth to industries that will usher in jobs and investments. He cited agriculture, tourism and allied industries, saying Mindanao’s abundant natural resources and the richness of Muslim culture would make it the perfect “food bowl” and an attractive tourist destination, respectively.

The executive branch has done its part in initiating the peace process in the South. Much will now depend on Congress, which has to pass the basic law that will govern the Bangsamoro. After last week’s signing of the Comprehensive Agreement on the Bangsamoro, a proposed basic law creating a new autonomous region for Muslims in Mindanao has to be submitted to Congress. President Aquino wants it passed this year, and supporters of the peace agreement, including the business community, have urged Congress to act swiftly and pass the proposed Bangsamoro charter.

Said the Makati Business Club in reaction to last week’s signing of the peace agreement: “We believe that the success of the peace deal hinges largely on genuine economic development and the improvement in the quality of the lives of the people, both in the Bangsamoro and in Mindanao as a whole. We are hopeful that the effective implementation of the agreement will unleash the region’s vast potentials for agriculture and agribusiness investments, tourism and natural resource development, among others.”

The group also pointed out that with the country’s steadily improving investment climate, the peace agreement presented a golden opportunity for the Bangsamoro and Mindanao, and that the business community must do its part.

The path to prosperity for Mindanao will be long and at times winding and bumpy. But at last, the people of Mindanao finally have a view of the road ahead. Wonderful things do happen when peace is given a chance.