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Breaking the Links Between Economics and Conflict in Mindanao DECEMBER 2003

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Breaking the Links Between Economics and Conflict in Mindanao DECEMBER 2003 Breaking the links between economics and conflict in Mindanao DECEMBER 2003 SYLVIA CONCEPCION • LARRY DIGAL • RUFA GUIAM ROMULO DE LA ROSA • MARA STANKOVITCH Breaking the links between economics and conflict in Mindanao DISCUSSION PAPER Sylvia Concepciòn Larry Digal Rufa Guiam Romulo de la Rosa Mara Stankovitch Presented at the ‘Waging Peace’ conference, Manila DECEMBER 2003 INTERNATIONAL ALERT • BUSINESS AND CONFLICT PROGRAMME Contents Foreword ............................................................................................................................4 Acknowledgements ..................................................................................................................5 Chapter 1: Conflict in Mindanao ..................................................................................6 1.1 Roots of the conflict ................................................................................................6 1.1.1 Diverse cultures ..........................................................................................6 1.1.2 Historical background ................................................................................6 1.1.3 Dispossession ..............................................................................................6 1.1.4 Poverty ........................................................................................................7 1.1.5 Discrimination ............................................................................................8 1.1.6 Political marginalisation ..............................................................................8 1.2 Conflict and peace efforts ........................................................................................8 1.2.1 Triggers of conflict ......................................................................................8 1.2.2 Emergence of the MNLF ............................................................................9 1.2.3 The Tripoli Agreement ..............................................................................10 1.2.4 Emergence of the MILF ............................................................................10 1.2.5 The Aquino government and the ARMM ................................................10 1.2.6 The Abu Sayyaf ........................................................................................11 1.2.7 The Ramos government: a final peace agreement with the MNLF............11 1.2.8 The Estrada government: all-out war ........................................................13 1.2.9 The Arroyo government: inconsistent approaches ....................................14 Chapter 2: Mindanao’s economy ................................................................................18 2.1 Economic underdevelopment..................................................................................18 2.2 Regional disparities ..............................................................................................19 2.2.1 The economy in Muslim areas ..................................................................20 2.3 BIMP-EAGA ..........................................................................................................21 2.4 Overseas development aid ......................................................................................22 2.5 Poverty ..................................................................................................................22 Chapter 3: Conflict and the economy ........................................................................24 3.1 The human cost of war ..........................................................................................24 3.2 Impact on the economy ..........................................................................................24 3.3 Displacement ..........................................................................................................25 3.4 The long-term effects of conflict ............................................................................26 3.4.1 Conflict and poverty..................................................................................26 3.4.2 Access to services ......................................................................................27 3.4.3 Lawlessness ..............................................................................................28 3.4.4 Arms-dealing ............................................................................................29 3.4.5 Illegal logging ............................................................................................30 3.4.6 Kidnapping for ransom ............................................................................31 3.4.7 Crime and conflict ....................................................................................31 3.5 The economics of pacification ................................................................................31 3.6 The links between economics and conflict: conclusions..........................................32 2 Breaking the links between economics and conflict in Mindanao ALTERNATE FORUM FOR RESEARCH IN MINDANAO Chapter 4: Breaking the links between economics and conflict: what role for the private sector? ................................................................................33 4.1 Scope for action......................................................................................................33 4.2 Case studies ............................................................................................................35 Datu Paglas: can the miracle be sustained? Philippines Business for Social Progress ARMM Business Council, Mindanao Business Council and Muslim Business Forum 4.3 Recommendations ..................................................................................................41 Endnotes ................................................................................................................................46 References ..............................................................................................................................49 Appendix ................................................................................................................................50 Table 1a: Gross Domestic Product by Region at constant (1985) prices, 1994–2000 Table 1b: Annual Growth of Gross Domestic Product at constant (1985) prices, 1995–2000 Table 1c: Distribution of Gross Domestic Product at constant (1985) prices, 1994–2000 Table 1d: Per capita Gross Regional Domestic Product, 2001 (pesos) Table 2a: Mindanao, Gross Value Added by sector at constant (1985) prices, 1994–2000 Table 2b: Mindanao, Gross Regional Domestic Product: percentage breakdown by sector, 1994–2000 Table 2c: Mindanao, Gross Regional Domestic Product: annual growth by sector, 1995–2000 Table 3a: Road density and pavement ratio, 1999 Table 3b: Mindanao, irrigation development as percentage of potentially irrigable area, 2001 Table 4a: BOI-approved local equity investment, 1992–2001 Table 4b: Mindanao, BOI-approved local equity investment, 1992–2001 Table 4c: Growth in BOI-approved local equity investment, 1993–2001 Table 5a: BOI-approved foreign equity investment, 1992–2001 Table 5b: Mindanao, BOI-approved foreign equity investment, 1992–2001 Table 5c: Growth in BOI-approved foreign equity investment, 1993–2001 Table 6a: Cost of BOI-approved projects, 1992–2001 Table 6b: Mindanao, Cost of BOI-approved projects, 1992–2001 Table 6c: Growth in cost of BOI-approved projects, 1993–2001 Table 7: Mindanao exports, 1991–2001 Table 8: Mindanao exports, 2000 Table 9: Mindanao export markets, 2000 Table 10: Mindanao, foreign trade by region, 1994–2000 Table 11: Mindanao, trade with EAGA Countries, 1994–2000 Table 12: Selected infrastructure facilities, % allocation Table 13: Poverty incidence in Mindanao, by region Table 14: Poverty in predominantly Muslim provinces Table 15: Mindanao, average annual per capita income, by province Table 16: Selected social indicators in Mindanao Table 17: Mindanao, poverty incidence: percentage of families in poverty Breaking the links between economics and conflict in Mindanao 3 INTERNATIONAL ALERT • BUSINESS AND CONFLICT PROGRAMME Foreword THIS REPORT SHEDS analytical light on the complex linkages between economic factors and the conflict in Mindanao, and on the possible role of local business leaders and their associates in communities or other sectors in the country in breaking these links. It also explores options for government in addressing these dynamics. Mindanao symbolises resistance. Generations of Moro peoples have resisted colonial conquest, assimilation by central government, and declarations of all-out war for over four centuries. Their quest for self-determination and their aspiration to establish a Bangsamoro nation has taken different forms of struggle. The peoples of Mindanao symbolise resilience. In times of war or peace, the people of the southern islands of the Philippines including Moro peoples, the lumads (indigenous peoples) and the Christian settlers in the lowland areas have managed to survive and to thrive – at times, together, and, at other times, separately. The island of promise more often than not has seen the expectations of its inhabitants frustrated either by the failure of development efforts, by poor governance or neglect, or by successive military operations. In this light, the people’s pursuit of peace in Mindanao, with support from friends, represents a
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