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Behind the Veil of Conflict

Behind the Veil of Conflict

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Published by EastAsiaPacific
Mindanao appears to be trapped in a vicious circle of conflict and underdevelopment. Its unresolved conflict - inherited from colonial times - is complex and economically damaging. Despite rich natural resources and opportunities opened up by recent market reforms Mindanao’s economy is consistently lagging behind Luzon and Visayas. It contributes only 15 percent each of the Philippines’ industry and services sectors, about a fifth of the country’s gross domestic product, and a fourth of total employment.

But with a third of the country’s total land area, good soil and rainfall, and a relatively typhoon-free climate Mindanao holds ample opportunity for economic development. In fact, the region is already the food basket of the Philippines, contributing about 38 percent of the country’s farms and about 60 percent of the country’s total agricultural exports. The basic development challenge that Mindanao, particularly Muslim Mindanao, faces is how to catch up with the level of development that leading regions in Luzon and Visayas have achieved.

Most recent development efforts have taken conflict resolution as a prerequisite to development. But an end to conflict is not enough. Though peace is a necessary prerequisite to growth and development in Mindanao, especially for those parts with a high incidence of violent conflict from multiple sources, such as southwestern and central Mindanao, it is not sufficient. At the same time, deferring development until conflict is fully over misses many opportunities.

The World Bank’s “Behind the Veil of Conflict” Study argues that Mindanao needs to achieve economic integration internally and externally to fulfill its development potential and as a peace-building strategy. While economic integration is not a single quick fix for development, it can motivate a different view of development issues and focus planners’ attention on what factors constrain interaction among municipalities, social groups, and economic sectors.

Many areas in Mindanao, including some conflict-affected areas, have good prospects for economic integration and can benefit from their existing links with growth centers. Stronger institutions and infrastructure are urgently needed, and building them should be the predominant strategy for all of Mindanao despite the conflict conditions in some areas.

Past strategies for the development of lagging regions have led government to intervene directly to address gaps perceived to hinder business growth. Such measures increased economic activity in the target area, but success was project-based with only a few winners. The local economies were driven farther apart by rivalry and competition for public investments. Ultimately, inequality was exacerbated—a situation that weighs heavily on the weak local institutions and vulnerability to conflict that loom over both leading and lagging areas in Mindanao.

Likewise, strategies for developing post-conflict areas have largely ignored the need to benefit from the growing economic density in neighboring areas. Most post-conflict strategies have been special interventions to address the complex political and social issues that have lingered for decades—often necessary as some places in Mindanao have been so deeply affected by division and conflict that any development program would be viewed with skepticism and mistrust. But post-conflict programs could do much more for affected communities by strengthening the basic services, access, and mobility that would enable them to interact economically with other communities.

This study argues that economic integration can speed up growth in a few localities in Mindanao, the benefits of which can then be shared with other areas. Using insights from the World Development Report 2009 (Reshaping Economic Geography), it reframes the policy question for lagging and remote areas in both Mindanao and the Philippines. Frequently, governments overemphasize geographic targeting to help areas that are not d
Mindanao appears to be trapped in a vicious circle of conflict and underdevelopment. Its unresolved conflict - inherited from colonial times - is complex and economically damaging. Despite rich natural resources and opportunities opened up by recent market reforms Mindanao’s economy is consistently lagging behind Luzon and Visayas. It contributes only 15 percent each of the Philippines’ industry and services sectors, about a fifth of the country’s gross domestic product, and a fourth of total employment.

But with a third of the country’s total land area, good soil and rainfall, and a relatively typhoon-free climate Mindanao holds ample opportunity for economic development. In fact, the region is already the food basket of the Philippines, contributing about 38 percent of the country’s farms and about 60 percent of the country’s total agricultural exports. The basic development challenge that Mindanao, particularly Muslim Mindanao, faces is how to catch up with the level of development that leading regions in Luzon and Visayas have achieved.

Most recent development efforts have taken conflict resolution as a prerequisite to development. But an end to conflict is not enough. Though peace is a necessary prerequisite to growth and development in Mindanao, especially for those parts with a high incidence of violent conflict from multiple sources, such as southwestern and central Mindanao, it is not sufficient. At the same time, deferring development until conflict is fully over misses many opportunities.

The World Bank’s “Behind the Veil of Conflict” Study argues that Mindanao needs to achieve economic integration internally and externally to fulfill its development potential and as a peace-building strategy. While economic integration is not a single quick fix for development, it can motivate a different view of development issues and focus planners’ attention on what factors constrain interaction among municipalities, social groups, and economic sectors.

Many areas in Mindanao, including some conflict-affected areas, have good prospects for economic integration and can benefit from their existing links with growth centers. Stronger institutions and infrastructure are urgently needed, and building them should be the predominant strategy for all of Mindanao despite the conflict conditions in some areas.

Past strategies for the development of lagging regions have led government to intervene directly to address gaps perceived to hinder business growth. Such measures increased economic activity in the target area, but success was project-based with only a few winners. The local economies were driven farther apart by rivalry and competition for public investments. Ultimately, inequality was exacerbated—a situation that weighs heavily on the weak local institutions and vulnerability to conflict that loom over both leading and lagging areas in Mindanao.

Likewise, strategies for developing post-conflict areas have largely ignored the need to benefit from the growing economic density in neighboring areas. Most post-conflict strategies have been special interventions to address the complex political and social issues that have lingered for decades—often necessary as some places in Mindanao have been so deeply affected by division and conflict that any development program would be viewed with skepticism and mistrust. But post-conflict programs could do much more for affected communities by strengthening the basic services, access, and mobility that would enable them to interact economically with other communities.

This study argues that economic integration can speed up growth in a few localities in Mindanao, the benefits of which can then be shared with other areas. Using insights from the World Development Report 2009 (Reshaping Economic Geography), it reframes the policy question for lagging and remote areas in both Mindanao and the Philippines. Frequently, governments overemphasize geographic targeting to help areas that are not d

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Published by: EastAsiaPacific on Sep 20, 2010
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Behind the Veil of Conict
Moving Toward Economic Integration for SustainedDevelopment and Peace in Mindanao
May 2010
East Asia and Pacifc Region Sustainable Development Department
Philippines Country Management Unit
 
ii
© May 2010 The International Bank or Reconstruction and Development/The World Bank 1818 H Street NWWashington, DC 20433, USATelephone: 202-473-1000Internet: www.worldbank.orgThis document was prepared by the Social Development sta o the Sustainable Development Department,East Asia and Pacic Region, World Bank.Social and economic development issues are an integral part o the development challenge in the East Asiaand Pacic Region. The World Bank’s recently completed
World Development Report 2009: Reshaping Economic Geography
has provided the conceptual ramework or this study.
Rights and Permissions
This volume is a product o the sta and consultants o the International Bank or Reconstruction andDevelopment/The World Bank. The ndings, interpretations, and conclusions expressed in this paper donot necessarily refect the views o the Executive Directors o The World Bank or the governments theyrepresent or o AusAID. The World Bank does not guarantee the accuracy o the data included in this work.The boundaries, colors, denominations, and other inormation shown on any map in this work do not implyany judgment on the part o The World Bank concerning the legal status o any territory or the endorsementor acceptance o such boundaries.The material in this publication is copyrighted. Copying and/or transmitting portions or all o this work without permission may be a violation o applicable law. The International Bank or Reconstruction andDevelopment/The World Bank encourages dissemination o its work and will normally grant permission toreproduce portions o the work promptly.For permission to photocopy or reprint any part o this work, please send a request with completeinormation to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, USA,telephone 978-750-8400, ax 978-750-4470, www.copyright.com. All other queries on rights and licenses,including subsidiary rights, should be addressed to the Oce o the Publisher, The World Bank, 1818 HStreet NW, Washington, DC 20433, USA, ax 202-522-2422, email pubrights@worldbank.org.
Cover Design
by Zephyr Design, ino@wearezephyr.co
Editing
by Communications Development, Inc, ino@cdinet.com
Photos
by MTF Secretariat and MTF-RDP Partners
Layout and Printing
by Inkwell Publishing Co., Inc., inkwell@ino.com.ph

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