Action 3.2 Enhance partnerships and improve tenure instruments for sustainable resource management

29. 
    Improving local livelihoods for communities is closely linked to building a base for a more sustainable management of ENR resources. It is important to see local communities as partners, working with the government to develop services and facilities. A big challenge is to ensure that the vulnerable groups, such as women, youth and indigenous peoples, are targeted beneficiaries of income-generating activities. The private sector and civil society are able to provide the human, technical and financial resources sorely missing to make ENR management sustainable. It is important to maintain systematic collaboration and consensus building across sectors, and among affected stakeholders to forge agreements on priorities and adoptable measures. To complement existing command-and-control regulations, successful initiatives to promote industry self-regulation, public-private partnerships, market-based policy instruments and community participation could be scaled up. Bureaucratic complexities and delays have often resulted in conflicts on the ground and limited the potential of these instruments to provide incentives for sustainable management and investments.
    

29. 
    Enhancing the productivity of community-based natural resource management initiatives requires providing marketing assistance, improving means of transportation, improving access to credit, and fostering partnerships with the private sector (World Resources Institute 2005). The business model involving local communities and the private sector has been successfully applied to reforestation and the management of tree plantations and privately managed forestlands (under instruments like Industrial Forestry Management Agreements). While many of the private sector’s ENR projects fall under their corporate social responsibility programs, their participation in major ENR investments could include ecotourism development, sustainable agriculture, sustainable forestry, and the development of renewable energy. Beyond these activities, more substantial private sector participation and investment in ENR management should be encouraged (such as the operation of sanitary landfills and wastewater treatment).
    

29. 
    Experience shows that “open access” areas that are untenured are subject to uncontrolled and unmonitored conversion to agricultural lands and unsuitable cultivation practices that result in significant loss of soil cover and the regular occurrence of landslides, siltation, and flashfloods. Instituting a process to secure community and household tenurial rights to land and local resources equates to improving livelihoods and ensuring equitable distribution of natural wealth for the local people. Secured tenure is important because local communities are far more likely to act in ways that conserve natural resources if they have real control over it, are able to influence decisions on how resources are used and if they will end up with a fair share of the benefits. New institutional arrangements such as Protected Area Management Boards (PAMBs) and provincial environmental councils could bypass many of the existing institutional and bureaucratic constraints, and encourage local stewardship of natural resources.
    

1. 
   Despite persistent conflict, Mindanao has significant development potential. With a third of the country’s total land area, good soil and rainfall, and a relatively typhoon-free climate, Mindanao has earned a reputation as the country’s food basket. It has more than a third of the country’s farms and accounts for about two thirds of the country’s total agricultural exports. The Mindanao economy represents 17.7 percent of the Philippine economy (as of 2008) and about a fourth of the country’s total employment. During 1995-2008, the evolution of Mindanao’s regional gross domestic product followed closely the growth pattern of the overall Philippine economy, achieving a similar average growth rate of about 4.4 percent per annum (Figure 1).
   

2. 
   But Mindanao lags behind Luzon and the Visayas, both economically and in terms of social indicators. The average per capita income in Mindanao is substantially lower than the national average with the consequence that the incidence of poverty in the region (46.7 percent in 2006) is significantly higher than the national average of 32.9 percent. Health and education indicators exhibit similar gaps, as does access to basic services. For example, in 2006, 30 percent of households in Mindanao were without access to electricity, compared to 23 percent in the Visayas and 11 percent in Luzon, while the telephone density in Mindanao was only 3.6 percent, versus 6.1 in the Visayas and 12 percent in Luzon.⁴³ Indeed much of Mindanao suffers from the “accumulated neglect” of the island by central Governments which have not given Mindanao priority in the national development efforts.
   

3. 
   One reason for the slower development progress is that Mindanao is trapped in a vicious cycle of conflict and underdevelopment. This conflict has its roots in colonial times when the increasing dominance of Christians resulted in the marginalization of Moros and Lumads⁴⁴. This trend was exacerbated by the Government policy of promoting settlement by Christian Filipinos. Calls for Moro self-determination resulted in war against the Filipino Government in the 1970s. Since then, conflict between Moros and Christian settlers and between Moros and the national Government has waxed and waned, often with long periods of relative peace, but without permanent resolution.
   

4. 
   Poor governance provides another reason for the relatively weaker development performance. Mindanao shares with the rest of the Philippines entrenched patterns of patronage politics. However, as demonstrated by the recent Maguindanao massacre, these patterns have been taken to an extreme in many parts of the region. Moro elites have tended to vacillate between opposition and accommodation to the national Government as means of attempting to consolidate power. This has tended to reinforce patronage politics and the use of force as politicians have assembled sizeable private armies, often in collaboration with the armed forces and national police. One result has been to promote intra-Moro conflict in parallel with Christian-Moro conflict.
   

5. 
   Finally, economic factors, notably the limited degree of economic integration of much of Mindanao, are an equally significant causal factor. The Moro parts of Mindanao are often relatively isolated, in socioeconomic terms, from centers of growth. As a result, poverty feeds violence and vice versa.
   

6. 
   Mindanao manifests two faces of development. On one side are the growth centers which exhibit sustained economic growth due to the presence of relatively good infrastructure, educational and health systems, a dynamic private sector, and world-class agribusiness firms. There are five of these in Mindanao: Cagayan de Oro, Iligan City, Zamboanga City, General Santos City, and Davao City. On the other hand are the economically lagging areas that suffer the opposite of what the growth centers enjoy, i.e., poor infrastructure and highly inadequate basic services (including education and health), poor local governance, a weak private sector, and hesitance of investors (both foreign and local) to locate their operations in these areas. A common denominator among these economically lagging areas/regions of Mindanao is the presence of armed conflict, be it Moro/Christian, intra-Moro (rido), or the presence of communist insurgents (Figure 2).
   

7. 
   Poverty and armed conflict are inextricably linked in Mindanao. Conflict exacerbates poverty by destroying the physical infrastructure indispensable for the smooth operation of economic activities, discouraging the investments that generate jobs, and resulting in neglect in the delivery of basic services, particularly education and health, due to threats of physical violence to those assigned to deliver them. Consequently, the conflict-affected regions of the Autonomous Region in Muslim Mindanao (ARMM) and the Caraga Region are also the areas where the most severe forms of poverty in the Philippines can be found.⁴⁵ In 2006, six of the 10 poorest provinces in the country were in Mindanao. Out of these six, three belong to the ARMM – Tawi-Tawi, Maguindanao, and Lanao del Sur. In turn, this has promoted a vicious cycle of conflict, leading to lack of investments, constraining economic growth, and resulting in limited economic opportunities, thereby giving rise to greater poverty which further fuels conflict. (The Annex describes the main triggers of conflict that are responsible for the most recent bouts of conflict.)
   

Source: World Bank (2010a)

8. 
   Internal displacement is an enduring feature that aggravates poverty and vulnerability, particularly in Central Mindanao. The “All Out War” in 2000 led to an estimated 900,000 internally displaced persons (IDPs). For much of the following decade the number of IDPs hovered around the 200,000 mark, but the disturbances in the wake of the MOA-AD (cf. Annex) in 2008 brought the numbers back up. The Internal Displacement Monitoring Center (IDMC  www.internal-displacement.org) currently estimates the number of IDPs as at about 160,000 (about 100,000 less than Colletta’s estimate for January 2010; cf. Figure 3). However, many of those who were earlier displaced have settled in new places and no longer show up in the statistics, yet they frequently remain amongst the most vulnerable.⁴⁶ While hundreds of thousands of IDPs have returned since fighting broke out again in 2008, they have typically returned on their own, without assistance, and are now struggling to recover their livelihoods.
   

Source: Colletta (2010)

B. Where Mindanao Could Be: Policy Options

9. 
   The following section lays out a multi-pronged approach to peace and development in the conflict-affected areas of Mindanao focusing on empowering communities, promoting economic integration, and addressing conflicting interests that make the achievement of peace difficult. It does not try to be comprehensive – e.g., no mention is made of education, although this is critical. Nor does it enter into the areas of promoting the peace negotiation process or security sector reform, which are farther removed from the mandate of the multilateral development banks. Rather, it presents a coherent set of actions intended to have a transformative impact on Mindanao. Note that these options are not dependent on the conclusion of a Peace Agreement.
   

Table 1

Summary of Policy Actions to Foster Faster Development in Mindanao

Policy Area 1: Empowering Local Communities Action 1.1 Scale up Community-Driven Development (CDD) Action 1.2 Consolidate CDD programs in Mindanao under national umbrella
Policy Area 2: Promoting Economic Integration Action 2.1 Develop a program of spatially connective infrastructure
Policy Area 3: Addressing “Spoilers”/Strengthening Land Tenure Rights
	Action 3.1 Develop land policy and the regulatory framework Action 3.2 Develop special mechanism to adjudicate conflicting land claims
Policy Area 4: Improving Governance in Mindanao
Action 4.1 Ensure clean, honest, and free elections Action 4.2 Audit the ARMM budget Action 4.3 Ensure greater transparency in budgetary allocations Action 4.4 Implement performance-based incentive schemes for LGUs Action 4.5 Dismantle private armies and return policing to the police

Policy Area 1: Empowering Local Communities
Action 1.1 Scale up Community-Driven Development (CDD)

10. 
    Community Driven Development (CDD) has been adopted by many parties as an approach to fostering peace and development in conflict-affected parts of Mindanao. This approach is embodied in the ARMM Social Fund of the ARMM Government’s Department of Social Welfare and Development, the activities of the Bangsamoro Development Agency,⁴⁷ the Mindanao Rural Development Program of the (national) Department of Agriculture, and the KALAHI-CIDSS program of the (national) Department of Social Welfare and Development. CDD has been successfully used to address the needs of conflict-affected communities in many countries around the world.⁴⁸
    

11. 
    Fundamentally CDD is about empowering communities to help themselves. CDD programs typically include at least two types of activities. The first is the facilitation of participatory development planning by communities in cooperation with local government authorities. The second is the implementation of priority investments (typically, but not necessarily, small roads, water supply systems, multipurpose community centers, classrooms, health posts) prioritized by the community through the planning process. Small-scale community-managed investments supported under an initial CDD approach can help rebuild trust and improve accountability between the local state and conflict-affected communities. In Mindanao, CDD programs have also promoted income-earning activities and training (including literacy training).
    

Action 1.2 Consolidate CDD programs in Mindanao under a national umbrella

12. 
    In the medium term, as part of a scaled up nationwide CDD program (see Discussion Note No. 16), it would be important to provide stronger incentives for institutionalizing CDD into LGU planning and budgeting systems as part of a strategic framework for participatory decision making at the local level in Mindanao, with enhanced transparency and accountability in the use of public funds. There is a need to undertake more rigorous evaluation of CDD programs, with a view to determining what works best and what works less well in conflict-affected settings. This would provide a solid basis for scaling up such programs with enhanced effectiveness and more impact on local governance. Consequently, development partners, in collaboration with the Office of the Presidential Advisor on the Peace Process, are about to launch an evaluation of CDD programs in conflict-affected areas. It would also make sense to encourage consolidation and harmonization of approaches by bringing the CDD programs in Mindanao under the umbrella of the expanded CDD platform currently under discussion with DSWD. Additional benefits could also be achieved by bringing under the CDD approach those donor-financed programs that simply contract out the delivery of goods and services to communities.
    

Policy Area 2: Promote Economic Integration

13. 
    CDD is an important tool, but it is insufficient to have the transformative impact that could break the cycle of conflict in Mindanao. It is small in scale, can absorb only limited funding, and is typically less connected to larger, economy-wide development. To achieve transformative economic development it will be necessary to promote greater economic integration of lagging regions with growth poles.
    

14. 
    If one compared the port and city of General Santos with Polloc Port and Cotabato City some 40 years ago, one would have found them to be at rather similar levels of development and economic activity. This is no longer the case. General Santos has outstripped its neighbor to the north, becoming one of Mindanao’s poles of growth, while the Cotabato City area has become an economic backwater. It is thus not surprising that Cotabato City’s hinterland is among the poorest parts of the Philippines. To reduce poverty in this hinterland (and in other isolated areas of Mindanao), it will be necessary to strengthen the economic links of such areas either to existing growth poles or to new ones. This is part of the logic behind the April 2010 declaration of Polloc Port as a free zone (non-Customs territory).
    

Action 2.1 Develop a program of spatially connective infrastructure

15. 
    Promoting new poles of growth is a worthwhile approach, but isolated areas need to be linked to them. As noted in Behind the Veil of Conflict (World Bank, 2010a), economic integration rewards localities that are linked to each other with efficient transport systems that increase mobility of people and goods. Building spatially connective infrastructure for Mindanao means:
    

• 
  At the national level, addressing infrastructure bottlenecks and improving competitiveness in the transport sector to allow Mindanao to participate in the large markets in the National Capital Region and outside the country.
  
• 
  At the regional level, linking cities and rural areas with infrastructure improvements. Provincial road improvements linking growth centers to areas that produce raw material will reduce the disparities in economic opportunity between growth areas and lagging areas.
  
• 
  At the local level, connecting remote locations to alleviate poor living conditions and reduce vulnerability to outbreaks of conflict.
  

16. 
    To this end there is a need to formulate an integrated and comprehensive infrastructure plan for the island. The plan should highlight an economically and financially rational way of providing seaports and airports (both local and international), telecommunication facilities, energy, irrigation facilities, and roads (including farm-to-market and access roads) and bridges based on a value-chain development approach for the dominant agricultural economy of the island. Pertinent policies⁴⁹ for the maximum and efficient use of these facilities should be reviewed such as the country’s air and sea policies, port (air and sea) management policy, energy policy, etc. The goal should be to make trading and transacting business as easy and cost-effective as possible for entrepreneurs and potential investors in Mindanao.
    

17. 
    Once the hinterlands are linked by infrastructure and better policies to growth poles, they need to produce products to sell in the growth poles. The comparative advantage of the isolated areas of Mindanao is likely to lie in natural resource extraction and agricultural production. While the former has significant economic potential, transformation of the lives of the poor is more likely to come through the development of agriculture. The measures described in the Philippines Discussion Note No. 10 on Agribusiness Development are relevant here. In summary, the isolated areas of Mindanao would benefit from the promotion of measures to ensure tenure and the efficiency of land markets and to promote the participation of the private sector in agribusiness value chains.
    

Policy Area 3: Addressing “Spoilers”/Strengthening Land Tenure Rights

18. 
    While the conclusion of the elusive Peace Agreement with the MILF remains highly desirable, it will not be a panacea. Just as the Final Peace Agreement with the MNLF resulted in conflict with the MILF and the proposed conclusion of the MOA-AD prompted widespread opposition, there will be many interests opposed to any peace agreement. And even once signed, there will be many potential “spoilers” who could make the aftermath of a peace agreement less than peaceful. To ensure that peace holds, it will be necessary to understand the varying and conflicting interests so as to be able to mitigate, co-opt, or block these interests. And it will be necessary to recognize and address legitimate claims, even when these are in conflict, as will most certainly occur frequently with respect to land.
    

19. 
    Issues of land are central to conflict in Mindanao.⁵⁰ The Moro self-determination movement is strongly motivated by a sense of injustice in being pushed out of ancestral domains, which began in the colonial period and was aggravated by the Government’s encouragement of settlement by Christians from Luzon and the Visayas in the twentieth century. Land grabbing continues to this day as powerful interests (both Christian and Moro) take advantage of the weak. One study of rido (Kamlian 2007) found that 35 percent of the examined cases of rido (clan feuds) had their origins in disputes over land. Of course, insecurity of land tenure, lack of title, and conflicting claims plague much of the Philippines, but the situation in Mindanao has been aggravated by the area’s conflicted history.