Egalitarian | Economic model that works for Mindanao

As a theoretical economist, I have been talking about creating economic hubs for Mindanao to diffuse concentration of development, create opportunities at the countryside, capture the benefit of value-added production, and increase the marginal productivity of labor.

For many years, growth had been concentrated in the urban centers as a result of the propagation of the metropolis concept where a central hub is created to bring about spillover development in the immediate and contagious spatial places. This was the intention, to build an economic accelerator so that development will flow from the central to the periphery.

But what happened over the course of time seemed to be the opposite. With the most potentials for growth in Mindanao being the food basket of the country and as basin of mineral resources of the country, these potentials remained to be untapped.

The simple reason is the lack of understanding of the culture and potential of Mindanao. There were investments made in areas where production might be effective but not the transportation. Mindanao as an island does not fully integrate among its different regions, albeit the macro-infrastructure and increasing budget share over the last 15 years.

But this was before. The Mindanao Development Authority (MinDA) under the visionary leadership and passionate work of Secretary Datu Abul Khayr Alonto, a framework for development for Mindanao, akin to the Marshall Plan to reconstruct Marawi with a strong ingredient for integrative growth effects for the whole Mindanao.

The plan follows a development strategy known as Mindanao Development Corridor. I observed this economic model in Germany which spurred the economic miracle of the country after the war.
A development corridor is an integrated spatial strategy where administrative regions are clustered together as brought by their competitive advantage or by their natural endowments. The integration is aimed to bring about synergy in the development potentials of the institutions, innovation abilities, environment, industry links both horizontal and vertical, logistics and transportation interconnectivity, and investment potentials.

The development corridors are Northern Mindanao, South Central, Western Mindanao, and the Bangsamoro.
The Northern Mindanao is a cluster dedicated for industry and trade to enjoy economies of scale endemic in the clusters. Also, it is a biodiversity and eco-tourism cluster due to its natural endowments fit for the tourism industry.

The South-Central Mindanao development corridor will be a logistics cluster given its strategic location and in-place infrastructures that ensure efficient transport of good among places.

While Western Mindanao Development Corridor is a mariculture and trade cluster. Given the potential of open seas, Western Mindanao can specialize on cultivating marine organism for food and other products. This cluster prides itself to claim to be the sardine capital or bottle sardines city.

The Bangsamoro development corridor is strategic for its value on restoration and rehabilitation by reconnecting Marawi and Lanao del Sur to markets making the two areas connected and accessible through efficient infrastructure towards the eventual increase economic activities in the areas. The Bangsamoro corridor stands to benefit the historical trading ties with other Southeast Asian countries that had long been established since history began.

For all its worth, Mindanao will benefit from the spatial strategy because of the expected economic results out from the direct investments happening in the identified areas. Growth in these areas is expected to gain momentum at the instance the identified programs are made operational. The strategy is anchored on the competitive advantage of the cluster, the places within the clusters will enjoy the benefit of investments, the immediate spatial clusters will benefit the growth spillover, there will be no competition on the infrastructure due to unique cluster requirement, and finally, such growth strategy happens to be history and culture-sensitive.

The growth effects need be complemented by an inclusive framework of governance. This is the very reason that the MinDA toils hard towards the shift to a federal setup. As mentioned, cluster models work in Germany because the country is Federal, we too can make our economic model of corridor strategy endure and create maelstrom of growth over time within federal system.

Adrian Tamayo served as the Research Director of the University of Mindanao and currently with Mindanao Development Authority (MinDA). He joined public service to contribute to this government. His studies and travels taught him that the cooperation of the citizens is a primary driver of growth as evident in great nations.

Posted in Opinion