Mindanao Jobs Report to guide future policy — WB
By Carmencita A. Carillo
DAVAO CITY — The World Bank (WB) and Australian-funded Mindanao Jobs Report (MJR) will help guide policy makers in reassessing programs and projects for the southern island’s economic development, a bank official said.
“It aims to provide better planning for investments in the future so that as Mindanao’s allocation or budget goes up, people will know where the money should go,” World Bank Country Director for the Philippines Motoo Konishi said in an interview after Friday’s meeting on the ongoing MJR.
The MJR, which started in January this year and is scheduled for completion and presentation to the new government by July 2016, is an offshoot of the 2014 Philippine Development Report (PDR) on Jobs that was intended to help the Aquino administration plan for inclusive growth.
Karl Kendrick T. Chua, MJR team leader and senior country economist at the World Bank Philippine office, said the Mindanao-focused report was initiated following feedback that the PDR did not sufficiently cover the island’s unique concerns.
“Various sectors said the (PDR) report was lacking and the Mindanao people felt that they have different experiences and challenges and those were not addressed in the PDR,” Mr. Chua said.
The MJR, being undertaken in coordination with the Mindanao Development Authority and the Philippine Business for Social Progress, seeks to present an overview of Mindanao and how past events and policies have shaped its present as well as provide insight on why Mindanao is not creating more and better jobs.
Initial findings of the MJR show that “unemployment in Mindanao is low because people are too poor they could not afford to be without work, but underemployment is high.”
Mindanao’s unemployment is at 5.3% compared to Luzon’s 8.5%, but underemployment is higher at 21% against 18%, respectively.
This situation has been attributed to decades of disadvantageous policies such as import substitution, which kept the exchange rate overvalued and affected the island’s agriculture exports, high effective protection and tax rates in agriculture, logistics networks that were built to connect plantations to port cities and eventually to Manila, leaving minimal local multiplier effects, and lack of Mindanao-wide planning.
The initial report also mentioned the political under-representation of Mindanao, where Mr. Chua said an additional P350 billion in the next three years on top of its regular budget is needed for investments in health, infrastructure and education to bring it within the upper middle class category within the Southeast Asian region.
“The island needs to undergo a structural transformation in productive agriculture, labor intensive manufacturing, and then to capital intensive manufacturing and high skill services,” Mr. Chua said.
“The country’s lack of structural transformation is most evident in Mindanao where agriculture is the dominant sector and yet it is the least productive and where manufacturing is very small and less productive,” he added.
Any change in Mindanao, Mr. Chua continued, should consider the three faces of the island: agrarian Mindanao, urbanizing Mindanao and the conflict-affected Mindanao.The report noted that majority of Mindanao’s population consists of subsistence farmers and landless laborers. In contrast, there is a small but fast-growing urban society, which is mostly linked to the agricultural export and minerals industries, and more recently the business process outsourcing sector.Mindanao’s formal sector is small and skewed towards the Davao Region at 15% and Northern Mindanao at 25%.The conflict-affected areas include those where the New People’s Army, Muslim insurgents, and other armed groups operate.“Poverty is pervasive due to the lack of good jobs,” Mr. Chua said.Mindanao Business Council head Vicente T. Lao, meanwhile, said job opportunities remain limited.
“The focus should not be in creating better jobs but in creating the jobs, which is still a basic problem here,” Mr. Lao said.
He also noted the centralized government policies that fail to consider specific regional concerns as well as centralized systems that make it harder to start a venture in Mindanao.
Mr. Chua said the Philippines today is very different from the last 10 years and even the last six decades, but economic growth has not been balanced across the country.
“Today the Philippines has a very fast growth which shows that macro management is something that the Aquino administration has focused on to ensure that the environment is conducive for business and investments,” he said, “(But) Mindanao’s growth is still slow even if Davao and other cities like Cagayan de Oro are growing fast.”
“The Philippines cannot develop fully if Mindanao lags far behind,” he added.