New Year, New Optimism

Following centuries of conflict and impoverishment, there is a new sense of optimism in the southern Philippine island of Mindanao, as a peace deal between the government and the Muslim separatist Moro Islamic Liberation Front (MILF) comes within reach. With the latest in a series of ceasefires between the two sides holding firm, negotiators representing the government and the Muslim rebel group reported significant progress in 2005, and signalled that a final deal could be reached by the middle of 2006.  

A Centuries-Old Conflict

The road to the brink of a peaceful settlement of the conflict in Mindanao has been a long and bloody one, lasting centuries. The claim of sovereignty by the Muslim population on Mindanao (and neighbouring Sulu) stretches back to the sixteenth century, when Spain began to colonise the southern region of the Philippines. Having sternly resisted the Spanish for three centuries, the Muslim south was subjugated by American colonists in the early twentieth century. Christian communities were established in Mindanao following the foundation of the Philippine commonwealth in 1935, diluting the Muslim population; while Muslims made up 98% of the area's populace in the 1930s, that ratio had fallen to 40% by 1976, and is currently around 20%.

Christian colonisation and control fuelled resentment within the Muslim population throughout this period, leading to the emergence of the separatist group - the Moro National Liberation Front (MNLF) - in the early 1970s. The government of Ferdinand Marcos signed a peace treaty with the MNLF in 1976 that paved the way for the establishment of the Autonomous Region of Muslim Mindanao (ARMM) in 1996; this gave Mindanao's Muslim population their own legal and political institutions in the provinces of Basilan, Sulu, Tawi-Tawi, Maguindanao and Lanao del Sur. MNLF founder Nur Misuari was installed as the first regional governor of the ARMM in 1996, but his rule ended in November 2001, after he led a failed uprising. He is now in jail.

A hardline group led by Salamat Hashim rejected the autonomy deal with the Marcos government and formed the 12,000-strong MILF, which began an armed campaign for an independent Muslim state in Mindanao in 1984. Since its establishment, the MILF has fought a bitter campaign against successive administrations, punctuated by ceasefires and peace talks. The latest ceasefire, established with the administration of Gloria Macapagal-Arroyo in 2003, has broadly held firm, despite temporary violations by rogue elements within the MILF. This should pave the way for significant progress in peace talks between the two sides during 2006.

What Will the Peace Deal Look Like?

During the latest round of peace talks in 2005, the Philippine government began to develop a draft agreement that could form the basis of a peace deal between the two sides. The deal is likely to provide a measure of autonomy for the Muslim ancestral domains (Bangsamoro) that will fall short of the MILF's initial demands for full independence. The MILF appears ready to compromise on immediate independence for its Moro homelands, provided that it gains a commitment from the government to a future referendum on the issue. A potential compromise deal on the Bangsamoro would appear strikingly similar to the ARMM deal that was struck with the MNLF in 1996 - and which was subsequently rejected by the MILF as a sell-out. Although the MNLF deal entailed political and legal autonomy for five Muslim-dominated provinces of the ARMM, the MILF deal is likely to see an enhancement of the ARMM's powers, as well as the possible expansion of Muslim control to predominantly Christian areas in Zamboanga del Norte, Zamboanga del Sur, North Cotabato, Sultan Kudarat and Sarangani provinces - a suggestion that has been opposed angrily by leaders of Christian communities within Mindanao.  

The government and the MILF are already believed to have agreed on the majority of issues relating to the Bangsamoro, including its concept, territories and resources, and over the coming weeks and months the two sides are expected to hammer out how the MILF will govern these regions. The MILF has set out a number of issues relating to the Bangsamoro that it wishes to see addressed during peace talks, including agrarian reform, the alleviation of poverty amongst Muslims, and the repatriation of land and compensation for the exploitation of the region's natural resources by outsiders. 

Outlook and Implications

Although many of the details of a potential peace deal still need to be agreed, Global Insight believes that the two sides can reach a deal during 2006. The peace process has suffered many setbacks as ceasefires have been broken, but the government and the MILF now appear fully committed to a peace deal, as the war-weariness generated by decades of conflict has made a return to full-scale hostilities an increasingly unpalatable option.

The Philippine government sees a peace deal as crucial to its efforts to combat the terrorist groups believed to be operating in the region, including Abu Sayyaf and Jemaah Islamiyah (JI). The MILF has been accused of sheltering and training Muslim militants, but has rejected these allegations by denouncing terrorism and offering the government its support in combating militants in the region. By securing a peace deal with the MILF, the Philippine government hopes to marginalise hardline elements within the group that may still be co-operating with militants.

The economic rewards of a peace deal could be significant for Mindanao. By securing such an agreement, the government hopes to tackle poverty within the region by clearing the way for investment and job creation. Mindanao is rich in natural resources, containing around 80% of Philippine iron reserves and producing around one-half of the country's pineapple, corn, coffee, copra, cocoa and hemp. Mindanao is also rich in oil reserves, and Saudi company Saudi Aramco, the biggest oil company in the Middle East, is currently conducting a feasibility study on the establishment of a second refinery in Mindanao that could supply the oil needs of East Asia and the United States' Pacific Coast. The MILF will be keen to seek guarantees that a proportion of the revenue gained from natural resources within the Banagsamro will be reinvested in the region, in order to raise the living standards of the Moro population. A peaceful Mindanao could also boost the region's tourism industry and encourage the development of resorts in Davao and Cagayan de Oro. Further development projects targeted for Mindanao include a new railway from Iligan City to Cagayan de Oro, mass housing for the Muslim community, and a lending programme to stimulate the growth of small businesses.

However, although a peace deal could unlock the economic potential of the Mindanao region, a more prosperous future for the region is by no means assured; the experience of the ARMM provides a sobering reminder to those who blithely predict a brighter future for Mindanao in the event of an MILF peace deal. Despite hundreds of millions of U.S. dollars being channelled into the ARMM, two out of three people in the region still live in poverty, and only one in 10 children completes basic education.

Contact: Raul Dary

24 Hartwell Ave.
Lexington, MA 02421, USA
Tel: 781.301.9314
Cel: 857.222.0556
Fax: 781.301.9416
raul.dary@globalinsight.com

www.globalinsight.com and www.wmrc.com