Thursday, July 18, 2013

Wealth sharing (Gov't and MILF)

LAST SUNDAY, Peace Adviser Teresita Quintos-Deles announced that the negotiating panels of the Government of the Philippines (GPH) and the Moro Islamic Liberation Front (MILF) had signed the Annex on Revenue Generation and Wealth Sharing in Kuala Lumpur. The timing is impeccable -- two weeks before President Benigno Simeon Aquino III (PNoy) delivers his State of the Nation Address (SONA) before Congress. PNoy will have much to say in his SONA -- on the economy, on the Western Philippine Sea, and on peace. (Will he mention charter change, I wonder?)

The Philippine Center for Islam and Democracy (PCID) and other organizations have issued statements congratulating both panels for ironing out the wrinkles in the fabric of the annex. The PCID statement lauded the panels’ “steadfast resolve to achieve a compromise regarding such a contentious and important issue” but hoped that the annex “will strengthen the foundation for genuine fiscal autonomy for the Bangsamoro.” (As I have often described autonomy in my lectures at universities thus: a young man is not autonomous -- much less independent -- if he has to run home to Mama to ask for allowance in order to treat his girl friend to a movie.)

As the PCID has consistently pointed out over the last decade, without financial viability, autonomy is only good on paper. We have only to review the performance of the Autonomous Region in Muslim Mindanao and the provinces of Basilan, Sulu, Tawi-Tawi, Lanao del Sur and Maguindanao after the signing of the 1996 Final Peace Agreement (FPA) with the Moro National Liberation Front. In September 2006, during the 10th anniversary of the signing of the FPA, MNLF Chair Nur Misuari said that the FPA had to be raised from the dead. At the time, he was incarcerated on charges of rebellion. (He was released after eight years, since no evidence was found to support the charges.)

Any analysis of autonomy in Muslim Mindanao cannot be meaningfully accomplished without a discussion of the historical antecedents that have determined the path in which peace and development have been pursued in the southern Philippines. This discussion of autonomy cannot be divorced from the different stages in the peace efforts with the Muslim separatists, as well as the steps taken after the so-called “Final Peace Agreement” was signed in 1996 between the Philippine government and the Moro National Liberation Front (MNLF). After all, it was to conciliate the interests of the Muslims as represented by the MNLF that the idea of autonomy in Muslim Mindanao was first advanced.

The reality of ARMM, which had led PNoy to label it as a “failed experiment,” is this: 16 years after the signing of the 1996 FPA, Muslim Mindanao remains as the least served region with the lowest human development indicators, poorest of the poor, and has the lowest contribution to gross domestic product. It has become even more conflict affected since 1996 and has the highest unemployment rate, with half of the adult population in the dark due to illiteracy (over 600,000 of the adult population are functionally illiterate). The ARMM government, burdened by inefficiency and lack of funds for development as well as plagued by corruption since 1996, has failed to deliver dividends of peace to the Bangsamoro.

With the signing of the Annex on Revenue Generation and Wealth Sharing, the Transition Commission now has enough fuel to start the machinery of crafting the Basic Law. Is the TC prepared? The 15 members of the TC, headed by MILF panel chair Iqbal, were appointed six months ago. I understand that the TC had been unable to function due to organizational problems such as the legal foundation for government to disburse funds to the commission. Unfortunate that such an issue had not been considered before the members were appointed. Luckily, international friends of Mindanao such as Japan intervened and provided training programs for the members of the TC. National agencies and civil society organizations have also stepped into the breach to provide briefings and training and round tables. The TC members must be champing at the bit, raring to start drafting the Basic Law.

What are the next steps, assuming there are no more organizational constraints for the TC?

PNoy’s term ends in 2016. We have two and a half years to draft the basic law, have Congress pass the legislation, and implement a transition period before the new Bangsamoro Region will have its first regional election. Will all these happen by 2016? Too tight a time line, many will agree. However, we have to march to the beat of PNoy’s drummers on the “daang matuwid” towards a better future.

At this point, the critical step is to look at options for enabling inclusive growth to prosper in the ARMM and the governance mechanisms required.

It is crucial that the Transition Commission begin discussions with key sectors in order to flesh out the Framework Agreement for the Bangsamoro, given the details as set out in the documents already signed. Before the annex on wealth sharing, both parties had signed, last February, the Annex on Transitional Arrangements and Modalities (TAM) which describes the structure of the Bangsamoro regional government as a ministerial form and the Terms of Reference for the Independent Commission on Policing (ICP), referring to the appropriate form, structures and relationships of the police force for the Bangsamoro. In January, both parties had signed the terms of reference for the Third Party Monitoring Team (TPMT). The TPMT will review, assess, evaluate, and monitor the implementation of the Framework Agreement on the Bangsamoro (FAB) and its annexes.

The TC can now start discussions on the transition mechanisms, the form of government, relationships between and among regional government, national government and local government, and now the details on fiscal autonomy -- taxation being a key foundation.

I have wondered why there was such a fuss over the sharing arrangements on taxes when even 100% share for the Bangsamoro would still result in zero, given the almost non-existent taxable enterprises and inefficient collection mechanisms. I do not anticipate drastic changes over the next five years, given the fact that the region is the least served by the government, with the lowest absorptive capacity with the weakest incentives for business.

Last November, we at PCID finally sparked the interest of the Foundation for Economic Freedom (FEF) on the economic issues pertinent to enabling the growth of a robust economy for the Bangsamoro. Together, we have developed a proposal for a series of workshops that would bring to the table hard-nosed business leaders, economists, experts to meet with leaders of the Bangsamoro to develop a menu of viable options. FEF, after years of operation, finally had a session on the peace process. GPH panel chair Miriam Coronel Ferrer gave a talk during at FEF’s dinner forum last month. In attendance were three former Finance secretaries -- Cesar Virata, Roberto de Ocampo and Ernest Leung.

Since January, we have met with officials of the Philippine government and development partners, leaders of the Bangsamoro (MILF Chair Murad, the Bangsamoro Development Authority, ARMM officials and businessmen) and key Mindanao leaders. Thus far, all agree that attention on developing a strong economic foundation for the Bangsamoro Region is crucial to its political autonomy.

(It is serendipity that a former World Bank Country Director for the Philippines, Thomas Allen, is a Fellow of FEF. He leads the initiative, which is funded by the AusAID. We at PCID, cognizant of the fact that business and economics is not our strong suit, have convinced the FEF to take lead, especially since Tom Allen is directing the project.)

If the Bangsamoro will follow the precedent set by ARMM -- where government officials encamp in MalacaƱang to follow up on their share of Internal Revenue Allotments or funding for projects -- then the Bangsamoro will be just that young man waiting for allowance from Mama.

According to Carol Arguillas of Mindanews, MILF panel Chair Mohagher Iqbal texted her: “I am pleased but right now I still see the bumpy road ahead. There are still many challenges ahead.”

But we remain optimists. PCID’s statement: “Although challenges are in the horizon as talks about Power Sharing and Normalization are about to commence, PCID acknowledges that the signing of the Annex on Revenue Generation and Wealth Sharing is a good sign that both panels are committed towards achieving a just and fair agreement.”

Further, PCID states: “We assert the primacy of the peace process and we ask both Panels to continue fast-tracking the remaining Annexes of the negotiations. May the Transition Commission conduct parallel efforts in preparing for the draft Bangsamoro Basic Law. We, as civil society, are prepared to assist in any way.”


source:  Businessworld Column of Amina Rasul

No comments:

Post a Comment