On 27 September 2017, the Foreign Service Institute held a Mabini Dialogue Series on “Promoting Mindanao’s Economic Agenda through the BIMP-EAGA Initiative” with Mr. Antonio S. Peralta as the guest speaker. Mr. Peralta is the President of the Foundation for Rural Enterprises and Ecology Development of Mindanao (FREEDOM) Inc., a non-government organization based in Davao City. He was involved in the formation of the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) when he was appointed as Regional Economic Adviser to the Office of the President in 1992.
Mr. Peralta discussed the developments in BIMP-EAGA since its inception, priority projects in Mindanao, the role of stakeholders in fulfilling the BIMP-EAGA Vision 2025, and the opportunities and challenges of promoting Mindanao’s development through BIMP-EAGA.
The BIMP-EAGA Initiative, launched in 1994, was formed after the four ASEAN Member States forged a pact to increase cooperation on cross-border trade and investment. To promote intergovernmental economic cooperation, technical working groups on transportation, agriculture and fisheries, tourism, finance, people mobility, and environment were established. The initiative was poised for a successful take-off if not for the 1997 Asian financial crisis which weakened the economic engines of Southeast Asia. The 1998 El Niño and La Niña weather phenomena also had devastating effects on the BIMP-EAGA economies.
By 2002, efforts were made to revitalize BIMP-EAGA cooperation. Key challenges were identified and modifications were made such as the BIMP-EAGA Facilitation Center, Local Government Forum, and the Customs, Immigration, Quarantine, and Security Task Force.
The BIMP-EAGA Roadmap to Development 2006-2010 was formulated to identify broad strategic directions and cluster or sector-specific goals and projects for implementation. The Roadmap expanded the initiative’s original goal of promoting intra-EAGA trade to developing the subregion’s competitive advantage through cross-border complementarities, small and medium enterprises (SMEs), and value chains. Based on the midterm and final assessments, the Roadmap achieved a certain degree of progress. However, project implementation gave mixed results. Mr. Peralta explained that most projects were not directly related to the strategic vision, and many were designed poorly with no established monitoring and evaluation mechanisms. Studies also found out that consistent and more focused government intervention is needed coupled with strong partnership with the private sector. More than 90 percent of the businesses in the subregion belongs to the SME category; thus, BIMP-EAGA should institutionalize the SME development agenda. Furthermore, closer institutional link with the ASEAN Secretariat will allow BIMP-EAGA to actively support other ASEAN projects and mechanisms.
From the Roadmap, the Implementation Blueprint 2012-2016 was designed to enhance implementation of strategic thrusts and priority projects. The Blueprint named the five strategic pillars of the BIMP-EAGA: (1) connectivity pillar aims to upgrade infrastructure such as airports, seaports, power grid, and information communication technology (ICT); (2) food basket pillar focuses on competitive and climate-resilient agro-industry and fisheries; (3) tourism pillar plans to turn EAGA into a sustainable and inclusive tourism destination in Asia Pacific; (4) environment pillar promotes sustainable management of the subregion’s ecosystems; and (5) socio-cultural and education pillar intends to foster people-to-people connectivity and cultural exchanges.
Several priority projects under the five strategic pillars are currently being developed. In Mindanao and Palawan, for instance, the total cost of infrastructure projects is expected to reach around USD4.8 billion. Transport connectivity has long been a cornerstone of development in BIMP-EAGA. Hence, the improvement of seaports and airports, along with road networks and power transmission, are deemed important. As for roads, railways, and bridges in Mindanao, a number of projects are in the pipeline such as the Mindanao Railway System, Panguil Bay bridge, Davao-General Santos road improvement, Sulu circumferential road, and Tawi-Tawi road network. Other airports in Mindanao will be developed in addition to the nine seaports and two energy-related projects.
On trade facilitation, two economic corridors were designated as priorities for development: West Borneo Economic Corridor (WBEC) and Greater Sulu-Sulawesi Corridor (GSSC). The WBEC is comprised of Brunei Darussalam, West Kalimantan in Indonesia, and Sarawak and Sabah in Malaysia. It has a fairly well-established transport infrastructure and linkages from Pontianak in West Kalimantan to Kuching in Malaysia. T he GSSC, on the other hand, is a maritime corridor mainly determined by the geography of the Sulu-Sulawesi Seas, and covers North Sulawesi in Indonesia, Sabah in Malaysia, and Mindanao and Palawan in the Philippines.
According to Mr. Peralta, other priority projects for 2017-2025 should meet the following criteria to ensure successful implementation: (1) consistent with and complementary to local and national development plans; (2) promote subregional synergies; (4) have positive social, economic and environmental impacts; (5) catalyze private sector investments especially on SMEs; (6) require active participation of LGUs; and (7) aligned with the goals of the ASEAN Blueprints.
The leadership of the BIMP-EAGA acknowledges the main role of the private sector as one of growth drivers of the subregion. The private sector can initiate public-private partnerships that will provide the needed funding to implement the priority projects. The sector can also establish an electronic trading platform for commodities which can be upgraded into a SME Development Fund, a financing scheme to support businesses as they take a more proactive role in the subregion’s supply chain. Civil Society Organizations (CSOs) are also significant actors in subregional cooperation. Policy leaders should extensively consult with the CSOs to ensure buy in from local communities. CSOs can help less developed communities meet the challenges of a competitive environment through capability-building measures on SME development. Furthermore, CSOs may take part in peace initiatives and engage in activities advancing environmental protection and sustainable development.
Although the BIMP-EAGA members have bounced back from the effects of the 2008 financial crisis, their economic performance will depend largely on maintaining resilience and competitiveness. To do so, poverty incidence in the EAGA has to improve significantly. Member countries should also resolve issues such as the large number of undocumented Filipinos in Sabah and persons of Indonesian descent in Mindanao, as well as piracy in the Sulu-Celebes Sea, among others. Other challenges noted pertain to transport connectivity, different levels of economic development, differences in policy and regulatory environment, lack of coordination and synergy between and among clusters or sectors, and weak project implementation.
Despite the challenges, opportunities in the subregion still abound. On trade, exporters of competitive commodities are set to gain from an integrated market. On tourism, the BIMP-EAGA can benefit from the arrival of more international tourists. The agriculture sector in Mindanao also has the potential to spur inclusive growth.