COTABATO CITY (MindaNews/ 24 October)— Foreign and domestic investors “would not rush” to the Autonomous Region in Muslim Mindanao (ARMM) despite the framework agreement signed recently by the government and the Moro Islamic Liberation Front (MILF), an economic expert in the region said.
Lawyer Ishak Mastura, former ARMM Trade and Industry secretary, noted the framework agreement has created a legal risk or uncertainties for investors since the ARMM Organic Act would be replaced by the Bangsamoro Basic Law.
The Bangsamoro Basic Law will be drafted by the Transition Commission, which will be created through an Executive Order, and would govern the Bangsamoro, the new autonomous political entity that will replace ARMM.
Section IV of the framework agreement states: “Consistent with the Bangsamoro Basic Law, the Bangsamoro will have the power to create its own sources of revenues and to levy taxes, fees, and charges, subject to limitations as may be mutually agreed upon by the Parties. This power shall include the power to determine tax bases and tax rates, guided by the principles of devolution of power, equalization, equity, accountability, administrative simplicity, harmonization, economic efficiency, and fiscal autonomy.”
Aside from the legal uncertainties in the near to medium term, Mastura said the influx of private investments would be on hold considering that the security situation “has not yet substantially changed,” citing the threats of the Bangsamoro Islamic Freedom Fighters (BIFF).
“This means serious investors are in a scoping and wait and see mode,” said Mastura, a son of senior MILF peace panel member Datu Michael Mastura.
The BIFF, the group headed by Ameril Umra Kato, broke away from the MILF over disagreements on the peace negotiations with the government.
Last August, BIFF elements simultaneously harassed military detachments in Maguindanao that displaced thousands of civilians and the closure of the Isulan-Cotabato City highway.
Col. Prudencio Asto, 6th Infantry Division spokesperson, said the military remains in a defensive posture for possible attacks that will be launched by the BIFF.
Despite the overwhelming support to the framework agreement, Mastura said the investment climate in the ARMM also faces uncertainties because of the upcoming 2013 elections that may result in leadership changes in the region.
Mastura, however, said there has to be an innovative strategy to attract big private investments to go to the ARMM as the government and the MILF work out the transition to the Bangsamoro entity.
” [The] investment strategy should be to encourage local investors from the Moros and Christian residents and the ethnic Chinese in the ARMM and surrounding contiguous areas with Moro populations to start investing again or expanding their current investments in the area. For example, diaspora funds from rich Maranao traders in places such as Greenhills would be great,” he said.
Outside the ARMM, Mastura said he expects a “mini-boom” in investments in the cities of Davao and General Santos and in the Iligan-Cagayan Corridor.
This will naturally happen because the “predictability or calculability” of the investment environment in these majority Christian cities in Mindanao will have increased by the signing of the GPH-MILF Framework Agreement, Mastura explained. (Bong S. Sarmiento/ MindaNews)