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By Jose M. Galang Jr.
(First of two parts)
KIDAPAWAN, North Cotabato—While military
personnel are slugging it out with armed rebels and terrorists in
one corner of Mindanao island, another war is being waged against a
more vicious enemy—poverty—in the resource-rich hinterlands.
And in contrast to the controversy—even
resistance from certain sectors—spawned by foreign participation
in the military operations, economic assistance from foreign donors
is getting a warm reception in areas where such aid is flowing.
Small business ventures
For instance, when the Japanese government and
the World Bank formalized last Tuesday a new financial grant for the
development of micro-enterprises in this part of Mindanao, where
economic development has been hamstrung by years of civil strife and
official neglect, an enthusiastic response came from a large group
of local officials as well as residents aiming to develop small
business ventures or community projects with the help of the
newly-committed funds.
The grant, amounting to $808,460 (equivalent to
nearly P41.5 million at today’s exchange rate), came from the
Japan Social Development Fund (JSDF), a facility set up with money
from the Japanese government but managed by the World Bank. Projects
supported with JSDF financing are those aimed at directly
“combating poverty and other social consequences that resulted
from the economic and financial crises of the past decade.”
Moving forward in a time of conflict
At Tuesday’s ceremony that launched the new financing in the
remote town
President Roxas in this province, Robert Vance Pulley, the new World
Bank country director in the Philippines, and Hiromichi Sakuma,
financial attaché at the Japanese embassy in Manila, signed the
grant agreement for the donor.
The local officials who also signed the
agreement were led by Nort Cotabato Gov. Emmanuel Piñol, Department
of Agriculture Region 12 director Mustapha Ismael, and Rodilo H.
Lebiano, president of the local
nongovernment organization that will help administer funds, the
Advocates of Cotabato Rural Development Inc. (ACORD).
SZOPAD Social Fund
The JSDF grant program is actually an expansion
of the World Bank’s Special Zone for Peace and Development (SZOPAD)
Social Fund for Mindanao, a 1998 program that extended a $10-million
loan to help increase the access of those in this island’s poor
and most conflict-affected areas to basic economic and social
infrastructure, services, and employment opportunities.
The SZOPAD project specifically targeted the
poor, the indigenous lumads, as well as ex-combatants of the
secessionist Moro National Liberation Front (MNLF) living in 14
cities and 15 provinces. These areas are among the poorest in
terms of economic development not only in Mindanao but also in the
country.
Shortly after the signing of a peace agreement
with the MNLF in September 1996, the Philippine government asked its
traditional donors of official development assistance (ODA) to
refocus such aid to the acceleration of development in the SZOPAD
areas. The World Bank loan program implemented in 1998 was a direct
result of that initiative.
Other funding
Aside from the Japan fund, the OPEC Development
Fund, put up by the Arab
oil-producing countries that employ large numbers of overseas
Filipino workers, has also allocated a loan of $10 million for the
period 2001-2002 to finance projects for the poor in the area as a
follow-up to SZOPAD.
As of January, the SZOPAD program has extended
financial assistance for 575 projects involving 337,199 households,
a report by the SZOPAD Social Fund staff said. Of these
beneficiaries, 44.9 percent are from MNLF communities, 28.8 percent
from indigenous people’s areas, and 26.3 percent in
”other poor communities” with both Christian and Muslim
residents.
With the new grant signed this week, ACORD’s
Lebiano said, there would be a
better chance to “ensure sustainability” of micro-enterprises
that were set up or augmented earlier with SZOPAD financing.
This focus on micro-enterprises, he said, would
make the small projects ”the true engines of growth for the
economy.”
All of the amount programmed for SZOPAD program
has now been released, the World Bank’s Pulley said, expressing
satisfaction at the speed at which the disbursements had been made.
In less than three years, he said, the project
was finished. “This exceeded our expectations,” he said, citing
the contrast between this speedy completion against the
Philippines’ poor overall record in availing of foreign credit
already in the pipeline. Pulley noted the “high repayment
record” among the fund beneficiaries—an average of 92 percent
over the past three years. “This is a lot better than the
repayment rate of big corporate borrowers from the country’s
leading banks,” he said.
Also citing that the signing of a grant agreement outside Manila was
“a first” for the World Bank Philippine office, Pulley told the
Cotabato group: ”This is where the action is, this is where we
should be.”
Pillow case maker
One of the ACORD members who have tapped the
SZOPAD Social Fund is Edna Gomez. She got a loan of P5,000 late last
year which she used in a cottage business, the production of pillow
cases.
From the earnings generated from the venture,
she said, not only was the
schooling of her three children sustained, she has also been able to
make a modest saving of P20 per month. ACORD officials say Gomez has
been able to make payments religiously on her loan.
During visits to a couple of projects that got
SZOPAD Social Fund assistance after the grant signing, residents of
the beneficiary communities said their incomes improved with the
establishment of the World Bank-funded
facilities.
In Kidapawan City’s Barangay Amas, for
instance, a solar drier and grains warehouse constructed with a
SZOPAD loan has helped the local farmers keep their crops’
moisture content low, thereby fetching better prices from
traders.
Farmers in Amas plant their lands to corn and
palay. Before the solar driers, they would dry their freshly
harvested grains in the national highway, a considerable distance
from the community. The warehouse, on the
other hand, enable the farmers to store surplus harvest—they can
now even withhold selling their stocks during periods of very low
prices for their products.
Amas, located some 106 kilometers west of
urbanized Davao City in southern Mindanao, is home to 4,351
individuals of a total 828 households, all making a living from
farming. A former MNLF member who is now a member of the farmers’
association said he wished future financial assistance would also be
extended on their purchases of seeds.
The warehouse and solar driers were constructed
in April 2000 with the help of a SZOPAD Social Fund grant of
P300,057.
Another Social Fund beneficiary, Barangay New
Bulatukan in the Cotabato town Makilala, which is about 32
kilometers from Kidapawan, used a P1.04-million grant for the
construction of spring-water system for the 220
households in the area.
Before the water system, project proponent
Ampiloy Ipal said, residents would usually travel a few hundred
yards to get the water for their basic needs. There were a few deep
wells in the community before, he recalled.
As in all grant financing, the amount given to the community need
not be repaid. For the maintenance of the water system, however, the
residents agreed to pay P5 per household per month.
Recently the New Bulatukan community association
decided to raise the monthly fee to P10 per household—to raise
money for a new water reservoir that now is felt necessary owing to
the increase in the community’s
population. There are no plans to go into the bottling of their
spring water, the residents said.
Conflict and incomes
The SZOPAD Social Fund Management Office, which
is under the direct supervision of the Office of the President, has
listed a total of 465 projects completed with proceeds from the
World Bank loan. There are 110 others being implemented, and 790
more already approved but still to be started.
During the site visits, requests for more
financial help poured on Pulley’s lap. However, he told the
residents that the World Bank facility has been fully expended and
that the work that is being done now by the
administrators is to see to it that loans are repaid so that new
projects can be funded with these earnings.
There are 7,076 more applications received by
the Social Fund office, out of which around 4,230 have been
considered as eligible for financial assistance. Not all of these
may actually get any money, however. The importance of social
development projects at the grassroots is recognized particularly in
Mindanao where armed conflict has often discouraged both government
projects and private investments in productive industries. This has
led to slow economic development in the area, resulting in high
levels of poverty among the residents.
Poverty incidence
The latest government estimates of poverty
incidence in the Philippines showed that for every 100 Mindanao
households, 47 are below the poverty threshold (or those families
whose annual per capita income falls below the minimum required for
them to afford basic necessities).
Results of a survey conducted recently by a
Davao-based NGO, MinLand Foundation, showed that economic and living
conditions in poor communities become even more miserable with the
outbreak of armed conflicts.
In conflict-affected areas in central Mindanao, for instance,
household incomes shrank by about half when fighting between
government troops and the Moro Islamic Liberation Front erupted.
Incomes averaged P3,000 a month per household before the fighting,
the survey said, but these dropped to just P1,650 a month by the
time hostilities ended.
Among persons who were forced by the conflict to
move out of their residences and take refuge in evacuation centers
or temporary shelters, incomes fell by a deeper rate—to P1,300 a
month on average - while those who stayed in their areas experienced
a lower income cut —to an average P2,000 per month, the survey
showed.
(Tomorrow: Heralding change)
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