Conclusion
DAVAO CITY—Being the backwater regions of four countries, the Brunei Darussalam, Indonesia, Malaysia, the Philippines-East Asean Growth Area (Bimp-Eaga) literally has a big yoke to carry, as their respective government leaders also seized the global trend of forming regional cooperation to fortify trading positions.
While the world’s richest economies formed their own blocs, such as the European Union, and have individually surrounded themselves with several bilateral trade agreements, the Southeast Asian region, already more than half-a-century old as a political bloc, has surfaced as the most attractive market. Multinational companies have been attracted to the region, pouring investments or forming subsidiaries.
At least three neighboring countries have found it advantageous to attach themselves to the 10-member of Asean. Thus, China, Japan and South Korea have initiated several bilateral trade deals: the Asean-China Free Trade Area (or ACFTA, in effect as of January 1, 2010); the Asean-Japan Comprehensive Economic Partnership (or AJCEP, in effect as of December 1, 2008); and, the Asean-Korea Free Trade Area (AKFTA, in effect as of January 1, 2010).
Within the Asean also are subgroupings according to the common features of their countries, including the Indonesia, Malaysia and Thailand subeconomic cooperation and the BIMP-Eaga. To the latter, Australia’s Northern Territory has also mimicked the “plus one” concept and has remained a special feature of the BIMP-Eaga.
While there had been significant improvements in the talking points for the Eaga cooperation, crucial issues on customs, immigration, quarantine and security have inched slowly forward. The snail pace in forging deals is largely due to these issues being matters of national application and has sensitive diplomatic implications, which must be tackled at the high levels of government.
Border security have been bolstered through three decades of cooperation, as the Philippines, Malaysia and Indonesia crafted periodic joint maritime patrol and exchange of knowhow. Brunei, as a country with the minimal coastline and with the barest issue on piracy or incursion into their waters, understandably has no maritime border concern as yet.
The bigger issues would still be economic cooperation and the lack in infrastructure to develop the region’s potential.
Three decades later, what had happened to the BIMP-Eaga areas as a consequence of their inclusion in the regional cooperation?
Mindanao and Palawan
By leading the formation of the BIMP-Eaga during his term, then-President Fidel V. Ramos demonstrated the potentials of Mindanao when he returned from a state visit through the Davao airport.
Through the years following the founding of the BIMP-Eaga, Davao City soon witnessed a flurry of construction and economic activities. In other parts of Mindanao, trade and business witnessed a vibrant pace that was only cut short by the Asian financial meltdown. The succeeding years became a letdown for BIMP-Eaga as nations across Asia concentrated on rebuilding their economies after 1997.
As many other Asian economies too, have found out, the surest path to rebuilding was harnessing the strength of its local business community, from restarting local commerce and later encouraging locals to patronize their own tourism destinations. Many businesses were buttressed by small and medium entrepreneurs with some big firms providing the so-called Big Brother mentoring.
Two decades after the Asian financial crisis and at least two worse episodes of El Niño, Mindanao was back on its feet and Palawan has become the most visited place, its revenues fattened by tourism.
Arturo P. Boncato Jr., the asstant secretary at the Philippine Department of Trade and Industry, said Mindanao and Palawan counterparts in Indonesia and Malaysia have also progressed a lot. Boncato said the growth was mainly because they have been pulled alongside the development of their respective countries. For instance, Indonesia’s leading growth across Asia in the last five years has also brought progressed to the Kalimantan cities of Bitung and Manado.
“These two Kalimantan cities of northern Indonesia are now the acknowledged gateways,” Boncato said. Areas near Kuala Lumpur have also made progress because of the steady industrial growth of Malaysia.
Infrastructure, though, remained wanting, and the crucial energy sector failed to arrest several years of electricity crisis and, thereby, dampening investment. Meanwhile, production for export was still tied to coconut, banana, pineapple and mango, with many other agriculture products still exported in their raw form.
Engagement
THE lack of development infrastructure to start regional trading is not a monopoly of Mindanao and Palawan. Still, their counterparts, mostly in the Borneo Island and in the scattered islands north of Indonesia, faced similar issues back then.
Mainly due to their distance from their respective nation’s capital, trading with neighbors that could have been reached in a few hours, are not there.
Arturo Milan, formerly the chief operation officer of the Davao Light and Power Corp. and currently the Mindanao adviser of the Aboitiz Equity Ventures, said he is yet to be apprised of the fine points of the Bimp-Eaga Vision 2025. Nonetheless, he said the business sector has already been invited on several occasions touching on the issue.
“What we suggest is for [the] government to inform the business communities in Mindanao about it, for us to respond appropriately and in a timely fashion,” Milan said. “We want to help realize it [the Bimp-Eaga Vision 2025], too, as much as we know that business would also benefit from this venture.”
Properly apprised, for instance, the owner of the Roro shipping has also changed the cargo ship to launch the project on April 30, from a 100 twenty-foot equivalent unit (TEU) to a 500 TEU ship, according to Boncato.
Fernando Juan C. Perez, assistant secretary for maritime of the Department of Transportation and the designated chairman of the Task Force Roro, appealed to the private community “to take on the opportunity opened for us all, especially in the southern part of the country”.
He said the business chamber in the Indonesian capital of Jakarta, called Kadin, has been informed of the direct cargo shipping to be started. “It now depends on the private sector,” Perez said. “The government is only [here] to facilitate all these transactions.”
In a planning session last December, Dato’ Sri Abdul Wahid Omar, minister to the Malaysian Prime Minister’s Department in charge of economic planning, said the senior officials “endorse the guiding framework for Bimp-Eaga Vision 2025”.
We “call upon all Bimp-Eaga stakeholders, especially the private sector and the local governments to take advantage of this opportunity to bring their views, inputs and projects that will generate economic growth and development in the subregion,” Abdul Wahid said. “We reiterate the need for greater synergies between the transport and tourism sectors to enhance the development of tourism destinations.”
Leaders’ consciousness
THE bigger issue still rests on the consciousness among the nation’s senior government leaders “who are still tied to the tradition of everything is with the nation’s capital,” Boncato said.
“There are still many government officials and lawmakers who still make stringent rules and regulations, without consideration that there is such a thing as BIMP-Eaga,” Boncato explained, adding “that movement of goods and people can happen, but only with their consent, to allow some relaxation of regulations to favor regional trading outside of the capital.”
He said connectivity issues still need regulations that are tied to how much the nation’s leaders would grant concession or not and which would affect the pace of development within the BIMP-Eaga. However, the BIMP-Eaga and the Asean officers have persistently engaged senior government leaders, including lawmakers. “And we believe that more and more of our leaders are more conscious now of these regional cooperation.”
Other pitfalls
With the Philippines at the chairmanship of both the Asean and the BIMP-Eaga, the nation’s emblem of the Philippine Eagle would figure prominently at how the country steers the two 2025 visions.
To avoid the pitfalls that dragged down previous attempts, Boncato said both public and private investments should be increased, especially in connectivity, both in the construction of ports and in the communication area.
We should also “engage aggressively the private sector, scale up Eaga products and services to global value chains,” he said. “More important, make BIMP-Eaga closer to the people.” Boncato hopes there would be no new episode of the Asian financial crisis like what occurred in 1997.
The government, however, has warned about the security issue arising from the global rise in extremism and which is showing its nasty face at the country’s southern backdoor as the Abu Sayyaf begins to engage in sea piracy. President Duterte has sought tri-nation cooperation with Indonesia and Malaysia to stop this.
Boncato said the BIMP-Eaga members should also discourage the previous “greater government and lesser private-sector involvement in the Eaga which have taken their toll on synergy, making Eaga largely disconnected with national capitals and the bigger Asean picture.”
“Institutional arrangements today [have] BIMP-Eaga, together with other subregional cooperation and growth triangles, recognized as building blocks to the Asean Economic Cooperation integration.” According to Boncato, the strength of today’s pursuit of the new vision is having the heads of state
“heavily involved”.
“We are working on greater private-sector engagement and will bring into the fold young business leaders,” he said. “In the Philippines we are engaging industry champions to be part of our journey toward 2025.”