Tung sows seed of hope for Mindanao

CHIEF Executive Tung Chee-hwa has caused a small storm in the southern Philippines with his off-the-cuff suggestion that one country, two systems, would work well as a model for the island of Mindanao, after the peace agreement last year gave its Muslim areas a measure of autonomy.

But confidence in the area's economic potential, following the peace pact between Philippine President Fidel Ramos and the leader of the Moro National Liberation Front (MNLF) Nur Misuari, is such that variants of the Hong Kong solution are beginning to gather some intellectual credibility.

In the short term, the backward island has more urgent concerns. The recent currency crisis and a slowdown in the Philippine economy will hit development and could cause delays in developing new infrastructure, despite the central government's commitments under the peace agreement with former Muslim rebels.

Professor Rollie Dy, executive director of the Centre for Food and Agribusiness at the University of Asia and the Pacific in Manila, said that, if the government planned to cut allocations to regions, it would cut them across the board and Mindanao would suffer like everyone else.

Senior officials in the Muslim and the Christian sectors, however, are confident the long-term future is bright.

Professor Dy has analysed the effects of the peso's slump on the region and has found it will actually boost the economy. As a net exporter, Mindanao's terms of trade should improve dramatically as a result of the devaluation.

Meanwhile agricultural products such as corn and bananas will benefit from import substitution in the island's traditional markets in the rest of the Philippines.