At long last, Philippine President Rodrigo Duterte has signed into law new autonomous powers for his country’s restive and poverty stricken Muslim-majority south, which observers hope will defuse one of Asia’s long-running conflicts, stem extremism and kick-start a vital economic revival.

Thursday’s signing of the Bangsamoro Organic Law is the culmination of a drawn-out process that had appeared on the verge of collapse on multiple occasions, including in the immediate aftermath of last year’s jihadist occupation of the town of Marawi.

Some in the mainly Catholic nation’s political elite had expressed scepticism about autonomy for southern Muslims after that episode, but Duterte, who hails from the region and is Christian, said it was the only way forward.

“In every conflict, the victims are the innocents, the children, the women, so try to think it over,” he said in comments on Thursday that appeared aimed at critics of the new law.

The law establishes the region of Bangsamoro (“Moro Nation”) on parts of the Philippines’ second-biggest island, Mindanao, and smaller islands where stop-start fighting between Islamist rebels and governments have claimed more than 120,000 lives over five decades.

The Moro, a name coined by Spanish colonialists for Philippine Muslims, are unique in the country for having resisted the influence of Spanish and American colonisation between the 16th and early 20th centuries. They consider Mindanao their ancestral homeland.

With ratings plummeting, how long can Philippine President Duterte last? God knows

Observers say the autonomy to be granted compares with the devolved powers granted by Indonesia to its Muslim-majority province of Aceh in 2006.

While Moro-occupied Mindanao already has some autonomy as part of a 1996 deal, that pact is widely seen as having failed to give the local government crucial powers to spearhead economic development.

The new law will grant Bangsamoro its own parliament, a guaranteed 5 per cent grant of national internal revenue, and the right to impose sharia law on Muslim residents. It will also get to keep 75 per cent of taxes collected in the area. Security and policing will remain in the hands of the central government.

Bangsamoro will only be formed once the new law is ratified by a plebiscite later this year, but the region’s 5 million people are widely expected to approve the changes. A transition authority will subsequently take charge until an election scheduled for 2022.

With multiple guerilla groups involved and the spectre that it could yet be derailed by jihadis, the creation of Bangsamoro ranks among the most complicated power devolutions that Asia has ever witnessed. Here’s a rundown of three key issues surrounding the new autonomous region:

Peace for good?

There is reason to be sceptical about whether the new autonomy will bring about a lasting peace.

After all, a series of previous agreements – the earliest in 1976 – have failed.

Chinese cash, American muscle, and Marawi’s discontents

Disaffection over enforcement of the agreements partly caused prolonged violence as disgruntled guerillas, who had signed up for peace, later went on to form more hardline splinter groups.

The Marawi episode, meanwhile, raises the threat of hardline Islamists jeopardising peace painstakingly negotiated by the government and the main guerilla group, the Moro Islamic Liberation Front (MILF).

“It is a major moment in Philippine history … there is real support from the MILF leadership and most advocates as well are seeing this as a very good beginning, even though it’s not perfect,” said Teresita Quintos Deles, who served as the chief peace adviser in the government of former President Benigno Aquino.

Murad Ebrahim, chairman of the MILF, said on Thursday that the Bangsamoro Organic Law’s widespread public acceptance – unlike past frameworks for autonomy – meant splinter separatist groups were unlikely to seek alliances with foreign jihadis.

“All these splinter groups are a result of the frustration with the peace process. The moment the small groups no longer accept the foreign elements, they can no longer come [to the Philippines],” he said.

Ramon Casiple, executive director of Manila’s Institute for Political and Electoral Reform think tank, said even if jihadism is neutralised, “another source of further problems” could come from political clans in the region who “will feel threatened by the entry of rebel groups into governance and electoral areas”.

MILF disarmament

Mayong Aguja, a sociology professor at Mindanao State University, said one of the immediate problems for Bangsamoro was the disarmament of MILF guerillas.

“The big challenge is how they are handled, what economic opportunities they will have when they disarm,” Aguja told This Week in Asia. “You need to understand that for many of these men, they have spent more time with their guns than with their families.”

What now for Duterte’s China pivot as Marawi cements US importance for Philippines?

The MILF leadership claims about 30,000 guerillas. Ebrahim has said six of the largest MILF camps were being converted into “productive civilian communities”. On Thursday, he said the group was “decommissioning immediately” 30 per cent all combatants and weapons.

Deles said successful disarmament depended on whether the national government followed through with promises to revitalise the region’s ravaged economy and create new jobs for the rebels. “It is not a simple thing … the government must know that the signing of the law is not the end of its job,” she said.

What’s in it for Duterte?

Observers say Duterte has gained significant political cachet by signing the Bangsamoro Organic Law.

Even though the heavy lifting for negotiations started during the era of Aquino, the current president pushed hard to have the final agreement ratified by his allies in the legislature, some of whom were sceptical about granting the region vast autonomous powers.

“The Bangsamoro Organic Law presents a major achievement for Duterte,” said Casiple.

Lasting peace with Muslim rebels in the south would mean the government could focus on neutralising its other major headache: the long-running insurgency by communists, according to Casiple.

Philippines’ Rodrigo Duterte wants to be friends, why isn’t China playing ball?

A successful implementation of the law could also strengthen the president’s plan to shift the country towards a federal system – a key plank of his campaign.

Duterte, a native of Mindanao and formerly mayor of its biggest city Davao, has long championed federalism as a way to empower far-flung provinces.

“At the end of the day, federalism will receive a boost since the Bangsamoro Organic Law is a possible model for federated regions under the proposed constitution,” Casiple said.