Thoughts on area development

THERE is a case room at the Asian Institute of Management (like Harvard University, AIM’s classrooms are called case rooms) with a First Philippine Holdings Corp. (FPH) label at its door. (A name on the door is an honor one gets for contributing something significant, which may include hefty donations.) FPH is a member of the Lopez Group of companies and is engaged in power generation, distribution, manufacturing and property development. News sources put its total assets as of 2020 at P400 billion.

It is in this case room where social development issues are being exposed, examined and clarified. In the discussion of “case studies,” one often hears professors (who are more like facilitators than teachers) say, “There are no right or wrong answers, there are only strong and weak arguments.” A student with a keen appreciation of the facts that can be derived from a development issue and makes a clear sense of them is likely able to present strong arguments.

The late and former Environment secretary Gina Lopez, who, rather than enjoy the good life, spent a good part of her youth and early adulthood being fully immersed in poor communities in India and Africa, was in this very case room that honors her family’s business as a student sometime in 1992-1993. Here, she argued for the interests of the poor like she always did anywhere.

One of her environment professors in that school, who himself became an environment undersecretary, remembers Gina: “Her grasp of ecological issues and her sense of compassion far exceeded that of her classmates.”

She went on to graduate with a Master in Development Management degree after a successful defense of her thesis on a resettlement project for Pinatubo victims (the Mount Pinatubo eruption happened in 1991).

At the time she was at AIM, the school had only two core graduate degree programs: one in business management and the other in development management. A professor who taught courses in both programs once quipped that he teaches business courses for the money and teaches development courses for the soul.

In that sense Gina Lopez was not normal. Scions of wealthy families, whenever they get to enroll at AIM, almost always take up business courses. She chose something for the soul. In her aborted stint as the head of the Department of the Environment and Natural Resources, she was true to her convictions. She acted like a traitor to her moneyed class when, risking a head-on conflict with big business interests, she suspended large-scale mining and logging operations throughout the country pending the completion of a corresponding full-scale audit.

The idea of an area audit sprang from her AIM training. Ed Morato, one-time dean and whose research heavily went into the design of AIM’s Development Management degree program, authored area development frameworks that recognize, among other things, the need to balance an area’s assets with its liabilities to achieve sustainable development. Extractive industries like mining, quarrying and logging deplete more than they replenish an area’s resource bases. Even the bulk of taxes imposed on these industries go to cities where the headquarters of big businesses are based, with only a token portion of them going to the host communities. This lopsided equation from an area development perspective invites disaster, where mostly the poor are at the receiving end of the displacement and suffering they cause.

Beyond protecting the vulnerable poor from disaster risks even before actual calamities strike, helping them get by in terms of livelihood should command government’s full-time attention, 24/7, 365 days a year. The key is to promote the agriculture sector, being one that absorbs up to 80 percent of the workforce that comes from the nation’s poor. The strategy calls for social entrepreneurship and for generating profit from farming and fishing.

Still, within the context of area development, Morato in another study found that “a large number of entrepreneurs set up their business because of the presence of an industry cluster. Sheer proximity to the industry cluster and entrepreneur-relatives within the cluster spawned the formation of new entrepreneurs and enterprises. Industry and enterprise creation accelerate where there is a critical mass of raw materials and semi-processed goods suppliers, service providers, manufacturers and marketing intermediaries huddle together in area-based community clusters. Clustering motivates suppliers, producers and marketers to complete the entire industry chain.”

This is where local entrepreneurship helps as a vehicle to achieve one core element of sustainable area development. But instead of enacting redundant laws (the latest of which being Sen. Ramon Revilla’s bill for a “Magna Carta of Young Farmers”), there is need to establish an industry cluster that can breathe life to farming and agriculture in general over the long term. Most local economies cannot support this strategy by themselves, given the debased resources in the countryside. This is an area where government would do well to come in strongly, not necessarily by creating more government offices or corporations, which up to now seems to be the default approach, but by honest to goodness implementation of environment laws, zoning regulations, a responsive justice system, and promotion of peace and order that requires less focus on purely military solutions and more on inclusive community participation.

The structures for these ends already exist. What is lacking are focus, a coherent strategy and inspired work on the ground that involves communities.

All government inputs that aim to lure farmers back to farming will mean nothing if they do not bring profits to farming. Politicians abound (not even counting their enablers) because there is money in politics. Make farming profitable and expect the herd, including politicians, to go into farming.