Porous peace in Mindanao’s free trade area

This policy brief aims to stimulate discussions around possible mechanisms for harnessing the development and peace potentials of cross-border trade while curbing its violent tendencies in the Mindanao region of the Philippines.

The size, scope and operation of illicit trading across the porous borders of the Sulu seas and the amounts involved in informal trading hint at its developmental role in Mindanao.

At the same time, the associated aspects of foregone tax revenues, clan interests and corruption have an impact on conflict dynamics and sub-national statebuilding of the Bangsamoro.

This policy brief aims to help examine enabling mechanisms that could encourage the peace-promotive potentials of this type of trade and curb its violent tendencies. Such mechanisms could help to bring sustained growth and enduring peace in the region, especially in light of the signing of the Comprehensive Agreement of the Bangsamoro (CAB) between the Philippine government and the Moro Islamic Liberation Front (MILF).

The principal recommendation is for the Bangsamoro Transition Authority and the Bangsamoro government, in the long term, to develop a thorough understanding of the real economy of cross-border trade. This would enable them to design nuanced and conflict-sensitive governance mechanisms to move small traders into the formal economy, to develop the area as a de facto free trade zone, and to implement mechanisms that would maximise the economic gains of such trade and minimise its potential to fuel violent conflict.