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Mid-East money to Mindanao

Duterte visit to Middle East

As the Philippines’ massive Christian population observes Holy Week in the run-up to Easter, President Rodrigo Duterte will be travelling around the Middle East – to Saudi Arabia, Qatar and Bahrain. And when he returns home he’ll bring back with him Easter eggs containing US$500 million worth of investment pledges and very possibly more.

Those pledges, already made, are largely for the southern island of Mindanao, the poorest of the country’s three island regions. They’re earmarked largely for projects in the Agro-Industrial Economic Zones which stretch from Cagayan de Oro City in the north to General Santos City in the south, and are concentrated in the Muslim provinces of the west.

There are 21 of these zones across the country; 13 of them are in Mindanao. All come under the Philippine Economic Zone Authority (PEZA), a government agency attached to the Department of Trade and Industry (DTI).

A PEZA team, headed by the agency’s Director-General, Charito Plaza, is already in the Middle East preparing the paperwork for the investment pledges. DTI Secretary, Ramon Lopez, along with a 60-strong Filipino trade delegation will be accompanying Duterte on his tour. Their task is to further enhance trade and investment prospects with the three Arab nations.

The projects identified as investment prospects cover a host of agricultural areas including crop production as well as irrigation and water-management systems. But one area of particular interest is the island-region’s small halal industry. The sector has around 500 halal-accredited companies, but they account for a tiny share of the global trillion-dollar market.

At present, Philippine halal products are largely for domestic consumption – their overseas’ market share is tiny and there isn’t a single Muslim country among the Philippines’ top-10 export destinations. But the plan is to create export markets for them – and Saudi Arabia and the two other Gulf States are seen as prime targets.

They’re also willing ones. Halal-food security is vital for the Muslim world; and these three Arab countries which lack sufficient productive land for both crops and livestock, are dependent on halal-food imports. The Philippines has the land and the manpower to boost output in these foodstuffs, and that’s what is attracting investor interest in Mindanao’s halal hubs and production areas.

But while the Philippines is seen as one place that could provide food merchandise which these nations require, to get the halal industry in the Philippines up to speed – and also up to international halal standards – will require investment.

Muslim countries have very strict regulations surrounding halal preparation and products are required to have internationally recognised and approved certification. The United Arab Emirates, for example, requires that all such goods are first vetted by its Emirates Standards and Metrology Authority and must be accredited and re-certified before they can enter their market. Presently there are just five halal-certifying organisations in the Philippines.

But Duterte has other business in Saudi Arabia which is home to the second largest population of expatriate Filipinos after the United States – just short of 1 million of them work there; largely in private homes, hospitals and petroleum companies.

These are huge fans of Duterte. In the May 2016 election which brought Duterte to power, 64% of the total votes cast in the capital, Riyadh, had his name on them; in the other large Saudi city, the Red Sea port city of Jeddah, 58% supported him. There are also some 250,000 Filipinos living and working in Qatar and around 60,000 in Bahrain. And once again, Duterte mopped up the majority of votes cast in these two island states last May.

Last year, 28% of all remittances to the Philippines – almost US$7.5 billion worth – came from overseas Filipinos living and working in the Middle East.

Duterte, who’s expected to push for better conditions of stay for the overseas workers – he’ll also witness the signing of labour agreements during his tour – will attend large-scale gatherings of expat Filipinos in each of the three countries’ capitals.

But Duterte’s not just popular with his compatriots in that region, he’s also popular with the region’s leaders. And according to Plaza: “Most of the Arab investors are fans of President Duterte because he is tough, because of his integrity and good governance”.

On the week-long trip Duterte will meet with three royal heads of state. In Saudi Arabia, where he’ll be from Monday until Wednesday, he’ll sit down with King Salman bin Abdulaziz bin Saud and Crown Prince Mohammed bin Naif in Riyadh. He will then spend two days in the Bahraini capital, Manama, where he’s scheduled to meet King Hamad bin Isa Al Khalifa, before going on to Doha, the Qatari capital, to meet the Emir, Sheikh Tamim bin Hamad Al-Thani.

These three monarchs understand better than most world leaders the need to maintain an orderly society. Their long histories have witnessed many tribal and religious conflicts and they know from bitter experience that the scars from those can easily re-open if law and order is allowed to lapse.

And so, what the West, the European Union, for example, perceives as Duterte’s hard-line polices – his War on drugs; his call for the restoration of the death penalty – in these kingdoms is viewed very differently. There they’re viewed as necessary in the interests of peace and social harmony.

All three Arab states have strict laws concerning illegal drugs where trafficking and possession can incur the death penalty. They also have zero-tolerance for anyone encouraging insurrection or involved in terrorism. Justice in these places – unlike in the Philippines – is swift; law enforcement and the judiciaries in these states don’t countenance long court delays.

It’s not surprising that all four of these leaders are constantly the target of international civil rights groups, the United Nations, progressive-Liberal politicians and the Western mainstream media.

And so, also on Duterte’s Middle East agenda will be requests for cooperation and assistance in dealing with serious security issues back home. He’ll be looking to forge stronger security partnerships with these states and will seek help in combating illegal drugs and, perhaps more urgent, in countering Islamist terrorism in the Philippines which is largely concentrated in western Mindanao.

But luring investment to the Philippines – not just for agricultural projects but also in areas such as energy, tourism (50,884 Saudis visited the Philippines in 2015) and Islamic-banking development – will figure large in the talks and in meetings conducted by the Filipino business delegates. Saudi Arabia, Qatar and Bahrain have a combined investment capital of more than US$500 billion.

Predictably, these will be successful state visits – Duterte is going there at the invitation of the three royal rulers – and bilateral political relations and trade are likely to prosper. Predictably, too, we expect the anti-Duterte movement to inflate what they see as negative aspects of his Middle East tour – he’s already been lightly criticised for going there during Holy Week; evidently that amounts to a heresy – and downplay, or ignore, any positive developments.