Mindanao traders link with ASEAN neighbors and why that matters
RECENT activities between Mindanao business groups and their counterparts in Singapore and Malaysia point to a revival of centuries-old precolonial trade ties.
Before European colonists forced present-day Malaysia, Philippines, and Indonesia to plant and produce cash crops to fuel their mercantilist trade, interisland trading was robust in the Southeast Asian straits fomented by the Sri Vijayan and Madjapahit empires and later, the sultanates. The vestige of that old relationship can be seen in the current barter trade in Zamboanga.
Even the Chinese played a big part in this old trade for centuries, which explains why many local Chinese families share the same roots as the predominantly Hokkien families in Malaysia.
Southeast Asia as we know it today was then considered one large nation simply divided into various small island states that engaged in frequent economic and social interaction. The modern nation states set apart by current borders simply did not exist before colonists came over from Europe.
Thus, these links will be revived, premised on the old ties that merely need reviving, jumping off from efforts to restart these two decades ago under the Brunei Indonesia Malaysia Philippines East Asian Growth Area (BIMP EAGA).
This is the historical backdrop of two recent events – visit of a Davaobased trade delegation to Singapore and Malaysia in late September and the signing of a memorandum between the Sarawak Business Federation and the Davao City Chamber of Commerce in Kuching two weeks ago.
The reported interest of Malaysian and Singaporean businessmen in Mindanao’s opportunities came at the best time, with the Bangsamoro Organic Law passed and the Moro Islamic Liberation Front (MILF) announcing the end of hostilities against the Philippine government. These are major steps towards peace, which will help unlock Mindanao’s investment and food bearing potentials.
One thing Mindanao can provide everyone them is fresh and processed food. Being away from the typhoon belt, food prices on the island remain stable, unlike Luzon.
What Mindanao’s producers can also gain from these trade relationships are buffer stocks of important commodities such as coconut, corn, and cassava which are vital raw materials for the island’s food processing industries.
Corn supply from Indonesia, for example, can keep prices stable, which can keep the price of hog and chicken feed low. A healthy intercountry trade platform will do well to keep commodity prices low for all food producing ASEAN countries like us.
Other areas of cooperation include information and communications technology and other specialized services such as banking and financial intermediation. These are enabling industries that help lower the cost of doing business across countries, and provide easy access to capital and skills that can help countries expand trade.
Already, increased link ages through social media and online banking, and the emergence of blockchain technology are enabling faster and more efficient trade and cross border investment. More linkages brought by these arrangements will be good for us all.
Singapore the reliable trade partner we can all learn from
The Republic of Singapore will definitely play a vital role in building ASEAN and the trade links between member states. The historic role of Singapore as a trading post and facilitator of trading arrangements is strong, as many multinationals are headquartered in the city state.
Singapore’s chairing of ASEAN underscores its regional leadership amid a world in flux, with Brexit concerns nagging Europe and the trade war between China and the United States threatening Asian growth.
This makes the present day an exciting one for students of international trade, as the quick changes force states into unique positions, from which new opportunities and threats can be obtained.
The city state’s diplomatic skills are renowned, built on a history of independence and an ability to play its cards smartly during the Cold War era, navigating its development from the time it separated from Malaysia in 1965.
Looking at more than 50 years of Singaporean history we see how its government has consistently and smartly effected diplomacy, using its innate strengths as a middle ground between West and East, creating a balance that has gained for it a strong and credible international presence.
Lee Kuan Yew and his team fashioned a foreign policy that helped guide the city state from a precarious birth to the Asian lion it is today. It looks like Lee Hsien Loong will further boost this capability, and with it, carry us all in ASEAN forward as a major player in the Asian Century. For reactions: