GLOBALIZATION AND LOCALIZATION IN THE
21ST CENTURY: THE CASE OF MINDANAO
REGIONS IN THE PHILIPPINES
Sophremiano B. Antipolo
PhD in Urban-Regional Planning and Policy
University of Sydney
Director, Mindanao Center for Policy Studies
University of Southeastern Philippines
Obrero Campus, Davao City
OUTLINE
• Introduction
• Spatial Implications and Challenges of Globalization and
Localization
• The Current Medium-Term Philippine Devt Plan:
Responding to The Challenges of Globalization
• Spatial and Urban Development in the Philippines
• Mindanao Cities In the 21st Century
• Decentralized Cities Under the 1991 Local Code
• Conclusion and Implications to Education
Introduction
• Globalization and Localization: to what extent will these
paradoxical and co-existing forces determine the course
of urban and rural planning?
• What are the challenges they pose upon decentralized
cities in the 21st century.
• In this 21st century, matters concerning globalization
present new challenges for urban and rural planners.
• Indeed, increasing globalization of economic activities
necessitates a critical re-evaluation of existing urban
and rural development strategies which seek to improve
the quality of life and to reduce spatial inequalities.
• In the Philippines, with the enactment and on-going
implementation of the Local Government Code, the
central challenge becomes twofold: (1) facing global
competition, and (2) improving local governance.
• This is because globalization is accompanied with
localization and, in the process, tends to erode the
regulatory power of nation-states.
• For one, globalization is closely related to the localization
strategy of transnational corporations (TNCs). Under
these circumstances, TNCs tend to integrate their
business activities with the local economic environment
where their establishments are located.
• Thus, globalization and localization signal the need to
emphasize the active role of spatial planning in
determining regional and economic development
policies. In this context, the performance of urban and
rural economies are largely dependent on the capacity
and capability of local government units (LGUs).
SPATIAL IMPLICATIONS AND CHALLENGES
OF GLOBALIZATION AND LOCALIZATION
• Lee and Kim (1998), alerted us of at least three (3)
distinctive impacts of globalization on spatial
configuration and regional (urban and rural)
development:
• First, the weakening of nation-states reduces their
ability to control the movement of capital, products, and
labor across national boundaries and to distribute
resources to achieve territorial equalization.
• They argued that this situation can lead to the
intensification of competition among regions and
localities and are likely to expand spatial inequalities.
• There will be greater inequality between cities and rural areas and
among cities of different sizes.
• In addition, local units will become more important economic units
operating on a global scale rather than the nation-states.
• Thus, globalization will require a new approach to policy-making
based on a “partnership“ with localities and regions, whose local
knowledge is far superior to that of the central government (Dubford
and Kafkalas, 1997).
• Localization of the economy and decision-making mechanism are
also closely related to the corporate globalization and localization
strategy of business activities.
• Transnational corporations have tended to seek expansion of their
market and production spaces on a global scale but their
transnational plants have tended to be integrated with local
business environments to make maximum use of resources where
their plants are located.
• No wonder, Swyngedouw (1992), reiterated Andrew
Mair (1991) who coined the term “GLOCALIZATION” to
characterize this paradoxical co-existence of
globalization and localization.
• Also, the weakening of the nation-states has tended to
expand the role of the private sector in local
development.
• Over time, the public sector is increasingly dependent on
the private sector, even for the provision of
infrastructure.
• Second, the increase in the mobility of capital is likely to
increase outflows of domestic capital to other countries and inflows
of foreign capital.
• The increase in outflows of capital may lead to a rapid decrease of
production activities in industrialized areas, particularly in areas
where labor intensive industries are concentrated and also a
reduction in factory movements between industrialized and less
industrialized areas.
• Since the industrialization of less prosperous areas has greatly
relied on the demand created by industrialized regions, the increase
of capital outflows is likely to reduce the potentiality of industrial
development in the less prosperous regions.
• Furthermore, the increase of foreign capital inflows may undermine
the self-sufficiency of the local economic base, since local economic
activities controlled by foreign ownership is increasing.
• Thus, one of the major challenges confronting future rural-urban
development is to maintain stability and self-sufficiency in the local
economy during the process of globalization.
• Third, there is a global spread of a capitalist mode of
production based on flexible production technology.
• In economic sense, globalization was initiated by advanced
economies as a response to the crises in post-war capitalist
production system.
• This system was based on capital intensity, standardization of
production and unionized labor organization.
• A new capitalist production system will move towards flexible
specialization in high value-adding activities and specialized
producer services.
• Rapid changes in technology and market demands have created
uncertainty and risk in investment climate.
• To adapt to this changing environment, firms have increased
vertical and horizontal disaggregation of their organizations and
established linkages with other organizations.
• Thus, in a flexible regime, firms favor business environments in
which they can easily obtain professionals and scientists and
establish cooperative production systems or networks with other
organizations.
• Also, in situations of greater decentralization of economic activities,
decision-making tend to be tied and rooted in a particular place
while they maintain immediate global contacts.
The Current Medium-Term Plan for Mindanao:
Strengthening Cities for Global Competition
• The Philippines recognizes the need to increase the
capacities of Mindanao urban centers to be more
competent for global competition.
• Accordingly, the Development Plan has adopted the
following strategies: (1) full physical integration of
Mindanao into the global economy by infusion of the
much needed infrastructure support that can consolidate
the region’s potentials into a vibrant economic unit; and
(2) strengthening Mindanao’s direct global trade and
economic links with the rest of the world through the
implementation of enabling policies.
Decentralized Form of Governance
• The current Development Plan emphasizes that for the
twin strategies of “people empowerment” and “global
competitiveness” to work, policies flowing from these
must conform to the guiding principles of
decentralization, democratic consultation, and reliance
on non-government initiatives (NEDA Board, 2005).
• Specifically, the development Plan provides that: “In
governance, a direct outcome of the strategy of
empowerment is the principle of decentralization and
subsidiarity. Lower levels of government (regional and
local) must be allowed to set priorities and decide
matters in their own spheres of competence.”
MINDANAO CITIES FOR THE 21ST CENTURY
• The 21st century is, indeed, expected to be a world of cities. The UN
projected that about half of the world’s population (or over 5 billion)
will be living in urban settlements.
• Under the current Local Code of the Philippines, urban centers are
primed to serve as hubs for industrial development.
• In Mindanao, most notable is the urban growth of General Santos
City which has gained the status of a “boom city” with the influx of
both population and economic activities.
• This development may be attributed to the dynamism of its local
government leadership and of the private business sector.
• In addition, other cities such as Davao, Cagayan de Oro,
Zamboanga, Cotabato, and Iligan, have shown significant economic
activities.
• And to further enhance the development in these city
growth centers, a new dimension to interregional
cooperation has been established – the BIMP-EAGA
(Brunei-Indonesia-Malaysia-Philippines East ASEAN
Growth Area).
DEVELOPMENT POTENTIALS
OF MINDANAO REGIONS
• Located in the south, Mindanao is the second largest
island in the Philippines.
• It comprises about 102,043 square kilometers of land
area.
• Ideally situated outside of the typhoon belt, Mindanao
enjoys a generally fair and tropical climate throughout
the year, making it the nation’s leader in agriculture and
agri-based industries.
• Mindanao is composed of four administrative regions
and one autonomous region comprising 27 provinces
and 29 cities.
• Mindanao is the site of one of the world’s richest nickel
deposits, while accounting for three-fourths of the
country’s iron reserves and a third of its coal resources.
• Forests still cover two-thirds of the island.
• Apart from the usual agri-based industries, there are
heavy industries along the northern coast producing
sintered iron and steel plates.
• Mindanao remains to be the “fruit basket “ of the
Philippines.
• Coconut and banana exports contribute largely to the
island’s income.
• It registers a manpower reserve of over 10 million with a
functional literacy rate of 94 percent.
• Moreover, the island is an ideal blend of vast frontiers
and highly urbanized centers of commerce and industry
suitable for the development of viable tourism and a
business climate for investors.
MINDANAO URBANIZATION
AND URBAN DEVELOPMENT TRENDS
• Mindanao has been urbanizing significantly in recent
years. Pernia et al (2004) noted that the urbanization
trends of Northern Mindanao and Southern Mindanao
alone, doubled in the past three decades.
• Outside of the primate city of Metro Manila and next to
Central Luzon and Southern Tagalog, the above two
regions posted the third and fourth highest urbanization
levels at 60.3 percent and 51.1 percent, respectively.
• Worth noting are the urban growth rates of all the four
regions of Mindanao which posted higher than the
national average.
MINDANAO CITIES AS FOCAL POINTS
FOR INTERNATIONAL TRADE
• Despite the global meltdown, Mindanao contributed 21.8
percent to the Philippine Gross Domestic Product (GDP) and
registering a positive 2.7 percent real growth rate in 2009.
• Such resiliency can be accounted for by its rapidly urbanizing
cities, namely: Zamboanga, Cagayan de Oro, Davao,
Cotabato, and General Santos.
• The above-mentioned cities have grown dramatically in terms
of population size and economy in the past three decades.
• Except for General Santos, all four cities have been
designated as regional centers, serving as focal points for
administrative and trade relations, as well as centers for
health service delivery and tertiary education.
• In fact, all of these cities are equipped with infrastructure
facilities viable for external linkages and exchanges such as
airports, seaports, road network and telecommunication system.
• Over the years, Mindanao experienced the influx of industries
which are resource-based or oriented towards domestic
consumption.
• The top manufacturing activities include: (1) food and beverage
manufacture; (2) wearing apparel; (3) wood and wood cork
products; (4) furniture and fixtures repair; (5) industrial chemicals;
(6) rubber products; (7) non-metallic mineral products; (8) iron
and steel basic industries; (9) machinery except electrical; and
(10) cement.
• As the cities of Mindanao prove to be viable centers of trade and
external linkages.
THE FISCAL OPPORTUNITIES FOR THE CITIES
UNDER THE PHILIPPINES LOCAL CODE
• Among the local government units, cities are in the best position to
go beyond basic needs and undertake development projects
because of their broader revenue base and revenue authority.
• They can levy all impositions by municipalities and provinces;
however, they can only exceed the maximum rates allowed for the
provinces and municipalities by up to 50 per cent except in the case
of professional and amusement taxes.
• Cities have the power to raise and use their own income which
include taxes, fees, and charges.
• The biggest revenues are usually derived from real property tax and
business taxes.
• One of the newest local sources under the Local Code is the
community tax, replacing the old national residence tax, which has
to be paid by every inhabitant of eighteen years of age and over who
is regularly employed on a wage or salary basis, or who is engaged
in business or an occupation, or who owns real estate of an
assessed value of P1,000 or more,
• Fees and charges come from public utilities and enterprises owned,
operated, and maintained by cities within their jurisdictions.
• Aside from locally generated revenues, local government units are
entitled to allotments coming from national internal revenue
collections based on the third preceding fiscal year, computed at a
maximum rate of 40 per cent by the third year of the effectivity of the
1991 Local Code.
• The shares are allocated by the type or level of the local
government unit in the following manner: provinces @ 23 per cent;
cities @ 23 per cent; municipalities @ 34 per cent; and barangays
@ 20 per cent.
• The allocation formula includes: population (50 per cent); land area
(25 per cent); and equal sharing (25 per cent).
• Local government units also have a share in the proceeds derived
from the utilization and development of the national wealth within
their respective areas.
• These include shares from mining taxes, royalties,
forestry and fishery charges, and other surcharges,
interests, of fines in any co-production, joint venture, or
controlled corporation (GOCC) engaged in the utilization
and development of the national wealth is also required
to share its proceeds with the local government units
concerned.
CONCLUSION AND IMPLICATION
• The implications of globalization outlined in this Paper called our
attention to at least three sets of challenges: (1) the breakdown of
national regulatory power is likely to lead to the devolution of
government functions to local governments units; thus, there will be
intensification of competition among regions and localities which are
likely to expand spatial inequalities; (2) the increase of the mobility
of capital and business activities will change the comparative
advantage for industrial location as production space for domestic
firms expand across national boundaries; therefore, it will be a
challenging task for local governments units to maintain the stability
and self-sufficiency of their local economies in the global economy;
and (3) the spread of the capitalist mode of production has also
significant impact on the changes of regional and local development
because it will change the spatial structure of economic activities
such as in production, financing, R&D, management and the like
which will require a different set of location factors of production.
• High-tech and information industries require not only advanced
communication and information facilities and specialized service but
also high quality residential environments.
• Judging not only from the spatial and urbanization trends in
Mindanao, but more so from its initiative in cross-border cooperation
via the BIMP-EAGA, it is with optimism that the cities of Mindanao
are poised to face up-front the forces of the globalization in the 21st
century.
• The issue concerning intensification of inter-regional competition
and inequalities can be addressed by strengthening urban-rural
linkages as demonstrated by the key development strategies as well
as the three sub-strategies adopted in the medium-term
development plan.
• The implementation of the People’s Industrial
Enterprises (PIEs) found parallel trends from the
successful British “new towns experiences” and Japan’s
“technopolis experiences” (Masser, 2005).
• For practical purposes, however, it is best to be
reminded of John Friedmann’s (1998) attempt to settle
the issue of inequalities in the context of “balance
growth” as there can never be an absolute balance in
quantitative terms across space.
• Our general agreement with this stance brings us to
postmodern theory in politics and planning.
• As Watson and Gibson (2008) emphasized, post-modern
politics suggests many possibilities.
• It defines an end to simplistic nations of class, alliances,
or urban social movements.
• It also defines an end to a politics which assumes
linearity of progress or the inevitability of revolution.
• No one political solution will emerge which will be
universally just.
• Power will be continually contested, and new and
different strategic alliances will emerge at each point of
resistance.
• Postmodern politics recognizes that there never can be one solution
which will benefit all people in all places for all time. Such an ideal
can only lead to disappointment.
• Rather, postmodern politics allows for – both marginal and
mainstream – recognizing that victories are only ever partial,
temporary and contested.
• At the very least, what postmodern theory has done is to open up a
plethora of ways of thinking and acting politically.
• The challenges brought about by localization forces accompanying
globalization could be contained by the local governments of
Mindanao cities as substantiated by the overall success in the
implementation of the Philippine Local Government Code.
• Again, following postmodern theory, this “success story” narrative
may be contested.
• Therefore, the complexity of globalization and localization forces
should continue to position the national government – but more
strongly the regional and local government units in Mindanao
regions of the Philippines to sustain exploration of progressive and
rational spatial development strategies and policies that combine the
concerns for the economic, social, political, environmental, and
cultural dimensions of urbanization.
• Finally, the role of improved education (both formal and non-formal
systems) should remain as a continuous policy variable in order to
sustain the viability of sub-national economies (rural and urban
regions) in optimizing the benefits of, and positioning the
Philippines against the perils of globalization.
THE END
&
THANK YOU!