Monday, August 14, 2006


By Sergio A. Pontillas

WITH THE awarding of its Environmental Compliance Certificate, the Atlas Consolidated Mining and Development Corporation is set to start commercial operations of its P3.5-billion nickel project in Quezon, Palawan.

To quote from the company’s report to the Securities and Exchange Commission, “road construction to the direct shipping mine location has been completed and the construction of a temporary causeway for loading has commenced.” Indeed, the development of this mining project is coming at us at full throttle.

This is the latest in the burgeoning mining industry that has been in the province since the 1970s. Ideally, part of proceeds from this mining project would be funneled off to jump-start, at least, the economy and the over-all development of Palawan, recently declared one of the poorest provinces in Region IV-B. Palawan is also beset with a looming population boom, one of the worst in the region.

But before we start the drums rolling, with matching thunderous applause, we should remind ourselves that mineral exploration and development along with its liquid cousin – oil – have often been historically linked to poverty especially among developing nations.

Governments from mineral-rich but poor African nations have been rightfully accused of being bad at managing their wealth. Nigeria, one perfect example, has long been producing oil but majority of its citizens barely survive with a per capita income of one dollar a day. Nigerian oil money was used to build an elephantine central bank, which was supposed to spur economic development in the country. But lack of a grassroots financial structure and frequent dips into the country’s oil money by warring politicians prevented development from trickling down to the country’s poor. This left Nigeria in its current state, where the only sign of modernity and development is its gargantuan central bank and the well decorated throne room of its ruling despot. Much like what is happening in Palawan, which has not benefited from its natural gas in Malampaya, mineral is siphoned out of resource-rich regions without the guarantee of profits getting poured back into the regions. With a centralized system of politics, management of profits from resources depends heavily on the caprices of the political elite.

This does not, however, go to show that Palawan may be on the road to a bleak future. The Philippines is, after all, better off than Nigeria and Chad. But we are not also richer than the Netherlands, which suffered an economic slump during its heyday as a North Sea gas giant. Economic historians point the blame on the sudden influx of dollar-denominated revenues from gas money, which upset the balance with other economic sectors. This made the agricultural and manufacturing sector of Netherlands less competitive in the international market. Consequently, those who worked in these sectors did not fare well during Netherlands’ heydays as a European natural gas giant. This same historical lesson could spell trouble for Palawan if proper support for the agricultural and fisheries sector is not given as the province follows the mining and energy industry bandwagon.


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