The shadow economy (2)

By VIC M. TAYLOR
Mindanews

WITH regard to the sale of firearms and ammunition to dissident groups by members of the security agencies, Khadaffy Janjalani himself stated in an interview undertaken a few months before his death in 2006 that the ASG had “no problem buying guns due to the plentiful supply from either gun smugglers, Recom [ PNP Regional Command], or Southcom [AFP Southern Command] soldiers who badly need cash”.

Smuggling routes have been described in some studies. These are all through the “southern backdoor” of the Philippines, connecting Indonesia, Malaysia and the Philippines. One such study speaks of the “T3” – the Terrorist Transit Triangle – centering on the Sulawesi Sea also known as the Celebes Sea. At least four routes have been identified which are used to smuggle firearms and ammunition to and from the Philippines – another study refers to Mindanao as being a source of firearms for the Jemaah Islamiyah in Indonesia – as well as the movement of terrorists themselves. These routes run along the following points:

1. Sandakan or other ports in Sabah through Palawan to northern Mindanao or the Central Philippines;
2. Zamboanga City through Basilan, Jolo, Tapul island in Sulu, the main island of Tawi-Tawi, Sibutu (southernmost point of Tawi-Tawi) then either to (a) Timbunmata island then Tawau in Sabah, or (b) Ligitan island then Lahad Datu in Sabah, or (c) Nunukan island in Indonesia then back to Sandakan;
3. General Santos City on the southern end of Mindanao, crossing several islands leading to Tahuna off the northeast tip of Sulawesi island, then to either Manado or Bitung in Indonesia;
4. General Santos City going through Karkarekelong island in Indonesia on to Ternate ending in central Sulawesi island.

As noted, these routes run both ways, to and from various points in the Philippines.

Lino Miani notes that these routes are traditional routes:

“The Sulu Arms Market… is not a market in the physical sense, rather it is an economy of guns where firearms and ammunition are the currency of a thriving international trade in violence. Its 500-year history of competition and conflict is older than most, yet the Sulu Arms Market is quite common in that it is both a source and a destination for smuggled guns… [It] is intertwined with piracy, terrorism, and the traffic of other illicit commodities. At various points since the Spanish conquest of the Philippines in 1521, European colonialists, Moro (Philippine Muslim) independence groups, Communists, Islamic militants, and criminal gangs all played a major part in the market’s development making it a truly globalized enterprise.”

Since the start of the Duterte administration – actually even before Mr. Duterte assumed the presidency but immediately after his electoral victory– his declared “war on drugs” has taken center stage among all programs of the government. It is a war that has been marked principally in the public’s mind by killings – 8,000 plus in the ten-month period since Mr. Duterte became President – in fulfillment of Duterte’s promise in his State of the Nation Address in July 2016 that “there will be no let-up in this campaign… We will not stop until the last drug lord, the last financier, and the last pusher have surrendered or put behind bars or below the ground, if they so wish”.

What has not been discussed so much has been the matter of why the issue of illegal drugs is a matter of concern. To begin with, the Philippines has the reputation of having the highest rate of methamphetamine abuse in East Asia. The Dangerous Drugs Board, the government body that sets regulatory policies for this sector, has placed the number of drug users nationwide at 1.8 million based on a 2015 survey undertaken.

In addition, the Philippines has developed the dubious reputation of being one of the main manufacturers within the region of amphetamine-type substances (ATS), mainly methamphetamine hydrochloride (shabu), along with Myanmar and China.

Of greater concern, though, is the matter of the insidious control that the illegal drug industry has taken over government units, what is often referred to as “narco-politics”. This, it seems, has taken root in the Armm.

A perceptive study undertaken in 2013 has described how this has taken place in two provinces of the Armm, the provinces of Maguindanao and Lanao del Sur. The study points out that the destitute social conditions in these provinces, the perennial state of conflict and weak governance provide the enabling conditions for an illegal drugs industry to thrive.

The high level of poverty and the turmoil caused by incidents of violence make the supplemental income provided by various tasks related to the industry – whether these be transportation, storage, repacking, distribution or retail selling – welcome. Thus ready hands to support the industry as well as a market seeking even just temporary respite from the travails of life are available.

The bountiful returns from controlling the trade in illegal drugs in an area push traffickers to look for ways to ensure the longevity of their enterprise. One, of course, is to build up the means to protect one’s turf from competitors as well as government entities mandated to shut down the industry. These include acquiring firearms and ammunition and setting up a private security force to resist attempts to terminate operations.

Another more subtle approach – which one may take as a complement to the first – is to capture the agencies of the State which have the mandate and authority to put an end to the industry. This is done by (a) taking over a position of authority in the area, and (b) infiltrating the agencies with police powers over the industry.

The lucrative returns generated by the industry provide the financial resources to win an election – running a campaign, buying votes and bribing electoral officials. Once in office, one is in a position to influence policies, divert attention away from the industry, buy the support of key individuals and impede punitive operations against the industry, thus ensuring the continued uninterrupted operation of the industry. Moreover, and particularly if one is in the position of being the Chief Executive of a government unit – Governor or Mayor or even Barangay Chairman –there is the much-coveted Internal Revenue Allotment (IRA), referred to in an earlier article in this series – which is in many cases handled as a personal fund

Once power is consolidated, one has the means to build alliances that will further strengthen one’s position and dissuade competitors from attempting to wrest power. Moreover, the ability to control the situation allows one to expand to other lucrative areas of operation such as the illegal trade in guns as well as commodities essential to the area – petroleum products, food supplies and whatever is required – without going through normal trading channels which would impose State-mandated charges on importations.

As fortunes grow, so does one’s power, creating a position of near-invincibility, forcing others to consider very carefully any plans to wrest power away from you.

As the afore-cited study of Cagoco-Guiam and Schoofs put it, “…gaining control over public office is only the first step in the process. Gaining access to the trappings of public office is critical precisely because it determines entry into other illegal businesses which are part of the shadow economy of Mindanao….Drug money can be converted into political power, but control over public office represents the real prize, because it ensures the diversification and protection of illicit sources of wealth.”[14]

It is not only the executive units and the police forces that are controlled but even the Courts:

“…the justice system is bound up in drugelated protection rackets. Public prosecutors delay the prosecution of cases filed by drug enforcers, whereas circuit court judges are bribed to dismiss the drug cases filed in their court.” (to be continued)