Mining and forestry should be part of the post-COVID-19 recovery plan
An excert from an article “Plant Camote: An economic recovery plan”
By Calixto V. Chikiamco
First off, there’s a difference between economic relief and economic recovery. Economic relief refers to the assistance government must extend to workers and businesses because it ordered them to stop due to the public health emergency. Economic relief is both a humanitarian response — help people who suffered through no fault of their own — and an economic one — to prevent consumer demand from cratering. Economic relief is immediate and urgent. Economic relief also includes the managed transition from a total lockdown to a new normal balancing the needs of public health and the economy.
It’s the policy government must adopt at the height of this pandemic.
In this regard, the government spent about P200 billion for social amelioration, about P50 billion to help employees in the MSME sector, and other programs. This is a good start but must be augmented much more to address the toll on people’s livelihoods.
Economic recovery, however, refers to a plan to restart the economy, recover lost ground, and revive. The plan must consider the post-pandemic conditions: hundreds of thousands, if not millions, of newly unemployed, including skilled OFWs returning from abroad, depressed worldwide and domestic demand, and the new normal of social distancing.
However, the economic recovery plan must also be anchored on making structural changes that will sustain the economic recovery for a long time, and not merely on the sugar high of fiscal stimuli. The economic recovery plan should also be developed with the idea of “not wasting a good crisis” as my friend and fellow columnist, former Finance Undersecretary Romy Bernardo likes to say, meaning using the crisis as an opportunity to push for reforms that would not have been possible before.
With that in mind, here are my notes for an economic recovery plan.
4. Mining and forestry should be part of the post-COVID-19 recovery plan.
Both mining and forestry production (and the related wood processing and furniture industries) can easily be jumpstarted to absorb the growing unemployed without any subsidy from the government. What both only need is a signature from the President or the Department of Environment and Natural Resources (DENR) Secretary.
In the case of mining, all the government has to do is to lift the moratorium on mining and remove the uncertainties with respect to taxation. There’s no reason why we shouldn’t push responsible mining, particularly now. It will generate foreign exchange to partially compensate for the loss of dollar revenues from electronics exports, BPO services, and OFW remittances. Gold prices have increased as a result of the crisis. Mining, particularly gold mining, remains an attractive investment.
The top three mining projects in the Philippines — Tampakan, Philex, Kingking — will generate at least $3 billion in new investments. That’s a lot of jobs in the countryside.
As for environmental concerns, that should still be taken into account but securing environmental permits should be made faster and easier and not be an excuse for shaking down the company.
Forestry is another winner, the Philippines being a tropical country. It takes only ten to 15 years to grow a tree to maturity here, depending on the species, while it takes more than 20 years in a temperate country. Finland, a forestry superpower in Europe, produces from five to 15 cubic meters per hectare. Plantation farmers in Mindanao can produce over 100 cubic meters per hectare.
The reason why forestry production has stagnated is the over-regulation of tree plantation by the DENR. The DENR applies the same stringent regulations that they apply to natural forests to plantation forests. Therefore, tree farmers need a permit for everything — for planting, for inventorying, for harvesting, for transport, etc. The same overregulation also killed wood processing plants, the natural buyers of the products of tree farms. The absurdity of this over-regulation is the fact that planting a tree for harvest is no different from planting cabbage to sell, but the government doesn’t regulate the planting and harvesting of cabbage.
All the government has to do in order to stimulate the industry and create green jobs is to issue an Executive Order or a Department Administrative Order (DAO) making a distinction between natural forests and plantation forests and liberalizing tree farming.
There are other major reasons why we need to boost forestry production. One is that forestry production is important for water conservation, and therefore agriculture and food production. The other reason is that this COVID-19 crisis has taught us that diminishing forestry cover could bring more wildlife, which carry viruses, in contact with people.
The Philippines should pay heed to those lessons as it is the most concentrated economy in Asia. Pro-competition policies should be part of a post-Covid recovery plan.
Read more: Business World