Five pillars of area development

NO HOLDS BARRED
Ike Seneres

The major investors in integrated area development (IAD) know what they are looking for, and so it is really a plus to integrate planning at the area level, to make it more attractive to the fund sources. The question now is how to define the scope of the planning area, and how big it should be.

A new trend in IAD planning follows the mindset that the universe of the plan should be the natural biosphere that encompasses the area being planned; including of course all the lands, mountains, waterways, air space and watersheds around it. This approach departs from the old practice of planning along artificial political boundaries that were created by national laws.

It is my good fortune to have known top officials in local and international development organizations, and I am getting to meet more contacts now because of my TV show. Putting two and two together, it is now very logical and practical for me to bring these officials and contacts together, so that they could all support IAD planning, using of course the biosphere approach.

It seems that we often take IAD planning for granted. We often presume that local government units (LGUs) would have IAD plans and that they are probably implementing these whether we know it or not. The truth is, if we do not know or hear about it, there are probably no such plans at all.

After interviewing hundreds of local mayors, I arrived at the conclusion that they are not able to plan for the development of their local jurisdictions, because they have no money to begin with. They would often gripe about the fact that their internal revenue allocation (IRA) is too small, that is if they have not heavily borrowed against it yet.

Almost traumatized by what I heard, I have always kept my eyes and ears open for a possible solution to their problem. Perhaps due to good fortune again, I actually found not just one, but five solutions to their problems. The only challenge now is how to convey this good news to them.

The Local Government Code (LGC) allows LGUs to enter into Build-Operate-Transfer (BOT) infrastructure projects under the BOT Law (R.A. 7718). The BOT scheme does not require any money on the part of the LGUs, but they have to develop a project concept that would attract investors.

The Clean Development Mechanism (CDM), a system that was born out of the first Kyoto Protocol allows LGUs to develop and build their own projects that would produce carbon credits, enabling them to make money as they sell these credits. There are many investors for this kind of projects too.

Debt for Nature (DFN) swap, a system developed by the World Wildlife Fund (WWF), allows LGUs to earn money from the recovery of lost natural environments, in cooperation with Non-Government Organizations (NGOs). National debts are “pardoned” in exchange for natural recovery. The national government then pays the LGUs for the value they created.

Official Development Assistance (ODA) objectively targets local projects, but the LGUs have to develop good project concepts that would attract international funding agencies. As always, projects that increase access to public services are prime attractions.

The legal basis for Municipal Bond Offerings (MBO) already exists, but the LGUs have to show good reason that they could create future value added that would justify and attract foreign and local investors, including their own town mates here and abroad.

Taken as a whole, these five sources of funding namely BOT, CDM, DFN, ODA and MBO would actually become more attractive to investors if LGUs within a broader biosphere could integrate and coordinate their plans to support common objectives that would improved their economies of scale.

This is now the top priority project of the United National Integrated Development Alliance (UNIDA), to organize economic cooperation forums at the local biosphere level, based on the Asia Pacific Economic Cooperation (APEC) model. Who knows we might even get funding from APEC?

Watch my TV show “Bears & Bulls”, a daily coverage of the Philippine Stock Exchange. 9:00 am to 1:00 pm in Global News Network. Email iseneres@yahoo.com or text +639293605140 for local cable listings.