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Shadow economies and conflict

Breaking the links between shadow economies and conflict in Mindanao

This project aims to investigate the interaction between violent conflict and the informal, or 'shadow', economy in conflict-affected Mindanao, the second largest and southernmost island in the Philippines.

Shadow economies are an important feature of the regional economy, but have largely been overlooked in the analysis of the conflict in Mindanao. Those involved in the peace process need to consider strategies for minimising the conflict risks posed by these economies while maximising their development potential.

In 2012 we produced a study that documented a number of shadow economies, including trade in illicit arms and drugs, kidnapping for ransom, informal land markets, illegal cross-border trade and traditional credit institutions. The study provides compelling evidence of the impact of these economies on the dynamics of violence, development and sub-national statebuilding in Mindanao.

Our research was presesented to senior officials in the Philippines government, the Australian, British, Malaysian and Norwegian embassies, and national and international organisations, and is currently being used to develop better-informed and more effective policy responses and reforms to the conflict in Mindanao.

"International Alert's book is insightful and important, and should come to the attention of the government agencies involved in the peace process," said Conrado de Quiros, Columnist for the Philippine Daily Inquirer. "Indeed, it should come to the attention of every Filipino who wants to make some sense of the often alien and forbidding world of Mindanao."