Thought Paper: On Davao City, growth poles and cumulative causation

Written for PLAN 201, which has been an awesome start to my stay at the UP School of Urban and Regional Planning. The prof is cool enough to let the substantial experience from the class (a good mix of government development workers, architects, engineers and researchers) emerge, while being to frame it theoretically without clamping down on the freewheeling discussions. There have been times where the thought of a cheery Saturday class was enough to get me through a brutal workweek. Gotta brush up on stat, though.

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Thought Paper: On Davao City, growth poles and cumulative causation

What comes to mind when discussing spatial theories of regional development such as growth poles (Perroux) and cumulative causation (Myrdal) is the case of Davao City, which is currently the most important development center in Mindanao, and is emerging as a strategic regional growth center, particularly in the context of the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA).

I believe Davao City is a prime example of how development has a tendency to cluster in centers, resulting in major urban concentrations that are key development hubs from a national perspective, and have the potential to play a regional role in the realms of culture, business, and international transport. Its strategic location practically assures this—found in the southeastern tip of the Philippines, Davao is the natural jump-off point for travellers from Northern and Central Mindanao before heading to the Zamboanga Peninsula and the islands of Basilan, Sulu and Tawi-Tawi. It has also begun to be a gateway to Southern Philippines for international travellers from Southeast Asia and even Australia and the United States.  The last two decades have also seen a boom in Davao City’s economic growth. This can be seen in multiple centers and industries within the city, which as shown in the chart below from the Davao City Planning and Development Office, spans seven growth sectors, which makes good use of its massive 244 hectares (as it is one of the largest cities in the world by area).

Table 1: Davao City’s network of economic growth centers[1]

Davao’s wealth has expanded to the greater Metro Davao area, which is not an administrative political unit but is a de facto grouping of the LGUs of Davao City, Digos, Panabo, Samal, Tagum, Carmen and Sta. Cruz. This radiation of wealth can largely be attributed to its success as an agri-industrial area: at least 43% of the land use of Davao City is dedicated to various agricultural/pastoral initiatives, including plantations for banana, pineapple, coffee and coconut.[2] Davao is known as the “Fruit Basket of the Philippines”, while Digos City has begun a thriving mango industry, and Panabo City is home to the world’s biggest banana plantation.

The Davao phenomenon can thus be framed by the theories of Perrouz, Aydalot and Boudeville on the investment in “growth centers” as a regional development strategy. The theory posits that rapid regional development can occur through attraction of activities and concentration of growth in “growth centers”, or “poles”, where key “propulsive industries” exert positive, magnetic influence on the surrounding area. This also presupposes that these poles shall be the source of economic growth, which will then diffuse or trickle out into the surrounding region. The growth center theory illustrates the key role of cities and urban networks in the global economic system, where densely-packed metropolitan areas naturally become hotbeds of economic, cultural and technological creativity and innovation.

This is intimately connected to the theory of cumulative causation, or the multiplier effect (Myrdal), where multiple developmental changes are set into motion by a single event or set-up of a particular industry. With cumulative causation, Davao’s comparative advantages, such as location and rich volcanic soil, are further bolstered by acquired advantages attracted by said growth poles. In the case of Davao, multiple industries and development interventions have created various economic spin-off effects.   Agri-enterprises such as fruit and cut flower production, processing and export, for example, have generated expansions all along the value chain, creating thousands of jobs in the processing, marketing, and transport businesses. The tourism industry in Davao is another such growth pole, where the service sector is a major growth driver. Non-economic triggers should also be factored into this, one important example being the state of governance in the given area. The Dutertes—particularly Rodrigo Duterte, who became mayor in 1988, as well as his daughter Sara, the current mayor—have been lauded for creating enabling environment through incentives for local economic development initiatives, and most especially, the improvement of the peace and order situation. This is in stark contrast to the uncontrolled criminality and insurgency that has hampered the development of other emerging hubs in Southern Philippines such as Zamboanga and General Santos City. Thus, Davao’s spurt of economic growth has attracted an additional influx of added local and foreign investment and support infrastructure, which leads to even more investments—and so on and so forth.

Key to the abovementioned spatial theories, however, is the question of transportation and transportation costs. This is linked to bid-rent theory (Alonso), which holds that land use, rent, intensity of land use, population and employment changes as the distance from the central business district (CBD) increases. Bid-rent theory further observes that in all industries, transport is a significant factor in production—the closer one is to the CBD, the higher the net income facilitated. As such, the more accessible an area, the greater concentration of customers, the more profitable the industry. Thanks to the dominant trend of economies of scale, wages and transport savings end up compensating for higher land and wage costs.

One of the implications of bid-rent theory is a concentric land-use structure. However, in reality, the bid-rent curve is not a strictly linear function. Rent prices “hump” or fluctuate depending on geographical factors such as rivers, hills or arterial roads that can raise or lower land prices. Further, the polycentric nature of modern megacities most obviously seen in areas such as Metro Manila (which has 16 contiguous cities), has given rise to the phenomenon of laborers who commute daily from fringe communities (such as Cavite, Bulacan and Laguna) to get to jobs in the central business districts of Makati, Ortigas and Quezon City.

Of course, such spatial development approaches are not without negative costs. Studies have shown that the paradigm of growth-pole development, which has been in vogue since the 1970’s, has a tendency to enhance regional inequalities instead of mitigating them. Other negative effects include urban sprawl and brain drain due to massive labor force migration, where the best and the brightest flock to major cities like Davao (and yes, colonial Manila) for education and jobs, and never go back to their respective home communities. On a larger scale, the same can be seen in the effects of globalization—the most major toll in my opinion being the reinforcement of economic and cultural hegemony. In Davao, this can be seen where most IPs (indigenous peoples) become absorbed in mainstream Dabawenyo culture, where bisaya and Catholicism dominate over the traditional languages and cultural practices of tribes such as the Mandaya and Mansaka, which eventually become forgotten. Even Davao’s crown festival, Kadayawan, has recently been criticized for taking on an insidiously exploitative bent.

That said, the last ten years have seen a gradual turn in development theory, particularly the realization that growth-pole development alone is unsustainable without looking at the integration of peripheral areas to growth centers, primarily through integrated local development. In many ways, growth-pole and cumulative causation is very much linked to the paradigm of neoliberal economic policy, but one would hope that Filipino national and local economic managers have learned enough from the economic crisis in the West to know that something definitely has to change. Christofakis and Papadakapolopoulos (2011) speak of “a “new economic geography” where theories and practices are also formulated, on the basis of the integrated development model. Said model has led to “significant re-adjustments” towards the formation of local-endogenous development as a strategy for regional development.

Thus, the two models (the growth poles and the integrated-endogenous development model), do not operate in a competitive way, but they are complementary to one another, on the basis of a “mixed” development model. In essence, the two models are applied in parallel in various combinations that depend on the particular characteristics and the stage of development of a country, the current international situation, and the strategic socio-economic choices of the governments.[3]

In the Philippine context, one example is the ongoing attempt by the ARMM Regional Government in recommending the development of “cluster” sites for sustainable integrated area development (SIAD) initiatives as an integrated-endogenous approach to balance the large-scale infrastructure usually favored by both national government and the international donor agencies. However, it remains to be seen if the Filipino economic ecosystem (including its economic managers) has reached a level of maturity that can transcend the standard paradigm of linear growth center development and the accordant misplaced belief “trickle-down” approach for peripheral areas. At this point, one can only hope.