Determining the true costs of war

By Regine Ong
REBUILDING after disasters and wars can be a tricky business even for seasoned politicians. It can be a source of rents, but it can as easily erode trust among citizens and destroy political careers. When President Rodrigo Duterte promised to rebuild the war-torn city of Marawi in the southern Philippines, “or else he will forever be the bad guy,” he was surely aware of the enormous social and political costs of reneging on his commitment.
A year later and the reconstruction has yet to begin. The debris has not been cleared, and residents are still barred from returning to their homes. Worse, Duterte barely spoke of the war and the progress of the rehabilitation during his recent State of the Nation Address, though he checked other boxes on his priority list: the war on drugs, the signing the Bangsamoro Organic Law, and the establishment of the Coconuts Farmers’ Trust Fund. He neither spoke of any compensation for lives lost nor properties destroyed.
So, will the recovery of Marawi become another unfulfilled promise?
The rehabilitation of Marawi is not a simple process of rebuilding physical structures. The government needs to ensure that affected communities are resilient and that future conflict can be prevented. The recovery should simultaneously rebuild and address concerns like poverty, education, and the rebuilding of relationships. Actions that fall short will spell neither growth nor peace in Marawi.
The government’s Bangon Marawi Comprehensive Rehabilitation and Recovery Plan is one such limited exercise. The Task Force’s Post Conflict Needs Assessment talks of social resilience but is purely focused on rebuilding vital infrastructure, which they calculate will cost around P17.8 billion for damage to public and private infrastructures within the affected areas.
A cursory assessment shows that the numbers don’t add up, even if we only accounted for the rebuilding of physical structures. Residents in the 24 most affected barangays claim that their lots account for only 25 to 30 hectares. However, the Bangon Marawi Comprehensive Rehabilitation and Recovery Program reports that the most affected areas total 250 hectares, of which one square kilometer or 100 hectares was completely destroyed.
By using construction-based estimates, we find that the rebuilding costs on 100 hectares range from a conservative P16.6 billion to P29.2 billion. Adding the cost of utilities such as power, water, and sanitation, plus the other destroyed or damaged structures in the Greater Marawi Area will surely increase these costs.
There is no adequate explanation behind the government’s calculations, and further delays will make it more difficult to know the true cost of war. In the absence of a more detailed report, let’s try to approximate the costs by using average construction costs per square meter. The key is to ascertain the cost of building a similar structure, and not the prewar cost of the structures, depreciation and all. We then combine the ensuing construction estimates with an accounting of Maranao dwelling styles and local building practices.
For instance, most families typically reside in mixed-use buildings where the physical structure acts as both a commercial and residential space. This type of development requires a more stable foundation and costs more than a simple residential structure. Because of their multiple purposes, these buildings were typically two or more levels aboveground.
Let’s use a conservative estimate of only 60% of the buildings with two-stories to extrapolate the cost of damages. Since two-story buildings have bigger foundations, bigger columns, and suspended beams and slabs, they increase the basic cost of construction by about 10-15%. This along with its multi-functionality makes the calculations more complex because we cannot imply that the whole structure is solely residential or solely commercial. By adding a margin of 10-15% above the projected commercial cost, while accounting for the type of materials used for construction, we arrive at a reliably close range of cost estimates for rebuilding the destroyed part of the city.
In addition, the Maranao live in conglomerates of tightly connected structures, where buildings are directly connected or located very close to each other. Let’s assume that the gap between structures is negligible and compute the cost of rebuilding on the entire 100 hectares.
Our calculations show that 100 hectares of low-cost structures will cost from P16.6 to P16.9 billion. At mid-cost the estimated amount will range from P18.9 to P20.8 billion. Finally, the cost of building a strong, stable, and modern structure can reach up to P21.2 billion to P29.2 billion.
The figures above do not include the cost of repairs or rebuilding of roads and bridges destroyed or severely damaged by the war. The figures do not include the rebuilding of destroyed educational and health facilities. For example, the publicly available data from the Department of Public Works and Highways shows an additional cost of P155 million to P176 million only for bridge repairs. This increases our estimated cost to P16.8 billion to P29.3 billion.
To be sure, the government’s estimates are not widely off the mark. However, we should note that these figures totally ignored those areas severely damaged in the Greater Marawi Area. We included neither large structures like hospitals and mosques nor foregone income resulting from destroyed businesses.
Recognizing the magnitude of conflict requires an honest and empirical estimate of the true costs of war. The State must be realistic, responsible, and credible in its rebuilding plans and estimates. It cannot risk further delays in the reconstruction process or, worse, jeopardize the full restoration of the city.
One would hope, in a time of pain and suffering, that the government would quickly help those in need. But that is not what we see. Having their homes and businesses destroyed, their savings looted, and their livelihoods at risk, the victims of Marawi have received most of their aid from private agencies as they wait for the support the government had promised earlier.
A compensation bill proposed earlier this year promises financial compensation to enable the residents of Marawi to immediately recover from the damage and destruction of their property. Similar bills have been filed since then, but neither the President nor Congress has voiced support for it. Facilitating the compensation bill will manifest the government’s sincerity to rebuild the city of Marawi and lay to rest growing fears about a resurgence of violent extremism.
As a first step, the government should do better and allow transparency in its methodology and accounting of the real costs of war, reevaluate its cost assessments, and see through its promise of rebuilding back and better.
 
Regine Ong studies economics and mathematics at Wellesley College and is currently on an academic internship with International Alert Philippines. Her research interests include development economics, income inequality, and applied econometrics.