The Jan. 10 violent clash between the Armed Forces of the Philippines (AFP) and a 200-fighter strong rogue element of the Moro Islamic Liberation Front (MILF) was the largest since a cease-fire took effect in July 2003. The rebels were a fringe group of MILF that had joined with the Abu Sofia armed group. MILF leaders were quick to deny involvement with the Jan. 10 attack. They might have known it was going to happen but chose not to intervene. If a rival faction launched the attack, MILF would benefit from the AFP taking severe action against the rogue elements; if a dissident MILF element launched the attack, MILF could offer to crack down on that faction in exchange for concessions in its ongoing negotiations with Manila. This latest clash will not derail MILF's peace talks with the government — which have survived sporadic, occasional fighting since the 2003 cease-fire — but it is a sign of things to come. A negotiated end to the insurgency will see MILF transform from a loosely Islamism-based separatist militant group into a political force. As the process continues, some elements of the group might, for their own reasons, oppose laying down their arms and re-entering society. These factions will turn into kidnap-for-ransom groups and armed criminal gangs for hire, while more radical elements will re-emerge as ideologically-based groups. Fractionalization is a common element of the insurgencies on Mindanao; MILF itself is an offshoot of another group, the Moro National Liberation Front. More fractionalization of insurgent groups can be expected as the prospect of peace between MILF and Manila changes Mindanao's political climate. The main reason MILF factions will turn to crime is economic — Mindanao is a poor region of a poor country, and lack of opportunity makes a life of crime attractive to former insurgents. Furthermore, Southern Mindanao's population consists of a relatively small Muslim majority in an overwhelmingly Catholic country. The issue is further complicated by an uneven distribution of wealth based on religious and ethnic lines. Since the beginning of U.S. assistance to the AFP in 2002, most of the violence in Southern Mindanao has been economically, rather than politically, motivated. For example, abductions by the notorious Abu Sayyaf militant group and other kidnap-for-ransom groups are more prevalent than attacks against government or Western targets. The Philippines' biggest militant attack, the Superferry 14 bombing in February 2004, was actually an Abu Sayyaf shakedown operation aimed at the operator, who refused to pay "taxes" to the group. A November 2004 attack against a Japanese construction company's compound in Mindanao was probably — according to sources in the security community — the work of an armed gang for hire possibly acting on behalf of a competitor. To develop Mindanao's economy and provide the area's poor with economic alternatives — with hopes of dissuading them from taking up radical causes — the U.S. Agency for International Development is pouring aid into the region and has had some success. However, the Philippines is one of the world's most corrupt countries, and ensuring the aid gets from Manila to the people in the hinterland who need it has been challenging. MILF could be maintaining clandestine connections to its fringe elements as insurance in case the peace process slows or collapses. However, as offshoot groups form, a lack of central control over MILF's various factions will accelerate the fractionalization. This has already happened to Abu Sayyaf. The AFP, with assistance from elite U.S. forces, has conducted a successful campaign against Abu Sayyaf, killing a number of its leadership figures. The AFP killed Abu Sayyaf Commander Munap Manialah (alias Commander Munap), and another significant leader — Khadafy Janjalani — is on the run or, very possibly, dead. In the absence of significant ideological influence, the former Islamist militant group has degenerated into a kidnap-for-ransom gang. As the MILF insurgency dies down, the AFP will strive to turn over security duties in Mindanao to the Philippine National Police (PNP), which will be hard-pressed to maintain order in the island's mountainous jungles. MILF also will assume the burden of security in Southern Mindanao as it gains more autonomy. Mindanao is emerging as a center of development in the Philippines, but if some groups are disenfranchised from the island's economic development based on ethnicity and religion, an element of instability will remain in place. If MILF and the PNP cannot control Mindanao, kidnap-for-ransom and armed criminal gangs will enjoy more freedom to operate, ensuring that parts of the region remain dangerous in the foreseeable future.