Babe's Eye View article

Let's face it, the World Bank is like the big bad wolf—not necessarily the former WB president Paul Wolfowitz (even if his name sounds like it). He was forced to quit last June after he got caught using his position to raise his girlfriend's yearly salary from $132,660 to $193,590.

Mind you, that fantastic sum was tax free—and she was being paid higher than Condoleezza Rice, who is the US Secretary of State. And to think Condi Rice has to pay her taxes! In any case, this scandalous affair makes people really wonder, who's the big bad wolf?

The World Bank, which was established more than 60 years ago, is supposed to help poor countries eradicate poverty by providing loans for infrastructure projects and consequently promote economic growth. But over the years, it has drawn flak for employing high-handed tactics in the guise of "policy prescriptions" which are put as conditions before granting a loan.

Oftentimes, these "prescriptions" are so restrictive it's like they're trying to put a noose around the necks of governments. Ecuadorian president Rafael Correa even accused the World Bank of blackmail for canceling a $100 million loan two years ago allegedly because Ecuador lowered its debt repayment scheme to 50 percent, which the World Bank found unacceptable.

But this Wolfowitz—who was a former ambassador and official at the Pentagon—has generated so much ill will, often getting the ire of member countries for his brusque and aggressive style, bypassing administrations and forcing "anti-corruption" conditions to a loan. He even reportedly rejected outright some loans on mere suspicions of corruption. He was fond of chanting the mantra of "good governance" during his two-year tenure. And now, he himself was caught in the web of corruption. Excuse me, Wolfie baby!

In the first place, it's rather ironic that an anti-poverty institution gives unbelievable salaries to favored officials. Wolfowitz's spokesman reportedly got a yearly pay of $240,000—tax free. When the scandal involving Wolfowitz's girlfriend Shaha Riza broke, hundreds of staffers, especially those posted in the Middle East angrily complained about "minuscule" increases and the suspension of promotions over the last two years due to "lack of funds."

There are many former World Bank officials who received big retirement packages and are living it well in Europe, Canada and the United States—and you can hedge your bet that these people are not exactly clean and corruption-free themselves.

Just recently, Nobel Peace Prize winner Muhammad Yunus—founder of the Grameen Bank which is successfully lifting people out of poverty through small loans—lectured new World Bank president Robert Zoellick that the agency cannot achieve its objective of reducing poverty because it has forgotten the people. The Bangladeshi Yunus virtually called the agency outdated since it has not changed its style since its creation 60 years ago.

This recent deferment of the $232 million road building loan to the Philippines because of reports about bid rigging is something that leaves a bad taste in the mouth. Of course, there's nothing new about the Philippines being involved in corruption. After all, it's been with us for over 50 years, and everybody knows most any kind of project always allocates a percentage "for the boys."

Gone are the days when corruption was limited to 10 percent in this country. As anecdotal evidence suggests, the figures have become so big that corruption can now go as high as 100 percent. As they say—and it's best said in Tagalog—"garapalan na talaga!" (Thick-faced all the way.)

We cannot claim to be clean; and I don't think anybody is claiming we are—but at the same time, the World Bank should not take a holier-than-thou attitude when it comes to corruption because the institution has been exposed as not-so-clean itself.

Maybe, as I jokingly tell my friends, I'm one of the few who can pontificate and claim to be "holier-than-thou" since supposedly, my great great grandfather was a Spanish priest. But kidding aside—really, the World Bank should stop lecturing us about corruption.

And with the economy getting better, we should try to exit from these World Bank loans and free ourselves from restrictive provisions that infringe on our right to make policies and decisions appropriate for our country's situation.

Latin American countries like Argentina, Brazil, Venezuela and others are trying to break free from the chains of debt that tie them up to World Bank impositions. These countries are paying loans early and are resorting to their own financing mechanisms to stop their dependence on the lending institution. And let's not forget we were able to repay our $220 million obligation to the IMF earlier than expected—ending more than four decades of dependence.

Hopefully, with the new ASEAN Charter, the Asian region will become a stronger market and will achieve economic integration with freer flow of goods, services, investments and labor. It may take a long time, like it took 25 years for the European Union to get its act together, but we have to start somewhere. And certainly, our Chinese friends who have become wealthier—and not necessarily all corrupt as some people think they are—could very well play a major role in helping economies like the Philippines.

Ideally, corruption should only be limited to a 10 percent minimum since it will be almost impossible to stop it. This country can actually be wealthy if it can only minimize corruption. Just the same, let's stop depending on Western institutions like the World Bank. At the end of the day, only us Asians can ultimately help ourselves.