The World Bank’s Development Assistance to Agrarian Reform in the Philippines

Anti-Land Reform Land Policy?

Saturnino M. Borras Jr., Danilo Carranza, Jennifer C. Franco and Mary Ann Manahan
Sunday 18 July 2010 by LRAN

Abstract

Historically the World Bank (WB) has been actively involved in land policies, specifically in land reform
and private land titling campaigns, worldwide. The Philippines has been among the significant recipients
of the World Bank’s policy advice and development assistance on land issues over the past decades. The
highlights of the World Bank’s land policy work in the Philippines have been: (i) active political and financial
support to the brutal military Marcos dictatorship, using land reform largely as a counter-insurgency
measure and to legitimize the military rule in the country; (ii) starting in the mid-1990s, its campaign to
pressure the Philippine government to immediately halt its state-driven Comprehensive Agrarian Reform
Program (CARP) due to World Bank claims, among others, that it makes the rural economy environment
insecure for financial investors and that the program is ”expensive”; and (iii) for the government to adopt
the market-led agrarian reform policy model being promoted by the World Bank in different countries
which is built upon the principle of ”willing seller, willing buyer” voluntary land sales transaction formula.

On balance, the impact of the World Bank’s recent development assistance on land reform is that it likely
undermined, not complemented, whatever remaining redistributive potential of the existing state-led
land reform in the Philippines.

Introduction

The World Bank is one of the largest sources of development finance in the developing world. Every
year, it moves US$ 18–20 billion across Asia, Africa, Latin America and Europe in loans and grants in a
bid to foster economic growth and reduce poverty. Considered the ”foremost international development
agency” among development policy circles, the World Bank was founded in 1944 in Bretton Woods, New
Hampshire, USA. Its initial mission was to assist the reconstruction of the war-torn economies in Europe.

Since then, it has expanded from a single institution – the International Bank for Reconstruction and
Development – to five institutions that are involved in particular areas of operation2. These range from
financing, advisory, and technical support for physical and institutional infrastructure such as energy,
transportation, and communication and restructuring of key sectors of the economy such as education,
water supply and sanitation, education, and agriculture, to private sector development and settlement of
investment disputes between foreign investors and their host countries.
From the original 44 member countries, its membership has grown to 186 to date.

As a public sector and
multilateral institution, the World Bank is owned by many countries as shareholders and supported by
taxpayers through direct financing of its portfolio or debt repayment. The number of shares or capital
subscription a country has is based roughly on the size of its economy and operates under the one dollar,
one vote policy – in sharp contrast to the United Nations principle of one member, one vote. The United
States is the largest single shareholder with 16.4 % share, and so, with the same percentage of votes,
followed by Japan (7.87 %), Germany (4.49 %), the United Kingdom, and France (both with 4.31 %). The
remaining shares are divided among the other member countries, most of which are from the developing
world. Naturally, the World Bank derives its policy agenda largely from its top shareholders, most of
which are from the G8. As is well-known, the World Bank is a very politically powerful and influential
institution.

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