1. Jacques de Larosière, ''Adjustment Programs Supported by the Fund: Their Logic, Objectives, and Results in the Light of Recent Experience," IMF Sur vey (February 6, 1984): 46.

2. U.S. Congress, Senate, Committee on Foreign Relations, Statement by James A. Baker, Secretary of the Treasury , 99th Cong., 2d sess., May 20, 1986, p. 7.

3. Princeton University's Woodrow Wilson School of Public and International Affairs provided funding for the original research, which was conducted in the Philippines from November 1980 to June 1981 and from July through August 1982. That research was the basis for an earlier version of the present work: Robin Broad, "Behind Philippine Policy Making: The Role of the World Bank and International Monetary Fund," Ph.D. dissertation, Princeton University, 1983; The research also served as the basis for the author's contributions to "Export-Oriented Industrialization: The Short-Lived Illusion," "Structural and Other Adjustments,'' and "Technocrats Versus Cronies," in Walden Bello et al., Development Debacle: The World Bank in the Philippines (San Francisco: Institute for Food and Development Policy, 1982).

4. "Under Attack—And Caught in a Dilemma," Far Eastern Economic Review (October 10, 1985): 77.

5. IMF, Annual Report of the Executive Board for the Financial Year Ended April 30, 1985 (Washington, D.C.: IMF, 1985), p. 96, table 1.2.

6. Stanley Please, The Hobbled Giant: Essays on the World Bank (Boulder, Colo.: Westview Press, 1984).

7. World Bank, "Visit to the Philippines for Operational Discussions," memorandum from John Blaxall to David Turnham, May 15, 1986, p. 1.

8. World Bank, "Aide-Mémoire," minutes of meetings between World Bank and Philippine Government ministers, March 17-24, 1986.

9. For details, see New Philippines Daily Express (Manila), August 2, 1986, p. 2; and World Bank, "Visit to the Philippines," pp. 1-2.

10. See "The Casino Society," Business Week (September 16, 1985): 78-90.

1. An earlier version of parts of this chapter was published as "The Transformarion of the Philippine Economy," Monthly Review 36 (May 1984): 11-21. On the Bataan general strike of June 4-7, 1982, see Henry Holland and Mimi Brady, "Le Nouveau Militantisme ouvrier," Le Monde Diplomatique (January 1983): 18.

2. The category of NICs does not always include these same countries but varies according to the precise definition used by each author. In this book, the NICs comprise seven LDCs that jointly accounted for well over 70 percent of LDC industrial exports in 1978. See UNCTAD, Fibres and Textiles: Dimensions of Corporate Marketing Structures , TD/B/C.1/219, November 19, 1980, p. 185, table 49. All the NICs except India followed export-led growth paths.

3. In this book, "the World Bank" and "the Bank" refer to the International Bank for Reconstruction and Development (IBRD) and its affiliate the International Development Association (IDA, established in 1960). As opposed to a second affiliate, the International Finance Corporation (IFC), the IBRD and IDA have the same staff, guidelines, and procedures (although different funding sources).

4. Immanuel Wallerstein, The Modern World System: Capitalist Agriculture and the Origins of the European World-Economy in the Sixteenth Century (New York: Academic Press, 1974), pp. 349-50; and Wallerstein, "Dependence in an Interdependent World: The Limited Possibilities of Transformation Within the Capitalist World-Economy," African Studies Review 17 (April 1974): 1-26.

5. Business Week (June 6, 1983), quoted in Ibon Facts and Figures , no. 149 (October 31, 1984): 3.

6. These were analyzed in what remains the most extensive and well-researched work on the World Banks operations in one country: Walden Bello et al., Development Debacle: The World Bank in the Philippines (San Francisco: Institute for Food and Development Policy, 1982), pp. 9-12, 198.

7. Most Bank mission reports, for example, have a life cycle that, for the purposes at hand, can be reduced to the following: The mission writes a "confidential" report, which may go through a number of drafts. Sometimes this report is discussed with the government concerned. Then that report, minus its more critical or controversial statements, becomes a "restricted" document, which "may be used by recipients only in the performance of their official duties." This version is sent to various member governments and U.N. agencies. Finally, some of these documents are sanitized further and become available to the public (or, at least, to the Western public).

8. See List of Persons Interviewed.

9. The term triple alliance is borrowed from Peter Evans, Dependent Development: The Alliance of Multinational, State, and Local Capital in Brazil (Princeton, N.J.: Princeton University Press, 1979). As is indicated by the book's title, Evans's triple alliance referred to multinational corporations, local private entrepreneurs, and state-owned enterprises in Brazil.

10. Much of this literature came from people connected with the Bank or the Fund as Staff or consultants. Finance and Development , a quarterly publication of the IMF and the World Bank, is filled with references to such articles and books. Other examples include Judith Tendler, Inside Foreign Aid (Baltimore: Johns Hopkins University Press, 1975); and Escott Reid, Strengthening the World Bank (Chicago: Adlai Stevenson Institute, 1973). See also the work of the Institute for International Economics in Washington, D.C.

11. See, for instance, Edward Mason and Robert Asher, The World Bank Since Bretton Woods (Washington, D.C.: Brookings Institution, 1973), pp. 420-56; and Joseph Gold, Conditionality , IMF Pamphlet Series 31, 1979.

12. John Williamson, The Lending Policies of the International Monetary Fund , Policy Analyses in International Economics 1 (Washington, D.C.: Institute for International Economics, August 1982); Sidney Dell, On Being Grandmotherly: The Evolution of IMF Conditionality , Essays in International Finance 144 (Princeton, N.J.: International Finance Section, Department of Economics, Princeton University, October 1981); and Bahram Nowzad, The IMF and Its Critics , Essays in International Finance 146 (Princeton, N.J.: International Finance Section, Department of Economics, Princeton University, December 1981). Williamson's August 1982 work is based, in large part, on a March 24-26, 1982, conference on IMF conditionality sponsored by the Institute for International Economics. Papers from that conference, held at Airlie House, Virginia, were published in John Williamson, ed., IMF Conditionality (Washington, D.C.: Institute for International Economics, 1983).

13. Williamson, Lending Policies , p. 62.

14. Ibid., p. 35; Nowzad, IMF and Its Critics , p. 25.

15. See Chapter 2, below.

16. Teresa Hayter, Aid as Imperialism (Harmondsworth: Penguin, 1971); Cheryl Payer, The Debt Trap: The International Monetary Fund and the Third World (New York: Monthly Review Press, 1974); and Cheryl Payer, The World Bank: A Critical Analysis (New York: Monthly Review Press, 1982). See also Susan George, How the Other Half Dies: The Real Reasons for World Hunger (Montclair, N.J.: Allanheld, Osmun, 1977); Denis Goulet and Michael Hudson, The Myth of Aid: The Hidden Agenda of Development Reports (Maryknoll, N.Y.: Orbis Books, n.d.); Frances Moore Lappé, Joseph Collins, and David Kinley, Aid as Obstacle: Twenty Questions About Our Foreign Aid and the Hungry (San Francisco: Institute for Food and Development Policy, 1980).

17. Payer, Debt Trap , pp. xii-xiii.

18. Ibid., p. xi.

19. Ibid.

20. This latter group includes, for instance, Payer, Debt Trap ; Betsy Hartmann and James Boyce, Needless Hunger: Voices from a Bangladesh Village (San Francisco: Institute for Food and Development Policy, 1979); and Ernest Feder, The World Bank and the Expansion of Industrial Monopoly Capital into Underdeveloped Agricultures (Quezon City: University of the Philippines Law Center, n.d.).

21. V. I. Lenin, Imperialism: The Highest Stage of Capitalism (New York: International Publishers, 1930), p. 85.

22. Included within this school are André Gunder Frank, Teotonio Dos Santos, Guillermo O'Donnell, Colin Leys, Walter Rodney, and Oswaldo Sunkel. See, for example, André Gunder Frank, Capitalism and Underdevelopment in Latin America: Historical Studies of Chile and Brazil (New York: Monthly Review Press, 1967); André Gunder Frank, "The Development of Underdevelopment," Monthly Review 18 (September 1966): 17-31; Teotonio Dos Santos, "The Structure of Dependence," American Economic Review 60 (May 1970): 235-46; Guillermo O'Donnell, Modernization and Bureaucratic Authoritarianism (Berkeley and Los Angeles: University of California Press, 1973); Colin Leys, Underdevelopment in Kenya: The Political Economy of Neo-Colonialism, 1964-1971 (Berkeley and Los Angeles: University of California Press, 1975); Walter Rodney, How Europe Under-developed Africa (London and Dar es Salaam: Bogle-L'Ouverture Publications, 1972); and Oswaldo Sunkel, "Transnational Capitalism and National Disintegration in Latin America," Social and Economic Studies 22 (March 1973): 132-76.

23. See Frank, Capitalism and Underdevelopment ; and André Gunder Frank, Latin America: Underdevelopment or Revolution (New York: Monthly Review Press, 1969). Cf. Wallerstein, Modern World System , p. 349.

24. Paul Baran, The Political Economy of Growth (New York: Monthly Review Press, 1957).

25. Hyan-Chin Lim, "Dependent Development in the World-System: The Case of South Korea, 1963-1979," Ph.D. dissertation, Harvard University, 1982, p. 27.

26. Marcos Arruda, "A Study of Capitalism in Brazil," Latin American Perspectives 7 (Fall 1979): 34. They themselves would perhaps prefer to see their work in the tradition of Raul Prebisch's structural school.

27. Evans, Dependent Development ; Fernando Henrique Cardoso and Enzo Faletto, Dependency and Development in Latin America , trans. Marjory Marringly Urquidi (Berkeley and Los Angeles: University of California Press, 1979); and Lim, "Dependent Development."

28. Wallerstein is of neither the dependency nor the new dependency school. His school of thought focuses on "class conflicts generated by the global relations of production," rather than on contradictions between nations. Wallerstein "explicitly selects the world capitalist system, and not the nation-state, as the unit of analysis for comparative purposes. He stresses that capitalism was from the beginning an affair of the world economy and not of nation-states" (Arruda, "Study of Capitalism," p. 34).

29. See Immanuel Wallerstein, "The Rise and Future Demise of the World Capitalist System's Concepts for Comparative Analysis," Comparative Studies in Society and History 16 (September 1974): 387-415.

30. One of the most influential theoreticians of Third World underdevelopment, who also drew heavily from the dependency school, was Samir Amin. Amin focused on the historical process of how these LDC economies became "disarticulated" by serving external needs. See, for example, Samir Amin, Neo-Colonialism in West Africa , trans. Francis McDonagh (New York: Monthly Review Press, 1973); and other works by the same author: Accumulation on a World Scale: A Critique of the Theory of Underdevelopment , trans. Brian Pearce, 2 vols. in 1 (New York: Monthly Review Press, 1974); Unequal Development: An Essay on the Social Formatrim of Peripheral Capitalism , trans. Brian Pearce (New York: Monthly Review Press, 1976); and "Self-Reliance and the New International Economic Order," Monthly Review 29 (July-August 1977): 1-21.

31. Lim follows Evans's terminology.

32. Cardoso and Faletto, Dependency and Development , p. 22.

33. Ibid., pp. 174, 153.

34. Fernando Henrique Cardoso and Enzo Faletto, Dependencia e Desenvolvimento na America Latina: Ensaio de Interpretaçao Sociologica (Rio de Janeiro: Editora Zahar, 1973), p. 140, quoted and translated in Evans, Dependent Development , p. 27.

35. Evans, Dependent Development , p. 4.

36. Ibid., p. 32. This is a domestic-international triple alliance, to be distinguished from the domestic triple alliance.

37. Lim, "Dependent Development," p. 6.

38. In particular, Lim underestimated the strength of TNCs in joint-venture setups and ignored the strong bargaining position afforded TNCs through their control of technology. Ibid., pp. 44, 88-89, 132, 139, 184, 189-90.

39. Two researchers delved into this kind of "class segments" analysis in their work on Chile. See M. Zeitlin and R. Ratcliff, "Research Methods for the Analysis of the Internal Structure of the Dominant Classes: The Case of Landlords and Capitalists in Chile," Latin American Research Review 10 (Fall 1975): 54.

40. Sunkel, "Transnational Capitalism," p. 146.

41. Baran, Political Economy of Growth , p. 195; see also pp. 205, 255. Cf. Evans, Dependent Development , pp. 282-83.

42. Cardoso and Faletto, Dependency and Development , p. 167; see also p. 210.

43. Evans, Dependent Development , p. 282. Cf. Lim, "Dependent Development," p. 35. Yet Evans tended to see the distinctions as being big versus small capitalists rather than as transnationalist versus nationalist.

44. In the case of Brazil, Marcos Arruda began to put factional life into Evans's state. As Arruda phrased it, "The question of who controls the state is key for the determination of ... in which direction and for whose benefit state power is being used." Evans, Arruda argued in 1979, "leaves a doubt as to which interest group is ultimately hegemonic. My position is that a globalist faction of the Brazilian state bourgeoisie is currently hegemonic and controls the core of state power." Neither Arruda nor the others, however, brought the analysis down to the specific ministries through which globalist influences are translated into policy (Arruda, "Study of Capitalism," p. 39; see also p. 33). While Arruda is more correctly placed in the Wallerstein world-systems school, his work has contributed to the theoretical advancement of the new dependentistas .

1. The history of the two institutions is extensively chronicled in the World Bank's semi-official history by Edward Mason and Robert Asher, The World Bank Since Bretton Woods (Washington, D.C.: Brookings Institution, 1973); and the IMF's multivolume official histories: J. Keith Horsefield, ed., The International Monetary Fund, 1945-1965: Twenty Years of International Monetary Cooperation , 3 vols. (Washington, D.C.: IMF, 1969); Margaret G. de Vries, ed., The International Monetary Fund, 1966-1971: The System Under Stress , 2 vols. (Washington, D.C.: IMF, 1976); and Margaret G. de Vries, ed., The International Monetary Fund, 1972-1978: Cooperation on Trial , 3 vols. (Washington, D.C.: IMF, 1985). See also the series of articles from Finance and Development commemorating the fortieth anniversary of Bretton Woods and republished by the Bank and the Fund in 1984 under the title Bretton Woods at Forty: 1944-84 (Washington, D.C.: World Bank and IMF, 1984).

2. See, for example, David H. Blake and Robert S. Walters, The Politics of Global Economic Relations (Englewood Cliffs, N.J.: Prentice-Hall, 1976), pp. 11-14; Fred Block, The Origins of International Economic Disorder: A Study of United States International Monetary Policy from World War II to the Present (Berkeley and Los Angeles: University of California Press, 1977), pp. 33-38.

3. Gabriel Kolko, The Politics of War: The War and United States Foreign Policy, 1943-1945 (New York: Random House, 1968). See also U.S. Congress, House, Committee on Banking and Currency, Participation of the United States in the International Monetary Fund and the International Bank for Reconstruction and Development — Report to Accompany H.R. 3314, A Bill to Provide for the Participation of the United states in the international Monetary Fund and the International Bank for Reconstruction and Development , Report 629, 79th Cong., 1st sess., 1945, p. 2.

4. Robert Gilpin, "The Politics of Transnational Economic Relations," in Transnational Relations and World Politics , ed. Robert Keohane and Joseph Nye (Cambridge, Mass.: Harvard University Press, 1971), pp. 57-59; Block, Origins , pp. 32-69; Dean Acheson, Present at the Creation (New York: W.W. Norton, 1969), p. 81; Richard N. Gardner, Sterling-Dollar Diplomacy in Current Perspective: The Origins and the Prospects of Our International Economic Order , rev. ed. (New York: Columbia University Press, 1980).

5. Keynes's original draft of what he titled the Clearing Union (later called the IMF), cited in Roy F. Harrod, The Lift of John Maynard Keynes (London: Macmillan, 1951; reprint ed. Harmondsworth: Penguin Books, 1972), p. 655.

6. According to Gardner, Sterling-Dollar Diplomacy , p. xiii, this note from one of the Anglo-American meetings on the Bank and the Fund said in full: "In Washington, Lord Halifax / Once whispered to Lord Keynes: / 'It's true they have the money bags / But we have all the brains.'"

7. Although discussions on the Bank and the Fund were separate, and the Fund commanded the most attention, for the concerns at hand they can be treated together. See U.S. Department of State, Proceedings and Documents of United Nations Monetary and Financial Conference, Bretton Woods, New Hampshire, July 1-22, 1944 , Department of State Publication 2866, International Conference Series 1, 3; 2 vols. (Washington, D.C.: U.S. Department of State, 1948).

8. John Maynard Keynes, The Collected Writings of John Maynard Keynes , ed. Donald Moggridge, vol. 26: Activities 1941 - 1946, Shaping the Post-War World: Bretton Woods and Reparations (Cambridge, England: Macmillan, 1979), pp. 211, 221.

9. Ibid., pp. 221-22; Harrod, Life of Keynes , pp. 686, 746; and "Report of the Committee on Site," March 13, 1946, in IMF, Selected Documents: Board of Governors Inaugural Meeting, Savannah, Georgia, March 8-18, 1946 , 1946, pp. 29-30.

10. Horsefield, International Monetary Fund , vol. 1, p. 95. (The Soviet Union signed the agreements establishing the Bank and the Fund, but never ratified them.)

11. Keynes, Activities 1941-1946 , pp. 212, 222. See also Gabriel Kolko and Joyce Kolko, Limits of Power: The World and United States Foreign Policy, 1945-1954 (New York: Harper and Row, 1972), p. 85; and Bereket Hable Selassie, "The World Bank: Power and Responsibility in Historical Perspective," African Studies Review 27 (December 1984): 35-46.

12. Keynes, vol. 25: Activities I940-1944, Shaping the Post-War World: The Clearing Union , ed. Moggridge (Cambridge, England: Macmillan, 1979), p. 404; and Keynes, Activities 1941-1946 , pp. 34, 65, 68-69, 109, 223; Harrod, Lift of Keynes , pp. 686-87; Horsefield, International Monetary Fund , vol. 1, pp. 67-73, 101-2; Robert W. Oliver, International Economic Cooperation and the World Bank (London: Macmillan, 1975), p. 138. See also David P. Calleo and Benjamin M. Rowland, America and the World Political Economy: Atlantic Dreams and National Realities (Bloomington: Indiana University Press, 1973), p. 40; and Sidney Dell, On Being Grandmotherly: The Evolution of IMF Conditionality , Essays in International Finance 144 (Princeton, N.J.: International Finance Section, Department of Economics, Princeton University, 1981), pp. 1-7.

13. Harrod, Life of Keynes , pp. 753-54. On the loan, see Gardner, Sterling-Dollar Diplomacy ; and Keynes, vol. 24: Activities 1944-1946: The Transition to Peace , ed. Moggridge (Cambridge, England: Macmillan, 1979).

14. Keynes, Activities 1941-1946 , pp. 41, 42, 63; Robert W. Oliver, Early Plans for a World Bank , Princeton Studies in International Finance 29 (Princeton, N.J.: International Finance Section, Department of Economics, Princeton University, 1971), p. 47. See Harrod, Life of Keynes , pp. 691, 752-53.

15. Acheson, Present at the Creation , p. 83; Harrod, Life of Keynes , pp. 575-76.

16. Keynes, Activities 1941-1946 , pp. 215, 227.

17. Paraphrasing of Article 1, in A. W. Hooke, The International Monetary Fund: Its Evolution, Organization and Activities , IMF Pamphlet Series 37, 1981; reprint ed. April 1982, p. 2.

18. Keynes, Activities 1941-1946 , p. 215.

19. World Bank, The World Bank, IDA, and IFC: Policies and Operations , June 1969, p. 3.

20. U.S. Congress, House, Committee on Banking and Currency, Participation of the United States in the International Monetary Fund and the International Bank for Reconstruction and Development , p. 4.

21. U.S. Treasury Department, Questions and Answers on the International Monetary Fund (Washington, D.C., 1944), quoted in Mason and Asher, World Bank , p. 18. See World Bank, Articles of Agreement of the International Bank for Reconstruction and Development (As Amended Effective December 17, 1965 ), art. 1.

22. On this, see World Bank, Articles of Agreement , art. 3, sec. 1; Acheson, Present at the Creation , p. 84; Oliver, Early Plans , p. 42; and Gardner, Sterling-Dollar Diplomacy , p. 85.

23. Gardner, Sterling-Dollar Diplomacy , p. 291.

24. World Bank, Articles of Agreement , art. 3, sec. 1(a).

25. Ibid., art. 3, sec. 3(c).

26. Mason and Asher, World Bank , p. 430; on these early loans, see pp. 153-54.

27. See Kolko and Kolko, Limits of Power , pp. 85-86; Gabriel Kolko, The Roots of American Foreign Policy (Boston: Beacon Press, 1969), p. 70; Mason and Asher, World Bank , p. 504.

28. IMF, Articles of Agreement of the International Monetary Fund (July 22, 1944), art. 5, sec. 4. Section 3 is also of relevance. See Joseph Gold, "Use of the Fund's Resources," in International Monetary Fund , ed. Horsefield, vol. 2, pp. 522-23.

29. Communication from IMF managing director to Chilean government preceding September 1947 loan, quoted in Horsefield, International Monetary Fund , vol. 1, p. 192; see also pp. 223-24.

30. Emil G. Spitzer, "Stand-by Arrangements: Purposes and Form," in International Monetary Fund , ed. Horsefield, vol. 2, p. 484; Frank A. Southard, Jr., The Evolution of the International Monetary Fund , Essays in International Finance 135 (Princeton, N.J.: International Finance Section, Department of Economics, Princeton University, 1979), p. 19; Samuel Lichtensztejn, The IMF and the Experience of Latin America's Southern Cone , DEE/D/41/i (Mexico: Instituto Latino-americano de Estudios Transnacionales, June 1980). See Per Jacobson, International Monetary Problems, 1957-63 (Washington, D.C.: IMF, 1964), p. 20, for a summary of these different "degrees of conditionality."

31. The Executive Board's decision adopting the principle of conditionality was taken on February 13, 1952, See Gold, "Use of the Fund's Resources," in International Monetary Fund , ed. Horsefield, vol. 2, pp. 523-24, 526-30; and IMF, "Selected Decisions of the Executive Directors (as of December 31, 1965)," in ibid., vol. 3, pp. 228-30. According to Dell ( On Being Grandmotherly , p. 10), "it was a desire to enlist the cooperation of the United States as the principal source of credit that prompted other Fund members to give way to American views on the question of conditionality, rather than any conviction on their part that the adoption of the U.S. concept of conditionality Was indispensable for a successfully functioning IMF." See also John Williamson, The Lending Policies of the International Monetary Fund , Policy Analyses in International Economics 1 (Washington, D.C.: Institute for International Economics, 1982), p. 11.

32. Quoted in J. Keith Horsefield and Gertrud Lovasy, "Evolution of the Fund's Policy on Drawings," in International Monetary Fund , ed. Horsefield, vol. 2, p. 404. See also Dell, On Being Grandmotherly , pp. 10-11.

33. Margaret de Vries, "The Process of Policymaking," in International Monetary Fund , ed. Horsefield, vol. 2, p. 11 See also Southard, Evolution , pp. 19-20; and Cheryl Payer, The Debt Trap: The International Monetary Fund and the Third World (New York: Monthly Review Press, 1974), appendix 2, p. 219. Member countries are represented by twenty full-time executive directors. Southard was U.S. executive director to the IMF from February 1949 to November 1962, and IMF deputy managing director from then until February 1974.

34. World Bank, Articles of Agreement , art. 4, sec. 10. "Although there is no similar provision in the Articles of the Fund, the last sentence of Article I ... has been understood to imply what is made express in the Bank's provision on political activity" (Joseph Gold, The Rule of Law in the International Monetary Fund , IMF Pamphlet Series 32, 1980, p. 59).

35. IBRD, Second Annual Report, 1947-1948 , 1948, p. 14. On the Polish loan, see also Gardner, Sterling-Dollar Diplomacy , p. 296. Poland subsequently withdrew from the Bank.

36. Interview with Dragoslav Avramovic, Geneva, Switzerland, July 2, 1982. See Mason and Asher, World Bank , pp. 28, 105-49, 151, 158.

37. World Bank, Third Annual Report, 1947-1948 , 1948, p. 20; and World Bank, The International Bank for Reconstruction and Development, 1946-53 (Baltimore: Johns Hopkins University Press, 1954), p. 112.

38. Mason and Asher, World Bank , p. 422.

39. World Bank, Fifth Annual Report, 1949-1950 , 1950, pp. 11-12.

40. World Bank, Tenth Annual Report, 1954-1955 , 1955, p. 35.

41. Mason and Asher, World Bank , p. 701; see also p. 291.

42. Ibid., pp. 316, 437.

43. Ibid., pp. 172, 689-91. The $75 million loan to Iran in 1957 is of particular interest, as it was the Bank's first program loan to an LDC. However, unlike program loans to developed countries, this balance-of-payments support came with conditions. In particular, through the vehicle of the loan, the Bank played an important role in Iran's seven-year development plan and in building an institution to implement the plan. On this, see ibid., p. 274.

44. Ibid., pp. 297, 324-31, 438. On EDI, see also Guy de Lusignan, "The Bank's Economic Development Institute," Finance and Development 23 (June 1986): 28-31; "The World Bank's Economic Development Institute," World Bank News 3 (August 30, 1984): 3-4; James Morris, The Road to Huddersfield: The Story of the World Bank (n.p.: Minerva Press, 1963), pp. 53-54; and Robert Stauffer, Transnational Corporations and the Political Economy of Development: The Continuing Philippine Debate , Research Monograph 11 (Sydney, Australia: Faculty of Economics, University of Sydney, 1980), p. 12.

45. The ECLA document in this regard is Raul Prebisch, The Economic Development of Latin America and Its Principal Problems , United Nations/ECLA, E/CN.12/89/Rev. 1, Santiago, Chile, 1950. For some interesting archival research on import substitution, see Sylvia Maxfield and James H. Nolt, "Protectionism and the Internationalization of Capital: U.S. Sponsorship of Import Substitution Industrialization in the Philippines, Turkey, and Argentina," draft, Chicago: University of Chicago, May 22, 1986.

46. Mason and Asher, World Bank , pp. 372, 455.

47. Including IDA and IFC loans: ibid., p. 678.

48. For more on India, see ibid., pp. 99, 372-73, 422, 455, 458, 494, 514-17; and Payer, Debt Trap , pp. 166-83. The Indian consortium was the Bank's first effort at what evolved into the consultative group.

49. Mason and Asher, World Bank , p. 426.

50. On Brazil, see Payer, Debt Trap , pp. 143-65; Payer, The World Bank: A Critical Analysis (New York: Monthly Review Press, 1982), pp. 99-104; Manchester Guardian , June 30, 1958; Mason and Asher, World Bank , pp. 160, 425, 464; and Horsefield, International Monetary Fund , vol. 1, p. 381. The Bank, in general, found it ''difficult, if not impossible, to impose conditions on a borrower unless some elements in the borrowing country Consider it to be in the country's interest to meet these conditions'' (Mason and Asher, World Bank , p. 438).

51. Philippines (Republic), Philippine Trade Act of 1946 , Title 3, sec. 2. This act is known as the Bell Trade Act.

52. For more on the Philippines during the late 1940s and 1950s, see Miguel Cuaderno, Sr., Problems of Economic Development (The Philippines — A Case Study ) (Manila: n.d.). This covers the fifteen-year period (1946-1960) when Cuaderno was governor of the Central Bank. of the Philippines. See also Miguel Cuaderno, Sr., Guideposts to Economic Stability and Progress: A Selection of the Speeches and Articles of Miguel Cuaderno, Sr., Governor of the Central Bank of the Philippines , rev. ed. (Manila: Bookman Printing House, for Central Bank of the Philippines, 1960); Shirley Jenkins, American Economic Policy Toward the Philippines (Stanford, Calif.: Stanford University Press, for American Institute of Pacific Relations, 1954); David Wurfel, "Problems of Decolonization," in The United States and the Philippines , ed. Frank H. Golay (Englewood Cliffs, N.J.: Prentice-Hall, for American Assembly, Columbia University, 1966), pp. 149-73; Robert E. Baldwin, Foreign Trade Regimes and Economic Development: The Philippines (New York: Columbia University Press, for National Bureau of Economic Research, 1975), pp. 17-49; Frank H. Golay, The Philippines: Public Policy and National Economic Development (Ithaca, N.Y.: Cornell University Press, 1961), pp. 140-62; and Payer, Debt Trap , pp. 50-65.

54. Despite accounting for a third of Bank membership in 1967, African countries had less than 8 percent of the voting power (Mason and Asher, World Bank , pp. 63-64). Similar shifts were, of course, reflected in IMF membership, which is a prerequisite for Bank membership (Margaret de Vries, "Setting Par Values," in International Monetary Fund , ed. Horsefield, vol. 2, pp. 87-89; de Vries, International Monetary Fund, 1966-1971 , vol. 1, p. 570; and interview with Ernest Leung, Metro-Manila, Philippines, January 30, 1981).

55. For the U.S. role in postwar coups, see Noam Chomsky and Edward S. Herman, The Political Economy of Human Rights , vol. 1: The Washington Connection and Third World Fascism (Boston: South End Press, 1979); and Richard J. Barnet, Intervention and Revolution: America's Confrontation with Insurgent Movements Around the World , rev. ed. (New York: New American Library, 1972).

56. The Bank largely stopped lending to developed countries by 1967 (Mason and Asher, World Bank , pp. 227, 458; Hooke, International Monetary Fund: Its Evolution, Organization and Activities , p. 4; interviews with Avramovic, July 2, 1982; and Leung, January 30, 1981).

57. De Vries, International Monetary Fund, 1966-1971 , vol. 1, chapter 28, "Growth of Responsibilities." This refers to the 1966-1971 period.

58. Margaret de Vries, "The Consultations Process," in International Monetary Fund , ed. Horsefield, vol. 2, p. 238.

59. De Vries, International Monetary Fund, 1966-1971 , vol. 1, pp. 575-76.

60. On these facilities, see Horsefield and Lovasy, "Evolution of the Fund's Policy on Drawings," in International Monetary Fund , ed. Horsefield, vol. 2, pp. 415-27; de Vries, International Monetary Fund, 1966 - 1971 , vol. 1, part 3, "General Resources: New Challenges and Responses," pp. 253-428; Calleo and Rowland, America and the World Political Economy , pp. 337-38, n. 2; Blake and Walters, Politics , pp. 46-47; Hooke, International Monetary Fund: Evolution, Organization and Activities , pp. 41-48.

61. Interview with Avramovic, July 2, 1982.

62. William Dale at conference on IMF conditionality, sponsored by Institute for International Economics, Airlie House, Virginia, March 24-26, 1982, quoted in Williamson, Lending Policies , p. 12.

63. Lichtensztejn, The IMF and the Southern Cone , p. 11; see Payer, Debt Trap .

64 . See Mason and Asher, World Bank , pp. 663-64.

65. On Brazil, see Payer, Debt Trap , pp. 143-65.

66. See Horsefield, International Monetary Fund , vol. 1, pp. 554-55, 604; de Vries, International Monetary Fund, 1966-1971 , vol. 1, p. 588. For the expansion of other IMF technical advice, see ibid., p. 579; and Manchester Guardian Weekly (May 7, 1978).

67. Quoted from Mason and Asher, World Bank , p. 376, also pp. 332, 376-77; and de Vries, International Monetary Fund, 1966-1971 , vol. 1, pp. 576, 590. The study on India was the Bank's Report to the President of IBRD and IDA on India's Economic Development Effort , 14 vols., 1965. Among the other studies were Ian Little, Tibor Scitovsky, and Maurice Scott, Industry and Trade in Some Developing Countries: A Comparative Study (London: Oxford University Press for the Development Centre of OECD, 1971); and Bela Balassa et al., The Structure of Protection in Developing Countries (Baltimore: Johns Hopkins University Press, 1971).

68. Mason and Asher, World Bank , p. 455. In this battle with nationalist factions, India became the Banks largest borrower by the early 1960s and (up to mid-I967) the LDC that had most heavily borrowed from the IMF (ibid., p. 678; Payer, Debt Trap , p. 166).

69. Mason and Asher, World Bank , pp. 432-33.

70. Teresa Hayter, Aid as Imperialism (Harmondsworth: Penguin, 1971), pp. 57-58.

71. Quoted from David Lilienthal, The Journals of David Lilienthal , vol. 5: The Harvest Years (New York: Harper & Row, 1971), p. 538 (entry for December 19, 1963), Bruce Nissen, "Building the World Bank," in The Trojan Horse: A Radical Look at Foreign Aid , ed. Steve Weissman (Palo Alto, Calif.: Ramparts Press, 1975), p. 53; Mason and Asher, World Bank , p. 203. In 1963 the United States controlled 30 percent of the total voting power in the World Bank (Morris, Road to Huddersfield , pp. 44-45).

72. The 1,057 loans and credits of the Bank group as of June 30, 1971, broke down as follows: 30 were program or nonproject; 1,027 were project. "With the exception of a loan to Iran in 1957, all the Bank program loans, until the loan to Nigeria in 1971, were made to developed member countries" (Mason and Asher, World Bank , pp. 229, 265, 430).

73. The loan's conditions were basically provisions for consultations; there were no strict performance clauses (de Vries, International Monetary Fund, 1966-1971 , vol. 1, pp. 338-47; Dell, On Being Grandmotherly , pp. 12-13).

74. Mason and Asher, World Bank , p. 547; on this earlier period, see also ibid., pp. 538-50; and Horsefield, International Monetary Fund , vol. 1, pp. 340-43.

75. Mason and Asher, World Bank , p. 505.

76. Ibid., p. 512, table 15-1, and p. 536. For more on consultative groups, see ibid., pp. 510-28; and de Vries, International Monetary Fund, 1966-1971 , vol. 1, pp. 612-13; Escott Reid Strengthening the World Bank (Chicago: Adlai Stevenson Institute, 1973), pp. 146-48.

77. Both men entered office in 1963 (Mason and Asher, World Bank , p. 550). These memoranda followed on the heels of a January 1966 paper on Bank and Fund collaboration (IMF, "Further Steps for Collaboration with the IBRD," EBD/66/9, Revision 1, January 19, 1966, revised February. 17, 1966).

78. IMF, "Memorandum on Fund-Bank Collaboration," from the IMF managing director to department heads, December 13, 1966, unnumbered p. 1.

79. Ibid., unnumbered pp. 1-2.

80. IMF and World Bank, "Further Steps for Collaboration Between the IMF and the IBRD," joint memorandum by the managing director of the IMF and president of the IBRD, February 19, 1970, unnumbered p. 1.

81. De Vries, International Monetary Fund, 1966-1971 , vol. 1, p, 613.

82. IMF and World Bank, "Collaboration Between the IMF and the IBRD," unnumbered p. 1.

83. See Diosdado Macapagal, Five-Year Integrated Socio-Economic Program for the Philippines , Address on the State of the Nation to the Fifth Congress of the Republic of the Philippines, January 22, 1962. This glosses over the question of exactly what sort of industrialization the Philippine economy underwent in the 1950s. On this, see especially Payer, Debt Trap , pp. 54-60; Edberto M. Villegas, The Philippines and the IMF-World Bank Conglomerate , Philippines in the Third World Papers, Series 17 (Quezon City: Third World Studies Center, University of the Philippines at Diliman, May 1979), pp. 6-7; and Guy Whitehead, "Philippine-American Economic Relations," Pacific Research 4 (January-February 1973): 3-6.

84. Quentin Reynolds and Geoffrey Bocca, Macapagal: The Incorruptible (New York: David McKay, 1965), p. 174; Diosdado Macapagal, A Stone for the Edifice: Memoirs of a President (Quezon City: MAC Publishing House, 1968), pp. 60-61; and interview with Macapagal, Metro-Manila, Philippines, March 27, 1981.

85. Interview with Macapagal, March 27, 1981.

86. Ibid.; see also Macapagal, Memoirs , p. 60.

87. The head of the IMF's Asian Division registered a complaint against this U.S. interference (interview with Leung, January 15, 1981).

88. For details, see Macapagal, Memoirs , annex A, p. 31; and J. Keith Horsefield, "Charges, Repurchases, Selection of Currencies," in International Monetary Fund , ed. Horsefield, vol. 2, table 22, p. 462. Ironically, the Philippines never made use of that $28.3 million committed by the IMF (interview with Macapagal, March 27, 1981; verified by data provided by Department of Economic Research, Central Bank of the Philippines, April 15, 1981).

The literature concerning the IMF conditions and the economic and political aftereffects of decontrol is fairly extensive: see Payer, Debt Trap , chap. 3, "Exchange Controls and National Capitalism: The Philippines Experience," pp. 50-74; Alejandro Lichauco, "The Lichauco Paper: Imperialism in the Philippines," Monthly Review 25 (July-August 1973): 1-111; Benito Legarda y Fernandez [Benito Legarda, Jr.], "Foreign Exchange Decontrol and the Redirection of Income Flows," Philippine Economic Journal 1 (First Semester 1962): 18-27; M. Treadgold and R. Hooley, "Decontrol and the Direction of Income Flows: A Second Look," Philippine Economic Journal 6 (Second Semester 1967): 117-20; John Power and Gerardo Sicat, The Philippines: Industrialization and Trade Policies (London: Oxford University Press, for Development Centre of the OECD, 1971), pp. 38-50; Vicente B. Valdepeñas, Jr., and Gemiliano M. Bautista, The Emergence of the Philippine Economy (Manila: Papyrus Press, May 1977), pp. 188-224; and Robin Broad, International Actors and Philippine Authoritarianism (Manila: Nationalist Resource Center, September 1981), pp. 8-9.

89. Quoted from interview with Avramovic; July 2, 1982. Interview with Armand Fabella, Metro-Manila, Philippines, December 8, 1980.

90. Interview with Fabella, December 8, 1980.

91. Interview with Avramovic, July 2, 1982.

92. Fabella (December 8, 1980) called it a "joint mission." Interviews with Macapagal, March 27, 1981; and with Hilarion Henares, Jr., Metro-Manila, Philippines, February 27, 1981.

93. Macapagal, Memoirs , p. 69; and Macapagal, Five-Year Integrated Socio-Economic Program for the Philippines , appendix 2, "Economic Growth in the Philippines: A Preliminary Report Prepared by the Staff of the IBRD, January 4, 1962," pp. 1-73.

94. Interview with Avramovic, July 2, 1982; and C. Hsieh, Employment Problems and Policies in the Philippines , United Nations, International Labour Organization, Employment Research Papers (Geneva, 1969), p. 27. Already during this period, Avramovic began airing the views that would lead to his departure from the Bank. "On the sly," according to Macapagal's National Economic Council chairman, Henares, "Avramovic advised us not to let the IMF and the World Bank control us" (interview with Henares, February 27, 1981). The Program Implementation Agency, staffed by "young technical people," was renamed the Presidential Economic Staff during Marcos's first term. After martial law, Marcos merged his own economic staff with the by then less powerful, more nationalist-oriented National Economic Council, to form the National Economic and Development Authority, the nation's highest economic planning body (Romeo B. Ocampo, "Technocrats and Planning: Sketch and Exploration," Philippine Journal of Public Administration 15 [January 1971]: 31-64).

95. Interview with Benito Legarda, Jr., Metro-Manila, Philippines, February 2, 1981. Legarda was then assistant director of the Central Banks Department of Economic Research.

96. Ibid.

97. Interview with Fabella, December 8, 1980.

98. Interview with Armado Castro, Metro-Manila, Philippines, January 20, 1981.

99. Interview with Legarda, February 2, 1981. This was up from the pre-float level of 3.90 to 1.00 (ibid.). IMF officials Obviously did not totally understand the economic forces at work, either.

100. Ibid. On the specific conditions as well as the economic and political aftereffects of the 1970 IMF program, see Payer, Debt Trap , pp. 71-74; Lichauco, "Lichauco Paper"; Villegas, Philippines , p. 10; and Broad, International Actors , pp. 9-10. Specifically on the investment acts, see Gonzalo M. Jurado, "Industrialization and Trade," in Philippine Economic Problems in Perspective , ed. Jose Encarnacion, Jr. (Quezon City: Institute of Economic Development and Research, School of Economics, University of the Philippines, 1976), p. 318; and Robyn Lim, "The Multinationals and the Philippines Since Martial Law," in A Multinational Look at the Transnational Corporation , ed. Michael T. Skully (Sydney: Dryden Press Australia, 1978), pp. 127-28.

101. Quoted in Robert Stauffer, "The Political Economy of Refeudalization," in Marcos and Martial Law in the Philippines , ed. David A. Rosenberg (Ithaca, N.Y.: Cornell University Press, 1979), p. 196.

102. This was, more officially, House Joint Resolution 2, signed into law by Marcos on August 4, 1969 (Alejandro Lichauco, "IMF-World Bank Group, the International Economic Order and the Philippine Experience," amended initial draft of paper presented at St. Scholastica's College, Manila, September 3, 1976, pp. 63-66).

103. Cited in Williamson, Lending Policies , p. 23.

1. Michael Moffitt, The World's Money: International Banking from Bretton Woods to the Brink of Insolvency (New York: Simon and Schuster, 1983), p. 30.

2. For the early effects of the Vietnam War on the U.S. economy, see Gabriel Kolko, The Roots of American Foreign Policy (Boston: Beacon Press, 1969), pp. v-vi, 88-132.

3. In 1975, the Washington, D.C.-based Indochina Resource Center estimated the U.S. expenditure on the Indochina wars at $150 billion, compared with approximately $3 billion channeled to the North Vietnamese and National Liberation Front from China and the Soviet Union (Indochina Resource Center, A Time to Heal: The Effects of the War on Viet Nam, Laos, Cambodia and America [Washington, D.C.: Indochina Resource Center, 1976], p. 4).

4. David P. Calleo and Benjamin M. Rowland, America and the World Political Economy: Atlantic Dreams and National Realities (Bloomington: Indiana University Press, 1973), p. 120.

5. The subject of the early 1970s dollar crises and the related shifting U.S. international political position has been dealt with extensively by both political scientists and economists. Some key readings in this broad literature are David H. Blake and Robert S. Walters, The Politics of Global Economic Relations (Englewood Cliffs, N.J.: Prentice-Hall, 1976); Calleo and Rowland, America and the World Political Economy ; Susan Strange, "The Politics of International Currencies," World Politics 23 (January 1971): 215-31; Fred Block, The Origins of International Economic Disorder: A Study of United States International Monetary Policy from World War II to the Present (Berkeley and Los Angeles: University of California Press, 1977), pp. 164-225; Margaret G. de Vries, The International Monetary Fund, 1966-1971: The System Under Stress , 2 vols. (Washington, D.C.: IMF, 1976), vol. 1, pp. 527-30; Stephen D. Cohen, International Monetary Reform, 1964-1969 (New York: Praeger, 1970); John Williamson, The Failure of World Monetary Reform, 1971-1974 (New York: New York University Press, 1977), chapter 9, "Why Bretton Woods Collapsed"; and Robert Triffin's classic Gold and the Dollar Crisis: The Future of Convertibility , rev. ed. (New Haven, Conn.: Yale University Press, 1961), which warned of the impending breakdown of the Bretton Woods system.

6. See Neil Sheehan, Hedrick Smith, E. W. Kenworthy, and Fox Butterfield, The Pentagon Papers (New York: Bantam Books, 1971), pp. 589-93.

7. Kolko, Roots , p. 88.

8. Willy Brandt, Chairman, Report of the Independent Commission on International Development Issues — North-South: A Program for Survival (Cambridge, Mass.: MIT Press, 1980), p. 203 (hereafter cited as Brandt Commission Report).

9. William H. Branson, "Trends in United States International Trade and Investment Since World War II," in The American Economy in Transition , ed. Martin Feldstein (Chicago: University of Chicago Press, for National Bureau of Economic Research, 1980), p. 185.

2. For the early effects of the Vietnam War on the U.S. economy, see Gabriel Kolko, The Roots of American Foreign Policy (Boston: Beacon Press, 1969), pp. v-vi, 88-132.

10. For details of the interactions, see Branislav Gosovic and John Ruggie, "On the Creation of a New International Economic Order," International Organization 30 (Spring 1976): 309-45. A more detailed description of what these new international economic order demands entailed can be found in the Brandt Commission Report; "The International Monetary System and the New International Economic Order," Development Dialogue , no. 2 (1980); and E.A. Brett, "The International Monetary Fund, the International Monetary System and the Periphery," IFDA Dossier , no. 5 (March 1979): 1-15. Perhaps the best overview of the scholarly debate over the significance of the North-South negotiations can be found in Michael W. Doyle, "Stalemate in the North-South Debate: Strategies and the New International Economic Order," World Politics 35 (April 1983): 426-64. Two perceptive analyses of what the North-South dialogue does and does not mean are Richard Nations, ''The Long Hard Road from Algiers to Cancún,'' Far Eastern Eco nomic Review (November 6, 1981): 108-10; and Elizabeth Bradshaw and Henry Holland, "Cancún: Rhetoric and Reality," Economic and Political Weekly (November 12, 1981): 1897-99.

11. Although more research is currently being undertaken on the new international division of labor, the questions it encompasses are, as yet, not sufficiently studied. The work by members of West Germany's Max Planck Institute, Folker Fröbel, Jürgen Heinrichs, and Otto Kreye, The New International Division of Labour: Structural Unemployment in Industrialized Countries and Industrialization in Developing Countries , trans. Pete Burgess (Cambridge, England: Cambridge University Press, 1980; trans. of original edition, Hamburg: Rowohlt Taschenbuch, 1977), which includes a detailed account of West Germany's textile and apparel industry, stands as a classic in the field. André Gunder Franks review, "New International Division of Labour?" ( Economic and Political Weekly [December 17, 1977]: 2093-96) is also useful. Samir Amin's work should be consulted; for example, "The New International Economic Order and the Future of International Economic Relations," paper presented at the International Conference of Alternative Development Strategies and the Future of Asia, New Delhi, March 11-17, 1980. See also Dieter Ernst, ed., The New International Division of Labor, Technology, and Underdevelopment: Consequences for the Third World (Frankfurt: Campus, 1980); and Gary Hawes, "Southeast Asian Agribusiness: The New International Division of Labor," Bulletin of Concerned Asian Scholars 14 (October-December 1982): 20-29.

12. A brief but insightful historical overview of the rise of corporate power over the last hundred years can be found in UNCTAD, Fibres and Textiles: Dimensions of Corporate Marketing Structure , TD/B/C.1/219, Geneva, November 19, 1980, pp. 3-19.

13. Calculated from Table 3.

14. In 1980, for example, average profit rates on U.S. direct investment abroad were above 30 percent in South Africa, Indonesia, Malaysia, Singapore, Hong Kong, Nigeria, Libya, Egypt, the Bahamas, and Argentina (calculated from computer printouts on U.S. direct foreign investment abroad, supplied by the U.S. Department of Commerce, November 1981). Profit rate equals income plus fees and royalties as percentage of total investment.

15. Survey of Current Business (February 1981): 41, 51.

16. See Walter Kiechel III, "Playing the Global Game," Fortune (November 16, 1981): 111-26.

17. The U.S. government (particularly the military), for example, invested substantial funding and effort in electronics research and development. By 1980, the Pentagon financed almost a third of U.S. research and development; the Ministry of International Trade and Industry financed 16 percent of Japan's ( International Herald Tribune , December 2, 1981).

18. Kiechel, "Playing the Global Game," p. 114.

19. Ibid., pp. 111-26.

20. Many volumes have been written on the microprocessor revolution. A good but already somewhat outdated bibliography can be found in Mary Alison Hancock, comp., Women and Transnational Corporations: A Bibliography Working Papers of the East-West Center Culture Learning Institute, Impact of Transnational Interactions Project (Honolulu: East-West Center, 1980), pp. 42-44. Of particular note are A. Sivanandan, "Imperialism in the Silicon Age," Monthly Review 32 (July-August 1980): 24-42; Barbara Ehrenreich and Annette Fuentes, "Life on the Global Assembly Line," Ms. Magazine (January 1981): 53; Rachel Grossman, "Women's Place in the Integrated Circuit," Southeast Asia Chronicle , no. 66 (January-February 1979), and Pacific Research 9 (July-August 1978); Peter Marsh, The Silicon Chip Book (London: Sphere Books, 1981);. J. Rada, The Impact of Microelectronics: A Tentative Appraisal of Information Technology , United Nations, International Labour Organization, World Employment Programme Study (Geneva, 1980). With special reference to the Philippines, see Enrico Paglaban, "Philippines: Workers in the Export Industry," Pacific Research 9 (March-June 1978).

21. The microprocessor work carried out in developing countries involves tedious, vision-impairing microscopic work and dangerous chemical baths. For details, see Grossman, "Women's Place"; Council for Primary Health Care (Manila), "Eye Care in the Electronics Industry: Whose Main Concern?" Health and Workers Bulletin , no. 2 (February 1984); and Thomas H. Gassert, Health Hazards in Electronics: A Handbook (Hong Kong: Asia Monitor Resource Center, 1985).

22. Grossman, "Women's Place," p. 7; Mary Alison Hancock, Electronics: The International Industry , Working Papers of the East-West Center Culture Learning Institute, Impact of Transnational Interactions Project (Honolulu: East-West Center, 1980), p. 29, table 7.

23. This refers to c.i.f. (cost, insurance, and freight) value at current prices for Item 729.3 of the Standard International Trade Classification (SITC), which also includes such things as thermionic valves and tubes, and transistors. In 1972 the value was $346 million; by 1976 it had surged to $1,357 million (Rada, Impact of Micro-electronics , p, 22, citing statistics from OECD, Trade by Commodities , Series C, 1972 and 1976).

24. These data refer to the total semiconductor imports to the United States under U.S. tariff code items 806.30 and 807 (United Nations Industrial Development Organization, Global and Conceptual Studies Branch, Division for Industrial Studies, Restructuring World Industry in a Period of Crisis — The Role of Innovation: An Analysis of Recent Developments in the Semi-conductor Industry , UNIDO/IS.285, December 17, 1981, pp. 246, table 6.8, and 247).

25. Rada, Impact of Micro-electronics , p. 22.

26. UNCTAD, Fibres and Textiles , pp. 237-44, presents a specific breakdown of the technological advances in spinning, weaving, and knitting.

27. Ibid., p. 167, table 45. Indeed, LDCs' share of the global apparel market is greater than heir share of any other industrial sector.

28. See UNCTAD, Fibres and Textiles , p. 171, chart 18, for comparison of capital invested per employee in twenty U.S. manufacturing sectors.

29. In the world of textile exporters, the case of India, which deliberately stuck to its labor-intensive handlooms, is something of an anomaly. Figures aggregating textile exports from LDCs can be somewhat misleading; spun yarn makes up a good portion of the total amount and, in countries such as Pakistan, is not necessarily the output of modern enterprises. In 1977, developing countries exported 19.4 percent of world textile yarn and fabric exports; developed countries, 72.7 percent (ibid., p. 167, table 45; p. 185, table 49).

30. This, of course, blurs the critical LDC world-order distinction: the industrial activity was not spread uniformly throughout the developing world but was concentrated in thirty or so LDCs.

31. IMF, Philippines: Recent Economic Developments , July 18, 1980, p. 32; Philippine Development (Manila) 6 (December 28, 1979): 29. Manufactured exports here refer, more precisely, to what the Philippine government calls "nontraditional" manufactured exports. Nontraditional manufactured exports accounted for 40 percent of total exports in 1980, whereas their share was less than 10 percent in 1970 ( World Business Weekly [August 20, 1981]: 49).

32. Economist (December 20, 1980): 67.

33. See, e.g., W. Arthur Lewis, Growth and Fluctuations, 1870-1913 (Cambridge, England: George Allen & Unwin, 1978), pp. 26, 29, and 280-81, table A-11; Charles Kindleberger, Foreign Trade and the National Economy (New Haven, Conn.: Yale University Press, 1962), pp. 23-25. Freight charges as a percentage of value of imports in overall world trade fell from 7.75 in 1970 to 6.55 in 1979, for example (UNCTAD, Review of Maritime Transport, 1980 , TD/B/C.4/222, May 25, 1981, p. 40, table 25).

34. It is true that certain factories that are essentially assembly-line, e.g., for automobiles, were set up in a few LDCs in the 1960s, but these were largely restricted to the richer LDCs with large internal markets, such as Brazil, Mexico, and Iran.

35. TNCs could carry out these minor operations directly, or indirectly through an operation called subcontracting or outward processing .

36 . Kennedy's Alliance for Progress was a precursor of this strategy. See Jerome Levinson and Juan de Onis, The Alliance That Lost Its Way: A Critical Report on the Alliance for Progress , Twentieth Century Fund Study (Chicago: Quadrangle Books, for Twentieth Century Fund, 1970).

37. Jonathan E. Sanford, Multilateral Banks: Can U.S. Limit Use of Its Contributions ? U.S. Library of Congress, Congressional Research Service, Issue Brief IB79114, January 13, 1980, update of October 19, 1979, p. 5. See also Margaret G. Goodman and Jonathan E. Sanford, The United States and the Multilateral Development Banks , U.S. Library of Congress, Congressional Research Service, for Congress, House, Committee on Foreign Affairs (Washington, D.C.: Government Printing Office, 1974).

38. Statement of W. Michael Blumenthal, Secretary of the Treasury, in U.S. Congress, House, Committee on Appropriations, Hearings Before the Subcommittee on Foreign Operations on Foreign Assistance and Related Appropriations for 1980 , 96th Cong., 1st sess., March 14, 1979, p. 13; and statement of C. Fred Bergsten, Assistant Secretary of the Treasury; in U.S. Congress, House, Committee on Appropriations, Hearings Before the Subcommittee on Foreign Operations on Foreign Assistance and Related Appropriations for 1978 , 95th Cong., 1st sess., February 16, 1977, p. 150.

39. Results of a 1975 Harris poll cited in Walden Bello and Severina Rivera, eds., The Logistics of Repression and Other Essays (Washington, D.C.: Friends of the Filipino People, 1977), p. 4. See United Nations Association of the U.S.A., United States Foreign Policy and Human Rights (New York: United Nations Association of the U.S.A., 1979).

40. Jonathan E. Sanford, U.S. Foreign Policy and Multilateral Development Banks (Boulder, Colo.: Westview Press, 1982), pp. 34-37; Victoria E. Marmorstein, "World Bank Power to Consider Human Rights Factors in Loan Decisions," Journal of International Law and Economics 13, no. 1 (1978): 113-36; Elizabeth P. Spiro, "Front Door or Back Stairs: U.S. Human Rights Policy in the International Financial Institutions" in Human Rights and U.S. Foreign Policy , ed. Barry M. Rubin and Elizabeth P. Spiro (Boulder, Colo.: Westview Press, 1979), pp. 134-37.

41. See James Petras and Morris Morley, The United States and Chile: Imperialism and the Overthrow of the Allende Government (New York: Monthly Review Press, 1975), pp. 83-105, 162-67; Jonathan E. Sanford, "The Multilateral Development Banks and the Suspension of Lending to Allende's Chile," in U.S. Congress, House, Committee on Foreign Affairs, Subcommittee on Inter-American Affairs, The United States and Chile During the Allende Years, 1970-1973 (Washington, D.C.: Government Printing Office, 1975), pp, 417-48; and David Gisselquist, "IMF Primer," International Policy Report (June 1981). The question of why the IMF continued lending to the Allende government, albeit on a small scale, has yet to be adequately analyzed.

42. Quoted in Philippines Daily Express (Manila), May 21, 1976. That loan was, in fact, hotly debated by the Banks board of directors, but the Scandinavian countries, not the United States, led the debate. Reportedly, the loan required the first actual vote by the Banks board on any of the more than two hundred loans in that fiscal year.

On the overall question of bilateral and multilateral aid and support for authoritarian regimes, see Noam Chomsky and Edward S. Herman, The Political Economy of Human Rights , vol. 1: The Washington Connection and Third World Fascism (Boston: South End Press, 1979); Walden Bello and Elaine Elinson, Elite Democracy or Authoritarian Rule ? (Oakland, Calif.: Philippine Solidarity Network and the Coalition Against the Marcos Dictatorship, June 1981); and Sanford, U.S. Foreign Policy .

43 . The Philippines is a case in point. See World Bank, Philippines — Country Program Paper , March 26, 1976, p. 2. Officials at U.S. AID in Bangkok acknowledged that this trend could also be found in assistance to Thailand interviews with officials [anonymity requested], U.S. AID, Bangkok, Thailand, July and August 1979).

44. Robert L. Ayres, "Breaking the Bank," Foreign Policy (Summer 1981): 113; Business in Thailand (October 1980): 5; Asian Wall Street Journal , June 6, 1978.

45. The Committee of the Board of Governors on the Reform of the International Monetary System and Related Issues existed from July 1972 to June 1974, when it gave its final recommendations. Its successor was the Interim Committee, so named because it was supposed to give way to an IMF Council. For an in-depth analysis of the work of the Committee of Twenty in the arena of international monetary reform, see Williamson, Failure of World Monetary Reform .

46 . Norman Girvan, Richard Bernal, and Wesley Hughes, "The IMF and the Third World: The Case of Jamaica, 1974-80," Development Dialogue , no. 2 (1980): 116; John Williamson, The Lending Policies of the International Monetary Fund , Policy Analyses in International Economics 1 (Washington, D.C.: Institute for International Economics, 1982), p. 22; A.W. Hooke, The International Monetary Fund: Its Evolution, Organization and Activities , IMF Pamphlet Series 37, 1981, p. 45. Likewise, as UNCTAD negotiated its integrated program for commodities, the Big Five provided more support for the IMF's expanded compensatory finance facility. The IMF's interest-subsidy scheme is another example of a marginal concession to the South's demands. As of 1982, the IMF guidelines permitted "an annual use of its resources up to 150 percent of quota and up to 450 percent of quota over a period of three years" (Joseph Gold, Order in International Finance, the Promotion of IMF Stand-By Arrangements, and the Drafting of Private Loan Agreements , IMF Pamphlet Series 39, 1982, p. 41). By 1984, the IMF was reversing this trend of "enlarged access" as it moved to tighten its loan limits.

47. Williamson, Lending Policies , p. 20.

48. Sidney Dell, On Being Grandmotherly: The Evolution of IMF Conditionality , Essays in International Finance 144 (Princeton, N.J.: International Finance Section, Department of Economics, Princeton University, 1981), p. 27.

49. IMF, Annual Report of the Executive Board for the Financial Year Ended April 30, 1980 (Washington, D.C.: IMF, 1980), p. 116; Michael Zammit Cutajar, comp., "Background Notes on the International Monetary Fund," Development Dialogue , no. 2 (1980): 111; and Asian Wall Street Journal , August 16, 1979.

50. The May 1981 loan agreement marked the fourth time the Saudis provided funds to the IMF under special borrowing arrangements. Asian Wall Street Journal , May 9, 1981; Far Eastern Economic Review (April 24, 1981): 92; "The IMF and World Economic Stability—Interview with Richard Erb, U.S. Executive Director at IMF," Challenge (September-October 1981): 23.

51. Formally the Intergovernmental Group of 24 on International Monetary Affairs, the Group of 24 is a subset of the Group of 77. However, the Group of 24 styles itself more as an offshoot of the IMF than of UNCTAD, and IMF publications, such as IMF Survey , tend to give it credibility and legitimacy by reporting on its activities as if it were an official IMF committee.

52. Asian Wall Street Journal , June 20, 1980. This is not to ignore the expansion in the Funds resources, beginning with the extended fired facility in 1974. This was, however, overshadowed by the Banks expansion in the second half of the 1970s ( Finance and Development 15 [September 1978]: 2-3). The IMF was not a net lender in either 1977 or 1978, or even in the first half of 1979 ( Economist [November 3-9, 1979]: 92). Moreover, there has continually been a large gap between the commitments claimed by the IMF and the net disbursements made; see UNCTAD's Trade and Development Report 1981 (Geneva, 1981) on this subject.

53. When Robert McNamara assumed the presidency of the Bank in 1968, he brought with him the experience of seven difficult years as U.S. secretary of defense, where he stood as President Johnson's chief deputy overseeing the war effort. Although McNamara's background, as "whiz kid" turned Ford Motor Company president, endowed him with a technocratic and authoritarian style that he never relinquished during his reign at the Bank, his Pentagon days left the deepest imprint on his views of development and revolution. An extremely revealing article by a former World Bank vice-president (whose term at the Bank almost precisely overlapped McNamara's) describes McNamara's development policies as emanating from his sense of impotence over what, by 1964, had been dubbed "McNamara's War." These views matured at the Bank as American black ghettos exploded in race and class wars in the mid and late 1970s (William Clark, "Robert McNamara at the World Bank," Foreign Affairs [Fall 1981]: 167-84).

A number of books and articles have been written about McNamara's thirteen years as Bank president; two men obviously close to McNamara and the inner sanctums of the World Bank wrote exceptionally revealing ones. In addition to Clark, see Robert L. Ayres, Banking on the Poor: The World Bank and World Poverty (Cambridge, Mass.: MIT Press, in cooperation with the Overseas Development Council, 1983); and Ayres, "Breaking the Bank," McNamara voiced his support for economic aid even earlier, during his term as secretary of defense. In 1966, addressing the American Society of Newspaper Editors, he noted "the certain connection between economic stagnation and the incidence of violence," a relationship suggesting that, if the situation were left, "the years ... ahead for the nations in the southern half of the globe [would be] pregnant with violence" ( New York Times , May 19, 1966).

54. Ayres, Banking on the Poor , p. 5.

55. Ibid., p. 226.

56. The phrase is the Banks own (William Ascher, "Political and Administrative Bases for Economic Policy in the Philippines," World Bank, November 6, 1980, p. 4 [hereafter cited as Ascher Memorandum]).

57. What "basic needs" means and does not mean has been debated elsewhere at length. For the World Banks own sense of "defensive modernization," see its 1975 Assault on Poverty , its 1975 Sector Policy Paper on rural development, and McNamara's speeches. Critical assessments include Cheryl Payer, The World Bank: A Critical Analysis (New York: Monthly Review Press, 1982); and Walden Bello et al., Development Debacle: The World Bank in the Philippines (San Francisco: Institute for Food and Development Policy, 1982), pp. 67-99. See also Frances Moore Lappé, Joseph Collins, and David Kinley, Aid as Obstacle: Twenty Questions About Our Foreign Aid and the Hungry (San Francisco: Institute for Food and Development Policy, 1980); Betsy Hartmann and James Boyce, Needless Hunger: Voices from a Bangladesh Village (San Francisco: Institute for Food and Development Policy, 1979); and Aart J. M. Van de Laar, The World Bank and the Poor (Boston: Martinus Nijhoff, 1980).

58. Ayres's own estimate ("Breaking the Bank," p. 108) is that "considerably more than one-half and perhaps as much as two-thirds of combined bank and IDA lending remains traditional."

59. For a more detailed sense of this ministerial meeting and the Group of 77 demands, see Cutajar, "Background Notes on the International Monetary Fund," p. 105; Clark, "Robert McNamara," pp. 181-82; and Ho Kwon Ping, "A Deadlock on Development," Far Eastern Economic Review (October 3, 1980): 56-57.

60. See Robert McNamara, Address to the Board of Governors, Belgrade, Yugoslavia, October 2, 1979 (Washington, D.C.: World Bank, n.d.).

61. Justinian F. Rweyemamu, "Restructuring the International Monetary System," Development Dialogue , no. 2 (1980), p. 86. See also Brandt Commission Report, pp. 232-34, 255, 274.

62. Andres Federman, "The Third World Bank: Making the Break," South (September 1981): 8.

63. Figures cited in Asian Wall Street Journal , October 8, 1980; Far Eastern Economic Review (April 24, 1981): 87. See also Economist (September 4, 1982): 46. These aims are explicitly stated by the World Bank Development Policy Staff's Senior Adviser, E. D. Wright, in "World Bank Lending for Structural Adjustment," Finance and Development 17 (September 1980): 21-23.

64. Williamson, Lending Policies , p. 21.

65. Ibid., p. 22.

66. Ibid., p. 21.

67. A packet of Bank and Fund memos and reports was put together for discussions the two institutions held on structural adjustment lending. Included in this packet were four memos and reports that summarized recent discussions: World Bank, "Structural Adjustment Lending—collaboration with the IMF," memorandum from Ernest Stern, vice-president of operations, to regional vice-presidents, June 9, 1980; IMF, "Statement by the Managing Director on Fund Collaboration with the Bank in Assisting Member Countries, Executive Board Meeting, May 28, 1980," 80/103, May 15, 1980; IMF, "The Chairman's Summing Up at the Conclusion of the Discussion on Fund Collaboration with the Bank in Assisting Member Countries, Executive Board Meeting, May 28, 1980," 80/114, June 2, 1980; and IMF, "Fund Collaboration with the Bank in Assisting Member Countries," memorandum from the managing director to department, bureau, and office heads, June 9, 1980. The quote is from IMF, "Chairman's Summing Up."

A Fund-Bank Development Committee (formally the Joint Ministerial Committee of the Boards of Governors of the Bank and Fund on the Transfer of Real Resources to Developing Countries) publicly and privately endorsed the expanded collaboration and cooperation between the two international financial institutions. Set up in 1974 after the Committee of 20 recommended that more be done to transfer resources to the South, the Development Committee was at this time headed by the Philippine finance minister, Cesar Virata (Cesar Virata, Chairman, Development Committee, Provisional Record of Discussion of the Twelfth Meeting of the Development Committee, Belgrade, Yugoslavia, September 30, 1979 , DC/79-14 [Washington, D.C.: World Bank, 1979]; and "Development Committee's 16th Meeting Held in Gabon on May 22, 1981," Press Communiqué [May 22, 1981]).

68. The literature on the World Bank and the IMF and the international division of labor is sparse. Fawzy Mansour breaks new ground in "The World Bank: Present Role and Prospects—An Outsider's View (draft)" (Dakar: U.N. African Institute for Economic Development and Planning, 1979), which stands as a critique of most radical critics of the Bank and the Fund (including Payer and Hayter). One of the few works from the Philippines dealing with the new international division of labor is the seven-part series "A Scenario of Neo-Colonialism," by Merlin Magallona of the University of the Philippines Law Center, published in the January and February 1981 issues of Makati Trade Times .

69 . Bela Balassa, "A 'Stages Approach' to Comparative Advantage," in Economic Growth and Resources , ed. Irma Adelman, proceedings of the Fifth Congress of the International Economic Association, Tokyo, Japan, 1977, vol. 4 (London: Macmillan, 1979), pp. 121-56. A growing literature criticizes the neoclassical notion of comparative advantage and studies the dynamics of international exchange from a Marxist perspective. These works dispute—many in theoretical terms Ricardo's theory of comparative costs and the Hecksher-Ohlin-Samuelson trade models that built on Ricardo's work. See Anwar Shaikh, "Foreign Trade and the Law of Value: Part I," Science and Society 43 (Fall 1979): 281-302; Shaikh, "Foreign Trade and the Law of Value: Part II," Science and Society 44 (Spring 1980): 27-57; John Weeks, "A Note on the Underconsumptionist Theory and the Labor Theory of Value,'' Science and Society 46 (Spring 1982): 60-76; Samir Amin, Unequal Development: An Essay on the Social Formation of Peripheral Capitalism , trans. Brian Pearce (New York: Monthly Review Press, 1976); Arghiri Emmanuel, Unequal Exchange: A Study of the Imperialism of Trade (New York: Monthly Review Press, 1972).

70. Bela Balassa, The Process of Industrial Development and Alternative Development Strategies , Essays in International Finance 141 (Princeton, N.J.: International Finance Section, Department of Economics, Princeton University, 1980), pp. 25-26. This essay contains the Graham Memorial Lecture by Balassa at Princeton University, April 17, 1980.

71. Bela Balassa, "Industrial Policies in Taiwan and Korea," in International Economics and Development: Essays in Honor of Raul Prebisch , ed. Luis Eugenio Di Marco (New York: Academic Press, 1972), p. 179.

72. Robert McNamara, Address to the United Nations Conference on Trade and Development, Manila, Philippines, May 10, 1979 (Washington, D.C.: World Bank, n.d.), pp. 29, 15, 27.

73. World Bank, Annual Report 1981 (Washington, D.C.: World Bank, 1981), pp. 70-71. Cf. World Bank, Annual Report 1980 (Washington, D.C.: World Bank, 1980), pp. 67-68.

74. Williamson, Lending Policies , p. 22.

75. International Herald Tribune , March 18, 1981. On the growth of TNB lending to LDCs over the 1970s, see Deborah L. Riner, "Borrowers and Bankers: The Euro-Market and Political Economy in Peru and Chile," Ph.D. dissertation, Princeton University, 1982.

76. Mansour, "World Bank," p. 42, citing the preliminary work of the Brandt Commission.

77. Arthur Bums, "The Need for Order in International Finance," speech at annual dinner of Columbia University Graduate School of Business, April 12, 1977, pp. 13, 14, 21, quoted in Howard M. Wachtel, The New Gnomes: Multinational Banks in the Third World (Washington, D.C.: Transnational Institute, 1977), p. 36.

78. United States, Council of Economic Advisers, Economic Report of the President (Washington, D.C.: Government Printing Office, 1977), p. 130.

79. An overview of the influence of powerful business groups and councils is presented in Lawrence Shoup and William Minter, Imperial Brain Trust: The Council on Foreign Relations and United States Foreign Policy (New York: Monthly Review Press, 1977). See also Kim McQuaid, Big Business and Presidential Power: From FDR to Reagan (New York: William Morrow, 1982).

80. World Bank, Annual Report 1980 , p. 70. As early as mid-1981, bankers, wary of the Philippines' already inflated debt, said that loans to the Philippines continued to carry favorable terms because of the structural adjustment program ( Far Eastern Economic Review [September 17, 1981]: 43).

81. Articles 806.30 and 807 of the Tariff Classification Act of 1962 permit temporay export of raw materials and components for further assemblage and processing abroad. On reentry to the United States, duty on the product is assessed only on its value added; earlier laws taxed the product on its full value. Similar laws exist in Western Europe (UNCTAD, Intra-Industry Trade and International Subcontracting , TD/B/805/Supp. 2, August 6, 1980).

82. For more on subcontracting, see UNCTAD, Fibres and Textiles , pp. 202-6; and Dimitri Germidis, ed., International Subcontracting: A New Form of Investment , Development Centre Studies (Paris: OECD, 1980).

83. Eleven countries in Asia, nine in Latin America, and five in Africa composed the twenty-five. Frank, ''New International Division of Labour?" p. 2095; Tsuchiya Takeo, "Free Trade Zones in Southeast Asia," Monthly Review 29 (February 1978): 31-32; Ibon Facts and Figures , no. 22 (July 15, 1979): 2.

84. Among the best work on EPZs has been done by Pacific Asia Resources Center (PARC), a Japanese research group. See PARC, "Free Trade Zones and Industrialization of Asia," Ampo: Japan-Asia Quarterly Review (1977), which shows how the World Bank worked with UNIDO in its promotion of EPZs.

1. That the IMF's and the World Bank's contacts would evolve historically to those suggested in Figure 2 was not predictable from the charter of either institution. Indeed, both institutions' Articles of Agreement (World Bank, Articles of Agreement of the International Bank for Reconstruction and Development [As Amended Effective December 17, 1965 ], art. 3, sec. 2; IMF, Articles of Agreement of the International Monetary Fund [July 22, 1944], art. 5, sec. 1) state that each member shall deal with the Bank and Fund (and vice versa) "only through its Treasury, central bank, stabilization fund or similar fiscal agency."

2. World Bank, Philippines — Country Program Paper , August 29, 1980, p. 13.

3. The Philippines was the second country to enter into an EFF arrangement with the IMF; the first, Kenya, dropped its EFF (which had begun some nine months prior to that of the Philippines) in midstream (IMF, Annual Report 1980 [Washington, D.C.: World Bank, 1980], p. 116; Asian Wall Street Journal , August 14, 1979).

4. Interview with Gregorio S, Licaros, Metro-Manila, Philippines, April l, 1981.

5. IMF, Annual Report 1980 , p. 116, table 1.7.

6. Paragraph based on interviews with Escolastica B. Bince, Metro-Manila, Philippines, December 2, 1980; Carmelita Areñas, Metro-Manila, Philippines, January 15, 1981; Mercy Suleik, Metro-Manila, Philippines, December 15, 1980; Leung, January 15 and 30, 1981; and Licaros, April 1, 1981. While these targets were, for the most part, confidential, there are a few written sources on the subject: Asian Wall Street Journal , August 14, 1979; Times Journal (Manila), August 18, 1977; World Bank, World Development Report 1982 (New York: Oxford University Press for the World Bank, 1982), pp. 76-77.

7. Quoted from interview with IMF official (anonymity requested), Metro-Manila, Philippines, November 25, 1980. Over the EFF period, the peso-dollar rate remained a fairly stable 7.4 (IMF, Philippines — Recent Economic Developments , July 18, 1980, p. 41).

8. Quote is from interview with IMF official (anonymity requested), Metro-Manila, Philippines, November 25, 1980. Paragraph based on interviews with Bince, December 2, 1980; Areñas, January 15, 1981; Suleik, December 15, 1980; Licaros, April 1, 1981; and Leung, January 15 and 30, 1981. Written sources were Asian Wall Street Journal , June 19, 1978, July 24, 1979, August 14, 1979; Philippines (Republic), Central Bank, Economic and Financial Development During the First Nine Months of 1977 , preliminary report from Amado R. Briñas, senior deputy governor, to Ferdinand Marcos, October 4, 1977; and World Bank, Philippines — Country Program Paper , 1980, p. 13.

9. Interviews with IMF official (anonymity requested), November 25, 1980; Leung, January 30, 1981; Bince, December 2, 1980; and Licaros, April 1, 1981, among others.

10. By 1978, nontraditional manufactured exports exceeded one billion dollars, representing almost a third of total export earnings (Barend de Vries, Transition Toward More Rapid and Labor-Intensive Industrial Development: The Case of the Philippines , World Bank Staff Working Paper 424, October 1980, p. 5). As officially defined by the Philippines' 1981 Omnibus Investments Code, nontraditional exports are to be distinguished from traditional exports, which are products whose total Philippine export value exceeded five million dollars in 1968.

11. Interviews with Suleik, December 15, 1980; Ofelia Soliven, Metro-Manila, Philippines, November 17, 1980. Philippines (Republic), Central Bank of the Philippines, Interagency Committee on IMF-EFF, "Preliminary Outline: Manual of Demand Policies," Manila, 1978 (mimeographed).

12. Interview with Bince, December 2, 1980. Bince was the Central Banks chief negotiator with the IMF.

13. Interview with Licaros, April 1, 1981.

14. Interviews with Ministry of Finance staff members (anonymity requested), Metro-Manila, Philippines, December 3, 1980, and March 26, 1981; Central Bank staff member (anonymity requested), Metro-Manila, Philippines, April 15, 1981.

15. Interview with Licaros, April 1, 1981. The associate director and assistant head of the Central Bank's Public Relations Service, Office of the Governor, Oscar A. de los Santos—who was Licaros's righthand man—used the same description (interview With de los Santos, Metro-Manila, Philippines, March 30, 1981).

16. Interview with Licaros, April 1, 1981. Cf. Licaros's quotes in Asian Wall Street Journal , June 21, 1980.

17. Figures from Business International, Roundtable with the Government of the Philippines, Manila, May 11-14, 1980: Briefing Paper (n.p.: Business International, n.d.) (hereafter cited as Business International, Briefing Paper), p. 30; Wall Street Journal , February 10, 1981; World Bank, World Debt Tables (Washington, D.C.: World Bank, April 1986), pp. 226-29.

18. Interview with Wilhelm G. Ortaliz, Metro-Manila, Philippines, January 19, 1981.

19. Interview with Ministry of Finance staff member (anonymity requested), Metro-Manila, Philippines, December 17, 1980.

20. Interview with Leung, January 15, 1981.

21. Interview with former Central Bank deputy governor (anonymity requested), Metro-Manila, Philippines, February 9, 1981. For more on Cheryl Payer's The Debt Trap: The International Monetary Fund and the Third World (New York: Monthly Review Press, 1974), see Chapter 1, above.

22. Interview with Edgardo P. Zialcita, Metro-Manila, Philippines, January 21, 1981. In this informal interview, Zialcita was speaking broadly about secrecy in both IMF projections and models, although he clearly realized the distinction between the two:

23. Interviews with Bienvenido M. Noriega, Jr., Metro-Manila, Philippines, January 30 and April 20, 1981; NEDA official (anonymity requested), Metro-Manila, Philippines, December 5, 1980; Ortaliz, January 19, 1981; Benito Legarda, Jr., February 2, 1981.

24. Interview with Ortaliz, January 19, 1981.

25. Interview with Leung, January 30, 1981.

26. World Bank, Report and Recommendation of the President of the International Bank for Reconstruction and Development to the Executive Directors on a Proposed Structural Adjustment Loan to the Republic of the Philippines , Report P-2872-PH, August 21, 1980, p. 1 (hereafter cited as World Bank, Report and Recommendation , August 21, 1980).

27. World Bank, Philippines — Country Program Paper , 1980, p. 3.

28. World Bank, Philippines — Country Program Paper , March 26, 1976, p. 19.

29. Ibid., p. 2. The Philippines' 1972-1976 experience with World Bank project loans and IMF yearly standby loans has been analyzed elsewhere. See Walden Bello and Severina Rivera, eds., The Logistics of Repression and Other Essays (Washington, D.C.: Friends of the Filipino People, 1977); Walden Bello et al., Development Debacle: The World Bank and the Philippines (San Francisco: Institute for Food and Development Policy, 1982); Robin Broad, International Actors and Philippine Authoritarianism (Manila: Nationalist Resource Center, 1981); Edberto M. Villegas, The Philippines and the IMF-World Bank Conglomerate , Philippines in the Third World Papers, Series 17 (Quezon City: Third World Studies Center, University of the Philippines at Diliman, 1979).

30. World Bank, Philippines — Country Program Paper , 1976, p. 17.

31. "Guinea pig" and "testing ground" were terms used by a wide-ranging group of Philippine government officials during the course of interviews. Among them: Areñas, January 15, 1981; Bince, December 2, 1980; Noriega, April 20, 1981; and NEDA official (anonymity requested), December 5, 1980.

32. Interview with Licaros, April 1, 1981.

33. Interview with Castro, January 20, 1981. Basic economic reports, restricted documents within the Bank, are working documents covering macroeconomic issues. Some of these basic economic reports have been published—after some censoring, like most Bank documents that reach the public document stage—by the Bank as a series of World Bank Country Economic Reports. Cheetham's report became The Philippines: Priorities and Prospects for Development , 1976.

34. Other references were United Nations, International Labour Organization, Sharing in Development: A Program of Employment, Equity and Growth for the Philippines (Geneva: ILO, 1974); IMF, Philippines — Use of Fund Resources , Report EBS/76/133, March 16, 1976. See, among others, World Bank, Philippines: Domestic and External Resources for Development , economic memorandum for 1979 Consultative Group Meeting, Report 2674-PH, November 12, 1979, pp. i, iii; and World Bank, Report and Recommendation of the President of the International Bank for Reconstruction and Development to the Executive Directors on a Proposed Loan to the Republic of the Philippines for a Third Urban Development Project , February 1980, pp. 2, 3. Cf. U.S. Agency for International Development, FY1982 Country Development Strategy Statement Philippines (Manila: AID, 1980), p. 28 and annex D, p. 1.

35. Interview with Flordeliza Dizon, Metro-Manila, Philippines, December 8, 1980. Dizon worked on the five-year plan as a member of the Subcommittee on Credit Resources and the Subcommittee on External Financing.

36. World Bank, Philippines — Country Program Paper , 1976, p. 17.

37. See Cheetham, Priorities and Prospects ; Philippines (Republic), Five-Year Development Plan 1978-1982 , September 1977. The term take off , repeated frequently by top Philippine policymakers and Bank and Fund officials during interviews, is taken from the work of W. W. Rostow; see esp. The Stages of Economic Growth: A Non-Communist Manifesto (London: Cambridge University Press, 1960).

38. Cesar Virata, minister of finance, to Robert McNamara, president of World Bank, letter, "Re: Philippine Industrial Development Policy," August 12, 1980. With the letter were attachment 1, "Statement on Industrial Policy for the 1980s," and attachment 2, "Industrial Development Policy."

39. Philippines (Republic), Ministry of Industry, Measures/Steps Taken by the Government in Connection with the Industrial Policy Recommendations Contained in the World Banks Industrial Sector Report , Working Paper of the Government of the Philippines (Manila: Ministry of Industry, 1979).

40. World Bank, Economic Perspectives on Southeast Asia and Asia , April 19, 1978, p. 74.

41. World Bank, Philippines — Country Program Paper , 1976, p. 11.

42. Ibid., pp. 21, 22.

43. As a foreign consultant paid through World Bank loan 1374-PH, Power spent eighteen months (1977-1979) working with the School of Economics research project. That project was headed by Romeo Bautista, who, in turn, went from the project to the World Bank, where he spent the thirteen months from July 1979 to August 1980 working on the question of exchange-rate flexibility and trade flows. From there, Bautista returned to the Philippines as a deputy director-general of NEDA (interviews with Romeo Bautista, Metro-Manila, Philippines, December 15, 1980, and with John Power, Honolulu, Hawaii, October 29, 1980; Romeo Bautista, John H. Power et al., Industrial Promotion Policies in the Philippines [Manila: Philippine Institute for Development Studies (at NEDA), 1979]; and World Bank, Report and Recommendation , August 21, 1980, pp. 17-18).

44. The World Bank and the Philippine government subsequently began to rotate the preparation of these economic memos for the Consultative Group (interview with NEDA official [anonymity requested], December 5, 1980).

45. Interview with Wilfredo Nuqui, Metro-Manila, Philippines, March 10, 1981. It seemed to be the Bank's job to prepare the special report On that topic.

46. Nominal tariff rate refers to the rate of protection on output, whereas effective tariff rate is the rate of protection on value added, taking into account tariffs on imported inputs. See W. M. Corden, "The Structure of a Tariff System and the Effective Protective Rate," Journal of Political Economy 74 (June 1966): 221- 37. The effective rate of protection is the more meaningful measure, but the Bank at this point in its conceptualization of how best to embark the Philippines on export-oriented industrialization referred solely to the nominal rates. World Bank, The Philippines: Country Economic Memorandum , Report 1765-PH, October 26, 1977, p. 11 and annex A, pp. 11-13.

47. World Bank, "consultative Group for the Philippines," Bank News Release , December 2, 1977. It was at this Consultative Group meeting that the government's 1978-1982 Five-Year Development Plan was formally presented ( New Philippines Daily Express [Manila], December 7, 1977).

48. World Bank, Philippines — Country Program Paper , 1978, cited by World Bank, Report and Recommendation of the President of the International Bank for Reconstruction and Development to the Executive Directors on a Proposed Loan to the Central Bank of the Philippines with the Guarantee of the Republic of the Philippines for an Industrial Finance Project , Report P-3028-PH, April 13, 1981, p. 17 (hereafter cited as World Bank, Report and Recommendation , April 13, 1981); and Philippines — Country Program Paper , 1980, p. 15.

49. World Bank, Report and Recommendation , April 13, 1981, p. 17. The sectoral content of the World Bank lending program is taken from Philippines — Country Program Paper , 1980, table on p. 20.

50. World Bank, Philippines: Industrial Development Strategy and Policies , World Bank Country Study, May 1980, p. vi (hereafter cited as World Bank, Industrial Development Strategy , May 1980).

51. The Bank has a well-documented history of covering up the fact that it, and not its client LDCs, typically initiated plans for projects to be funded by the Bank. This has been discussed extensively elsewhere. See Edward Mason and Robert Asher, The World Bank Since Bretton Woods (Washington, D.C.: Brookings Institution, 1973), p. 308; Susan George, How the Other Half Dies: The Real Reasons for World Hunger (Montclair, N.J.: Allanheld, Osmun, 1977), p. 226; Michael Scott, Aid to Bangladesh: For Better or Worse ? (San Francisco: Institute for Food and Development Policy, 1979), p. 9; and Judith Tendler, Inside Foreign Aid (Baltimore: Johns Hopkins University Press, 1975), pp. 86-87, 93-95.

52. Philippines Daily Express (Manila), February 16, 1979.

53. Business Day (Manila), February 26, 1979; Philippines Daily Express (Manila), February 27, 1979.

54. World Bank, Industrial Development Strategy , May 1980. The three volumes, at this stage, were published together in one document.

55. World Bank, Industrial Development Strategy and Policies in the Philippines , Report 2513-PH, 3 vols., October 29, 1979: vol. 1: Summary Report ; vol. 2: Main Report ; vol. 3: Statistical Appendix and Annexes . There were at least two even earlier versions of this, one in May 1979, the other in July 1979.

56. World Bank, Industrial Development Strategy , May 1980, p. 22.

57. World Bank, Report and Recommendation , August 21, 1980, p. 32.

58. Quoted in New York Times , May 26, 1980. The mission relayed the hope of making the Philippine SAL the Banks first such loan to top Philippine officials (interview with Noriega, January 30, 1981). The Philippines did not quite make it to number one, but its SAL was the first in Asia and followed on the heels of its three forerunners, in Turkey, Kenya, and Bolivia. All four loans were approved within six months.

59. Business Day (Manila), August 22, 1979.

60. Quoted from interview with Ortaliz, January 19, 1981.

61. From the start the Bank made it clear that this $200 million loan would be the first of many. Interviews with Ortaliz, January 19 and April 13, 1981; Noriega, January 30 and April 20, 1981; and NEDA official (anonymity requested), December 5, 1980.

62. World Bank, Economic Perspectives on Southeast Asia and Asia , April 19, 1978, p. 74.

63. World Bank, "World Bank Approves $200 Million Loan for Structural Adjustment in the Philippines," Bank News Release , 81/5, September 18, 1980; and World Bank, "Loan Agreement for Loan [No. 1903-PH]" (draft), July 14, 1980. The final version of the loan agreement for the SAL was the same as this draft (interview with Philippine government official [anonymity requested], Metro-Manila, Philippines, April 21, 1981).

64. Guillermo Soliven, special assistant to the governor, Central Bank of the Philippines, and Lawrence Hinkle, World Bank, to Jose Leviste, Jr., deputy minister of industry, Republic of the Philippines, cable, July 9, 1980.

65. Ibid. As is discussed below, government documents indicate that the SAL's first installment (of $100 million peso-equivalent) would help finance the cement industry's coal conversion program (in keeping with the Banks industrial restructuring and modernization program); help finance the Cavite, Davao, and Legaspi EPZs; and help create a financing fund to assist exporters (Roberto Ongpin, "Re: Utilization of Peso Proceeds of SAL," memorandum from minister of industry to Cesar Virata, minister of finance, November 27, 1980; and Rafael Sison, "Re: $50 Million Peso Equivalent of SAL," memorandum from DBP chairman to Cesar Virata, minister of finance, October 13, 1980).

66. World Bank, "Aide-Mémoire," outcome of discussions between World Bank and Philippine government, Manila, Philippines, August 20-31, 1979 (mimeographed).

67. Ibid., unnumbered pp. 2-3. As the Bank noted in retrospect in Report and Recommendation , August 21, 1980, p. 32, a substantial part of the reason it was decided to push for a structural adjustment loan was that "the specific solutions to the major problems ... were readily available, and the Bank was ... then in a position to help formulate these."

68. World Bank, "Aide-Mémoire," cover memo, unnumbered p. i.

69. Ibid., unnumbered p. 10.

70. Interview with Noriega, January 30, 1981. Noriega's sentiments were corroborated by others.

71. Interview with NEDA official (anonymity requested), December 5, 1980.

72. World Bank, Report and Recommendation , August 21, 1980, p. 29.

73. Statement of Roberto Ongpin, cited in World Bank, Meeting of the Consultative Group for the Philippines, Washington, D.C., December 13 & 14, 1979 — Report of Proceedings by the Chairman plus Annexes , PHL-80-1, March 20, 1980, annex 6, p. 1.

74. Statement of Michael Gould, Philippines programs division chief, World Bank, cited in Meeting of Consultative Group, December 13 & 14, 1979 , annex 12, p. 18. See also World Bank, Philippines: Domestic and External Resources for Development , p. 26. Also released at this time was the Bank's financial-sector report (No. 2546).

75. Interview with NEDA official (anonymity requested), December 5, 1980.

76. Interview with Noriega, January 30, 1981.

77. Interview with Nuqui, March 10, 1981.

78. See, e.g., John Power and Gerardo Sicat, The Philippines: Industrialization and Trade Policies (London: Oxford University Press, for Development Centre of the OECD, 1971); and Gerardo Sicat, Economic Policy and Philippine Development ([Metro-Manila]: University of the Philippines Press, 1972 ).

79. World Bank, Philippines — Country Program Paper , 1980, p. 7. It was opportune to have a new industry minister at just this point. "Ongpin could be a strong factor in pushing the changes along because criticism of the industrial structure was not criticism of the Ministry of Industry under him " (interview with Power, October 29, 1980).

80. Quoted from Ascher Memorandum, p. 6.

81. Interview with Ortaliz, January 19, 1981.

82. Interview with NEDA official (anonymity requested), December 5, 1980.

83. Interview with Noriega, January 30, 1981.

84. Interview with Corpus, February 11, 1981. Corpus added that he did the same with other aid institutions, both bilateral and multilateral, but that the "World Bank has been the most influential."

85. Interview with Bince, December 2, 1980.

56. World Bank, Industrial Development Strategy , May 1980, p. 22.

87. World Bank, Philippines — Country Program Paper , 1976, p. 2.

88. B. de Vries, Transition Toward Industrial Development , p. 3.

89. World Bank, Philippines — Country Program Paper , 1980, p. 15.

90. Ascher Memorandum, p. 6.

91. Interview with Ortaliz, January 19, 1981.

92. Interview with deputy minister of industry (anonymity requested), Metro-Manila, Philippines, November 17, 1980. The word is derived from the Spanish compadre .

93 . World Bank, Philippines — Country Program Paper , 1980, p. 21.

94. William D. Clark, World Bank vice-president for external affairs, quoted in Asian Wall Street Journal , June 6, 1978.

95. Interview with Ortaliz, January 19, 1981. For list of the committee's membership, see World Bank, Industrial Development Strategy , May 1980, pp. 100-102.

96. World Bank, Report and Recommendation , August 21, 1980, p. 32. The IMF mission that was simultaneously in-country for its annual November review likewise lent a hand. See Chapter 5 for more on the IMF role in SAL reforms.

97. World Bank, Report and Recommendation , August 21, 1980, p. 33; interview with Ortaliz, January 19, 1981. The amount—$50,000—showed up in the loan agreement as a ''project preparation advance" (World Bank, "Loan Agreement for Loan [No. 1903-PH]").

The Bank's veto over contractors and consultants is covered by a standard clause in most loan agreements. What happens when an LDC government tries to elude Bank approval of consultants was shown in the case of the Banks withdrawal of a $250 million loan for an Indian fertilizer-plant complex in January 1981, The loan was terminated after the Indian government switched consultants, from the American firm with which it had originally contracted, to an Italian firm. For more on this, see Mohan Ram and Richard Nations, "Questions About a Lapsed Loan," Far Eastern Economic Review (January 16, 1981): 46-48; and Jane Merriman, "India Strays from World Bank," South (February 1981): 73-79.

98. See, for instance, World Bank, Report on Government-IBRD Project Implementation Review , 1980, p. 4; and statement of Michael Gould cited in World Bank, Meeting of Consultative Group, December 13 & 14, 1979 , annex 12, p. 18.

99. Interview with Nuqui, March 10, 1981.

100. Interviews with Nuqui, March 10, 1981; Noriega, April 20, 1981; and Michael Bamberger, Metro-Manila, Philippines, March 19, 1981.

101. Interview with NEDA official (anonymity requested), December 5, 1980.

102. Interview with Ortaliz, January 19, 1981.

103. Interview with Noriega, January 30, 1981.

104. Interview with Noriega, April 20, 1981.

105. Interview with Ortaliz, January 19, 1981. This was echoed by Noriega in an interview on April 20, 1981. The Bank wanted indirect tax realignment included as a condition for the first SAL; it maintained that the move went along with tariff revisions. Philippine technocrats did not disagree, but felt that it was too much to include at that time (interviews with Ortaliz, April 13, 1981; and Noriega, January 30, 1981).

106. Interview with Ortaliz, January 19, 1981.

107. Interview with Noriega, April 20, 1981.

108. Interview with Ministry of Finance staff member (anonymity requested), December 17, 1981.

109. Fund preconditions, covering such policies as exchange rates and food prices (as opposed to performance clauses) are almost "never put in documents as they are all to be done beforehand" (interview with Leung, January 15, 1981; cf. Teresa Hayter, Aid as Imperialism [Harmondsworth: Penguin, 1971], pp. 57-58).

110. Interview with Bince, December 2, 1980. Areñas's response was strikingly similar: "We don't have that in writing" interview with Areñas, January 15, 1981).

111. Interview with Ortaliz, January 19, 1981; Far Eastern Economic Review (August 8, 1980): 46; Business Day (Manila), July 22, 1980.

112. At board meetings of the Bank, as at those of the Fund, there is relatively little formal voting and even fewer surprises: it is quite unusual for loan proposals to make it that far and then be vetoed. On this, see Escott Reid, Strengthening the World Bank (Chicago: Adlai Stevenson Institute, 1973), p. 195; and Margaret de Vries, "The Process of Policymaking," in The International Monetary Fund, 1945-1965: Twenty Years of International Monetary Cooperation , ed. J. Keith Horsefield, 3 vols. (Washington, D.C.: IMF, 1969), vol. 2, p. 9.

113. Soliven and Hinkle to Leviste, cable, July 9, 1980.

114. The aim was to establish a tariff system with nominal rates between 10 and 50 percent, which meant that "most effective rates of protection will be brought within a range of 10-80 percent" (World Bank, Report and Recommendation , August 21, 1980, p. 22).

115. Virata to McNamara, August 12, 1980, p. 3. The ten were cement, iron and steel, automotive, wood and wood products, motorcycles and bicycles, glass and ceramics, furniture, domestic appliances, machinery and other capital equipment, and electrical and electronic goods.

116. Interview with Noriega, January 30, 1981; Razon T. Haresco, speech presented at Policy Conference on Tariff Reforms, Metro-Manila, Philippines, April 22, 1981.

117. World Bank, Report and Recommendation , August 21, 1980, p. 22. On Philippine effective rates of protection in the 1950s and 1960s, see Robert E. Baldwin, Foreign Trade Regimes and Economic Development: The Philippines (New York: Columbia University Press, for National Bureau of Economic Research, 1975).

118. Business Day (Manila), October 6, 1980; IMF, Philippines: Recent Economic Developments , July 18, 1980, p. 46.

119. World Bank, Report and Recommendation , August 21, 1980, pp. 21, 29.

120. Strengthening the linkages meant that domestically oriented industries would produce more for export.

121. World Bank, Report and Recommendation , August 21, 1980, pp. 22, 23, 29.

122. Interview with Nuqui, December 8, 1980. Reiterated in interview with Power, October 29, 1980.

123. Vice-President and Secretary, World Bank, Summaries of Discussions at the Meeting of the Executive Directors of the Bank and IDA, September 16, 1980 , SD80-52, November 20, 1980, p. 9.

1. World Bank, "World Bank Approves $200 Million Loan for Structural Adjustment in the Philippines," Bank News Release , 81/5 (September 18, 1980).

2. Interviews with, for instance, a NEDA official (anonymity requested), December 5, 1980; Noriega, January 30, 1981; and Ortaliz, March 31, 1981.

3. See Philippines (Republic), Executive Order 609: Modifying the Rates of Import Duty on Certain Imported Articles as Provided Under Presidential Decree No. 1464, Otherwise Known as the Tariff and Customs Code of 1978, as Amended , August 1, 1980; and Philippines (Republic), Executive Order 632A: Modifying the Rates of Import Duty on Certain Imported Articles as Provided Under Presidential Decree No. 1464, Otherwise Known as the Tariff and Customs Code of 1978, as Amended , November 28, 1980.

4. The rehabilitation and modernization of the textile sector under a Bank project loan was to be the first of these. See Chapter 6.

5. Executive Order 609; Executive Order 632A ; and ''Special Report: Tariff Reforms," Business Day (Manila), April 22, 1981. The average effective rate of protection for consumer goods fell from 77 percent to 41 percent (World Bank, Report and Recommendation , August 21, 1980, pp. 22-23).

6. For more on this subject of intra-industry trade, see Paul Krugman, "Economies of Scale, Imperfect Competition and Trade: An Exposition," July 1981 (mimeographed); and Bela Balassa, Intra-Industry Trade and the Integration of Developing Countries in the World Economy , World Bank Staff Working Paper 312, January 1979, pp. 24-32.

7. Ascher Memorandum, p. 2. Official Bank statements, attempting to counteract the damaging effects of the leaking of the Ascher Memorandum, argued that William Ascher was simply a Johns Hopkins University political risk analyst and that the memo thus represented onetime Bank consultant Ascher's outside views and work. But this was a cover-up. Ascher's name appeared in the April 1981 World Bank phone book as a member of the Central Projects Staff's Projects Advisory Staff (with a Bank office and phone extension); moreover, he was aided in his work by members of the Bank's East Asia Division.

8. World Bank, "Background Notes for Press," December 7, 1981, reprinted in IMF Survey (December 14, 1981): 395-96.

9. See U.S. Treasury Department, Assessment of U.S. Participation in the Multilateral Development Banks in the 1980s — Consultation Draft , September 21, 1981, annex 5, pp. 44-45.

10. Central Bank (of the Philippines) Review (August 1981 ): 7.

11. Guillermo Soliven, special assistant to the governor, Central Bank of the Philippines, and Lawrence Hinkle, World Bank, to Jose Leviste, Jr., deputy minister of industry, Republic of the Philippines, cable, July 9, 1980. The other $5 million of the total $200 million loan is a technical-assistant component, primarily funding World Bank-approved foreign consultants.

12. Interview with Ortaliz, January 19, 1981.

13. Ibid.

14. Interview with Ortaliz, March 31, 1981.

15. Interview with Noriega, January 30, 1981.

16. Chulia Azarcon, Tariff Commission commissioner, statement during open forum of Policy Conference on Tariff Reforms, Metro-Manila, Philippines, April 23, 1981; Executive Order 609; Executive Order 632A .

17. Returned to Marcos's fold (in public statements, at least), the influential Philippine Chamber of Food Manufacturers "hailed" the government's "speedy action on the request" for a more gradual reduction of tariff duties on sausages, preserved meat, chocolate, macaroni and spaghetti, roasted cereals and cereal products, and tapioca and sago ( Bulletin Today [Manila], February 3, 1981; Executive Order 609; Executive Order 632A ).

18. Soliven and Hinkle to Leviste, cable, July 9, 1980. These caveats are repeated in World Bank, Report and Recommendation , August 21, 1980, pp. ii, 33, and annex 3, p. 63, under the heading "Special Bank Implementation Actions."

19. Interviews with Noriega, January 30, 1981, and April 20, 1981.

20. Interview with Noriega, April 20, 1981. Cf. Pierre M. Landell-Mills, "Structural Adjustment Lending: Early Experience," Finance and Development 18 (December 1981): 17-21.

21. The so-called paper lifting of martial law left Marcos's powers intact. The election, boycotted by all major opposition patties, likewise brought only cosmetic changes. See Civil Liberties Union of the Philippines, Tuloy Ang Ligaya (On with the Circus ), New Year's Statement of the Civil Liberties Union of the Philippines (Quezon City: Civil Liberties Union of the Philippines, January 1, 1981); and Civil Liberties Union of the Philippines, The Plebiscite and the Foreign Connection (Quezon City: Civil Liberties Union of the Philippines, March 26, 1981). Excellent in this regard are the Far Eastern Economic Review articles by Sheila Ocampo over the relevant period; see, for instance, "Landslide Win for Marcos," Far Eastern Economic Review (June 19, 1981): 13.

22. Interview with Ortaliz, March 31, 1981. Diokno, Ortaliz added, was "taking advantage of the situation."

23. "Marcos' circle" refers to the so-called cronies within the transnationalist business faction, who, as the Ascher Memorandum explained elsewhere (p. 8), have "particularly good connections with the Marcos administration [and] are consolidating their advantages." On the cronies, see Chapter 8. Note that the Bank acknowledged the existence of Peter Evans's "triple alliance'' in the Philippines.

24. Ascher Memorandum, pp. 8-9; see also p. 1.

25. Interview with Ortaliz, April 13, 1981.

26. World Bank, Report and Recommendation , April 13, 1981, p. 47 (under the heading "Projects in Execution").

27. The Tariff Commission assumed administrative responsibility for changes in tariff rates. Its recommendations went to a transnationalist-dominated ministerial-level Board on Tariff Policy. The board's decisions then went to President Marcos for approval.

28. Azarcon at Policy Conference on Tariff Reforms, April 23, 1981.

29. Ramon J. Farolan, Customs commissioner, "Bureau of Customs: Programs for the Eighties," speech presented at Policy Conference on Tariff Reforms, April 23, 1981.

30. Norma A. Tan, "Tariff Reforms and the Structure of Protection," speech presented at Policy Conference on Tariff Reforms, April 23, 1981. Tan, then a consultant to the Tariff Commission, wrote the chapter entitled ''The Structure of Protection and Resource Flows in the Philippines" in Romeo Bautista, John H. Power et al., Industrial Promotion Policies in the Philippines (Manila: Philippine Institute for Development Studies [at NEDA], 1979), pp. 129-71; which was an edited version of her Ph.D. dissertation (University of the Philippines, School of Economics, April 1979).

31. Sicat at Policy Conference on Tariff Reforms, April 22, 1981.

32. Edgardo Tordesillias, deputy minister of industry, "Industrial Development Programs and Tariff Structure," speech presented for Roberto Ongpin, Policy Conference on Tariff Reforms, April 22, 1981 (emphasis added).

33. The author was an invited guest of Business Day at the conference. These impressions came from conversations with audience members as well as from overheard conversations in which the author was not directly involved.

34. The full second tranche was made available to the Philippine government by the end of 1981 but was not budgeted for disbursement as part of the Philippine budget until 1982 (IMF, Philippines — Staff Report for 1982 Article IV Consultations , SM/82/55, March 24, 1982, p. 2, n. 1, and p. 6).

35. Conversation with Ortaliz at Policy Conference on Tariff Reforms, April 23, 1981. Having "the hearings and meetings made it easier to sell phase IV to the President" (interview with Noriega, April 20, 1981).

36. Business Day (Manila), October 6, 1980; Cesar Virata, minister of finance to Robert McNamara, president of the World Bank, letter, "Re: Philippine Industrial Development Policy," August 12, 1980, attachment 1, p. 10.

37. World Bank, Report and Recommendation , August 21, 1980, pp. 22, 24.

38. World Bank, Industrial Development Strategy and Policies in the Philippines , Report 2513-PH, October 29, 1979, vol. 1: Summary Report , p. 7.

39. Bulletin Today (Manila), October 23, 1980.

40. Quoted in Julie A. Amargo, "Licaros, Ver and Imelda," Philippine Signs (February 18-24, 1984): 8.

41. Interview with Licaros, April 1, 1981.

42. Interview with former Central Bank deputy governor (anonymity requested), February 9, 1981.

43. Interview with Noriega, April 20, 1981, repeating statements originally made on January 30, 1981. Reiterated by Ortaliz (April 13, 1981), and by Licaros himself (April 1, 1981).

44. Interviews with Ortaliz, January 19, 1981; and Noriega, April 20, 1981.

45. Interview with Noriega, April 20, 1981.

46. Ibid.

47. Interview with Ortaliz, January 19, 1981.

48. World Bank, Report and Recommendation , August 21, 1980, p. 24.

49. She received the title of special assistant to the governor (interviews with Noriega, April 20, 1981; Licaros, April 1, 1981).

50. Times Journal , January 8, 1981.

Thus, in mid-1981, Ongpin became minister of trade and industry. Although people in the Central Banks Department of Economic Research interviewed by the author were firm in their insistence that no such transfer of power would occur (especially Areñas, April 15, 1981), Central Banks Robert Garcia, assistant to the governor, admitted publicly during the open forum of the Policy Conference on Tariff Reforms, April 23, 1981, that "the move of import licensing from out of the Central Bank has taken effect. It was found by the IMF and GATT that such import licensing [duties] had to be transferred."

51. This was the so-called Dewey Dee caper of early January 1981. On this, see Chapter 6, below; and Robin Broad and Walden Bello, "Structural and Other Adjustments," in Walden Bello et al., Development Debacle: The World Bank in the Philippines (San Francisco: Institute for Food and Development Policy, 1982), p. 180.

52. Interview with Ortaliz, April 13, 1981. Laya subsequently became enmeshed in a scandal of his own when the IMF discovered in late 1983 that the Central Bank had been overstating its foreign exchange reserves by $600 million. For this mistake in counting, Laya was "promoted" to the post of minister of education.

53. In looking at the experience of twenty-four devaluations in nineteen countries during the year following each devaluation, economist Richard Cooper has noted that "devaluation seems to increase substantially the possibility that the finance minister of the devaluing country will lose his job" (Richard N. Cooper, "Currency Devaluation in Developing Countries," in Government and Economic Development , ed. Gustav Ranis [New Haven, Conn.: Yale University Press, 1971], pp. 472-513).

54. Statement of Daniel A. O'Donohue, acting deputy assistant secretary, Bureau of East Asian and Pacific Affairs, Department of State, in U.S. Congress, House, Committee on Foreign Affairs, U.S. Policy Towards the Philippines, Joint Hearings Before the Subcommittee on Asia and Pacific Affairs and the Subcommittee on Human Rights and International Organizations , 97th Cong., 1st sess., November 18, 1981, p. 78.

55. Interview with Licaros, April 1, 1981. The purchasing-power parity theory or doctrine was developed by Sweden's Gustav Cassel around 1917 to predict the equilibrium level of a flexible exchange rate. In general terms, the theory states that the exchange rate between one currency and another is in equilibrium when, at that rate of exchange, their domestic purchasing powers are equivalent. See Bela Balassa, "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy 72 (December 1964): 584-96.

56. Interview with Bince, December 2, 1980. Even Virata was quoted in the Philippine press as decrying the IMF's "questionable application of dubious economic theories such as the purchasing-power parity theory" ( Bulletin Today [Manila], November 16, 1980).

57. Interview with Legarda, February 2, 1981. The Exchange and Trade Relations Department is the former Exchange Restrictions Department (Margaret G. de Vries, The International Monetary Fund, 1966-1971: The System Under Stress , 2 vols. (Washington, D.C.: IMF, 1976), vol. 1, p. 636.

58. See, e.g., IMF, Staff Report for the 1980 Article IV Consultation and Review of Standby Arrangement , EBS/80/159, July 16, 1980, pp. 12-14.

59. Interview with Legarda, February 2, 1981. The term has carried over from the Fund's original articles to the second amendment. The U.S. Treasury representative to the Bretton Woods Conference, Harry Dexter White, noted in 1946 that "in the drafting of the Articles of Agreement, no attempt was made to define fundamental disequilibrium." And, as Joseph Gold commented decades later, Fund officials "have not yet ventured a formal definition of it" (Joseph Gold, "The Techniques of Response," in The International Monetary Fund, 1945-1965: Twenty Years of International Monetary Cooperation , ed. J. Keith Horsefield, 3 vols. [Washington, D.C.: IMF, 1969], vol. 2, p. 581).

60. Interview with Legarda, February 2, 1981.

61. Ibid.

62. Ibid.; and interview with Leung, January 15, 1981.

63. Interviews with IMF official (anonymity requested), November 25, 1980; and Leung, January 15, 1981. World Bank, Report and Recommendation , August 21, 1980, p. 25.

64. Interview with Licaros, April 1, 1981.

65. Interview with Bince, December 2, 1980.

66. This assessment was reiterated in Business International, Briefing Paper , pp. 36-37.

67. Interview with Ministry of Finance staff member (anonymity requested), December 17, 1980. View repeated by Areñas, January 15, 1981, and in Business International, Briefing Paper , pp. 36-37. Percentages calculated from statistics supplied by Department of Economic Research, Central Bank of the Philippines, January 1981.

68. World Bank, The Philippines: Poverty, Basic Needs, and Employment: A Review and Assessment , draft of Report 2984-PH, n.d., pp. 124-27. The pagination refers to the 154-page, single-spaced edition of the report, not the 392-page edition. See also World Bank, Philippines — Country Program Paper , August 29, 1980, p. 4.

69. World Bank, Report and Recommendation , August 21, 1980, p. 23. See also p. 25 of that report. Cf. John Maynard Keynes, The Collected Writings of John Maynard Keynes , ed. Donald Moggridge, vol. 26: Activities 1941-1946, Shaping the Post-War World: Bretton Woods and Reparations (Cambridge, England: Macmillan, 1979), chapter 2, "Commercial Policy, December 1941-December 1945."

70. Interview with Noriega, April 20, 1981.

71. Interview with Ortaliz, April 13, 1981.

72. World Bank, Industrial Development Strategy , May 1980, p. ix.

73. See, e.g., Bulletin Today (Manila), June 6, 1980.

74. Interview with Legarda, February 2, 1981. Cf. Business International, Briefing Paper , p. 39.

75. Virata to McNamara, August 12, 1980, p. 4.

76. The U.S. dollar is the intervention currency.

77. A similar vow had initially been taken by Virata and Licaros in a December 1979 letter to the IMF; Cesar Virata and Gregorio Licaros to Jacques de Larosière, letter requesting a new standby arrangement from the Fund, December 14, 1979. However, the Bank acknowledged that six months later the Fund was "disappointed by the government's failure to vigorously use exchange rate policies . . . to achieve program objectives" (World Bank, Philippines — Country Program Paper , 1980, p. 13).

78. IMF, Staff Report , July 16, 1980, p. 19.

79. IMF Survey (October 26, 1981): 337.

80. IMF, Philippines — Staff Report for 1982 Article IV Consultation , March 24, 1982, p. 13. Better reflecting the peso's international purchasing power, the nominal effective exchange rate represents a trade-weighted basket of currencies. Major currencies are the U.S. dollar, the yen, the Deutsche mark, pounds sterling, and the Swiss franc. The nominal effective exchange rate divided by price differences yields the peso's real effective exchange rate.

81. Ibid.

82. In mid-1981, the Ministry of Trade also became part of the Ministry of Industry under Ongpin.

83. See, among others, World Bank, Industrial Development Strategy , October 29, 1979, vol. 1, pp. 3-9; and World Bank, Report and Recommendation , August 21, 1980, pp. 16-17, 19.

84. Asian Business (May 1981): 57; Business Day (Manila), March 17, 1981.

85. Roberto Ongpin, "Re: Utilization of Peso Proceeds of SAL," memorandum from minister of industry to Cesar Virata, minister of finance, November 27, 1980.

86. World Bank, Industrial Development Strategy , October 29, 1979, vol. 1, p. 9.

87. Interview with Victor Ordoñez, Metro-Manila, Philippines, December 9, 1980.

88. World Bank, The Philippines: Country Economic Memorandum , Report 1765-PH, October 26, 1977, annex A, p. 2; and World Bank, Industrial Development Strategy , October 29, 1979, vol. 1, pp. 8-9.

89. Ibon Facts and Figures , no. 29 (October 31, 1979): 1; and Asiaweek (June 6, 1981).

90. IMF, Philippines: Recent Economic Developments , July 18, 1980, p. 34; and World Bank, Staff Appraisal Report on the Industrial Finance Project , Report 3331-PH, April 7, 1981, p. 7.

91. Interview with Merlin M. Magallona, Metro-Manila, Philippines, December 16, 1980.

92. IMF, Philippines: Request for Standby Arrangement with Supplementary Financing , EBS/80/25, February 5, 1980, p. 7; statement of Roberto Ongpin in World Bank, Meeting of the Consultative Group for the Philippines, Washington, D.C., December 13 & 14, 1979 — Report of Proceedings by the Chairman plus Annexes , PHL-80-1, March 20, 1980, annex 6, p. 3.

93. Philippines (Republic), Board of Investments, Rules and Regulations to Implement Presidential Decree No. 1789, Otherwise Known as the Omnibus Investments Code , reprinted in Business Day (Manila), April 1, 1981.

94. Business Day (Manila), February 25, 1981.

95. Business International, Briefing Paper , pp. 26, 28; Business Day (Manila), February 26, 1981.

96. Business Day (Manila), February 25 and 26, 1981; Far Eastern Economic Review (February 27, 1981): 6.

97. Asiaweek (June 6, 1980): 24; interview with Ordoñez, December 9, 1980. Villafuerte Was minister of trade until mid-1981, when the Ministry of Trade and the Ministry of Industry were merged and Villafuerte became presidential representative for trade negotiations (a post with Cabinet rank).

98. World Bank, The Philippines: Country Economic Memorandum , Report 1765-PH, October 26, 1977, annex A, p. 12. See also World Bank, Philippines: A Development Strategy and Investment Priorities for the Central Visayas (Region VII ), vol. 1: The Main Report , Report 2264-PH, January 4, 1979, p. 49.

99. World Bank, Report and Recommendation , August 21, 1980, p. 21. This was through Presidential Decree 1646 of October 1979 providing greater incentives for traders involved in nontraditional exports ( Far Eastern Economic Review [August 1, 1980]: 97).

100. Statement of Roberto Ongpin, in World Bank, Meeting of Consultative Group, December 13 & 14, 1979 , annex 6, p. 4.

101. Far Eastern Economic Review (August 1, 1980): 99.

102. Asiaweek (June 6, 1980): 28.

103. Bulletin Today (Manila), May 18, 1981. For more on the Philippine trading houses, see Ngo Huy Liem, Promotion of General Trading Companies in an Export Oriented Economy: The Philippine Experience (Freiburg, Federal Republic of Germany: Institute for Development Policy, University of Freiburg, 1982).

104. Interview with Ortaliz, April 13, 1981.

105. Asian Wall Street Journal , February 14, 1980; Far Eastern Economic Review (February 15, 1980): 49.

106. Virata to McNamara, August 12, 1980, attachment 1, p. 5. See also statement of Roberto Ongpin, in World Bank, Meeting of Consultative Group, December 13 & 14, 1979 , annex 6, p. 4.

107. Barend de Vries, Transition Toward More Rapid and Labor-Intensive Industrial Development: The Case of the Philippines , World Bank Staff Working Paper 424, October 1980, p. 3.

108. Interviews with Soliven, November 17, 1980; Magallona, December 16, 1980.

109. Interview with Ortaliz, January 19, 1981. Sentiments corroborated by others.

110. Conversation with Philippine government official on interagency committee for SAL reforms (anonymity requested), April 22, 1981.

111. Interview with NEDA official (anonymity requested), December 5, 1980.

112. Ibid. View corroborated by others.

113. IMF, "The Chairman's Summing Up at the Conclusion of the Discussion on Fund Collaboration with the Bank in Assisting Member Countries, Executive Board Meeting, May 28, 1980," 80/114, June 2, 1980, p. 1.

114. Interview with IMF official (anonymity requested), November 25, 1980.

115. See, for example, World Bank, Report and Recommendation , August 21, 1980, p. 25; World Bank, Country Economic Memorandum , October 26, 1977, p. iii; World Bank, Philippines — Country Program Paper , 1980, attachment 4, p. 1.

116. Quoted from IMF, "Fund Collaboration with Bank in Assisting Member Countries," memorandum from the managing director to department, bureau, and office heads, June 9, 1980, p. 1.

117. This paragraph is based on an interview with an IMF official (anonymity requested), November 25, 1980, and was corroborated in an interview with one of his colleagues (anonymity requested), Washington, D.C., September 28, 1982.

118. World Bank and IMF, The Philippines: Aspects of the Financial Sector , World Bank Country Study, May 1980.

119. Vice-President and Secretary, World Bank, Summaries of Discussions at the Meeting of the Executive Directors, September 16, 1980 , SD80-52, November 20, 1980, p. 7, and IMF, "Chairman's Summing Up," p. 1. See also p. 2 of the latter document.

120. IMF, "Statement by the Managing Director on Fund Collaboration with the Bank in Assisting Member Countries, Executive Board Meeting, May 28, 1980," 80/103, May 15, 1980, p. l.

121. One such example was India, a country in which the World Bank exerted some of its strongest attempts at policy-making influence during the 1950s and 1960s. But in: 1981, it was the IMF that took over that role with an EFF. On this, see Robin Broad, "Sous le Pouce du F.M.I.," Afrique-Asie (February 1, 1982): 45-46.

122. IMF, "Statement by Managing Director," p. 3; and World Bank, "Structural Adjustment Lending Collaboration with IMF," memorandum from Ernest Stern, June 9, 1980, p. 1.

123. Interview with IMF official (anonymity requested), November 25, 1980.

124. IMF, Staff Report , July 16, 1980, p. 5.

125. On EDI and the IMF Institute, see Chapter 2, above. See also "The Fund's Technical Assistance," Finance and Development 19 (December 1982): 10-15; and "The World Bank's Technical Assistance," Finance and Development 19 (December 1982): 16-21:

126. Interview with Soliven, November 17, 1980.

127. Ascher Memorandum, p. 7.

1. Pierre M. Landell-Mills, "Structural Adjustment Lending: Early Experience," Finance and Development 18 (December 1981): 21.

2. Barend de Vries, "Public Policy and the Private Sector," in World Bank, Economic Development and the Private Sector , September 1981, p. 5.

3. Ascher Memorandum, p. 1.

4. World Bank, "Aide-Mémoire," outcome of discussions between World Bank and Philippine government, Manila, Philippines, August 20-31, 1979, unnumbered p. 1.

5. Bela Balassa, Structural Adjustment Policies in Developing Economies , World Bank Staff Working Paper 464, July 1981, pp. 1-2.

6. World Bank, Focus on Poverty , 1983, quoted in Robert E. Wood, "The Aid Regime and International Debt: Crisis and Structural Adjustment," Development and Change 16 (April 1985): 207.

7. Remarks delivered by Jaime V. Ongpin, minister of finance of the Philippines, Carnegie Endowment for International Peace, Washington, D.C., April 7, 1986.

8. Interview with political prisoner (anonymity requested), National Penitentiary, Muntinglupa, Philippines, March 29, 1981.

9. Pilipino Muna: Bulletin of the National Economic Protectionism Association (Manila), no. 17 (May 1986): 3.

10. Yoshihara Kunio, Philippine Industrialization: Foreign and Domestic Capital (Quezon City: Ateneo de Manila University Press, 1985), p. 108.

11. Ibon Facts and Figures , no. 140 (June 15, 1984): 7.

12. Ibid. After a 1984 interview with Concepcion, Ibon wrote: "Foreign brands sell better, says Jose Concepcion, noting that Swift meats is the number one selling brand in meat products."

13. Ascher Memorandum, cover memo.

14. Ibid., pp. 8, 2.

15. Peter Evans, Dependent Development: The Alliance of Multinational, State, and Local Capital in Brazil (Princeton, N.J.: Princeton University Press, 1979), p. 283.

16. Ascher Memorandum, p. 14 (emphasis added).

18. Far Eastern Economic Review (October 31, 1980): 62.

19. Interview with Lichauco, January 13, 1981.

20. See Alejandro Lichauco, "The Lichauco Paper: Imperialism in the Philippines," Monthly Review 25 (July-August 1973). Lichauco became a political figure of sorts in the premartial law Philippines. He was elected representative from the first district of Rizal to the Constitutional Convention in progress when martial law was declared. He was imprisoned at the start of martial law.

21. Alejandro Lichauco, "The Philippine Economic Situation: Growth and Nondevelopment," in The Ligouri Lectures , by Jose Diokno, Alejandro Lichauco, and Francisco Claver, S.J., papers prepared for the Ligouri Lectures, Cebu City, July 30-August 1, 1979 (Cebu: Redemptorist Press, 1979), pp. 21-23.

22. "Interview: Industry Minister Ongpin on the 11 Major Industrial Projects," Business Day (Manila), January 19, 1981.

23. World Bank, Philippines — Country Program Paper , August 29, 1980, p. 7. "The World Bank and IMF are not happy" with the major industrial projects (interview with Ortaliz, January 19, 1981).

24. Barend de Vries, Transition Toward More Rapid and Labor-Intensive Indus-trim Development: The Case of the Philippines , World Bank Staff Working Paper 424, October 1980, p. 2.

25. World Bank, Philippines — Country Program Paper , 1980, p. 7.

26. Statement of Roberto Ongpin, in World Bank, Meeting of the Consultative Group for the Philippines, Washington, D.C., December 13 & 14, 1979 — Report of Proceedings by the Chairman plus Annexes , PHL-80-1, March 20, 1980, annex 6, pp. 2-3.

27. Interview with Lichauco, January 13, 1981.

28. Interview with NEDA official (anonymity requested), December 5, 1980.

29. See, for instance, World Bank, Philippines: Domestic and External Resources for Development , economic memorandum for 1979 Consultative Group Meeting, Report 2674—PH, November 12, 1979, p. 34; World Bank, Industrial Development Strategy , May 1980, p. 16; and ''Setbacks for Ambition," Far Eastern Economic Review (December 12, 1980): 55.

30. Interview with Ortaliz, January 19, 1981. The pledge was more formally made-by the Philippine government in NEDA's Economic Report on the Philippines, 1978-80 (Manila: NEDA, December 1980), which was prepared for the January 1981 Consultative Group meeting; see esp. pp. 2-7. The pledge is also mentioned in World Bank, Philippines — Country Program Paper , 1980, p. 7, and was stressed by an IMF official (anonymity requested) in a November 25, 1980, interview.

31. See, e.g., Cesar Virata, minister of finance, to Robert McNamara, president of the World Bank, letter, "Re: Philippine Industrial Development Policy," August 12, 1980, attachment 1, p. 12; and Business Week (February 28, 1981): 60.

32. Cesar Virata's remarks to the seventh annual Philippine Business Conference, Manilas Philippines, November 3, 1981, quoted in "Realism Replaces Ambition," Far Eastern Economic Review (November 20, 1981): 54. See also Ongpin's letter to Far Eastern Economic Review (December 11, 1981): 4; and Business Day (Manila), January 19, 1981. Cf. Business International (February 19, 1982): 64.

33. Ferdinand Marcos's address to the seventh annual Philippine Business Conference, Manila, Philippines, November 5, 1981, quoted in Far Eastern Economic Review (November 20, 1981): 54.

34. Ferdinand Marcos's speech to the University. of the Philippines Law School, quoted in Asian Wall Street Journal , October 2, 1979. Cf. "FM Won't Relent on '11 Giants,'" Business Day (Manila), December 16, 1980; "Govt Won't Deter Sked [ sic ] Industrial Projects," Bulletin Today (Manila), November 12, 1980; and Bulletin Today (Manila), December 11 and 12, 1980.

35. Quoted in Business Day (Manila), May 7, 1982.

36. Interview with Ministry of Finance staff member (anonymity requested), May 19, 1981. By 1986, only the copper smelter, the diesel engine factory, and the fertilizer plant were operating.

37. Tordesillias at Policy Conference on Tariff Reforms, April 22, 1981. See also World Bank, Report and Recommendation , August 21, 1980, p. 27; and World Bank, Philippines — Country Program paper , 1980, p. 21.

38. See table describing key components of structural adjustment loans in Landell-Mills, ''Structural Adjustment Lending," p. 19. "Regular Bank project loans are often needed to complement structural adjustment lending" ("Background Notes for Press," IMF Survey [December 14, 1981]: 396).

39. Interview with Ortaliz, March 31, 1981.

40. Interview with Ortaliz, April 13, 1981.

41. Interview with Noriega, April 20, 1981.

42. Quoted in Business Day (Manila), April 16, 1980.

43. The loan was given final approval in April 1982 (World Bank, "World Bank to Support Philippines $600 Million Textile Restructuring Program," Bank News Release , 82/77 [April 22, 1982]).

44. The cost soared from the original estimate of $250 million. Philippines Daily Express (Manila), March 26, 1981, cited a figure of $500 million. By the time of the general procurement notice for the loan, the figure given was $600 million ( Development Forum Business Edition [November 30, 1981]: 11).

45. Including corporate debts of about $75 million and personal debts of approximately $12.5 million ( Economist [January 31, 1981]: 72). For more on Dewey Dee, see Chapter 7, below.

46. Conversation with Philippine government official (anonymity requested), Metro-Manila, Philippines, April 23, 1981. Cf. Asian Wall Street Journal , February 3, 1981.

47. World Bank, Philippines: Staff Appraisal Report on Textile Sector Restructuring Project , Report 3700-PH, March 26, 1982, p. 40; Bulletin Today (Manila), October 28, 1980, December 16, 1980, May 23, 1981; Business Day (Manila), May 20, 1981. For more on requirements, see Textile Asia (August 1981): 88.

48. Interview with executive from Philippine textile firm (anonymity requested), Metro-Manila, Philippines, May 21, 1981.

49. Asian Wall Street Journal , February 3, 1981.

50. Business Day (Manila), February 2, 1981.

51. Textile Asia (July 1981): 103.

52. Bulletin Today (Manila), May 23, 1981.

53. UNIDO, Global and Conceptual Studies Branch, Division for Industrial Studies, Restructuring World Industry in a Period of Crisis — The Role of Innovation: An Analysis of Recent Developments in the Semiconductor Industry , UNIDO/IS.285, December 17, 1981, pp. 211-12.

54. Textile Asia (July 1981): 103.

55. Business Day (Manila), February 3, 1981. By 1986, about 75 percent of Unisol's yarn and knitted fabric was exported directly; the rest was sold to garment exporters (data supplied by Central Bank of the Philippines, July 1986).

56. All information on Filsyn is from Leo Gonzaga, "Buying Up the Market," Far Eastern Economic Review (November 27, 1981): 51-52; Mamora Tsuda, A Preliminary Study of Japanese-Filipino Joint Ventures (Quezon City: Foundation for Nationalist Studies, 1978), pp. 160-64; and John F. Doherty, A Preliminary Study of Interlocking Directorates Among Financial, Commercial, Manufacturing and Service Enterprises in the Philippines (Manila, 1979), pp. 84-86. See also Textile Asia (February 1982): 97. By the mid-1980s, Filsyn was the sole domestic producer of polyester fiber ( Manila Bulletin [formerly Bulletin Today ], March 13, 1986; Malaya [Manila], March 31, 1986).

57. Securities and Exchange Commissioner Roserio Lopez, quoted in Leo Gonzaga, "Buying Up the Market," p. 52.

58. Interview with Fabella, December 8, 1980.

59. For more on the business groups that dominated local affiliations with TNCs, see Mamora Tsuda, A Preliminary Study of Japanese-Filipino Joint Ventures , and Yoshihara Kunio, Philippine Industrialization: Foreign and Domestic Capital .

60 . Quoted from World Bank, Staff Appraisal Report on the Industrial Finance Project , Report 3331-PH, April 7, 1981, p. 5.

61. Business Day (Manila), May 20, 1981; see also Business Day , April 14, 1980.

62. Business Day (Manila), March 9, 1986.

63. According to data provided by the Central Bank of the Philippines, July 1986.

64. Interviews with NEPA official (anonymity requested), Metro-Manila, Philippines, January 27, 1981; and Magallona, January 12, 20, and 27 , 1981.

65. Interviews with Magallona, January 16, 1981; and Ortaliz, April 13, 1981.

66. World Bank, Report and Recommendation , August 21, 1980, p. 30.

67. Interviews with national entrepreneurs (anonymity requested), Metro-Manila, Philippines, January 29, April 23, and May 13, 1981.

68. Interview with Henares, February 27, 1981.

69. Ascher Memorandum, pp. 7, 9.

70. Interviews with Nuqui, March 10, 1981; and with officer of East Asia Division, World Bank (anonymity requested), December 15, 1980, cited in Walden Bello, David Kinley, and Elaine Elinson, "The Making of McNamara's Second Vietnam," in Walden Bello et al., Development Debacle: The World Bank in the Philippines (San Francisco: Institute for Food and Development Policy, 1982), p. 62.

71. Statement of Daniel A. O'Donohue, acting deputy assistant secretary, Bureau of East Asian and Pacific Affairs, Department of State, in U.S. Congress, House, Committee on Foreign Affairs, U.S. Policy Toward the Philippines, Joint Hearings Before the Subcommittee on Asia and Pacific Affairs and the Subcommittee on Human Rights and International Organizations , 97th Cong., 1st sess., November 18, 1981, p. 78.

72. Ascher Memorandum, p. 8.

73. Interview with Henares, February 27, 1981.

74. "Background Notes for Press," IMF Survey (December 14, 1981): 395.

75. B. de Vries, Transition Toward Labor-Intensive Industrial Development , p. 20.

76. IMF, Philippines: Recent Economic Developments , January 24, 1975, p. 18.

77. World Bank, Philippines: Poverty, Basic Needs, and Employment , Report 2984-PH, draft (hereafter cited as Poverty Report 2984-PH, draft), p. 130.

78. Interview with Bince, December 2, 1980.

79. Business Week (June 16, 1980): 118-B-1.

80. World Bank's July 1979 draft of the industrial-sector report, cited in World Bank, Philippines: Third Urban Development Project — Staff Appraisal Report , Report 2703a—PH, February 26, 1980, p. 20. See also World Bank, Industrial Development Strategy and Policies in the Philippines , Report 2513-PH, vol. 1: Summary Report , October 29, 1979, p. 10. The Philippine government defines scale according to total assets: (1) cottage industries have total capitalization less than or equal to P100,000; (2) small-scale industries, P100,000 to P1 million; (3) medium-scale, P1 million to P4 million; and (4) large-scale industries, greater than P4 million (interview with Ortaliz, April 13, 1981; Bulletin Today [Manila], May 20, 1981; U.S. AID, F & 1982 Country Development Strategy Statement — Philippines [Manila: AID, 1980], p. 48).

81. Statement of Roberto Ongpin, cited in World Bank, Meeting of Consultative Group for the Philippines, Washington, D.C., December 13 & 14, 1979 — Report of Proceedings by the Chairman plus Annexes , PHL-80-1, March 20, 1980, annex 6, p. 6.

82. David O'Connor, "Chapter on Export-Oriented Industrialization and the World Bank in the Philippines," draft (1981), p. 15 (mimeographed).

83. World Bank, The Philippines: Country Economic Memorandum , Report 1765-PH, October 26, 1977, annex A, p. 7. See also United Nations, Centre on Transnational Corporations, Transnational Corporations in the International Semiconductor Industry , 83-45443, 1983, pp. 380-93.

84. Bulletin Today (Manila), April 21, 1981.

85. Statement of Roberto Ongpin, in World Bank, Meeting of Consultative Group, December 13 & 14, 1979 , annex 6, p. 6. "Productivity in many export firms compares favorably with that in these countries" (World Bank, Industrial Development Strategy , October 29, 1979, vol. 1, p. 2). A study by the Asian Pacific Compensation Survey likewise showed that the average monthly wages paid by foreign corporations in the Philippines were much lower than elsewhere in the region ( Le Monde , August 27, 1980).

86. World Bank, Poverty Report 2984-PH, draft, pp. 112-13, and 113A, table 4.3; Guy Standing and Richard Szal, Poverty and Basic Needs: Evidence from Guyana and the Philippines , ILO World Employment Programme Study, 1979, pp. 87-90. See also IMF, Recent Economic Developments , January 24, 1975, p. 17.

87. Data provided by World Bank, July 1986.

88. World Bank; Poverty Report 2984-PH, draft, pp. 112-13.

89. World Bank, Industrial Development Strategy , October 29, 1979, vol. 1, p. 2.

90. The two versions of the Poverty Report are: World Bank, Poverty Report 2984-PH, draft; and World Bank, Aspects of Poverty in the Philippines: A Review and Assessment , vol. 1: Overview ; vol. 2: Main Report with Annexes and Statistical Appendix , Report 2984-PH, 2 vols., December 1, 1980 (hereafter cited as Poverty Report 2984-PH).

91. World Bank, Poverty Report 2984-PH, p. 53. The Stolper-Samuelson theorem, in brief, states that free trade between countries with different factor endowments will raise the relative price of the factor of production used intensively in the export industry and, therefore, that the owners of that factor of production stand to gain from opening the economy. The predictions of the factor-price equalization theorem follow from the Stolper-Samuelson theorem. See Wolfgang F. Stolper and Paul A. Samuelson, "Protection and Real Wages," Review of Economic Studies 9 (November 1941): 58-73; Paul Samuelson, "International Factor-Price Equalisation Once Again," Economic Journal 59 (June 1949): 181-97.

92. World Bank, Poverty Report 2984-PH, draft, pp. 125-26.

93. Ibid., p. 127. The Bank failed to mention that the 1969 devaluation was part of an IMF stabilization loan package. Cf. Romeo Bautista, John H. Power et al., Industrial Promotion Policies in the Philippines (Manila: Philippine Institute for Development Studies [at NEDA], 1979), p. 76, for the problems of translating the Stolper-Samuelson results into income distribution effects.

94. Ferdinand Marcos, Speech on the Occasion of the Silver Anniversary of the Central Bank of the Philippines, January 4, 1974, quoted in Felix Casalmo, The Vision of a New Society (Manila, 1980), p. 86.

95. IMF, Philippines: Recent Economic Developments , July 18, 1980, p. 12. Such differentials added to the national entrepreneurs' relative disadvantage vis-à-vis exporters.

96. Business International, Briefing Paper , p. 67.

97. Quoted from IMF, Philippines: Recent Economic Developments , January 24, 1975, p. 18. See also, for example, Omotunde Johnson and Joanne Salop, "Stabilization Programs and Income Distribution," Finance and Development 17 (December 1980): 3.

98. See, for instance, World Bank, Industrial Development Strategy , May 1980, pp. 12, 26; World Bank, Report and Recommendation , August 21, 1980, pp. 9, 10, 31.

99. Conversation with government official (anonymity requested), April 23, 1981.

100. Quoted in Barbara Ehrenreich and Annette Fuentes, "Life on the Global Assembly Line," Ms. Magazine (January 1981): 58.

101. Interview with IMF official (anonymity requested), November 25, 1980.

102. IMF, Philippines — Request for Standby Arrangement with Supplementary Financing , EBS/80/25, February 5, 1980, p. 16. See also IMF, Staff Report for the 1980 Article IV Consultation and Review of Standby Arrangement , EBS/80/159, July 16, 1980, p. 16.

103. Interview with Ortaliz, April 13, 1981.

104. Records of Wage Commission, Ministry of Labor, Manila, cited in Edberto M. Villegas, Studies in Political Economy (Manila: Silangan Publishers, 1983), p. 97. The basic pay plus various additional monthly cost-of-living allowances make up the effective minimum wage.

105. The average daily wage rate in rural areas followed a similar trend, falling from about 125 percent of the monthly poverty line in 1979 to just over 100 percent in 1982 (World Bank, The Philippines — Recent Trends in Poverty, Employment and Wages , Report 5456-PH, June 20, 1985, p. 32, table 12).

106. See, for example, Leo Gonzaga, "The Workers Are Restive," Far Eastern Economic Review (March 20, 1981): 51.

107. Jaime T. Infante, The Political, Economic, and Labor Climate in the Philippines , Multinational Industrial Relations Series 8a (Philadelphia: Industrial Research Unit, Wharton School, University of Pennsylvania, 1980), p. 52.

108. Ibid., p. 95; Bulletin Today (Manila), March 1981, cited in the Oakland, California, newspaper Ang Katipunan , September 22, 1981.

109. Sheila Ocampo, "Striking Out Alone," Far Eastern Economic Review (June 5, 1981): 65.

110. Interview with Filipino social worker (anonymity requested), Metro-Manila, Philippines, March 13, 1981.

111. World Bank, Poverty Report 2984-PH, draft, p. 118.

112. Interviews with Ortaliz, April 13, 1981; and Rene Ofreneo, Metro-Manila, Philippines, May 17, 1981. Asia Monitor 5 (Third Quarter 1981): P-5-301.

113. Conversation with government official (anonymity requested), April 23, 1981.

114. The list of so-called vital industries was long, but in 1981 it included, among others, manufacture and processing of textiles and garments, and production of export products, particularly by firms with Central Bank or Board of Investments certificates of export orientation, including hotels and restaurants in three-, four-, or five-star categories ( Business Day [Manila], March 27, 1981).

115. Sheila Ocampo, "Striking Out Alone," pp. 64-65.

116. Bulletin Today (Manila), May 16, and 19, 1981; Guardian (New York), June 10, 1981.

117. "Foreign Firms Confident as Labor Law Lifts Philippine Strike Ban," Business Asia (August 14, 1981): 259-60; Leo Gonzaga, "Jobs, Not Wages," Far Eastern Economic Review (January 15, 1982): 46. Asian Wall Street Journal , June 2, 1981, estimated that this strike ban covered 95 percent of all businesses in the Philippines.

118. World Bank, Poverty Report 2984-PH, draft, p. 112; see also p. 127.

119. From papers presented at the January 1981 Consultative. Group Meeting in Paris, cited in interviews with Central Bank staff member (anonymity requested), Metro-Manila, Philippines, March 19, 1981; and Nuqui, March 10, 1981.

120. World Bank, Poverty Report 2984-PH, pp. 18-19.

121. See, e.g., IMF, Staff Report , July 16, 1980, p. 16.

122. World Bank, Philippines — Country Program Paper , March 26, 1976, p. 10.

123. Data provided by Export Processing Zone Authority, 1986.

124. B. de Vries, Transition Toward Labor-Intensive Industrial Development , p. 17.

125. See, for instance, Barend de Vries's statement at press conference, cited in Philippines Daily Express (Manila), February. 27, 1979.

126. World Bank, Report and Recommendation , August 21, 1980, p. 31; Louis Kraar, "The Philippines Veers Toward Crisis" Fortune (July 27, 1981): 35; Far Eastern Economic Review (October 2, 1981): 36; and Financial Times (London), February 8, 1982.

127. World Bank, Poverty Report 2984-PH, draft, pp. 153-54.

128. Ibid., pp. 148-49.

129. Ibid., p. 143A, table 5.14.

130. Employment in clothing/footwear subsectors plunged from 514,060 (1970) to 405,430 (1975) (ibid., pp. 141-43 and p. 143A, table 5.14).

131. This was not the only problem with the Bank's employment estimates. There was also the fact that EPZs created jobs for a new labor force: young, single women. See Rachel Grossman, "Women's Place in the Integrated Circuit," Southeast Asia Chronicle , no. 66 (January-February 1979), and Pacific Research 9 (July-August 1978); "Filipino Women Workers Praised by MEPZ Firm," Business Day (Manila), May 20, 1981. For more on the employment effects of TNCs in the developing world in general, see United Nations, International Labour Organization, Employment Effects of Multinational Enterprises in Developing Countries , 1981.

132. World Bank, "Philippines—Random Thoughts on Rural Development," memorandum from David J. Steel to M. A. Gould and L. E. Hinkle, September 1, 1977 , p. 6.

133. Cited in Bulletin Today (Manila), October 27, 1980.

134. Business Asia (May 15, 1981): 160.

135. Statement of Benigno S. Aquino, Jr., in U.S. Congress, House, Committee on Foreign Affairs, U.S. Policy Toward the Philippines, Joint Hearings Before the Subcommittee on Asia and Pacific Affairs and the Subcommittee on Human Rights and International Organizations , 97th Cong., 1st sess., November 18, 1981, p. 20.

136. Statistics supplied by Philippine Ministry of Trade and Industry, 1986.

137. In early 1986, the Philippine government measured unemployment at 20 percent and underemployment at 40 percent. Underemployment here refers to those who work less than half time. Remarks delivered by Jaime Ongpin, minister of finance of the Philippines, Carnegie Endowment for International Peace, Washington, D.C., April 7, 1986.

138. Report: News and Views from the World Bank (September-October 1978): p. 3.

139. Interview with Ministry of Finance staff member (anonymity requested), December 17, 1980. Presumably he is referring to Simon Kuznets's U-shaped curve between inequality and level of development. On this, see M. S. Ahluwalia, "Inequality, Poverty and Development," Journal of Development Economics 3 (December 1976): 307-42.

140. Fernando Henrique Cardoso and Enzo Faletto, Dependency and Development in Latin America , trans. Marjory Marringly Urquidi (Berkeley and Los Angeles: University of California Press, 1979), p. 169.

141. Interview with World Bank official (anonymity requested), Metro-Manila, Philippines, March 4, 1981.

1. World Bank, Staff Appraisal Report on the Industrial Finance Project , Report 3331-PH, April 7, 1981, p. 27.

2. World Bank and IMF, The Philippines: Aspects of the Financial Sector , World Bank Country Study, May 1980 (hereafter cited as World Bank and IMF, Philip-pines — Financial Sector , May 1980), preface. Here again, a number of internal reports preceded this May 1980 "red-cover" public version: one in June 1979, another in September, and still another in October. See also World Bank, Philippines — Country Program Paper , August 29, 1980, p. 15; World Bank, Report and Recommendation , April 13, 1981, p. 17.

3. See, e.g., World Bank, Staff Appraisal Report on Industrial Finance Project , pp. 18-21.

4. Cesar Virata, minister of finance, to Robert McNamara, president of World Bank, letter, "Re: Philippine Government's Statement of Policy on the Future Evolution of the Financial Sector," March 13, 1981.

5. For instance, interviews with Areñas, January 15, 1981; Corpus, February 11, 1981; NEDA official (anonymity requested), December 5, 1980; and Licaros, April 1, 1981.

6. While the SAL is listed under the heading of "Nonproject: Structural Adjustment" in the Banks 1981 Annum Report (Washington, D.C.: World Bank, 1981), the apex loan is listed under "Development Finance Companies: Industrial Finance—Central Bank of the Philippines," pp. 193-94.

7. World Bank, "Aide-Mémoire," outcome of discussions between World Bank and Philippine government, August 20-31, 1979, unnumbered p. 1.

8. Ibid., unnumbered p. 2.

9. IMF Survey (December 14, 1981): 395-96.

10. Pierre M. Landell-Mills, "Structural Adjustment Lending: Early Experience," Finance and Development 18 (December 1981): 18. Later it became Bank policy to use sector loans for single-sector restructuring and SALs for more comprehensive, multisector policy dialogues.

11. Paragraph based on Edward Mason and Robert Asher, The World Bank Since Bretton Woods (Washington, D.C.: Brookings Institution, 1973), pp. 166-67, 190.

12. World Bank, Development Finance Companies , Sector Policy Paper, April 1976, p. 3. See also World Bank, DFC Policy Paper , Report 823, July 28, 1975.

13. In 1968, a Department of Development Finance Companies was set up in the Bank to complement assistance provided by the IFC's Development Finance Company Division. Until that year, only private development finance companies were eligible for World Bank funds (Mason and Asher, World Bank , pp. 358-65, 375-78; Escott Reid, Strengthening the World Bank [Chicago: Adlai Stevenson Institute, 1973], p. 54; and U.S. Treasury Department, United States Participation in the Multilateral Development Banks in the 1980s , February 1982, pp. 27-29).

14. World Bank, Economic Perspectives On Southeast Asia and Asia , April 19, 1978, p. 61. DBP is the former Rehabilitation Finance Corporation.

15. Ibid.; World Bank, Staff Appraisal Report on Industrial Finance Project , p. 69; Euromoney (April 1979): 36. Although officially licensed as an investment house, PDCP performed the duties of a development bank (World Bank and IMF, Philippines: Financial Sector , May 1980, p. 29). PDCP was 30 percent owned by foreign stockholders, including Union Ban k of Switzerland, Deutsche Bank, and the local subsidiary of the J. Walter Thompson advertising agency. In 1978, the Bank added a third conduit to the list of Philippine financial institutions servicing its medium- and long-term industrial and infrastructural financing. This was the then four-year-old, privately owned Philippine Investments Systems Organization, which also boasted foreign stockholders.

16. Quoted from World Bank, Report and Recommendation , August 21, 1980, p. 32. See also World Bank, Staff Appraisal Report on Industrial Finance Project , p. 26.

17. World Bank, Report and Recommendation , August 21, 1980, p. 36.

18. World Bank, Staff Appraisal Report on Industrial Finance Project , p. 50.

19. IMF-CB Banking Survey Commission, The Recommendations of the Joint IMF-CB Banking Survey Commission on the Philippine Financial Sector , September 1972, p. ii; World Bank and IMF, Philippines: Financial Sector , May 1980, p. 51; and Miguel Cuaderno, Sr., Problems of Economic Development (The Philippines — A Case Study ) (Manila, n.d.), pp. 86-95.

20. This paralleled the overall rise, starting in the early 1960s, of the IMF relative to the United States in influencing LDC policy-making.

21. For a more detailed historical overview, see Margaret G. de Vries, ed., The International Monetary Fund, 1966-1971: The System Under Stress , 2 vols. (Washington, D.C.: IMF, 1976), vol. 1, pp. 579-82; and J. Keith Horsefield, ed., The International Monetary Fund, 1945-1965: Twenty Years of International Monetary Cooperation , 3 vols. (Washington, D.C.: IMF, 1969), vol. 1, pp. 552-53, on which this paragraph is based.

22. IMF-CB Banking Survey Commission, Recommendations , 1972, p: ii; R. S. Ofreneo et al., "A Critique of the 1972 and 1980 Financial Reforms," University of the Philippines at Diliman, 1981, p. 2 (mimeographed).

23. Interview with Fabella, December 8, 1980.

24. Ibid.

25. "It took the state of emergency to allow the amendments to the Central Banks charter and the Banking Acts to be enacted" ("Philippines: The Economy That Came Up Smiling," Euromoney [April 1979]: 30).

26. IMF-CB Banking Survey Commission, Recommendations , 1972, cover letter.

27. Cesar Virata, "The Philippine Financial System Faces Challenge of the '80s," in Fookien Times Philippines Yearbook, 1981-82 (Manila, 1981), p. 108; Ibon Facts and Figures , no. 51 (September 30, 1980); Asian Wall Street Journal , October 27, 1978; Business Day (Manila), January 19, 1981; Philippines Daily Express (Manila), November 4, 1975; Ofreneo et al., "Critique," p. 4. Minimum capital base levels for investment houses became P20 million ( Asian Finance [September 15-October 14, 1976]: 87).

28. This new policy was contained in Presidential Decree 71. Maria Socorro L. Africa, "Participation of Offshore Banking Units (OBUs) in the Peso Market: Implications for Domestic Credit and the Money Supply," Master's thesis, School of Economics, University of the Philippines, 1980, pp. 1-2; Ofreneo et al., "Critique," p. 6; and interview with Diokno, May 14, 1982.

29. The term underwriting refers to managing the issuance of stocks.

30. World Bank and IMF, Philippines: Financial Sector , May 1980; pp. 51-52; ''Philippines: The Economy That Came Up Smiling," Euromoney (April 1979): 36; Virata, "Philippine Financial System;" p. 108. See Philippines (Republic), Republic Act 37: General Banking Act Approved on July 24, 1948 ; IMF-CB Banking Survey Commission, Recommendations , 1972, Recommendation 48, pp. 76-79, and Recommendation 68. pp. 97-100.

31. World Bank, Staff Appraisal Report on Industrial Finance Project , p. 12; Business Day (Manila); January 1-9, 1981,

32. Philippines (Republic), Central Bank of the Philippines, Circular No. 739: Rules and Regulations Governing Commercial Banks and Banks with Expanded Commercial Banking Authority to Implement the Provisions of Batas Pambansa Blg. 61 Further Amending Republic Act No. 3373 as Amended, and Other Relevant Provisions of Banking Laws (July 10, 1980), p. 2.

33. The major example was the series of so-called Central Bank—IBRD loans for agricultural machinery. On these, lee Eduardo Evangelista, "Agricultural Credit Programs: A Critique," Master's thesis, Asian Institute of Management, Metro-Manila, 1978, pp. 33-52, and exhibits 11-14. See also World Bank, Staff Appraisal Report on Industrial Finance Project , p. 26.

34. Interviews with IMF official (anonymity requested), November 25, 1980; NEDA official (anonymity requested); December 5, 1980; World Bank, Report and Recommendation , August 21, 1980, p. 17. The usefulness of overlapping (or parallel) missions had been stressed in the 1966 and 1970 memoranda of collaboration between the Bank and Fund. However, joint missions were another thing. As of 1972, according to the semiofficial World Bank history, "jointly sponsored missions are unknown" (Mason and Asher, World Bank , p. 545).

35. See, for instance, Licaros's quote in Philippines Daily Express (Manila), December 23, 1979.

36. Interview with Areñas, January 15, 1981.

37. Interview with NEDA official (anonymity requested), December 5, 1980.

38. Interview with IMF official (anonymity requested), November 25, 1980.

39. Interview with Noriega; April 20, 1981.

40. Interview with Licaros, April 1, 1981.

41. Central Bank of the Philippines; Circular No, 739 , pp. 12-13, 35.

42. Interview with Licaros, April 1, 1981

43. Philippines (Republic), Presidential Decree No. 71: Amending Republic Act No. 337, entitled "The General Banking Act " (November 29; 1972); Central Bank of the Philippines, Circular No. 739 , sections 35-52; Philippines (Republic), Batasang Pambansa, Batas Pambansa Blg. 61: An Act Amending Further Republic Act Numbered Three Hundred Thirty-Seven, as Amended; Regulating Banks and Banking Institutions and For Other Purposes, Otherwise Known as the "General Banking Act " (April 1, 1980), section 21; Philippines (Republic), Central Bank of the Philippines, Circular No. 756: Amending Section 9 of Circular No. 739 (August 22, 1980).

44. See World Bank and IMF, The Philippines: Report on Aspects of the Financial Sector , vol. 1: The Summary , Report 2546-PH, June 6, 1979 (hereafter cited as World Bank and IMF, Philippines: Financial Sector , June 6, 1979), p. 3; and IMF, Staff Report for the 1980 Article IV Consultation and Review of Standby Arrangement , EBS/80/159, July 16, 1980, p. 10. In the Philippine context, short-term debts mature in less than one year; medium-term extend to five years.

45. Central Bank of the Philippines, Circular No. 739 ; Philippines (Republic), Central Bank of the Philippines, Circular No. 740: Rules and Regulations Governing Thrift Banks to Implement the Provisions of Batas Pambansa Blg. 61, 62, and 63 Further Amending Republic Acts No. 337, as Amended, 3779, as Amended, and 4093, as Amended Respectively, and Other Relevant Provisions of Banking Laws (July 10, 1980); Philippines (Republic), Central Bank of the Philippines, Circular No. 741: Rules and Regulations Governing Rural Banks To Implement the Provisions of Batas Pambansa Blg. 65 Further Amending Republic Act No. 720, as Amended, and Other Relevant Provisions of Banking Laws (July 10, 1980); Philippines (Republic), Central Bank of the Philippines, Circular No. 742: Rules and Regulations Governing Non-Bank Financial Intermediaries Authorized to Perform Quasi-Banking Functions to Implement the Provisions of Batas Pambansa Blg. 61 Further Amending Republic Act No. 337, as Amended, Batas Pambansa Blg. 66, Amending Presidential Decree No. 129, and Other Relevant Provisions of Applicable Laws (July 10, 1980); Philippines (Republic), Batasang Pambansa, Batas Pambansa Blg. 61 ; Philippines (Republic), Batasang Pambansa, Batas Pambansa Blg. 62: An Act Amending Further Republic Act Numbered Three Thousand Seven Hundred Seventy-Nine, as Amended, Otherwise Known as the ''Savings and Loan Association Act " (April 1, 1980); Philippines (Republic), Batasang Pambansa, Batas Pambansa Blg. 63: An Act Amending Further Republic Act Numbered Forty Hundred and Ninety-Three, as Amended, Otherwise Known as the "Private Development Banks Act " (April 1, 1980); Philippines (Republic), Batasang Pambansa, Batas Pambansa Blg. 64: An Act Amending Further Republic Act Numbered Eighty-Five, as Amended, Otherwise Known as the "Charter of the Development Bank of the Philippines " (April 1, 1980); Philippines (Republic), Batasang Pambansa, Batas Pambansa Big. 65: An Act Amending Further Republic Act Numbered Seven Hundred Twenty, as Amended, Otherwise Known as the ''Rural Banks Act " (April 1, 1980); Philippines (Republic), Batasang Pambansa, Batas Pambansa Blg. 66: An Act Amending Presidential Decree No. 129, as Amended, Otherwise Known as the "Investment Houses Law " (April 1, 1980); Philippines (Republic), Batasang Pambansa, Batas Pambansa Blg. 67: An Act Amending Republic Act Numbered Two Hundred and Sixty-Five, as Amended, Otherwise Known as the "Central Bank Act " (April 1, 1980).

For a summary of these laws, see Cesar Virata, minster of finance, to Robert McNamara, president of the World Bank, letter, "Re: Philippine Industrial Development Policy," August 12, 1980, pp. 16-18.

46. Asian Finance (April 15, 1979): 64; Philippines Daily Express (Manila), November 23, 1979.

47. Fabella (December 8, 1980) used these terms.

48. World Bank, Staff Appraisal Report on Industrial Finance Project , pp. 2, 29; and see World Bank, Report and Recommendation , August 21, 1980, pp. 5, 9.

49. World Bank, The Philippines: Country Economic Memorandum , Report 1765-PH, October 26, 1977, annex A, p. 12. This requirement was repeated by de Vries in 1980 and at the 1980 Consultative Group meeting (Barend de Vries, Transition Toward More Rapid and Labor-Intensive Industrial Development: The Case of the Philippines , World Bank Staff Working Paper 424, October 1980, p. 14; Bulletin Today [Manila], January 1, 1981).

50. Virata to McNamara, August 12, 1980, p. 6; see also p. 16.

51. World Bank, Staff Appraisal Report on Industrial Finance Project , p. 23.

52. See, for example, IMF, Staff Report , July 16, 1980, p. 10; World Bank and IMF, Philippines: Financial Sector , May 1980, p. 81; Virata to McNamara, March 13, 1981, p. 1; and Virata, "Philippine Financial System," p. 110.

53. World Bank and IMF, Philippines: Financial Sector , June 6, 1979, p. 6. This was also cited in Philippines Daily Express (Manila), October 3, 1979, and by an IMF official during an interview (November 25, 1980).

54. Interview with Fabella, December 9, 1980. See World Bank, Report and Recommendation , April 13, 1981, p. 15; Far Eastern Economic Review (November 14, 1980): 8. The Joint IMF-Central Bank Banking Survey Commission of 1971-1972 was reconstituted and enlarged in 1979. The Philippine side of this group was informally known as the Financial Reforms Committee.

55. Interviews with Noriega, April 20, 1981; and Leung, January 15, 1981.

56. Interview with former Central Bank deputy governor (anonymity requested), February 9, 1981.

57. Interview with Fabella, December 8, 1980.

58. Interview with IMF official (anonymity requested), November 25, 1980.

59. World Bank and IMF, Philippines: Financial Sector , May 1980, p. 72, n. 1; see also pp. 3 and 6 of the June 6, 1979, version of this report. For a later admission of this lack of data, see Millard Long, Review of Financial Sector Work , World Bank Industry Department, October 1983, pp. 39-41.

60. Central Bank of the Philippines, Circular No. 739 , p. 8 (emphasis added); see also pp. 2, 7.

61. Interview with Licaros, April 1, 1981.

62. Interview with Areñas, January 15, 1981.

63. Interview with Bince, December 2, 1980.

64. Interview with Legarda, February 2, 1981.

65. Philippines (Republic), Central Bank of the Philippines, memorandum for CB Panel, Joint IMF-CBP Banking Survey Commission, "Subject: Report of the Joint IMF-WB Mission on Aspects of the Financial Sector of the Philippines," by Arnulfo B. Aurellano, special assistant to the governor, October 8, 1979, pp. 5-9 (hereafter cited as Aurellano Memorandum).

66. Ibid., pp. 1, 5, 9.

67. Quoted in Bulletin Today (Manila), September 4, 1979.

68. See Investment House Association of the Philippines, "IHAP Position on Universal Banking," Manila [1979]; and Business Day (Manila), June 8, 1979.

69. David SyCip, chairman, Committee to Study Multi-Purpose Financial Institutions Proposal, "Statement of Views re: Proposal to Permit/Encourage the Development of Multi-Purpose Financial Institutions," Bankers' Association of the Philippines, Manila, November 20, 1979; interviews with Magallona, December 16, 1980, and January 16, 1981; Business Day (Manila), June 8, 1979; Ibon Facts and Figures , no. 51 (September 30, 1980): 8; and Philippines Daily Express (Manila), September 30, 1979, August 18, 1980.

70. Interviews with Gabriel Singson, Metro-Manila, Philippines, February 23, 1981; Central Bank staff member (anonymity requested), December 3, 1980; and Areñas, January 15, 1981.

71. Interview with Noriega, April 20, 1981.

72. Ibid.

73. Interview with Fabella, December 8, 1980.

74. See Central Bank of the Philippines, Circular No. 739 , p. 11. By comparison, the minimum capital base of a commercial bank was P20 million, raised to P100 million as of 1973.

75. Interview with Fabella, December 8, 1980.

76. Even Minister Virata admitted that the Philippine banking reforms were in line with the German universal-banking model ( Makati [Manila] Trade Times , March 6-12, 1981).

77. Interview with Fabella, December 8, 1980.

78. Variations of this phrase were used by Licaros (April 1, 1981); Singson (February 23, 1981); national entrepreneurs (anonymity requested, May 13, 1981); Zialcita (January 21, 1981); and Ministry of Finance staff member (anonymity requested, December 17, 1980).

79. Interview with Legarda, February 2, 1981.

80. Interview with Licaros, April 1, 1981.

81. Interview with former Central Bank deputy governor (anonymity requested), February 9, 1981.

82. See, for example, Far Eastern Economic Review (January 23, 1981): 38-39; Business Day (Manila), September 26, 1979; Asian Wall Street Journal , February 26, 1980; Asian Wall Street Journal Weekly (October 25, 1982): 25. Reiterated in interview with Corpus, February 11, 1981.

83. Philippine press reports cited by Magallona, December 16, 1980; Fabella, December 8, 1980; and Gonzalo Jurado, Metro-Manila, Philippines, January 27, 1981.

84. Interview with Central Bank staff member (anonymity requested), April 19, 1981, citing phrase used by others:

85. Philippines (Republic), Central Bank, "Apex Development Finance Unit;" annex A, unnumbered p. 1 (mimeographed),

86. Asian Finance (June 15, 1980): 24. Cf. World Bank and IMF, Philippines: Financial Sector , June 6, 1979, p. 8.

87. Interview with Eduardo Villanueva, Metro-Manila, Philippines, February 23, 1981.

88. This handout was Central Bank, "Apex Development Finance Unit," annex A.

89. Interview with Central Bank staff member (anonymity requested), December 3, 1980. Statements to this effect were repeated during a number of other interviews with Central Bank staff and officials.

90. Interview with Villanueva, February 23, 1981.

91. Ibid.

92. Interviews with Singson, February 23, 1981; Legarda, February 2, 1981; former Central Bank deputy governor (anonymity requested), ,February 9, 1981; Areñas, January 15, 1981; and de los Santos, March 30, 1981.

93. See, for example, World Bank, Staff Appraisal Report on Industrial Finance Project , pp. 52-53; World Bank, Philippines — Country Program Paper , 1980, p. 9.

94. World Bank, Report and Recommendation , April 13, 1981; p. 18.

95. World Bank, Staff Appraisal Report on Industrial Finance Project , pp. 49-50 (emphasis added).

96. Manila Journal , November 3-9, 1980.

97. Interview with Licaros, April 1, 1981.

98. Ibid., and interview with Singson, February 23, 1981.

99. World Bank, Staff Appraisal Report on Industrial Finance Project , p. 31.

100. Ibid., p. 31 and p. 5, annex 2; and interview with Villanueva, February 23, 1981. The Monetary Board directs the Central Bank's management, operations, and administration-by preparing the necessary rules and regulations for these purposes. Under Marcos, the Monetary Board was composed of the Central Bank governor (Licaros at the time Of the ADFU's birth, then Laya, then Jose Fernandez), minister, of finance (Virata), minister of industry (Ongpin), minister of planning and economic policy (Sicat until July 1981, then Placido Mapa), and a representative of the private sector.

101. Interview with Villanueva, February 23, 1981.

102. World Bank, Staff Appraisal Report on Industrial Finance Project , pp. 30-32, 53.

103. Interview with Licaros, April 1, 1981.

104. Interview with Imelda Macaraig, Metro-Manila, Philippines, February 23, 1981. Up to eight more professional positions were, at that point, allotted in the ADFU (World Bank, Staff Appraisal Report on Industrial Finance Project , p. 31).

105. Interview with Diokno, April 11, 1981.

106. Interviews with Villanueva, February 23, 1981, and Macaraig, February 23, 1981; Bulletin Today (Manila), April 27, 1981. See also World Bank, Staff Appraisal Report on Industrial Finance Project , p. 31.

107. Interview with Diokno, January 17, 1981; Christian Science Monitor , September 18, 1980.

108. Interview with Philippine government official (anonymity requested), April 21, 1981.

109. Interview with World Bank official (anonymity requested), March 4, 1981.

110. Interview with Philippine government official (anonymity requested), April 21, 1981.

111. Interview with Villanueva, February 23, 1981.

112. Bulletin Today (Manila), April 27, 1981. On EDI, see Chapter 2, above.

113. World Bank, Staff Appraisal Report on Industrial Finance Project , pp. 32, 53.

114. Following a common pattern of World Bank and UNDP collaboration, the Bank was the executing agency for these UNDP funds. Interview with Macaraig, February 230 1981; World Bank, Report and Recommendation , April 13, 1981, p. 19; World Bank, Staff Appraisal Report on Industrial Finance Project , p. 32.

115. Interview with Macaraig, February 23, 1981.

116. World Bank, Staff Appraisal Report on Industrial Finance Project , p. 32.

117. Interview with Villanueva, February 23, 1981.

118. Interview with Macaraig, February 23, 1981.

119. Ibid.

120. World Bank, Staff Appraisal Report on Industrial Finance Project , p. 14.

121. Paragraph based on World Bank, Staff Appraisal Report on Industrial Finance Project , pp. 33, 48-49; World Bank, Report and Recommendation , April 13, 1981, p. 20. See also Business Day (Manila), April 24, 1981. The Bank relied on an SGV study for the figures cited in this paragraph, as the citation for p. 159, table 7, of the Staff Appraisal Report disclosed.

122. List of participatory financial institutions, as of April 1986, was provided by the Central Bank of the Philippines, July 1986.

123. World Bank, Staff Appraisal Report on Industrial Finance Project , pp. 49-50.

124. Interview with Villanueva, February 23, 1981. See, for instance, World Bank, Report and Recommendation , April 13, 1981, p. 23; Staff Appraisal Report on Industrial Finance Project , p. 33.

125. Interview with Macaraig, February 23, 1981; World Bank, Staff Appraisal Report on Industrial Finance Project , p. 30; World Bank, "World Bank to Assist Industrial Sector in the Philippines," Bank. News Release , 81/84 (May 11, 1981); and Business Day (Manila), April 24, 1981. Cf. World Bank, Development Finance Companies , pp. 36-37, 47; Mason and Asher, World Bank , p. 317, n. 37.

126. Interview with Villanueva, February 23, 1981.

127. Interview (by telephone) with Macaraig, March 5, 1981; Manila Journal , December 10, 1979; World Bank, "World Bank to Assist Industrial Sector in the Philippines," Bank News Release , 81/84 (May 11, 1981); World Bank, Report and Recommendation , April 13, 1981, pp. 18-19; World Bank, Staff Appraisal Report on Industrial Finance Project , p. 50.

128. World Bank, ''World Bank to Assist Industrial Sector in the Philippines," Bank News Release , 81/84 (May 11, 1981); and "Top 1,000 Corporations in the Philippines," Fookien Times Philippines Yearbook, 1981-82 , pp. 126-40. This list of the 1980 top corporations is taken from the Philippine Securities and Exchange Commission records. Although approximately 550 firms fall within this asset range, not all fulfill the "export-oriented'' and "labor-intensive'' criteria.

129. This included the $100 million co-finance component of the apex loan (World Bank, ''World Bank to Assist Industrial Sector in the Philippines," Bank News Release , 81/84 [May 11, 1981]).

130. Interview with Macaraig, February 23, 1981.

131. World Bank, Staff Appraisal Report on Industrial Finance Project , pp. 52-53; interview with Macaraig, February 23, 1981.

132. World Bank, Report and Recommendation , April 13, 1981, pp. 18-19. The ADFU and, in turn, the World Bank were given specific power to review these subloans. On this, see World Bank, Staff Appraisal Report on Industrial Finance Project , pp. 34, 62-65.

133. Bulletin Today (Manila), April 27, 1981.

134. Wall Street Journal , June 24, 1981; World Bank, Report and Recommendation , April 13, 1981, p. ii.

135. Years here refer to World Bank fiscal years (July-June); World Bank, Co-Financing (Washington, D.C.: World Bank, September 1983), pp. 20-21, table 2; and "Co-Financing: World Bank Tries Harder," The Banker (January 1983): 66. At the end of 1980, twenty-six LDCs were in arrears over repayment to private banks ( International Herald Tribune , October 29, 1981). At roughly that same time, the World Bank publicized the fact that there had never been a default on its loans, never a payment missed (Eugene H. Rotberg, The World Bank: A Financial Appraisal [Washington, D.C.: World Bank, March 1978], p. 12; World Bank, Co-Financing: Review of World Bank Activities , December 1976; World Bank, Annual Report 1980 [Washington, D.C.: World Bank, 1980], pp. 68-70; Asian Finance [September 15, 1977]: 5; Brandt Commission Report, p. 275). Even in the early 1980s, however, the Bank's boast warranted somewhat deeper investigation. At that point, there were at least two cases in which late payments occurred: Chile (under Allende) and Tanzania (1982). See Cheryl Payer, The World Bank: A Critical Analysis (New York: Monthly Review Press, 1982), pp. 46-50; and International Herald Tribune , October 23-24, 1982. On the question of the Banks debt-renegotiation role historically, see Mason and Asher, World Bank , pp. 224-26.

136. World Bank, Co-Financing , 1976, pp. 15, 17.

137. World Bank, Philippines — Country Program Paper , 1980, p. 25; World Bank, Annual Report 1980 , p. 70.

138. Times Journal (Manila), November 1, 1980.

139. Times Journal (Manila), December 21, 1980.

140. Interview with Licaros, April 1, 1981.

141. World Bank, Report and Recommendation , April 13, 1981, pp. 49-50.

142. World Business Weekly (August 31, 1981): 49.

143. World Bank, Co-Financing , 1983, p. 9. See also Asian Finance (September 17, 1977): 5.

144. World Bank, Co-Financing , 1976, pp. 12, 15.

145. Interview with Macaraig, February 23, 1981.

146. See, e.g., World Bank, Staff Appraisal Report on Industrial Finance Project , p. 62.

147. Interview with Licaros, April 1, 1981.

148. Ibid.

149. World Bank, Staff Appraisal Report on Industrial Finance Project , p. 30.

150. Business Day (Manila), April 24, 1981.

151. World Bank, "Operating Policy Guidelines of the Apex Development Finance Unit, Central Bank of the Philippines," April 1, 1981, p. 1. These guidelines also appeared as annex 2 of the projects Staff Appraisal Report on Industrial Finance Project .

152 . World Bank, Staff Appraisal Report on Industrial Finance Project , p. 27.

153. In a survey of New York bankers, "practically every major New York lender interviewed warned of hazards" for the Philippines ( Asian Wall Street Journal , January, 20, 1981).

154. Interview with IMF official (anonymity requested), November 25, 1980.

155. World Bank, Co-Financing , 1976, p. 14.

156. Interview with Villanueva, February 23, 1981.

157. Asiaweek (May 1, 1981): 36-37; James Bartholomew, "The Shockwave Spreads," Far Eastern Economic Review (February 6, 1981): 87; Louis Kraar, "The Philippines Veers Toward Crisis," Fortune (July 27, 1981): 37-39.

158. World Bank, "Aide-Mémoire," unnumbered page 5.

159. Reportedly, the limit on banks' net domestic-assets increase stood at approximately 16 percent—as opposed to a 1980 inflation rate of about 25 percent ( Far Eastern Economic Review [June 12, 1981]: 81). On this, see also Chemical Bank, Economic Research Department, Asian Economic Trends (New York: Chemical Bank, January 1982), p. 26; and Far Eastern Economic Review (May 1, 1981): 53.

160. Philippines (Republic), Central Bank, Office of the Governor, ADFU, "Industrial Finance Fund: Proposed Statement of Policy and Operating Procedures," April 1981, p. 1.

161. Ibid., pp. 1, 2.

162. Philippines (Republic), Central Bank, Office of the Governor, ADFU, "Industrial Finance Fund," April 1981, p. 1, This document and the paper cited in the two immediately preceding notes are separate papers.

163. Conversation with Philippine government official (anonymity requested), Policy Conference on Tariff Reforms, April 23, 1981.

164. Central Bank, "Industrial Finance Fund," pp. 1-3; arid Central Bank, "Industrial Finance Fund: Proposed Statement of Policy and Operating Procedures," p. 4. The four "lead banks'' were PNB, United Coconut Planters Bank, DBP, and Land Bank of the Philippines.

165. Marc Frons, "A Little Help for Some Friends?" Newsweek (August 10, 1981): 40; "Helping Hand in Manila," Far Eastern Economic Review (April 3, 1981): 43; James Bartholomew, "Sweetheart Firm May Get Special. Deal," New Statesman (June 19, 1981): 4. See also "With a Little Help from Their Friend,'' Economist (June 27, 1981): 79.

166. This is discussed further in Chapter 8, below. Quote is from Central Bank, "Industrial Finance Fund," p. 1. For more on the, history of these businessmen, see Kraar, "Philippines Veers Toward Crisis," pp. 34-39; Walden Bello, David O'Connor, and Robin Broad, "Technocrats Versus Cronies," in Walden Bello et al., Development Debacle: The World Bank in the Philippines (San Francisco: Institute for Food and Development Policy, 1982), pp. 183-95; and Ibon Facts and Figures , no. 73 (August 30, 1981): 5-7.

1. Aurellano Memorandum, p. 9.

2. Diwa Guinigundo, ''What Is Unibanking?" Diliman Review 28 (May-June 1980): 3-6.

3. Interviews with priest (anonymity requested), Metro-Manila, Philippines, May 19, 1981; priest (anonymity requested), Bukidnon, Mindanao, Philippines, December 23, 1980; priest (anonymity requested), Metro-Manila, Philippines, March 12, 1981; priest (anonymity requested), Metro-Manila, Philippines, March 6, 1981. Cf. John Doherty, S.J., "The Governments New Export Offensive," Diliman Review 28 (September-October 1980): 25-28.

4. Interviews with commercial bank executive (anonymity requested), Metro-Manila, Philippines, March 9, 1981; investment house executive (anonymity requested), Metro-Manila, Philippines, May 24, 1981; investment house executive (anonymity requested), Metro-Manila, Philippines, December 14, 1980, and March 11, 1981; and administrative assistant to commercial bank president (anonymity requested), Metro-Manila, Philippines, April 10, 1981.

5. Central Bank, Circular No. 739 , p. 22.

6. World Bank and IMF, Philippines: Financial Sector , June 6, 1979, p. 6.

7. Cesar Virata, minister of finance, to Robert McNamara, president of World Bank, letter, "Re: Philippine Government's Statement of Policy on the Future Evolution of the Financial Sector," March 13, 1981, p. 2; World Bank and IMF, Philippines: Aspects of the Financial Sector , World Bank Country Study, May 1980, p. 79. See also Philippines Daily Express (Manila), September 26, 1979. Virata's description was repeated by Leung (January 15, 1981).

8. Central Bank, Circular No. 739 , p. 7.

9. World Bank and IMF, Philippines: Financial Sector , June 6, 1979, pp. 6-7.

10. IMF, Staff Report for the 1980 Article IV Consultation and Review of Standby Arrangement , EBS/80/159, July 16, 1980, p. 10.

11. Central Bank, Circular No. 739 , p. 19.

12. Ibid., pp. 19, 26. See Manila Journal , March 17-23, 1980.

13. On this, see Sixto K. Roxas, "Unibanking: The Philippines Third Wave," Fookien Times Philippines Yearbook 1981-82 (1981), p. 164.

14. Interviews with IMF official (anonymity requested), November 25, 1980; and World Bank official (anonymity requested), March 4, 1981. See any of the versions of the World Bank and IMF joint report on the Philippine financial sector.

15. Interview with Fabella, December 8, 1980. Cf. Fabella's quotes in Times Journal (Manila), February 8, 1980; and Leo Gonzaga, "Buying Up the Market," Far Eastern Economic Review (November 27, 1981): 51.

16. Interview with Fabella, December 8, 1980.

17. The 1,034 rural banks controlled only 2.3 percent of the financial system's assets. See Ibon Databank, The Philippine Financial System — A Primer (Manila: Ibon Databank, 1983), p. 9. This excellent primer by the Manila-based Ibon research institute is the best reference source on the Philippine financial sector.

18. The five were PNB, United Coconut Planters Bank, Metropolitan Bank and Trust Co., Philippine Commercial and Industrial Bank, and Allied Banking Corp. (Guy Sacerdoti, "Postscripts to a Trauma," Far Eastern Economic Review [March 26, 1982]: 89).

19. This former savings bank was Family Bank, which became a commercial bank in 1981 and an ECB in September of 1982. Of the top fifteen banks (ranked by assets as of 1978)—PNB, Citibank, Bank of the Philippine Islands, Metropolitan Bank and Trust Company, Allied Banking Corporation, United Coconut Planters Bank, Far East Bank and Trust Company, China Banking Corporation, Rizal Commercial Banking Corporation, Philippine Commercial and Industrial Bank, Consolidated Bank and Trust Company, Equitable Banking Corporation, Pacific Banking Corporation, Manila Banking Corporation, and Insular Bank of Asia and America only six (China Bank, Rizal Commercial, Consolidated, Equitable, Pacific, and Insular) had not become ECBs as of August 1982 (Philippines: The Economy That Came Up Smiling," Euromoney [April 1979]: 33; "Financial Fiasco," Ibon Facts and Figures , no. 143 [July 31, 1984]: 7; and Ibon Databank, The Philippine Financial System A Primer , pp. 103-6).

20. Ibon Facts and Figures , no. 143 (July 31, 1984): 7.

21. Far Eastern Economic Review (January 15, 1982): 6. See also Leo Gonzaga, "More and More of the Brightest Bankers Are Going Commercial," Far Eastern Economic Review (September 24, 1982): 95-96.

22. Business Day (Manila), April 22, 1981; Euromoney (April 1979): 36-37.

23. Times Journal (Manila), July 27, 1978; Philippines Daily Express (Manila), July 22, 1980; Financial Times (London), November 11, 1980; Business Day (Manila), March 9, 1981; R. S. Ofreneo et al., "A Critique of the 1972 and 1980 Financial Reforms," University of the Philippines at Diliman, 1981, appendix A-1 (mimeographed).

24. Asia Monitor 5 (Third Quarter 1981): P-5-303; Euromoney (April 1979): 37; Business Day (Manila), April 20, 1981; Bulletin Today (Manila), October 27, 1980.

25. Quoted from Euromoney (April 1979): 36. John F. Doherty, A Preliminary Study of Interlocking Directorates Among Financial, Commercial, Manufacturing and Service Enterprises in the Philippines (Manila, 1979), p. 13. Among other links, J. B. Fernandez, Jr. (later Marcos's and then Aquino's Central Bank governor) was Bancom's vice-chairman and (as of early 1981) Far East Bank and Trusts president and chairman of the board (Ofreneo et al., "Critique," appendices B-1, B-2; Bulletin Today [Manila], January 7 and March 26, 1981).

26. Defense Minister Enrile was chairman of the board of United Coconut Planters Bank and a director of PDCP (Ofreneo et al., "Critique," appendix B-1; and "Some Are Smarter Than Others" [Manila, n.d.], p. 14 [the latter citation refers to an opposition article that was privately circulated in Manila in 1979]).

Panfilo Domingo was PNB's president and chairman of the board and also PDCP's chairman of the board (Ofreneo et al., "Critique," appendix B-2).

27. Quoted in Business Day (Manila), April 14, 1981. Cf. Business Day (Manila), April 15, 1981.

28. Leo Gonzaga, "The Wizards Are Disappearing," Far Eastern Economic Review (November 15, 1984): 85.

29. Interviews with Licaros, April 1, 1981; former Central Bank deputy. governor (anonymity requested), February 9, 1981; Central Bank staff member (anonymity requested), March 19, 1981; and Ministry of Finance staff member (anonymity requested), December 3, 1980.

30. Remarks of the United Democratic Opposition (UNIDO), quoted in Business Day (Manila), January 16, 1981.

31. Interview with Philippine government official (anonymity requested), March 6, 1981.

32. Central Bank deputy governor, quoted in Euromoney (April 1979): 30; and Ibon Databank, Primer on Philippine Commercial Banking (Manila: Ibon Databank, 1979), p. 13. Prior to 1972, TNBs had been barred from taking equity in the Philippine financial sector, but the four wholly foreign-owned banks (Bank of America, Citibank, Hong Kong and Shanghai, and Standard and Chartered Group) that were active in the country before the 1947 ban were allowed to retain their operations (Maria Socorro L. Africa, "Participation of Offshore Banking Units [OBUs] in the Peso Market: Implications for Domestic Credit and the Money Supply," Master's thesis, School of Economics, University of the Philippines, 1980, pp. 1-2; Robert Stauffer, "Philippine Martial Law: The Political Economy of Refeudalization," in Marcos and Martial Law in the Philippines , ed. David A. Rosenberg [Ithaca, N.Y.: Cornell University Press, 1979], p. 214).

33. "How Successful Was the Bank Build-Up Drive?" Asian Finance (January 1976): 29.

34. Interview with IMF official (anonymity requested), November 25, 1980. The Philippine government added other incentives to spur this TNB involvement in 1981. See Far Eastern Economic Review (September 11, 1981): 81.

35. World Bank and IMF, Philippines: Financial Sector , June 6, 1979, p. 3.

36. Ibon Databank, Philippine Financial System — A Primer , pp. 194-96. See also Robyn Lim, "The Multinationals and the Philippines Since Martial Law," in A Multinational Look at the Transnational Corporation , ed. Michael T. Skully (Sydney: Dryden Press Australia, 1978), p. 131; and Renato Constantino, The Nationalist Alternative (Quezon City: Foundation for Nationalist Studies, 1979), p. 35.

37. Frederick R. Dahl, "International Operation of U.S. Banks," Law and Contemporary Problems 32 (Winter 1967): 111.

38. Aurellano Memorandum, p. 9.

39. Interviews with Licaros, April 1, 1981; former Central Bank deputy governor (anonymity requested), February 9, 1981; Central Bank staff member (anonymity requested), March 19, 1981; and Finance Ministry staff member (anonymity requested), December 3, 1980.

40. "OBUs Join Credit Debate," Asian Finance (June 15-July 14, 1977): 85. Cf. World Bank, Poverty Report 2984-PH, draft, p. 129.

41. Interview with national entrepreneur (anonymity requested), March 13, 1981. Similar statements made by Henares, February 27, 1981.

42. On this global phenomenon, see Richard J. Barnet and Ronald E. Müller, Global Reach: The Power of Multinational Corporations (New York: Simon and Schuster, 1974), p. 152; and UNCTAD, Marketing and Distribution of Tobacco , TD/B/C.1/205, 1978, p. 21.

43. Asian Finance (June 15-July 14, 1977): 86. For more statistical information on TNCs' penetration among the top 1,000 Philippine corporations, see United Nations, Economic and Social Commission for Asia and the Pacific, Joint CTC/ESCAP Unit on Transnational Corporations, Monitoring and Regulating Transnational Corporations in the Philippines , Working Paper 11, August 1980.

44. IMF, Philippines: Recent Economic Developments , July 18, 1980, p. 46.

45. Walden Bello, David O'Connor, and Robin Broad, "Export-Oriented Industrialization! The Short-Lived Illusion," in Walden Bello et al., Development Debacle: The World Bank in the Philippines (San Francisco: Institute for Food and Development Policy, 1982), p. 155.

46. Interview with Central Bank staff member (anonymity requested), April 14, 1981.

47. Calculated from computer printouts on U.S. direct foreign investment abroad, supplied by U.S. Commerce Department, 1981. Profit rate equals income plus fees and royalties as percent of total investment.

48. Nationalist Resource Center, U.S. Imperialism in the Philippines (An Anti-Imperialist's Sourcebook ) (Manila: Nationalist Resource Center, 1980), p. 38.

49. "Philippines: The Economy That Came Up Smiling," Euromoney (April 1979): 30.

50. Quoted in E. P. Patanne, "Slow Development in Manila," Asian Business (July 1981): 44.

51. Louis Kraar, "The Philippines Veers Toward Crisis," Fortune (July 27, 1981): 36. It should be emphasized that illegalities are not completely alien to TNCs themselves. A 1980 Fortune study examining the activities of 1,043 major TNCs concluded that 11 percent had committed at least one of the following five crimes between 1971 and 1978: bribery (including kickbacks and illegal rebates), criminal fraud, illegal political contributions, tax evasion, or price fixing. The 11 percent figure is actually a minimum, as Fortune included only cases of actual conviction on federal criminal charges or cases resulting in consent decrees ("How Lawless Are Big Companies?" Fortune [December 15, 1980]: 57).

52. Peter Evans, Dependent Development: The Alliance of Multinational, State, and Local Capital in Brazil (Princeton, N.J.: Princeton University Press, 1979), p. 162.

53. For more on what Fortune (July 27, 1981, p. 37) calls the "crony problem," see Walden Bello, David O'Connor, and Robin Broad, "Technocrats Versus Cronies," in Bello et al., Development Debacle , pp. 183-95.

54. Philippines (Republic), Central Bank, Office of the Governor, "Industrial Finance Fund: Proposed Statement of Policy and Operating Procedures," April 1981, p. 4.

55. Asiaweek (May 1, 1981): 36.

56. World Bank, "Operating Policy Guidelines of ADFU," April 1, 1981, p. 2. See "IMF Stand-by Arrangement with RP," Central Bank (of the Philippines) Review (August 1981): 8.

57. Asian Wall Street Journal , February 10, 1981.

58. Interview with Manila-based TNC executive (anonymity requested), February 13, 1981.

59. As was explained in Chapter 1, the use here of the term triple alliance focuses only on Filipino institutions, whereas Evans's triple alliance includes both international and national institutions.

60. For more on how this industry-finance-government hookup works in Japan, see Andreas R. Prindl, Japanese Finance: A Guide to Banking in Japan (Chichester: John Wiley and Sons, 1981); Alexander K. Young, The Sogo Shosha: Japan's Multinational Trading Companies (Boulder, Colo.: Westview Press, 1979); Hugh Patrick, ed., with Larry Meissner, Japanese Industrialization and Its Social Consequences (Berkeley and Los Angeles: University of California Press, 1976); Hugh Patrick and Henry Rosovsky, Asia's New Giants: How the Japanese Economy Works (Washington, D.C.: Brookings Institution, 1976); Chalmers Johnson, M/T/ and the Japanese Miracle: The Growth of Industrial Policy, 1925-75 (Stanford, Calif.: Stanford University Press, 1982).

61. Interview with IMF official (anonymity requested), November 25, 1980. See Gonzaga, "More and More of the Brightest Bankers Are Going Commercial," pp. 95-96.

62. See Aurellano Memorandum, p. 6; Ibon Databank, Philippine Financial System — A Primer , pp. 42-49.

63. Doherty, Preliminary Study of Interlocking Directorates , p. 100; John Doherty, S.J., "Who Controls the Philippine Economy?" in Cronies and Enemies: The Current Philippine Scene , ed. Belinda A. Aquino (Honolulu: Philippine Studies Program, Center for Asian and Pacific Studies, University of Hawaii, 1982), pp. 7-35.

64. Vyvyan Tenorio, "A Blueprint Bogged Down," Far Eastern Economic Review (August 1, 1980): 99. See also John Doherty, "The Government's New Export Offensive," Diliman Review (September-October 1980): 25; and Ngo Huy Liem, Promotion of General Trading Companies in an Export-Oriented Economy: The Philippine Experience (Freiburg: Institute for Development Policy, 1982).

65. For specific names and holdings, see Doherty, Preliminary Study of Interlocking Directorates , and "Who Controls the Philippine Economy?"; Ofreneo et al., "Critique," p. 64 and appendix B-1; Asian Finance (May 15, 1980): 76; Manila Journal , March 17-23, 1980.

66. Aurellano Memorandum, p. 6.

67. Ibid.

68. Interview with Fabella, December 8, 1980. Cf. Central Bank, Circular No. 739 , p. 22.

69. Philippines (Republic), Batasang Pambansa, Batas Pambansa Blg. 61 , sec. 21-B; Central Bank, Circular No. 739 , pp. 54-55. These limits were generous when compared to other countries where such financial-industrial equity hookups are allowed. In Japan, the limit for a single investment has fluctuated between 5 and 10 percent of a financial institution's capital (Young, Sogo Shosha , p. 36; Prindl, Japanese Finance , p. 25). In Singapore, the limit on total equity investment stands at approximately. 40 percent of net worth; in Mexico, at about 25 percent of total resources (David SyCip, "Statement of Views re: Proposal to Permit/Encourage the Development of Multi-Purpose Financial Institutions," Bankers' Association of the Philippines, Manila, November 20; 1979, p. 3).

70. Central Bank, Circular No. 739 , p. 54.

71. SyCip, "Statement of Views," p. 3.

72. NEDA, Economic Report on the Philippines, 1978-1980 (Manila: NEDA, December 1980), p. 3. Cf. World Bank and IMF, Philippines: Financial Sector , May 1980, p. v.

73. World Bank and IMF, Philippines: Financial Sector , May 1980, p. 76.

74. Ibid., pp. 76-77. Cf. Millard Long, Review of Financial Sector Work , World Bank Industry Department, October 1983, p. 39.

75. Cesar Virata, minister of finance, to Robert McNamara, president of World Bank, letter, "Re: Philippine Industrial Development Policy," August 12, 1980, attachment 1, p. 4.

76. Interview with Macaraig, February 23, 1981. See Far Eastern Economic Review (April 16, 1982): 5.

77. IMF, Philippines — Staff Report for the 1982 Article IV Consultation , SM/82/55, March 24, 1982, p. 9; Far Eastern Economic Review (April 30, 1982): 41. The original 1981 net domestic asset ceiling (an IMF performance criterion) was raised during the IMF's mid-1981 review "to accommodate the financial rescue operation" (IMF, Staff Report , March 24, 1982, pp. 6, 9).

78. IMF, Staff Report , March 24, 1982, p. 9.

79. Evans, Dependent Development , p. 278.

80. "On the Takeover Trail," Far Eastern Economic Review (September 11, 1981): 61.

81. Ibid.; Leo Gonzaga, "High Noon in Manila," Far Eastern Economic Review (March 19, 1982): 74; Business Day (Manila), April 20, 1981.

82. Leo Gonzaga, "The High Cost of Help," Far Eastern Economic Review (October 4, 1981): 104.

83. Marc Frons, "A Little Help for Some Friends?" Newsweek (August 10, 1981): 40.

84. Leo Gonzaga and Guy Sacerdoti, "Operation Cold Comfort," Far Eastern Economic Review (May 14, 1982): 87.

85. Ibid.; see also Guy Sacerdoti, "Delta's Dire Straits," Far Eastern Economic Review (April 16, 1982): 63.

86. Gonzaga, "High Noon in Manila," p. 74.

87. Quoted in Kraar, "The Philippines Veers Toward Crisis," p. 37. See Ascher Memorandum, pp. 2, 12, 14.

88. Conversation with Philippine government official (anonymity requested), Policy Conference on Tariff Reforms, April 23, 1981. Sentiments repeated by other government officials.

89. For more on these appointees, see Central Bank (of the Philippines) Review (August 1981): 13; Bello, O'Connor, and Broad, "Technocrats Versus Cronies," pp. 183-85; World Business Weekly (August 24, 1981): 11-12; Renato Constantino, "The World Bank's Trojan Horses," Far Eastern Economic Review (August 14, 1981): 39.

1. GATT, International Trade 1980/81 (Geneva: GATT, 1981), p. 2, table 1.

2. Ibid. From 1948 to 1971, world trade (volume) grew at an average annual rate of 7.3 percent, while from 1958 to 1978, the average annual growth rate for manufactured exports was between 9.5 and 10 percent (UNCTAD, Secretariat, Trade and Development Report 1981 [Geneva: UNCTAD, 1981], p. 2, table 4; GATT, Networks of World Trade , 1978, cited in Vijay L. Kelkar, "Post-War Growth in World Trade in Manufactures," Economic and Political Weekly [April 7, 1984]: 596, table 1).

3. GATT, "International Trade in 1981 and Present Prospects," GATT Press Release , GATT/1313, March 23, 1982, p. 2, table 1.

4. The figures compared are year-over-year declines (GATT, "International Trade in 1981," pp. 1 and 2, table 2).

5. World Bank, World Development Report 1979 (New York: Oxford University Press, 1979), p. 17.

6. Calculated from IMF, Annual Report of the Executive Board for the Financial Year Ended Apri1 30, 1981 (Washington, D.C.: IMF, 1981), p. 8, table 1. In the decade before 1975, the rate was 5 percent (World Bank, World Development Report 1978 [New York: Oxford University Press, 1978], p. 9).

7. IMF, World Economic Outlook: A Survey by the Staff of the IMF , Occasional Paper 9 (Washington, D.C.: IMF, 1982), p. 31.

8. OECD report, cited in International Herald Tribune , May 4, 1982.

9. Ibid.

10. Jan Tumlir, director, GATT economic department, quoted in International Herald Tribune , January 25, 1982.

11. United States, Council of Economic Advisers, Economic Report of the President (1982), quoted in International Herald Tribune , February 26, 1982.

12. On the "new protectionism," See Robert McNamara, Address to the United Nations Conference on Trade and Development, Manila, Philippines, May 10, 1979 (Washington, D.C.: World Bank, n.d.), pp. 6-9; Douglas R. Nelson, The Political Structure of the New Protectionism , World Bank Staff Working Paper 471, July 1981; Bela Balassa, The Newly Industrializing Countries in the World Economy (New York: Pergamon Press, 1981), p. 113. See also Robert E. Baldwin, The Inefficiency of Trade Policy , Essays in International Finance 150 (Princeton, N.J.: International Finance Section, Department of Economics, Princeton University, 1982), p. 20. This essay was presented as the Frank D. Graham Memorial Lecture, Princeton University, October 7, 1982.

13. OECD official, quoted in International Herald Tribune , January 25, 1982.

14. Hollis B. Chenery and Donald B. Keesing, The Changing Composition of Developing Country Exports , World Bank Staff Working paper 314, January 1979, p. 42. Cf. World Bank, Philippines: Domestic and External Resources for Development , Economic Memorandum for 1979 Consultative Group Meeting, Report 2674-PH, November 12, 1979, p. 26; McNamara, Address to UNCTAD, 1979 , p. 6.

15. In early 1982, the Multi-Fiber Arrangement Controlled four-fifths of textile and apparel world trade ( International Herald Tribune , April 16, 1982). For more on the MFA, see John Cavanagh, "Northern Transnationals Can Use New MFA to Sew Up Markets," South (May 1982): 70-71; Diana Tussie, "GATT and the MFA: Counter to 'Free Trade,'" South (January 1982): 21; and Malcolm Subhan, "Alive But Struggling,'' Far Eastern Economic Review (January 1, 1982): 34-35; "Coming Apart at the Seams," Far Eastern Economic Review (March 19, 1982): 52-54; Malcolm Subhan, "Not Quite Sewn Up," Far Eastern Economic Review (April 30, 1982): 44-46. With special reference to Asia, see almost any early-1980s issue of Textile Asia .

16 . Jonathan Power, "A Rich-Poor Alliance Against Protectionism," International Herald Tribune , February 26, 1982.

17. Tussie, "GATT and the MFA," p. 21.

18. As a result, these products were taxed at a 16 percent rate ( Asia Monitor 5 [Third Quarter 1981]: P-5-305).

19. See IMF, Philippines: Recent Economic Developments , July 18, 1980, appendix, p. 51, table 9.

20. Robert McNamara, Address to the Board of Governors, Washington, D.C., September 30, 1974 (Washington, D.C.: World Bank, 1974), p. 12.

21. World Bank, Philippines — Country Program Paper , March 26, 1976, p. 6. In 1980, Philippine exports and imports accounted for 43 percent of GNP ( Business Day [Manila], May 6, 1981).

22. McNamara, Address to UNCTAD, 1979 , p. 6. See also World Bank, The Philippines: Country Economic Memorandum , Report 1765-PH, October 26, 1977, annex A, p. 12.

23. Barend de Vries, Transition Toward More Rapid and Labor-Intensive Industrial Development: The Case of the Philippines , World Bank Staff Working Paper 424, October 1980, p. 19.

24. Statement of Andreas Abadjis, senior adviser, Asian Department, IMF, and head of IMF delegation to 1979 Consultative Group meeting, in World Bank, Meeting of the Consultative Group for the Philippines, Washington, D.C., December 13 & 14, 1979 — Report of Proceedings by the Chairman plus Annexes , PHL—80-1, March 20, 1980, annex 5, p. 2. See also World Bank, Philippines: Domestic and External Resources for Development , p. 26; World Bank, Industrial Development Strategy , October 29, 1979, vol. 1, p. 32; IMF, Philippines: Recent Economic Develop-merits , p. 34; IMF, Philippines — Request for Standby with Supplementary Financing , EBS/80/25, February 5, 1980, p. 19.

25. See, for example, World Bank, Report and Recommendation , August 21, 1980, p. 31; World Bank, World Development Report 1978 (New York: Oxford University Press, 1978), p. 32.

26. B. de Vries, Transition Toward Labor-Intensive Industrial Development , p. 17; World Bank, Philippines — Country Program Paper , 1976, p. 14; and World Bank, Industrial Development Strategy , October 29, 1979, p. 2. See also, for example, World Bank, Report and Recommendation , August 21, 1980, p. 30; and World Bank, Staff Appraisal Report on the Industrial Finance Project , Report 3331-PH, April 7, 1981, p. 11.

27. Interview with Power, October 29, 1980; and Romeo Bautista, John H. Power et al., Industrial Promotion Policies in the Philippines (Manila: Philippine Institute for Development Studies, 1979), pp. 74-75. For more on Power and Bautista's book and involvements, see Chapter 4, above. Cf. IMF, Philippines — Staff Report for 1982 Article IV Consultation , March 24, 1982, p. 19.

28. Chenery and Keesing, Developing Country Exports , p. 43.

29. B. de Vries, Transition Toward Labor-Intensive Industrial Development , p. 17. Similarly, Balassa, in his April 1980 Frank D. Graham Memorial Lecture at Princeton University, shared optimistic projections concerning the growth of LDC-manufactured exports to industrial countries even with the ''maintenance of the Multi-Fiber Arrangement." The catch is that the MFA was not simply being maintained, as Balassa suggested; it was being tightened (Bela Balassa, The Process of Industrial Development and Alternative Development Strategies , Essays in International Finance 141 [Princeton, N.J.: International Finance Section, Department of Economics, Princeton University, 1980], p. 25).

30. World Bank, Report and Recommendation , August 21, 1980, p. 31.

31. Vice-President and Secretary, World Bank, Summaries of the Discussions at the Meeting of the Executive Directors of the Bank and IDA, September 16, 1980 , SD80-52, November 20, 1980, p. 8.

32. Ibid. See also World Bank, Philippines — Country Program Paper , 1976, p. 9.

33. This paragraph and the preceding one are based on the World Bank's World Development Report 1981 (New York: Oxford University Press, 1981), pp. 10-11; and World Development Report 1978 (New York: Oxford University Press, 1978), pp. 26-29, quotation from p. 32. Earlier projections also appeared in Chenery and Keesing, Developing Country Exports , p. 36.

34. See, for example, World Bank, China: Socialist Economic Development , vol. 1: The Main Report , Report 3391-CHA, June 1, 1981, p. 169. In this instance, the World Development Report 1981 high-assumption scenario was used with only the caveat that this assumed that protectionist barriers would not increase "significantly."

35. Interview with Ortaliz, January 19, 1981. Similar sentiments were expressed by Sicat in a speech presented at Policy Conference on Tariff Reforms, April 22, 1981; by Minister of Labor Blas Ople speaking on a 1980 Philippine television program (quoted in Business Day [Manila], December 5, 1980); by Bince, December 2, 1980; and by a Ministry of Finance staff member (anonymity requested), May 19, 1982.

36. Sicat, speech presented at Policy Conference on Tariff Reforms, April 22, 1981.

37. See World Bank, Progress Report on Structural Adjustment Lending , SecM84-461, May 23, 1984, p. 7, table 3, and Pierre M. Landell-Mills, "Structural Adjustment Lending: Early Experience," Finance and Development 18 (December 1981): 19, table 1.

38. Interview with Bank of Thailand official (anonymity requested), Bangkok, Thailand, July 1979.

39. World Bank, Thailand: Toward a Development Strategy of Full Participation , Basic Economic Report 2059-TH, September 1, 1978; World Bank, Industrial Development Strategy in Thailand , June 5, 1980; World Bank, Thailand: Coping with Structural Change in a Dynamic Economy , August 1980; Santi Mingmongkol, "The World Bank and Thailand: New Wine in an Old Bottle," Southeast Asia Chronicle , no. 81 (December 1981): 20-24; Bangkok Bank Monthly Review (November 1980): 401-6 and (November 1981): 434-49; and Far Eastern Economic Review (May 23, 1980): 40-46; (February 13, 1981): 40-44; and (June 4, 1982): 56-61.

40. See, for example, World Bank, Indonesia: Selected Issues of Industrial Development and Trade Strategy , Report 3182-IND, October 29, 1980, annex 1: The Structure of the Manufacturing Sector ; and World Bank, Chile: An Economy in Transition , Report 2390-CH, 3 vols., June 21, 1979, vol. 1: The Main Report ; vol. 2: The Annexes .

41 . The similarities are detailed further in Robin Broad, "Behind Philippine Policy Making: The Role of the World Bank and International Monetary Fund," Ph.D. dissertation, Princeton University, 1983, pp. 469-97.

42. Quoted in Christian Science Monitor , September 18, 1980.

43. Advertisement by Investment Promotion Division of the Greater Colombo Economic Commission, Colombo, Sri Lanka, in Far Eastern Economic Review (October 16, 1981): 71.

44. Interview with government official on Interagency Committee for SAL reforms (anonymity requested), April 22, 1981. Similar phrase used by Bautista, December 15, 1980.

45. Interview with Bince, December 2, 1980.

46. Interview with Manila-based TNC executive (anonymity requested), February 13, 1981.

47. Chenery and Keesing, Developing Country Exports , p. 47.

48. World Bank, Report and Recommendation , August 21, 1980, p. 31.

49. World Bank, Industrial Development Strategy , October 29, 1979, vol. 1, p. 2.

50. Quoted in John Kelly and Joel Rocamora, "Indonesia: A Show of Resistance," Southeast Asia Chronicle , no. 81 (December 1981): 16.

51. Barbara Ehrenreich and Annette Fuentes, "Life on the Global Assembly Line," Ms. Magazine (January 1981): 58.

52. World Bank, China: Socialist Economic Development , vol. 1, p. 168. China, a fledgling member of the Bank and the Fund, is a good example of a country trying to move into light-manufactured exports in its free trade zones, although it is not yet a would-be NIC:

53. See, for instance, UNIDO, Global and Conceptual Studies Branch, Division for Industrial Studies, Restructuring World Industry in a Period of Crisis — The Role of Innovation: An Analysis of Recent Developments in the Semiconductor Industry , UNIDO/15.285, December 17, 1981, p. 225.

54. John Cavanagh, "Textile Multinationals: Profiting from Protectionism," Geneva, 1981, p. 4 (mimeographed). See Textile Asia (August 1981): 87.

55. On South Korea, for example, see IMF, Korea — Recent Economic Developments , SM/82/70, April 15, 1982, pp. 54, 56, and appendix, p. 93, table 20, and p. 94, table 21; Hyan-Chin Lim, "Dependent Development in the World-System: The Case of South Korea, 1963-1979," Ph.D. dissertation, Harvard University, 1982; and Far Eastern Economic Review (February 19, 1982): 40-41.

56. "The 'Four Dragons' Lose Fire," Business Week (March 28, 1983): 64.

57. W. Arthur Lewis, Development Economics: An Outline , University Programs Modular Studies (Morristown, N.J.: General Learning Press, 1974), p. 10.

58. George L. Hicks and Geoffrey McNicoll, Trade and Growth in the Philippines: An Open Dual Economy (Ithaca, N.Y.: Cornell University Press, 1971); Douglas S. Paauw, "The Philippines: Estimates of Flows in the Open, Dualistic Economy Framework, 1949-1965," draft, Washington, D.C.: National Planning Association, Center for Development Planning, 1968; Douglas S. Paauw and Joseph L. Tyron, "Agriculture-Industry Interrelationships in an Open Dualistic Economy: The Philippines, 1949-1964," in Growth of Output in the Philippines , ed. Richard W. Hooley and Randolph Barker (Manila: School of Economics, University of the Philippines, and International Rice Research Institute, 1967).

59. See, for instance, World Bank, Poverty Report 2984-PH, vol. 1, p. 20; World Bank, Staff Appraisal Report on Industrial Finance Project , p. 10; and World Bank, Philippines — Country Program Paper , August 29, 1980, p. 7.

60. World Bank, Philippines — Country Program Paper , 1976, p. 13.

61. Statement of Shahid Husain, cited in World Bank, Meeting of the Consultative Group for the Philippines, Washington, D.C., November 30 & December 1, 1978 — Report of Proceedings by the Chairman , 1979; p. 66.

62. Roberto V. Ongpin, "A. New and Revitalized Ministry of Trade and Industry," Fookien Times Philippines Yearbook 1981-1982 (1981), p. 118.

63. "Export Processing Zone Authority—An Agent for Development," Export Processing Zone Authority advertisement for Bataan Export Processing Zone, 1979.

64. Ibid.

65. Interviews with Ortaliz, April 13, 1981; Noriega, Apri1 20, 1981; Licaros, April 1, 1981; and Bince, December 2, 1980, among others.

66. World Bank, Philippines: Domestic and External Resources for Development , p. 29; World Bank, Staff Appraisal Report on Industrial Finance Project , p. 4. See also World Bank, Industrial Development Strategy , October 29, 1979, p. 13.

67. CACP [Citizens' Alliance for Consumer Protection] Journal (Manila) 1 (Second Quarter 1981): 29.

68. Mary Soledad Perpiñan, R. G. S., "Women and TNCs: The Philippine Experience," Manila, March 1981, p. 6 (mimeographed).

69. World Bank, Industrial Development Strategy , October 29, 1979, p. 32. According to the Textile Mills Association of the Philippines, the value added under Republic Act 3137 (the so-called Embroidery Law, which allows garment manufacturers to import, on consignment, duty-free raw materials for local processing and subsequent re-export) was only 30 percent (Ibon Databank, Primer on Garment Industry [Manila: Ibon Databank, 1981], p. 19).

70. Calculated from World Bank, Philippines: Domestic and External Resources for Development , p. 61, table 3.5, and p. 64, table 3.8.

71. Calculated from United Nations, Statistical Office, 1977 Supplement to the World Trade Annual Report: Trade of the Industrialized Nations with Eastern Europe and the Developing Nations , vol. 5: The Far East (New York: Walker, 1979), pp. v-554, v-579.

72. UNIDO, Restructuring World Industry , p. 250. The figure would, however, have to be closer to the lower estimate if the World Bank's aggregate average value-added figure of 25 percent is to hold. Clearly, none of these three estimates is a precise calculation, but they provide useful approximations.

73. See Ibon Databank, Primer on Garment Industry , p. 18.

74. World Bank, Philippines: Domestic and External Resources for Development , p. 4.

75. "Coming Apart at the Seams," Far Eastern Economic Review (March 19, 1982): 52; "Tough Year Ahead for Textile Talks," South (June 1982): 72; John Cavanagh, "Northern Transnationals Can Use New MFA." On subcontracting, See Chapter 3, above.

76. World Bank, Country Economic Memorandum , annex A, p. 11. The Banks 1979 projections for Philippine import payments of intermediate goods destined for export-processing industries likewise indicated that overall import dependence was expected to remain high (World Bank, Philippines: Domestic and External Resources , p. 29).

77. This refers to total tariff item 806.30/807 imports to the United States.

78. Paragraph based on UNIDO, Restructuring World Industry , pp. 237, 244-51; quote is from p. 249. See also United Nations, Centre on Transnational Corporations, Transnational Corporations in the International Semiconductor Indus try, 83-45443, 1983.

79. See J. Rada, The Impact of Micro-electronics: A Tentative Appraisal of Information Technology , United Nations, International Labour Organization, World Employment Programme Study, 1980.

80. James A. Norling, international manager for Motorola's semiconductor group, quoted in Business Week (March 15, 1982): 38.

81. UNIDO, Restructuring World Industry , p. 237. On this question of employment, see Chapter 6, above; and United Nations, International Labour Organization, Employment Effects of Multinational Enterprises in Developing Countries , 1981, p. 82.

82. Walden Bello, David O'Connor, and Robin Broad, "Export-Oriented Industrialization: The Short-Lived Illusion," in Walden Bello et al., Development Debacle: The World Bank in the Philippines (San Francisco: Institute for Food and Development Policy, 1982), p. 153.

83. Peter Evans, Dependent Development: The Alliance of Multinational, State, and Local Capital in Brazil (Princeton, N.J.: Princeton University Press, 1979), pp. 314-15.

84. "Manila Export Zones Lure Business," Christian Science Monitor , September 18, 1980; Peacemaker (Manila) I (September 1981): 7. The Bataan Zone cost $192 million to build in 1973, earned only $82 million in ten years of operation, generated only half of the predicted direct employment, and had a negative net present value (Peter G. Warr, Export Processing Zones in the Philippines [Kuala Lumpur and Canberra: ASEAN-Australian Joint Research Project, 1985]). See also Judy S. Castro, The Bataan Export Processing Zone , United Nations, International Labour Office, Asian Employment Programme Working Paper, September 1982. The $2.1 billion was nearly $1 billion higher than had been projected in the plant's 1976 agreement. In the immediate aftermath of the April 1986 accident at the Chernobyl nuclear power plant, the Aqnino government decided to "mothball" the Bataan plant.

85. Philippine government estimates. For a discussion of the impact of such infrastructure investments, see Ibon Facts and Figures , no. 60 (February 15, 1981).

86. Business International, Briefing Paper , p. 33.

87. Ibid.

88. World Bank, Philippines — Country Program Paper , 1980, p. 5; World Bank, Staff Appraisal Report on Industrial Finance Project , p. 4. NEDA's Five-Year Philippine Development Plan, 1978-82 — Draft Revisions for 1981 and 1982 (December 1980, pp. 8-9) targeted $3.082 billion for 1982. See also Bulletin Today (Manila), February 19, 1981. The World Bank, however, slated the $3 billion current-account deficit mark for the following year, 1983 (World Bank, Philippines — Country Program Paper , 1980, attachment 3C).

The current account measures how much a country earns versus how much it spends internationally exclusive of borrowing and foreign investment; the balance-of-payments figure includes capital flows from abroad.

89. World Bank, World Debt Tables (Washington, D.C.: World Bank, 1986), pp. 226-29; and Philippines (Republic), Central Bank, "External and Financial Development in the Philippines in 1981: Year-End Report of the Central Bank of the Philippines to President of the Philippines on the State of the Economy and the Financial System," Manila, 1982.

90. This was from $1.2 billion (1980) to $2.05 billion (1981) (IMF, Staff Report , March 24, 1982, p. 4).

91. By World Bank estimates, the debt service ratio for 1979 was already at 21 percent (World Bank, Philippines: Domestic and External Resources for Development , p. 4).

92. World Bank, Philippines — Country Program Paper , 1976, p. 17. In the past, the Philippine government got around this limit by changing its definition of debt service ratio. See note 93, below.

93. IMF, Staff Report , March 24, 1982, pp. 13, 17, and appendix 1, p. 23. Debt service ratio, as calculated by the IMF, refers to the ratio of debt service net of IMF obligations and prepayments to the current year's current-account earnings. In other words, the IMF defines the debt service as payments on medium-term and long-term loans divided by the export of goods and services. The denominator of the World Banks debt service ratio calculation excludes transfers and investment income (which the IMF includes). The real discrepancy in calculations is not between these two, but between these and the Philippine government's calculation. The Philippine government uses total debt service as the numerator and the previous year's receipts on current and capital accounts as the denominator. By counting the proceeds from foreign loans as receipts, the Philippine governments calculation diminishes the ratio.

Passing from debt service ratios to the actual dollar terms behind them puts the Philippines' dilemma in starker focus. According to Business International, 1979 Philippine debt service payments totaled $1.56 billion ( Briefing Paper , p. 33). As the IMF calculated in 1980, debt service payments on loans with maturities over one year would hit $2 billion in 1982 (as against the previous year's gross export earnings of somewhat more than double that amount) and top $3 billion by 1985 (IMF, Staff Report , July 16, 1980, p. 14; Central Bank, "Economic and Financial Development in the Philippines in 1981").

94. Cited in Economist (November 27, 1982): 88. This figure includes interest and amortization of medium- and long-term debt plus short-term debt outstanding at start of year.

95. Interviews with Purita Neri, Central Bank of the Philippines, November 17, 1980; and with Central Bank staff member (anonymity requested), January 22, 1981; and E. S. Browning, "East Asia in Search of a Second Economic Miracle," Foreign Affairs (Fall 1981): 145.

96. Interview with officer of World Bank's East Asia Division (anonymity requested), December 15, 1980, by Walden Bello. The situation was exacerbated became the rapidly rising interest rates in the West bloated that portion of the debt borrowed on a variable-interest-rate basis, which embraced more than one—third of Philippine debt in 1981 ( Far Eastern Economic Review [December 12, 1981]: 50).

97. World Bank, Philippines — Country Program Paper , 1976, p. 8.

98. World Bank, Economic Perspectives. on Southeast Asia and Asia , April 19, 1978, p. 5.

99. World Bank, Philippines — Country Program Paper , 1980, p. 7.

100. These figures are from the Banks "high borrowing, high growth of GDP and manufactured exports scenario" for China (World Bank, China: Socialist Economic Development , vol: 1, pp. 175, 180-81).

101. Interview with IMF official (anonymity requested), November 25, 1980.

102. Interview with Ministry of Finance staff member (anonymity requested), December 17, 1980.

103. Interview with Zialcita, January 21, 1981. Cf. Guillermo Soliven, quoted in "Bringing the Banks Up to Date," Euromoney (April 1979): 26.

104. Interviews with (among others) Zialcita, January 21, 1981; Corpus, February 11, 1981; and NEDA official (anonymity requested), December 5, 1980.

105. "Chairman's Opening Statement," in World Bank, Meeting of Consultative Group, December 13 & 14, 1979 , p. 17.

106. World Bank, Philippines — Country Program Paper , 1980, p. 5.

107. Philippines (Republic), NEDA, Five-Year Philippine Development Plan, 1978-1982 (Manila: NEDA, 1977), p. 26, table 2.5; Philippines (Republic), Philippines Development Report 1980 (Manila: Central Bank, 1981); interview with Ferdinand Marcos in Asian Wall Street Journal , February 21, 1981; Business Day (Manila), January 23, 1981.

108. Quoted in Business Day (Manila), January 23, 1981.

109. Interviews with staff economist (anonymity requested), Center for Research and Communications, Metro-Manila, Philippines, May 20; 1981; and with official (anonymity requested), Asian Development Bank, Metro-Manila, Philippines, March 20, 1981. "Certain foreign estimates put it [the 1980 growth rate] at only 3%" ( Far Eastern Economic Review [January 16, 1981]: 50).

110. World Business Weekly (August 24, 1981): 12.

111. Textile Asia (July 1981): 102, and (November 1981): 100. The total value "rose moderately" ( Textile Asia [August 1981]: 87).

112. NEDA, Five-Year Plan — Revision for 1981 and 1982 , preface. See also Bulletin Today (Manila), February 19, 1981. Once again, government figures did not always mesh. Business Day (Manila), March 3, 1981, claimed President Marcos's "revised" target for 1981 was 5.9 percent and that realized growth for 1980 was 5.7 percent:

113. IMF, Staff Report , March 24, 1982, p. 6.

114. Ibid. The 1980 population growth rate was 2.7 percent ( Euromoney [April 1982]: 27). On the population growth rate, see also World Bank, World De. velopment Report 1981 (Washington, D.C.: World Bank; 1981), p. 166, table 17; and Far Eastern Economic Review (July 16, 1982): 42.

115. Asia Monitor 6 (Second Quarter 1982), P-6-206; and Far Eastern Economic Review (April 30, 1982): 40. The average real growth for non-oil Asian LDCs was 5 percent in 1981 ( Far Eastern Economic Review [June 11, 1982]: 91).

116. Guy Sacerdoti, "Recession's Net Spreads," Far Eastern Economic Review (April 23, 1982): 88.

117. Central Bank of the Philippines, Annual Report 1981 , draft, cited in Sacerdoti, "Recession's Net Spreads," p. 90; Chemical Bank (January 1982): 27. The Central Bank figure cited is for sales including a component of receivables.

118. "Nontraditional exports increased by 14.2 percent in 1981, compared with 29.0 percent in 1980" (IMF, Staff Report , March 24, 1982, p. 11, n. 1).

119. Economist (November 27, 1982): 88; Institutional Investor (October 1982): 245-46; Philippines Daily Express (Manila), December 5, 1982; and Far Eastern Economic Review (November 5, 1982): 59.

120. The same, the Bank reported, was true for Thailand and Malaysia (World Bank, Economic Perspectives on Southeast Asia and Asia , pp. 21-22).

121. Interview with Ordoñez, December 9, 1980. Sentiments reiterated by other government officials during interviews.

122. World Bank, "Philippines—Random Thoughts on Rural Development," memorandum from David J. Steel to M. A. Gould and L. E. Hinkle, September 1, 1977, p. 5.

123. Statement of Barend de Vries in World Bank, Meeting of Consultative Group, December 13 & 14, 1979 , annex 7, p. 1.

124. See, for instance, World Bank, Philippines — Country Program Paper , 1976, p. 13; World Bank, Staff Appraisal Report on Industrial Finance Project , p. 10; World Bank, Meeting on Consultative Group, November 30 and December 1, 1978 , p. 66.

125. World Bank, Third Urban Development Project — Staft Appraisal Report , Report 2703a-PH, February 26, 1980, p. 3. See also U.S. AID, FY1982 Country Development Strategy Statement Philippines (Manila: AID, 1980), annex D. For more on World Bank loans to the Philippine urban sector, see Walden Bello and Vincent Bielski, "Counterinsurgency in the City," in Bello et al., Development Debacle , pp. 101-25.

126. See Business Day (Manila), March 17, 1981, and May 10, 1982.

127. See Vivencio R. Jose, "Re-Orienting Philippine Education," in Mort gaging the Future: The World Bank and IMF in the Philippines , ed. Vivencio R. Jose (Quezon City: Foundation for Nationalist Studies, 1982), pp. 128-58; World Bank, "Philippines to Improve Elementary Education with $100 Million Loan," Bank News Release , 81/129 (July 2, 1981); and Nationalist Resource Center, What's Behind the Education Act of 1982 ? ([Manila]: Nationalist Resource Center, 1982).

128. World Bank, Poverty Report 2984-PH, draft, p. 65; interview with World Bank official (anonymity requested), March 4, 1981; interview with professor (anonymity requested), Asian Institute of Management, Metro-Manila, Philippines, March 18, 1981; interview with Grace Goodell, International Rice Research Institute, Los Bañrios, Philippines; March 15, 1981; interview with Glenn Denning, International Rice Research Institute, Los Baños, Philippines, March 16, 1981; Far Eastern Economic Review (March 12, 1982): 39; and Rene E. Ofreneo, ''Modernizing the Agricultural Sector," in Mortgaging the Future , ed. Jose, pp. 98-127. These World Bank cash crop projects were alongside other Bank projects that furthered the counterinsurgency (or legitimacy) goal. See Walden Bello, David Kinley, and Vincent Bielski, "Containment in the Countryside," in Bello et al., Development Debacle , pp. 67-99.

129. See Walden Bello, "The World Bank in the Philippines: A Decade of Failures," Southeast Asia Resource Chronicle , no. 81 (December 1981): 3.

130. First post-martial law debate between Marcos's Kilusang Bagong Lipunan (KBL or New Society Movement), represented by Assemblymen Arturo M. Tolentino and Emmanuel Palaez, and opposition representatives Assemblymen Salvador Laurel and Francisco "Soc" Rodriguez, February 15, 1981. On this, see Bulletin Today (Manila), February 17, 1981. Cf. Asian Wall Street Journal , December 21, 1981; Bulletin Today (Manila), January 19, 1981.

131. Interview with Ministry of Finance staff member (anonymity requested), Metro-Manila, Philippines, January 15, 1981. Similar statement made by another Ministry of Finance staff member (anonymity requested), Metro-Manila, Philippines, December 17, 1980.

132. André Gunder Frank, Crisis in the World Economy (New York: Holmes and Meier, 1980); Raul Prebisch, "The Crisis of Capitalism. in the Periphery," speech presented at first annual Raul Prebisch Lectures, UNCTAD, Geneva, Switzerland, July 6, 1982; UNIDO, Restructuring World Industry .

133 . John Hein, Major Forces in the World Economy: Concerns for International Business , Conference Board Report 807 (New York: Conference Board, 1981), p. 8; and Business Asia (May 15, 1981): 106.

134. Jacques de Larosière, "The Need for International Economic Adjustment: The Role of the IMF," address to the Annual Meeting of the French-American Chamber of Commerce, Minneapolis, Minnesota, March 4, 1982, pp. 1-2.

1. World Bank projections for developing-country GDP growth for 1980-1985 were substantially higher every year than the actual growth rates. Bank projections, published in annual World Development Reports (New York: Oxford University Press, various years), were 5.1 percent (high case). and 4.4 percent (low case) for GNP in 1980; 5.3 percent (high) and 4.1 percent (low) in 1981; 5.7 percent (high) and 4.5 percent (low) for 1980-1990 in 1982; 4.5 percent (average) for 1982-1985 in 1983; 2.8 percent (average) in 1984; 3.0 percent (average) in 1985; and 3.3 percent (average) in 1986. In 1986 the United Nations calculated GDP growth for developing countries from 1980 to 1984 at 0.8 percent and for 1985 at 2.0 percent. See World Bank, World Development Reports for 1980 (pp. 11, 99); 1981 (p. 15); 1982 (p. 37); 1983 (p. 27); 1984 (p. 35); 1985 (p. 138); and 1986 (p. 44). See also UNCTAD, Trade and Development Report, 1986 , 1986, p. 150.

2. United Nations, Department of International Economic and Social Affairs, World Economic Survey 1986: Current Trends and Policies in the World Economy , 1986, p. 12. Output in China grew annually at an average rate of 9.8 percent (1981 to 1985).

3. Ibid., p. 45.

4. Louis Kraar, "Reheating Asia's 'Little Dragons,'" Fortune (May 26, 1986): 134.

5. See articles by James Clad in Far Eastern Economic Review : "Trade-Zone Benefits Built on Shifting Sand" (February 14, 1985): 89; "Call for New Carrots" (February 28, 1985): 86-87; and ''Penang Road to Growth on Shifting Foundations" (September 19, 1985): 79-85.

6. United Nations, World Economic Survey 1986 , p. 85.

7. Ibid., p. 49.

8. World Bank, World Development Report 1986 (New York: Oxford University Press, 1986), p. 44. The high projection was 7.1 percent annual growth for exports, 7.7 percent for imports; the low projection was 3.2 percent for exports, 3.4 percent for imports:

9. United Nations, World Economic Survey 1986 , p. 4. Moreover, a substantial debt write-off would be necessary to stimulate real growth in the largest debtors.

10. Wall Street Journal , August 21, 1985, p. 28.

11. Both quotes are from Wall Street Journal , August 7, 1986, p. 22.

12. IMF Survey (June 30, 1986): 205. See also Financial Times (London), October 28, 1985, p. 8A; Wall Street Journal , January 23, 1986; Carol T. Loomis, "Why Baker's Debt Plan Won't Work," Fortune (December 23, 1985): 98-102.

13. World Bank, World Development Report 1986 , pp. 125-36. The only major LDC recipients of foreign investment that are not among the top debtors are Hong Kong and Singapore.

14. See Table 12; and IMF, World Economic Outlook: A Survey by the Staff of the International Monetary Fund (Washington, D.C.: IMF, 1986), p. 229.

15. Inter-American Development Bank, Economic and Social Progress in Latin America, 1985 Report — External Debt: Crisis and Adjustment (Washington, D.C.: Inter-American Development Bank, 1985), p. 22. The seven are Argentina, Brazil, Chile, Colombia, Mexico, Peru, and Venezuela.

16. For more detailed treatment of the origins of the debt crisis, see Cheryl Payer, The Debt Trap: The International Monetary Fund and the Third World (New York: Monthly Review Press, 1974); and John Cavanagh, Fantu Cheru, Carole Collins, Cameron Duncan, and Dominic Ntube, From Debt to Development: Alternatives to the International Debt Crisis (Washington, D.C.: Institute for Policy Studies, 1985).

17. IMF, Annual Report of the Executive Board for the Financial Year Ended April 30, 1985 (Washington, D,C.: IMF, 1985), p. 64.

18. Extended fired facilities are repaid five to ten years after drawing.

19. Net flows were $5.7 billion in 1981 and in 1982, and $4.2 billion in 1984 (IMF, International Financial Statistics , various issues).

20. These were Vietnam, Cambodia, Liberia, Sudan, Guyana, and Peru.

21. See Willy Brandt, Arms and Hunger (New York: Pantheon Books, 1986).

22. The facility was financed by reflows to the IMF from a trust fund set up for low-income LDCs in 1976. That trust fund was financed through the sale of some of the IMF's gold holdings. See ''The IMF's Structural Adjustment Facility," Finance and Development 23 (June 1986): 39.

23. Ibid.

24. Wall Street Journal , July 25, 1985, p. 24.

25. "World Bank Tries Harder," The Banker (January 1983): 66; ''World Bank Announced New Co-Financing Instruments," Bank News Release (January 13, 1983); World Bank, Co-Financing , 1983, pp. 11-13 and 20-21, table 2.

26. See "Brief Notes: International Finance ," IMF Survey , July 15, 1985; Wall Street Journal , July 1, 1985; Katherine Roberts and Peter Kornbluh, "U.S. Bolsters Chile Despite Repression," San Jose Mercury News , July 21, 1985.

27. During fiscal years 1984 and 1985, the World Bank used the program to disburse an additional sum of $4.5 billion to 44 recipient countries. See A. W. Clausen, Address to Board of Governors, Seoul, Korea, October 8, 1985 (Washington, D.C.: World Bank, 1985), p. 10.

28. Quoted in Robert E. Wood, "The Aid Regime and International Debt: Crisis and Structural Adjustment," Development and Change 16 (April 1985): 194.

29. For details of MIGA's operations, see "The Multilateral Investment Guarantee Agency: An Update," Finance and Development 22; (December 1985): 54.

30. As early as July 1985, Federal Reserve Board Chairman Paul Volcker testified to the House Banking Committee that the World Banks role in debtor countries "is likely to be more critical" as the IMF role diminishes. Volcker cited Colombia as an example, where the Bank was the major multilateral lender (with a SAL), but where the IMF did not have a standby arrangement ( Washington Post , July 31, 1985).

31. Data provided by World Bank official, July 1986.

32. "Washington's Gambit to Head Off a Debtor Revolt," Business Week (September 23, 1985): 35.

33. See Stanley Please, The Hobbled Giant: Essays on the World Bank (Boulder, Colo.: Westview Press, 1984), p. 41.

34. Elliot Berg and Alan Batchelder, "Structural Adjustment Lending: A Critical View," paper prepared by Elliot Berg Associates of Alexandria, Virginia, for World Bank, Country Policy Department, January 1985, p. 15.

35. World Bank, Sector Adjustment Lending , World Bank News Special Report, April 1986, p. 2.

36. Paragraph based on ibid., pp. 1-13; quoted matter on p. 9.

37. Washington Post , April 14, 1986; Time (July 14, 1986): 45.

38. Quoted in Wall Street Journal , July 3, 1986, p. 21. Conable was hand-picked by Treasury Secretary James Baker.

39. Jaime Ongpin, minister of finance of the Philippines, "Briefing Notes on the Philippine Economy (After 30 Days in Office)," March 1986, p. 3. This dismal list ends with an ironic final item: "business confidence returning."

40. Remarks delivered by Jaime Ongpin, minister of finance of the Philippines, Carnegie Endowment for International Peace, Washington, D.C., April 7, 1986, p. 2. Two American academics put it similarly in Foreign Affairs : "The root causes [of economic decline] lay in the mismanagement of macroeconomic policy and the resultant decline in industrial efficiency. . .. The heart of the problem was the complete politicization of entrepreneurship" (Carl Landé and Richard Hooley, "Aquino Takes Charge," Foreign Affairs [Summer 1986]: 1089-90). See also Paul Gigot, ''Crony Capitalism Slaps Philippines," Asian Wall Street Journal , November 8, 1983.

41. It should be noted that in 1982 the Philippines had already suffered a trade deficit of $2.6 billion. For an excellent analysis of this period, see Joel Rocamora, "The Marcos Dictatorship, the IMF and the Philippine Economic Crisis," in Sourcebook on the Philippine Crisis , ed. Joel Rocamora (Berkeley, Calif.: Philippine Resource Center, n.d.), p. 3.

42. For Ongpin's views in 1984, see T. K. Seshadri, "Manila Awaits Its Moment of Truth," Asian Finance (May 15, 1984).

43. Roy Rowan, "Business Talks Tough to Marcos," Fortune (November 28, 1983): 146.

44. Norman Peagam, "The Spectre That Haunts Marcos," Euromoney (April 1984): 51. A superb three-part series broke the capital-flight story: Peter Carey, Katherine Ellison, and Lewis M. Simons, "Hidden Billions: The Draining of the Philippines," San Jose Mercury News , June 23, 24, 25, 1985. See also follow-up articles of June 28 and October 27, 1985.

45. Phil Bronstein, "U.S. Seeks to Hold Marcos at Arm's Length," San Francisco Examiner , September 15, 1985.

46. Senator Paul Laxalt, "My Conversations with Ferdinand Marcos: A Lesson in Personal Diplomacy" Policy Review (Summer 1986): 205.

47. To fill in this brief summary of events in the Philippines from Benigno Aquino's assassination to Cory Aquino's victory, see Walden Bello, "Benigno Aquino: Between Dictatorship and Revolution in the Philippines," Third World Quarterly 6 (April 1984): 283-309; Walden Bello, "Philippines in Turmoil," Intervention I (1985): 26-33; Walden Bello, "Edging Toward the Quagmire: The United States and the Philippine Crisis,'' World Policy Journal 3 (Winter 1985): 29-58; A. James McGregor, Crisis in the Philippines — A Threat to U.S. Interests (Washington: Ethics and Public Policy Center, 1984); U.S. Congress, Senate, Select Committee on Intelligence, The Philippines: A Situation Report , Staff Report, 99th Cong., 1st sess., October 31, 1985; Marjorie Niehaus, Philippine Internal Conditions: Consequences of the Aquino Assassination , U.S. Library of Congress, Congressional Research Service, Issue Brief IB84114-update, November 19, 1985; Daniel B. Schirmer and Stephen Rosskamm Shalom, eds., The Philippines Reader: A History, of Colonialism, Neocolonialism, Dictatorship, and Resistance (Boston: South End Press, 1987); Robert Shaplen, ''A Reporter at Large: From Marcos to Aquino," New Yorker (August 25, 1986): 33-73 and (September 1, 1986): 36-64; Raymond Bonner, Waltzing with a Dictator: The Marcoses and the Making of Arnerican Policy (New York: Times Books, 1987).

48. "Under Attack—And Caught in a Dilemma," Far Eastern Economic Review (October 10, 1985): 77. The analysis of the Philippines as guinea pig was widespread in the country after a Philippine edition of Development Debacle appeared in late 1982 (Walden Bello et al., Development Debacle: The World Bank in the Philippines [San Francisco: Institute for Food and Development Policy, 1982]).

49. See Washington Post , October 14, 1984. It took another five months for the Philippines to reach agreement on the rest of the rescue package—a $10 billion rescheduling package with 483 Creditor banks, finally signed in May 1985.

50. World Bank, Economic Adjustment Policies in the Philippines , Background Paper Prepared for the Meeting of the Consultative Group of the Philippines to be Held in Paris in July 1983, May 25, 1983, p. 9.

51. Ibid., p. 11.

52. United States, Agency for International Development, "An Overview of the Philippine Structural Adjustment Program" (Manila: U.S. AID, February 1984), p. 6.

53. Ibid., p. 10.

54. See Nayan Chanda, " Vote of No Confidence," Far Eastern Economic Review (September 13, 1984): 16.

55. A good review of SAL programs as of July 1983 is provided in World Bank, Economic Adjustment Policies in the Philippines .

56 . IMF, Philippines — Staft Report for the Article IV Consultation , EBS/84/117, May 29, 1984, p. 45.

57. Interview with World Bank official (anonymity requested), Washington, D.C., July 10, 1986.

58. "EPZA Goes to Cavite," Metro-Manila Times , January 27, 1986.

59. See Business Day (Manila), March 27, 1986, p. 3.

60. Percentages measured in value terms ( Ibon Facts and Figures , no. 145 [August 31, 1984]: 2).

61. These figures refer to value of exports (IMF, Philippines: Recent Economic Developments , SM/84/132, June 8, 1984, p. 113).

62. In value terms using 1972 constant prices. Statistics provided by Philippine Ministry of Trade and Industry, June 1986.

63. Ibon Facts and Figures , no. 182 (March 15, 1986): 1, based on statistics from the Central Bank of the Philippines and the National Census and Statistics Office.

64. Bernardo Villegas, "The Philippines in 1985: Rolling with the Political Punches," Asian Survey 26 (February 1986): 135-36.

65. Statistics provided by the Philippine Ministry of Trade and Industry, June 1986.

66. Estimates vary. See Jose Gonzaga, "The Turn of the Screw," Far Eastern Economic Review (February 9, 1984): 54-55; Journal of Commerce , March 27, 1985, p. 11A; and Los Angeles Times , August 23, 1985.

67. Jose Gonzaga, "Inflation Turns Downward," Far Eastern Economic Review (May 9, 1985): 86.

68. Reported in Business Day (Manila), January 13, 1984.

69. Data provided by World Bank official, July 1985.

70. Statistics from the Philippine Export Processing Zone Authority, various years.

71. For a complete listing, see Manila Times , January 27, 1986.

72. Manila Bulletin , June 9, 1986, p. 17.

73. See "Why Marcos Can't Last Much Longer," Business Week (February 24, 1986): 47.

74. Among those to exercise this option in 1985 were Del Monte, Procter and Gamble, Coca-Cola, Bayer, Avon, and McDonald's. See Ibon Facts and Figures , no. 169 (August 31, 1985): 6.

75. World Bank, "Aide-Mémoire," minutes of meetings between World Bank and Philippine Government ministers, March 17-24, 1986, p. 2.

76. Interview with World Bank official (anonymity requested), Washington, D.C., August 1986.

77. World Bank, The Role of Industry in Economic Recovery in the Philippines , June 1986, p. 27. The Bank targeted five areas for its new industrial restructuring: trade liberalization, industrial investment incentives, industry financing, export policies, and technology policy.

78. Ibid., p. 43.

79. Data provided by Central Bank, June 1986; "Under Attack—And Caught in a Dilemma," Far Eastern Economic Review (October 10, 1986): 78; Ibon Databank, The Philippine Financial System — A Primer (Manila: Ibon Databank, 1983), p. 134.

80. Ibon Facts and Figures , no. 170 (September 15, 1985): 4.

81. Jose Galang, "After All That Drama, Look for Useful Reform," Far Eastern Economic Review (May 8, 1986): 84.

82. Ibon Facts and Figures , no. 170 (September 15, 1985): 2-3.

83. Asian Wall Street Journal , January 8, 1984, p. 3. By mid-1985, a Manila banker would predict, "Over time, I'd expect the number of banks here to shrink from 35 to 20" (Robert Winder, "The Philippine Way to Reschedule," Euromoney [July 1985]:84).

84. Guy Sacerdoti, "Bank Takeover Launches Crusade," Far Eastern Economic Review (September 6, 1984): 10; and Winder, "The Philippine Way to Reschedule," p. 84.

85. Ibon Facts and Figures , no. 170 (September 15, 1985): 3.

86. World Bank, "Aide-Mémoire," March 17-24, 1986, p. 2. See also Galang, "After All That Drama, Look for Useful Reform," pp. 84-86.

87. Interview with World Bank official (anonymity requested), Washington, D.C., August 1986. See also World. Bank, "Aide-Mémoire," March 17-24, 1986, for conversation with Fernandez.

88. John E. Lind, Philippine Debt to Foreign Banks (San Francisco: Northern California Interfaith Committee on Corporate Responsibility, 1984), pp. 12-13.

89. Ibid., p: 13.

90. Ibid., p. 12.

91. Washington Post , August 6, 1984, p. 30. Ongpin claimed that $6 to $7 billion of the country's foreign debt Was wasted on the cronies. Ironically, in April 1986, evidence emerged that Ongpin's Benguet Corporation had been owned by Imelda Marcos's brother, crony Benjamin "Kokoy" Romualdez. See Wall Street Journal , April 4, 1986.

92. Peter Evans, "State, Local and Multinational Capital in Brazil: Prospects for Stability of the 'Triple Alliance' in the Eighties," in Latin America in the World Economy: New Perspectives , ed. Diana Tussie (New York: St. Martin's Press, 1983), p. 140.

93. He was referring to crony bailouts as well as to the falsification of Central Bank data (Wall Street Journal , January 23, 1984, p. 25).

94. Asian Wall Street Journal , December 7, 1983, p. 1.

95. Financial Times (London), July 4, 1984.

96. Remarks of Jose Concepcion, minister of trade and industry of the Philippines, Carnegie Endowment for International Peace, Washington, D.C., June 20, 1986.

97. American Express converted $26 million of its loans for the Bataan nuclear power plant into Interbank equity (Leo Gonzaga, "Ex-Herdis Banks Well," Far Eastern Economic Review [December 13, 1984]: 87; Guy Sacerdoti, "Long-Term Deposits," Far Eastern Economic Review [May 8, 1986]: 141).

98. A 1984 International Labour Organization study on Asian countries found a strong correlation between a country's reliance on exports and the amount of damage that a deep recession in the world economy will inflict on it. See United Nations, International Labour Office, "Developing Asia Hit Where It Really Hurts," special press kit, December 1984.

99. Hollis Chenery et al., Redistribution with Growth (London: Oxford University Press, 1974), p. 17.

100. Thorough analyses of this "poverty crusade" are found in Robert L. Ayres, Banking on the Poor: The World Bank and World Poverty (Cambridge, Mass.: MIT Press in cooperation with the Overseas Development Council, 1983); and Sheldon Annis, "The Shifting Grounds of Poverty Lending at the World Bank," in Between Two Worlds: The World Bank's Next Decade , ed. Richard E. Feinberg (Washington: Overseas Development Council, 1986), pp. 87-109. Ayres singles out two problems: insufficient attention by the Bank to the factors that generate poverty, and lack of a sophisticated political theory for implementing the proposed distributional redirections (pp. 74-80). Both an excellent overview of participatory development and an extensive bibliography of development literature are found in Guy Gran, Development by People (New York: Praeger, 1983).

101. World Bank, Sector Adjustment Lending , p. 3.

102. Even the nationalist Philippine National Economic Protectionism Association is quite critical of the 1950s import-substitution industrialization in the Philippines: ''The import substitution period of the 1950s was characterized by massive inflow of foreign investment. ... Filipino savings were being spent more on consumer goods and services rather than being reinvested. ... Filipino businessmen were looking into the foreign markets rather than developing the local market" (Jorge V. Sibal, "The History of NEPA Is the History of Economic Nationalism," Pilipino Muna: Bulletin of the National Economic Protectionism Association [Manila], no. 17 [May 1986]: 4). For more on import-substitution strategies, see Raul Prebisch, The Economic Development of Latin America and Its Principal Problems , United Nations, Economic Commission on Latin America, E/CN. 12/89/ Rev. 1, 1950; Albert O. Hirschman, The Strategy of Economic Development (New Haven, Conn.: Yale University Press, 1958).

103. Albert O. Hirschman, "The Rise and Decline of Development Economics," in The Theory and Experience of Economic Development , ed. Mark Gersovitz, Carlos F. Díaz-Alejandro, Gustav Ranis, and Mark R, Rosenweig (London: George Allen & Unwin, 1982), p. 372.

104. Paul Streeten, Development Perspectives (London: Macmillan, 1981), p. 91.

105. Marc Nerfin, ed., Another Development: Approaches and Strategies (Uppsala: Dag Hammarskjöld Foundation, 1977); William H. Matthews, ed., Outer Limits and Human Needs: Resource and Environmental Issues of Development Strategies (Uppsala: Dag Hammarskjöld Foundation, 1976); "What Now? Another Development," 1975 Dag Hammarskjöld Report, Development Dialogue , no. 1-2 (1975).

106. "Another Development with Women? Development Dialogue , no. 1-2 (1982).

107. Carlos Díaz-Alejandro, "Delinking North and South: Unshackled or Unhinged?" in Rich and Poor Nations in the World Economy , ed. Albert Fishlow, Council on Foreign Relations 1980s Project (New York: McGraw-Hill, 1978), pp. 87-162.

108. Organization of African Unity, Lagos Plan of Action for the Economic Development of Africa, 1980-2000 (Geneva: International Institute for Labour Studies, 1981). See also Timothy M. Shaw, "Debates About Africa's Future: The Brandt, World Bank and Lagos Plan Blueprints," Third World Quarterly 5 (April 1983): 330-44.

109. Giovanni Andrea Cornia, Richard Jolly, and Frances Stewart, eds., Adjustment with a Human Face: Protecting the Vulnerable and Prompting Growth , A Study by UNICEF (New York: Oxford University Press, 1987). Also see Bernadette Orr, "Adjustment with a Human Face," International Health News (National Council of International Health) 7 (June 1986): 3, 9, and (August 1986): 5, 11; and Khadija Haq and Uner Kirdar, eds., Human Development: The Neglected Dimension , Papers Prepared for the Istanbul Roundtable on Development: The Human Dimension, September 2-4, 1985 (Islamabad: North South Roundtable, 1986); North South Roundtable and UNDP Development Study Programme, Salzburg Statement on Adjustment and Growth with Human Development, 7-9 September 1986 (Islamabad: North South Roundtable; New York: UNDP, 1986).

110. Albert Fishlow, "The State of Latin American Economics," chapter 5 in Inter-American Development Bank, Economic and Social Progress in Latin America, 1985 Report — External Debt: Crisis and Adjustment , 1985, pp. 123-48.

111. Bolivia also initiated its own program along these lines. See Inter-American Development Bank, Economic and Social Progress in Latin America, 1985 Report — External Debt: Crisis and Adjustment , 1985; and United Nations, World Economic Survey 1986 , p. 23.

112. Alvin Levie, Nicaragua: The People Speak (South Hadley, Mass.: Bergin and Garvey, 1985); George Black, Triumph of the People: The Sandinista Revolution in Nicaragua (London: Zed Press, 1982).

113. Florian A. Alburo et al., Economic Recovery and Long-Run Growth: Agenda for Reforms (Manila: Philippine Institute for Development Studies, May 1, 1986); and Philippines (Republic), National Economic and Development Authority, "Policy Agenda for People-Powered Development," draft [1986].

114. "Prescriptions for 'People-Powered' Development," Ibon Facts and Figures , no. 191 (July 31, 1986).

115. One of the better World Bank studies, Poverty and Hunger: Issues and Options for Food Security in Developing Countries (Washington, D.C.: World Bank, 1986), admits what many of its critics have long argued and Bank hierarchy has long disclaimed: hunger is partially rooted in distribution and poverty problems. The study fails, however, to make the connection between the World Bank's emphasis on cash crops for exports and the incidence of hunger.