Sustaining reforms

He can’t seem to make the luster rub off on his anointed, and even in the lynchpin of his watch, the nation has just slipped 10 notches to 95th out of 167 countries in the Corruption Perceptions Index. But overall President Aquino will be leaving a nation that is in a better place than when he assumed power.

He was a reluctant candidate who memorably said, upon his victory, that he didn’t think people picked him for his managerial skills.

A common question these days, as his term draws to a close, is whether the positive changes are sustainable, since P-Noy is seen as one of a kind, the black swan of 2010 who might turn out to be a fluke in Philippine governance.

At least one person whose agency has worked closely with the P-Noy administration thinks the changes can be sustained. He’s the Japanese country director of the World Bank Group, Motoo Konishi, who bade goodbye to friends last night, in preparation for his early retirement.

Konishi, who turns 59 on March 9, ends his four years in Manila this Sunday. He leaves for the World Bank home office in Washington on Feb. 7, but he will be back soon, since he intends to retire in the Philippines.

“It’s a birthday gift to myself,” Konishi told me the other night. “I will come back here to start a career that I don’t know yet, to serve the Philippines.”

I’m sure he already has a pretty good idea of his next career move, but his decision to retire here bolsters what he told me, that his Manila posting has been “the best job for me in the 35 years of my career.”

Why is that? “Because we have a client that knows how to use our intellectual knowledge and international experience, and they are able to bring what they take and digest it as their own,” he said.

The World Bank has been a big booster of the Aquino administration, which has worked closely with the WB in drawing up reforms and development programs. As Konishi put it, “We’ve been in the kitchen with the government in answering difficult things, and the government has used us in an exemplary way.”

Among the close collaborations are in the excise tax and budgeting reforms, the conditional cash transfer and public-private partnerships, one of Konishi’s areas of expertise.

P-Noy’s administration, Konishi said, “has created a new, modern image of the Philippines abroad.”

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Konishi has had it easier than his predecessor, Bert Hofman, who is currently the WB country director for China. (Konishi’s replacement, who arrived in Manila recently, is Aussie Mara Warwick, who worked under Hofman as a senior urban environment specialist in Beijing.)

Four years ago Hofman also bid goodbye to a small gathering in Manila shortly before he left for Singapore to take up his new post as WB regional economist.

Hofman had narrowly escaped Senate censure during the Arroyo administration for refusing to appear before the chamber. The Senate had wanted him to explain why the World Bank had debarred seven Philippine companies and one well-connected contractor, Eduardo C. de Luna, from participating in WB-funded projects.

Hofman sent word that the debarments, of which those covering De Luna and his firm, E.C. de Luna Construction Corp. were permanent, were announced not by the WB office in Manila but by the home office in Washington. De Luna and the seven firms were found to have engaged in collusive bidding for two WB-funded road projects worth $33 million. The debarment was based on investigation conducted by the bank’s Integrity Vice Presidency or INT, which looks into allegations of fraud and corruption involving WB-funded projects.

In 2010, Hofman and his office happily supported the new team at Malacañang with its emphasis on anti-corruption. He liked the fact that the VIP wang-wang or sirens could be eliminated overnight. When Hofman’s Manila posting ended, he was also asked if he thought the reforms of daang matuwid were sustainable.

I still remember what he told me: You can’t change 50 to 100 years of rot in just one administration.

But change, even if it comes slowly, can be irreversible, like a rocky mountain slope being permanently altered by a constantly flowing rivulet.

“I expect to see a caring, competitive and clean Philippines in 10 years,” Hofman said.

Maybe World Bank officials are more optimistic than Pinoys. Or maybe economic experts have a better appreciation of our development prospects.

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It’s no blind optimism. Konishi has degrees in international economics, development economics, international law and international business. He has served as World Bank director for Central Asia, with fields of expertise in infrastructure, transport and water.

What should be the priorities of the next Philippine team? Increasing production and managing rice prices, Konishi told me. Agricultural reforms. We must double investments in infrastructure from the current six percent of gross domestic product (although this is already up from the 2-1/2 percent of GDP in 2010) to around 10-12 percent, including through PPPs. He’s even optimistic about the PPP, which he describes as the largest program in Asia and is attracting investor interest.

The World Bank does not wear rose-tinted glasses. Late last year Konishi had told us that with all the reforms implemented in the budget process, it was still nearly impossible to keep track of many projects due to a weakness in the system that’s still waiting to be corrected. There’s no single, unified code to identify projects down the line, so you can’t be sure if a project listed in the annual General Appropriations Act is the same one being implemented by a particular agency.

He also considers as a crucial concern the peace and order situation in Mindanao, where he says aggressive efforts are needed to create jobs.

For jobs, you need investments. Konishi sees restrictive economic policies as the biggest hindrance to foreign direct investment. While lifting foreign ownership limits needs Charter change, he believes “almost everything” to attract FDI can be done even without amending the Constitution.

“You seriously need to open up so foreigners can wholly own their businesses,” he told me.

With elections approaching, does the World Bank think current reforms can be sustained, regardless of who wins the presidential race? It’s a question on most people’s minds.

Konishi answers readily: “Absolutely. As long as the focus is maintained on governance and improving services for the poorest and lifting the whole ship from the bottom, and implementing difficult economic reforms.”

He intends to be around to see his forecast materialize.