PHILIPPINES SUFFERS POVERTY DIVIDE

As the rubbish truck approached, dozens of people surged towards it, running through knee-high garbage to reach the fresh treasure.

Picking over rubbish earns people a measly, erratic income

They scrambled onto the tailboard and roof of the truck even before it opened its rear gate to pour out its stinking cargo.

The near-destitute people began foraging amongst the detritus for morsels.

They were after empty plastic bottles, scraps of metal or paper - all of which can be recycled by the sackful for a few cents.

Welcome to Smokey Mountain, the rubbish dump for central Manila.

If anyone wants to know what poverty means - and the enormous task ahead, if this country is to achieve the poverty-busting UN Millennium Development goals - they could do worse than visit Smokey Mountain. One of the women who works there, who gave her name as Bilma, said she tried to feed five children on what she could make.

"I work from sunrise to sunset," said Bilma. "Sometimes I make enough money, but sometimes I make nothing at all."

The Philippines' capital has enormous contrasts.

Manila is a shocking contrast of rich and poor

I drove past a glittering shopping mall full of the latest fashions from Hong Kong and Paris.

Ten metres from the mall I saw a small boy, maybe seven years old, returning from school in his uniform.

He was struggling to get himself and his schoolbag through the door of his home - a shanty structure that was little more than a dirty wooden box balanced precariously on the sidewalk.

About 40% of Filipinos, or more than 30 million people, live in abject poverty. Most of those are in rural areas.

It is a testament to how poor the countryside is that many still pour into dreadful urban shanties for a "better" life.

Debt deals

The powerful Speaker of the Philippines House of Representatives, Jose de Venecia, said there was no hope of his country reaching the UN goal of halving extreme poverty unless its foreign debt was reduced.

"The debt repayments and the government payroll take up 90% of the budget," he said, speaking in his 27th-floor home in Manila's elite Makati district. "That leaves just 10% for schools and hospitals, water and electrification projects."

This nation is always ranked high in the hierarchy of corrupt governments and corrupt societies Journalist Vergel Santos

Mr de Vanecia has proposed a new scheme for trying to reach the development goals - not just for the Philippines, but for all the 100 most heavily indebted nations.

His "debt for equity" proposal involves converting half of the debts into equities, which would be used by creditor nations to invest in projects aimed at achieving the UN goals.

Thus, for example, if the Philippines owed France $100m a year in debt repayments, Paris would, on a voluntary basis, forego half the repayments in exchange for a $50m-share in development projects. The money for those projects would be found by the Philippines government.

Debtor nations would thus spend some of the money they would have spent on debt, on development. The scheme is imaginative but to agree to it, creditor nations may want tough conditions and to closely monitor the development projects involved.

More resources

The mayor of Manila, Lito Atienza, told me he could solve the problems of the urban poor "today" if he had the resources.

Manila's mayor says a better business climate is key

He cited the Baseco area of the city, near Manila port, as an example of what could be done. Slum clearance was achieved there, he said, when the area was redeveloped.

But I drove around Baseco and saw people living in appalling conditions - houses that were little more than shacks on the edge of the road.

"I didn't say we have solved the problem," Mayor Atienza replied. "I said we have started to do something about it. Yes, there are a still a lot of shanties all over that area. I am just citing one specific area where we are succeeding in at least reducing the problem."

The mayor said improving the climate for business was the key to ending poverty.

Corruption

Filipino social critics, and ordinary farmers and teachers I spoke to, said the problems of poverty in the Philippines had little to do with a lack of government resources.

They said most people were poor in this country because of the extremely unequal income distribution. Journalist Vergel Santos added that corruption in ruling circles was another major factor.

"Just look at the lopsided income distribution," said Mr Santos, "and there are surveys - fairly independent ones - saying this nation is always ranked high in the hierarchy of corrupt governments and corrupt societies."

There is some evidence of progress. Near Smokey Mountain there is a modest government-sponsored housing project where some 20,000 people, many of them former rubbish pickers, now live.

Father Ben Beltran, a Catholic priest who works in the new housing estate, explained how the project had been achieved:

"You have to have a dream, and believe that it's not your destiny, that it's not God's will for you to be impoverished like that. We marched on the street and forced the government to rehabilitate the dump. That got us to where we are now," he said.

By Mark Doyle
Developing World Correspondent in Manila