The faded proclamation pasted to a concrete wall is the only trace of her visit. Last February, shortly after she replaced Joseph Estrada as president of the Philippines, Gloria Macapagal-Arroyo ventured into Project Four, a sprawling slum of 20,000 on the outskirts of Manila. It's a place filled with rotting garbage, rusty chicken cages and naked children. Arroyo stayed for a few minutes. Like her predecessors, she promised to help the squatters buy the land they occupy. But three months later, nothing has changed. And now someone has scrawled large question marks all over the proclamation. "The date is wrong," says Gil Modesto, a 37-year-old community organizer, pointing to the document. Shirtless men and small children gather around the wall. The date given on the proclamation is one year earlier, obviously a clerical error. But to the slum dwellers, it seems to verify the indifference of the government and its elite leaders. "This promise was made in a very rushed way for political purposes," says Modesto. "Some here feel it's bogus."
Ten miles away, Arroyo glided into her oak-paneled dining room in the presidential palace last week. Around 5 feet tall, in a glowing lime green dress, she is elegant and graceful. And she's not bashful about listing her own accomplishments. In an interview with NEWSWEEK's Lally Weymouth, the new president emphasized her own steadfastness in quelling a recent riot by 20,000 poor people outside her palace gates. Arroyo knows that she faces a gantlet of problems. Economic growth is paltry (a projected 1.6 percent this year). She inherited a $3 billion budget deficit. There is stiff political opposition to her government. But she says her country's No. 1 problem is poverty. And, she adds, it is getting worse. Of the 76 million people in the Philippines, more than 38 percent live below poverty level, defined as income under $220 per year. How to deal with this massive social issue? "You can't just sign proclamations to help the poor," says Arroyo. "You have to go down to the people and say, 'You're now going to have a chance to own your own land'."
In some ways, Arroyo is the mirror image of her predecessor. Joseph Estrada was disliked by the business elite. Foreign investment shrank while he was in office. A former movie actor, he was known for his boozing and womanizing, and he is now charged with stealing government money. But he was beloved by the poor, who believed he could find them jobs and homes.
From all indications, Arroyo has a better chance of making good on that promise. She's an economist and hails from the political elite. She's got the support of the business community. A phalanx of competent technocrats will work to attract foreign investment and boost the economy. But the poor are suspicious of her--and that is shaping up as a major problem. The Senate campaign last week, which she hoped would add legitimacy to her government, was marred by violence. Almost 100 people, many of them poor supporters of Estrada, died in clashes with the police and armed bands. More street battles are expected in the months ahead, and they promise to make the new president's political life difficult. "I hate to be Marxist," says one Western diplomat in Manila. "But what we're seeing here is a class war."
Arroyo, the upper-class daughter of a former president, is trying to make sure that doesn't happen. In recent weeks, she has made well- publicized visits to poor areas of the country. Last week she ate in public with soldiers using her bare hands, an earthy practice Estrada was well known for. After the riot outside her palace on May 1, she issued arrest warrants for two prominent opposition leaders who are charged with instigating the protest. …