A New Marshall Plan?
December 20, 2001
By ALBERT R. HUNT
The Wall Street Journal
Gordon Brown is not to be confused with George Marshall. Mr. Brown, the British chancellor of the exchequer, is rumpled, a bit paunchy, an academic and an economist given to egotistical outbursts. Gen. Marshall, a solider and statesman, was calm, dignified, even austere.
Mr. Brown, however, sees strong parallels between the world today and the world in 1947, when America launched the reconstruction of war-ravaged Europe -- the Marshall Plan, named after the secretary of state. In several speeches, including one in Washington this week, Mr. Brown proposes the world's wealthiest countries should double aid to developing countries for health, education and antipoverty efforts: This would be another $50 billion annually for the next 15 years.
The conditions that breed terrorism, he says, are similar to those that fed totalitarianism over a half-century ago. "How do you win the peace? That was the question in 1945 and it's what we face today after Afghanistan," he noted in an interview this week.
The top British economic official has a tough sell: He's a controversial figure at home -- battling with his own prime minister -- and got a cool reception from U.S. Treasury Secretary Paul O'Neill this week.
But Mr. Brown, who believes that increased assistance should be conditioned on substantive reforms in developing countries and encouraging pro-growth market policies, is raising the right issues. This follows commitments from the World Bank, the International Monetary Fund, the United Nations and the world's wealthiest countries including the U.S. for "bold and ambitious" development targets over the next decade-and-a-half, including:
Achieving universal primary education for every child by 2015. There are 110 million young kids around the world who don't go to school. This probably would cost an additional $10 billion a year.
Improving health care, including a major effort against AIDS -- which is exploding in places like Ukraine as well as Africa -- and reducing by two-thirds the number of kids (now 30,000) under five who die each day from preventable causes. The $10 billion annual price tag seems too low.
Cutting in half the number of people -- 1.1 billion, or about 20% of the world -- who live in poverty, most of them abjectly so. Conservatively, this will cost $20 billion a year between now and 2015.
The challenge, Chancellor Brown insists, is no different from that in the post-World War II period. President Truman's and Secretary Marshall's initial goal to rescue Turkey and Greece from communism evolved into a comprehensive plan to rebuild war-torn economies; the U.S. devoted 1% of its gross domestic product to this initiative, or about ten times the percentage expended on foreign aid now.
"Just as the urgent needs of Greece and Turkey provided the catalyst for the Marshall Plan," Mr. Brown observes, "today's plans for global reconstruction are precipitated by a specific challenge -- that of Afghanistan and Pakistan." This requires more direct foreign investment, expanded trade, and more debt relief as well as increased public investment.
He acknowledges that "historically the world signs up for targets and then never meets them." Moreover the politics are not very propitious: The Marshall Plan rebuilt decimated economies, but ones that had originally been developed with sophisticated infrastructures, unlike today's developing economies. Opposition is vehement from the left and the right. The antiglobalization crusade of labor and environmental groups was put on hold after Sept. 11, but hasn't changed. Nor has the skepticism over the effectiveness of existing aid programs from the right, including the Bush administration.
Both sides have valid points, Mr. Brown admits, but the British Labor politician cautions the left: "The issue is not whether we have globalization...it is whether we manage it well or badly, fairly or unfairly."
And in response to conservative criticism of existing programs he suggests a new "compact" of increased aid to only those developing nations that commit to and practice genuine reform: transparent, corruption-avoiding systems. There would have to be an honest record of where assistance funds go (not for weapons systems or to pad the pockets of political and business cronies) and a reliable accounting of national finances, usage of central bank reserves, and foreign-currency borrowings.
Developing countries that abide by these codes and standards would get increased assistance; those that don't wouldn't. Mr. Brown points to a handful of reform-minded regimes -- Uganda for one -- that he argues demonstrates the viability of these notions.
Critics question whether Chancellor Brown is the best messenger. He possesses a formidable intellect but is hugely controversial in his own country. His relations with Prime Minister Tony Blair -- their offices are next door to one another on Downing Street -- are so tense that the Financial Times recently quoted a former top Blair aide declaring the feud was "crippling" the government. Mr. Brown, supremely confident of his own talents, wants to be prime minister one day, the sooner the better. Blair allies say that's a pipe dream and his ambition undermines his agenda.
He enjoys good relations with a number of important American figures, but most are Democrats. He plugged his international development notions in a meeting with a skeptical Treasury Secretary Paul O'Neill this week.
But Mr. Brown's message clearly is important. There may be better approaches but any long-term war on terrorism has to deal with the rampant poverty, lack of education and inadequate health care around the globe. This won't be possible without active American leadership. This is not a view exclusive to the left; Mr. Brown cites Henry Kissinger as a proponent of a similar approach.
In 1946, President Truman realized rebuilding Europe would be politically attainable only under the mantle of a popular figure like George Marshall. Currently any major global effort will have to be the "Bush Plan." If it's to happen, who will play Truman?
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