October 13, 2003

October 13, 2003 | Commentary on Middle East

Marshall Plan Won't Work in Iraq

They say generals are always fighting the last war. A lot of civilians are attempting to do the same thing -- or worse -- with their calls for a Marshall Plan for Iraq.

The Marshall Plan, widely considered the most successful foreign policy initiative in U.S. history, has become the metaphor used to campaign for American economic intervention abroad. But winning a peace is like winning a war -- no cookbook solution, no copying what happened in the past, will ensure victory. Indeed, as things now stand, history does not hold the answer to Iraq's problems.

The plan, as it were, began June 5, 1947, when then-Secretary of State General George C. Marshall proposed the United States provide economic aid to help Europe recover from the devastation of World War II. Congress appropriated $13.3 billion (more than $100 billion in today's dollars) over the next four years for European recovery.

Ever since, leaders have returned to this model to attempt to solve a variety of problems. President Kennedy wanted his "Alliance for Progress" for Latin America. It failed.

In 1981, Socialist European statesmen such as Austria's Bruno Kreisky demanded a Marshall Plan for Third World nations in the Southern hemisphere and launched a development summit in Cancun, Mexico. Again, the plan met with little success. Western assistance actually declined in the 1980s and 1990s. When the Soviet empire collapsed in late 1989, there was much talk of a "Marshall Plan" for Eastern Europe. No plan appeared, but the West did provide piecemeal financial aid.

The success of the Marshall Plan hasn't been repeated -- and for good reason. The political, economic and security conditions in these other cases differed sufficiently to require different solutions.

People forget how different the circumstances are between post-World War II Europe and modern-day Iraq. Europe was badly damaged after five years of brutal warfare, but far less seriously in some critical areas than many feared in 1945-46. Significant industrial capacity survived in both defeated and liberated countries. All that was needed were raw materials, food and some machinery and technical know-how to help revive the European economy.

In addition, by 1948, the security situation in Europe had greatly improved, and the worst of the chaos and privations of the early postwar years had passed. In short, Europe was primed for recovery.

Most important, the Europeans took charge of their own destiny. In announcing the program, Marshall declared: "The initiative, I think, must come from Europe." And it did. By 1948, virtually all the western European countries had legitimate, functioning governments in place. (West Germany held its first elections in 1949). The key to Washington's success was that these governments took ownership of the program. Present-day Iraq presents an entirely different challenge. None of the conditions found in Europe in 1948 are evident there. Before Iraq begins reconstruction efforts, it needs a legitimate government to determine how to provide for its long-term security, structure its national debt, liberalize its economy (remove controls on prices on trade), privatize state-owned infrastructure and establish a sound money supply.

As an occupying power, the United States has a moral and legal obligation to establish a legitimate government in the country and adequate domestic security. America must spend the funds required to do the job right.

Arguing for $20 billion in supplemental spending as a Marshall Plan investment is wrong-headed and obscures the real purpose of these funds, which is to help Iraq establish a stable, capable and legitimate government. Nor is it appropriate to substitute spending with forced loans to a liberated country that doesn't have a sovereign authority to accept the debt.

Congress and the administration can argue about reconstruction later. Right now, we need supplemental funds to get a genuine Iraqi regime and security force up and running and U.S. troops out as soon as possible. Then Iraqi leaders can map their own path for rehabilitating their country -- with America as a partner, not an overseer.

Gunter Bischof is the 2003/4 Marshall Plan Anniversary Professor of Austrian Studies and the Director of CenterAustria at the University of New Orleans. James Jay Carafano is a senior research fellow at The Heritage Foundation.

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