October 24, 2011 4:09 pm

The debatable merits of a Marshall plan

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Unrest has eroded pan-Arabism

Amr Moussa, former head of the Arab League, wants one. So does Ibrahim Dabdoub, one of the Gulf’s most prominent bankers. Hassan al-Boraei, Egypt’s labour minister, says it is essential, if the Arab spring is not to fade into autumnal hardship.

The object of their desires? A Marshall plan for the Middle East, to help drag the region out of conflict and poverty, as the eponymous US-based initiative did for post-second world war western Europe. Just as “the people want the fall of the regime” is the cry that reverberates around the Arab street, the call for a grand project to revive the region economically has spread through policymaking salons from north Africa to the Gulf.

As Mr Boraei put it straightforwardly at the World Economic Forum meeting at the Dead Sea in Jordan at the weekend: “A Marshall plan is needed.”

Yet, for all the proposal’s compelling simplicity and zeitgeist appeal, there are big questions about whether it is either desirable or feasible. If the call for a Marshall-style stimulus was one of the loudest messages to emerge from the WEF gathering, then another was the warning that the idea was fundamentally flawed.

The argument goes to the heart of wider debate about what many countries in the region need to do to dispel their economic malaise – and who should be taking the lead in helping them pay for the changes and implementing them.

The logic behind the Arab Marshall plan idea revolves around two uncontentious observations: economic discontent has been a big driver of this year’s political uprisings in countries that share similar systemic problems. They need new infrastructure, job-creation programmes and efforts to promote private enterprise as an alternative to working for all-pervasive state institutions. A Marshall-style initiative would be good not only for the people of those nations, but for the stability of the region and the wider world – just as it was in traumatised and economically battered postwar Europe.

But, while the scenario sounds seductive, a universal plan would in some ways be going against the political grain of the Arab awakening. The season of protest has had the contradictory effect of unifying the region’s peoples in some basic political and economic demands, while at the same time eroding governmental pan-Arabism as countries react to protest in contrasting ways and sometimes denounce or even attack each other. Even more importantly, unlike in postwar western Europe, any kind of regional initiatives would be made harder because the conflict is continuing, at different paces in different countries, and with varying results.

Then there is the question of where the Arab Marshall money would come from. Western governments flailing through their own economic crises are not in a position to do much, and, in any case, close engagement is unlikely to go down well with voters in the developed world. The other obvious – and more politically acceptable – sources are the oil-rich Gulf states, although they have generally preferred to give direct assistance to countries rather than launch pan-regional grand projects.

Policymakers who are cool on a Marshall plan say the economic focus across the region should instead be on narrower or smaller-scale initiatives, such as bespoke infrastructural deals, winning access to world markets for countries’ goods and services, and promoting the establishment and growth of small companies. There also needs to be a much greater emphasis on institutional reform, because even nations that have changed significantly politically by overthrowing leaders or regimes have not altered administratively.

As one senior finance official focused on the region puts it: “I am not that optimistic about something that looks like a Marshall plan. I suspect it will be more uneven and more bilateral.”

That is a more complex, messier and less beguiling prospect than the idea of a Marshall reprise. But it has the virtue of being intellectually and emotionally consistent with an Arab awakening that is in part a celebration of difference and a rejection of leaders who ruled by sweeping diktat and treated their publics as homogenous masses.

The Middle Eastern Marshall will be the man or woman who works out an economic plan flexible enough to thrive amid both that variety and an atmosphere of continuing and unpredictable political change.

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