Posted by: tnowotny | January 26, 2017

What lessons from the Austrian /Narshall plan for the future help to Syria

I had been asked to submit suggestions as to lessons to be drawn from the actual implementation of the Marshall Plan in Austria ( it had been essential in the post – war recontruction of Austria )

Here is what I wrote:

Doz Dr Thomas Nowotny

Not just remembering the Marshall – Plan;
but honoring it.
A look into the future

Austrians have been justly grateful for the help they had been given via the Marshall – Plan. This help has been essential in facilitating the rapid economic ( and with it societal and political development ) of the country. It also had been instrumental in anchoring Austria firmly in the “West” by having it participate the “European Payments Union”, which has acted as precursor to the organization for European Economic Cooperation – OEEC and, later on, to European integration.
Austrian gratitude has found expression on many occasions in the past, and found expression too, in several projects of US Austrian cooperation ( in particular in the academic field )
But a new page has been turned in history. The world order we have come to know is crumbling. We are uncertain as to what will replace it; and we are aware too, of the many dangers this future might harbor.
Yet the Marshall – Plan of 1947, had also been a wager on a future that , at that time, also seemed uncertain and fraught with danger.
The truest homage we could pay to this old Marshall – Plan is thus the attempt to not passively suffer what the future might bring, but to rescue this future from looming uncertainty and possible chaos through a plan that would be realistic yet imbued by the ethos of global solidarity .

The following are sketches on two alternative proposals for such plans:

a) The first one would attach to work already in progress on the reconstruction of post – conflict Syria – possibly also involving Syria`s neighbors. This project would be action oriented and of immediate political relevance.

b) The second, alternate project would open the discussion – and provide an – empirically founded – base – on the future of international cooperation in the promotion of development.

******

a) A “Marshall – Plan” for post conflict Syria ( and the neighboring countries )
There is no need to dwell on the vast differences between war – wary, Post -World War II Europe – with the basic structures of effective state institutions, and of a high level of human and social capital still intact; and, on the other hand, a strife torn Syria where – if they survive at all – state institutions are being captured by outside powers with the country likely to disintegrate into mutually hostile regions or quasi – states; or – alternatively – with an ethnic and religious minority having terrorized the majority into resentful and passive acquiescence.

Given these uncertainties, it is clear, nonetheless, that eventual stability and peace have to rest upon a solid, sustainable economic base. This is a prerequisite too, for the return of refugees and of internally displaced persons; as well as for the integration of non – returning Syrians into their present, regional host countries.

While not ignoring these vast difference between post World War II Europe and Syria, there are nonetheless some lessons from Europe´s Marshall – Plan, that might be applied in Syria ( and its neighboring countries ). These are:

1) Aid has to be massive ( probably no less than 200 Billion US Dollars )

2) Aid has be tied into and be part of a political process, reestablishing peace and stability.

3) Economic, financial and humanitarian assistance have to be complemented by other proven methods of support; such as the twinning of corporations , the exchange of experts, support for institutions building etc.

4) The aid is to be administered by the donors. The shift towards administration by Syrians has to come much later and should be very gradual

5) Aid should be converted into counterparts funds. The use of these funds should be under the joint control of the donor’s agency and Syrian authorities, with the donor’s agency having the right of veto.

6) Assistance through this Marshall – Plan for Syria should stimulate sustainable, that is viable economic activities. Of course, humanitarian assistance has to be rendered too , especially at the beginning. But – in its majority – such humanitarian assistance should also involve payment by the recipients into this counterpart fund.

7) Economic assistance should aim at weaning Syria from its over reliance on the production of oil and at strengthening the exposed sector of its economy.

8) Inter alia, this implies a re – launch and the promotion of inter – regional trade. This could be supported by a fund patterned after the Post World War II “European Payments Union”

9) According to press reports, Russia is at work already elaborating such a “Marshall – Plan for Syria”. Russian leadership of such a project is highly problematic though: Russia’s economy is not bigger than the one of Italy. Russia thus is too weak a partner for such a big project. Also by being based on oil and gas, its economy would be not complementary and thus helpful to the economies of MENA countries. Finally, Russia’s motives in such a project are obviously the very selfish ones of building and extending in the Middle East / West Asia a zone of strong strategic dominance.

10) Given the problems with a Russian – led project, in view of the likely US disengagement form the region; and in view, finally of the very direct linkages of the region to Europe, Europe should take the lead in the project, and the lead in establishing an special agency for its implementation.
********

At that stage, a first Austrian contribution, administered by AWSG could consist in a review of lessons that could be drawn from the Austrian experience with the Marshall plan and that – even in view of blatantly different circumstances – could usefully be applied in the reconstruction of Syria ( and its neighboring regions ). The project should result in a report by Austrian and international experts, to appear no later than autumn of 2017. Both the launch and the publication of the report should be tied to the work of the “Syria Donors’ Conference”
********

b) The future of international cooperation in the promotion of economic development

Obviously, it has been very tempting to propose that the model of the Marshall – Plan be applied in promoting the development of still poorer countries, many of the located in Africa. In fact, former Chancellor Bruno Kreisky had done so himself when convening the “North / South Conference in Cancun”.

These proposals were motivated by the notion that lack capital / foreign exchange would constitute the most serious obstacle to the economic rise of poorer countries. This notion has proven misleading, as did many other passing “fashions” in the theory of development assistance.

In the meantime and since these first discussions, the world has changed profoundly. It has become absurd, for example, to classify the wealthy nations as the “industrial” ones, given the fact that, by now, the share of industry in the GDP of some still poorer countries is higher than the share of industry in the GDP of very wealthy countries. With the rapid growth of South / South trade, the economic interlinkages are no longer exclusively “North/ South”. More often than not, ample supply of foreign exchange generated through the sale of oil, for example, has proven a bane more than a benefit.

With all that – is there still a place for massive transfers to the poorer countries of the world?

The answer given by the established big members of the (then ) G – 8 Group was nonetheless a positive one. And obviously, it corresponded to a still urgent need of nations left behind in the wake of the development of some more fortunate ”emerging” countries like China or Vietnam. It would be not just cynical but simply wrong to disparage as misplaced the massive assistance ( mainly to Africa ) decided upon by the G – 8 “Gleaneagles Summit” in 2005. In a way, this massive assistance could very well claim to constitute a kind of “ Marshall – Plan” for the poor of the world.

It goes without saying, of course, that under any and all circumstances, we could not do without humanitarian assistance. Few would be so heartless as to claim that it should cease. But as to assistance to development, the record is very mixed still. Evidently, even after Gleaneagles, substantial aid has, in most cases, not provided the results that had been hoped for.

At periodic intervals, the volume, quality and effect of official development assistance has been assessed at international gatherings, with repeated attempts to learn from past successes and failures and to map a way into the future. Such assessment and evaluation has been routine too, at the many International Development Banks and at the DAC Committee of the OECD.

What seems to be lacking still is the broader, the more detached and perhaps a bit academic overview of Official Development Assistance – ODA’s record; of its successes and failures, and as to its future aims and tools.

It is suggested that this review be done by a group of select, highly renowned international experts, funded by AWS and working under the patronage of former UN Secretary General Ban Ki Moon .

A parallel could be drawn, in this place to efforts funded by France, to develop alternatives / supplements to the GDP statistics when measuring human well – being and human progress. Three highly prominent experts were signed up for the purpose of leading that project; namely Joseph Stigiltz, Amartya Sen and Jean Paul Fitoussi.

More thought would have to be given to the final composition of such a commission. Here are just a few names that come to mind more or less spontaneously :

Esther DUFLO ( MIT / USA- + France )
Tommy Koh ( Singapore )
Jeffrey Sachs ( Columbia University USA )
William Easterly ( NYU New York )

******

What the two proposal would have in common:

– Both of them would stand under the highest Austrian patronage ( HBP, HBK, BMF, BMEIA )

– These Austrian “patrons” would be joined by one to three highly regarded international persons.

– The projects would be linked to Austrian activities / Austrian actors ( eg Austrian participants in the Syria donors conference, or , in case of the second proposal – to BMEIA / ADA

– -Mixed international / Austrian advisory board composed of both academics and practitioners.

– Fully and amply funded

– Secretariat and administrative staff

– Accompanying also international . publicity

– Prominent launch at an international gathering

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