At first blush, the idea that the United States, working with other nations, should initiate, guide, and finance economic development and introduce democratic regimes to the nations of the Middle East—just as it did in post–World War II Germany and Japan—is appealing. From a humanitarian viewpoint, one cannot help but be moved by the idealism of helping millions of people who are currently unemployed and poor—including many children and young people, and others who live under oppressive regimes—to gain the kind of life Americans cherish. From a realpolitik viewpoint, military means will not suffice when it comes to ending the terrorism that threatens the United States and its allies, or halting the insurgencies that destabilize the Middle East.

General James Jones, who served as National Security Advisor to President Barack Obama, summarized the viewpoint held by many other military leaders. He stated that there are three things needed to attain peace: "One is the security pillar, and you’ve got to have that. But accompanying that, you have to have an economic package that gives people who don’t have any hope, hope for a better future. That’s the answer to the terrorist threat, really. . . . And the third one is governance and rule of law, and I include corruption and all of those other things."¹Secretary of Defense Robert Gates agreed. He held that "economic development, institution-building and the rule of law, promoting internal reconciliation, good governance, providing basic services to the people, training and equipping indigenous military and police forces, strategic communications, and more—these, along with security, are essential ingredients for long-term success."²

Moreover, the defeated nations were treated differently after the World Wars. Following World War I, the nations that lost were given a raw deal, which is widely believed to be one reason that Fascism rose and in turn led to World War II. After the Second World War, the defeated nations were treated, as General Jones put it, "generously"; they were helped to rebuild their economies and reform their polities. They have since become stable, peaceful nations and allies of the United States.

One would have to have ice water in his veins, have a heart of stone, and be politically unwise not to wish the same for the Middle East. Indeed, several major public voices have called for such a Marshall Plan for the region. General Jones explained, "We learned that lesson after World War II—you know we rebuilt Europe, we rebuilt Japan. That was an example of an enlightened view of things. The Marshall Plan, I am told, wasn’t very popular in this country, but we went ahead and did it."³

Secretary of State Hillary Clinton believes that "as the Arab Spring unfolds across the Middle East and North Africa, some principles of the [Marshall] plan apply again, especially in Egypt and Tunisia. As [Secretary of State George] Marshall did in 1947, we must understand that the roots of the revolution and the problems that it sought to address are not just political but profoundly economic as well."⁴Moreover, two professors at Columbia Business School, Glenn Hubbard (Chairman of the Council of Economic Advisors under George W. Bush) and Bill Duggan, argued that a Middle East Marshall Plan would "limit the spread of Islamic extremism" in the region.⁵Senator John Kerry argued that "we are again in desperate need of a Marshall Plan for the Middle East."⁶ Senator John McCain also expressed support for such a plan.⁷

A Bridge Too Far

Regrettably, there is no way to bring anything remotely resembling the Marshall Plan to the Middle East, and trying to launch one is likely to have some undesirable side effects. Before the reasons for this dire thesis are discussed, one should note that even though it is not possible for the West to transform the economies and polities of the Middle East, or help it to transform itself in desired ways in the foreseeable future, this does not mean that terrorism and insurgency can be dealt with only by military means. Rather, it means that the nonmilitary means will have to be rather different from those that were used at the end of World War II.

Different Sociologies. Many conditions that contributed to the success of the Marshall Plan (which was applied to Germany, Italy, and other select European nations) and a similar approach to post–World War II Japan are missing in the Middle East. Arguably, the most important difference concerns security. The nations reconstructed after World War II had surrendered after defeat and fully submitted to the occupation, had been neutral during the war, or were on the U.S. side and were at peace at home to begin with (such as the United Kingdom, France, and Turkey). That is, development occurred only after hostilities completely ceased and a high level of domestic security was established. There were no terrorists, insurgencies, car bombs, or rocket attacks. Therefore, the forces that took over the management of these nations could fully focus their resources on rebuilding. Security needs were minimal compared to those in Afghanistan and Iraq.

Indeed, given the experience in Iraq and Afghanistan, few, if any, even consider the proposition that the West will occupy more lands in the Middle East and manage their transformation. Secretary Gates made this clear when he testified that "there will be no American boots on the ground in Libya. Deposing the Qadhafi regime, as welcome as that eventuality would be, is not part of the military mission."⁸Gates reaffirmed that the United States "will provide the capabilities that others cannot provide either in kind or in scale," but "the removal of Colonel Qadhafi will likely be achieved over time through political and economic measures and by his own people."⁹In other words, while the German and Japanese reconstructions were mostly hands-on projects, those now considered amount to long-distance social engineering with the West providing funds and advice, but with the execution largely done by locals. That is, no boots on the ground—and no managers.

While transforming regimes in the Middle East are quite eager to receive financial aid and economic resources from the West, they oppose the strings attached to these funds. For instance, the Pakistani government, and especially the powerful and influential military, greatly resented the conditions for building the civil society that are part of the 2009 Kerry-Lugar Bill, which provides $7.5 billion in aid over 5 years.¹⁰This resistance is one major reason why the funds have not been largely dispersed. In post-Mubarak Egypt, the government complained about Western interference when the U.S. Agency for International Development (USAID) "published ads in Egyptian newspapers asking for grant proposals on a $100 million program to support ‘job creation, economic development and poverty alleviation’ and a $65 million program for ‘democratic development,’ including elections, civic activism and human rights."¹¹The Egyptian newspaper al Akhbar argued that USAID "dealt with Egypt as a humiliated country."¹²Fayza Aboul Naga, the minister for planning and international cooperation, stated, "I am not sure at this stage we still need somebody to tell us what is or is not good for us—or worse, to force it on us."¹³ U.S. assistance in Egypt is often seen as an infringement on sovereignty as expressed by Hafiz Salama, an influential Muslim cleric, when he stated, "We tell America and its allies lurking in Egypt: end your evil interference in Egypt’s internal affairs, interference that we condemn as a conspiracy against the future of Egypt."¹⁴Others argue that Western models of development are not appropriate for their countries and that they should follow the Chinese or some other model.

Furthermore, Germany and Japan were strong nation-states before World War II in the sense that citizens heavily identified with the nation and showed their willingness to make major sacrifices for the "fatherland." They continued to act so during the reconstruction period. The first loyalty of many citizens of Middle Eastern nations, which are tribal societies cobbled together by Western countries, is to their ethnic or confessional group. They tend to look at the nation as a source of spoils for their tribe and fight for their share rather than make sacrifices for the national whole. Deep ethnic and confessional hostilities, such as those between the Shia and Sunnis, the Pashtun and Tajik, the Hazara and Kochi, and various tribes in other nations, either gridlock the national polities (for example, Iraq and Afghanistan), lead to large-scale violence (Yemen, Bahrain, and Sudan), result in massive oppression and armed conflict (Libya and Syria), or hinder economic development.

Cultural Differences. Max Weber establish ed the importance of culture (in the sense of shared normative values) when hedemonstrated that Protestants were more imbued than Catholics with the values that lead to hard work and high levels of saving, both essential for the rise of modern capitalist economies. For decades, development in Catholic countries (such as those in southern Europe and Latin America) lagged behind the Protestant Anglo-Saxon nations and those in northwest Europe. Similar differences have been recorded between Quebec and other provinces of Canada. These differences declined only after Catholics became more like Protestants.¹⁵

Weber also pointed to the difference between Confucian and Muslim values,¹⁶ thus, in effect, predicting the striking difference between the high rates of development of the South Asian "tigers"—China, Hong Kong, Taiwan, Singapore, and South Korea—and the low rates of Muslim states, especially those that adhere more strictly to sharia than others. The thesis is not that Muslim states cannot develop because of innate characteristics of the people, but because these cultures stress other values, especially traditional religious values and communal and tribal bonds. These cultures can change, but, as the record shows, only slowly, and the changes involved cannot be rushed by outsiders.

Preconditions. One also must take into account that Germany and Japan were developed nations before World War II with strong industrial bases, infrastructure, educated populations, and support for science and technology, corporations, business, and commerce. Hence, they had mainly to be reconstructed. In contrast, a large number of Middle Eastern states that lack many if not all of these assets, institutions, and traditions cannot be reconstructed because they were not constructed in the first place. This is most obvious in Afghanistan, Yemen, Sudan, and Libya. It is also a major issue in nations that have drawn on one commodity—oil—to keep their economies going, but have not developed the bases for modern economies, especially Saudi Arabia and Bahrain. Other nations, such as Tunisia, Pakistan, Morocco, Syria, and Egypt, have better prepared populations and resources but still score poorly on all of these grounds compared to Germany and Japan.

Given that Western powers are unlikely to occupy and manage transformation in the Middle East, the help they can give basically amounts to some type of foreign aid—that is, working with the existing institutions while trying to encourage reform.

Germany and Japan had competent government personnel and relatively low levels of corruption. In many nations in the Middle East, corruption is endemic, pervasive, and difficult to scale back to tolerable levels. A 2008 study by the Economist, for instance, found that a few of the main reasons that Afghanistan’s development is proceeding so poorly are widespread corruption, cronyism and tribalism, lack of accountability, and gross mismanagement.¹⁷ In 2010, it was discovered that more than $3 billion in cash had been flown out of Kabul over the course of 3 years. The amount is particularly startling because Afghanistan’s gross domestic product was only $13.5 billion in 2009, and more declared cash flies out of Kabul each year than the government collects in tax and customs revenue nationwide. The large sum is believed to have mostly come from stolen foreign assistance.¹⁸Thus, one must take into account that a significant proportion of whatever resources are made available to Middle Eastern nations could be siphoned off to private overseas bank accounts or allocated on irrelevant bases to cronies and supporters, and that a good part of the funds could be wasted and unaccounted for.¹⁹Steve Knack of the World Bank showed that "huge aid revenues may even spur further bureaucratization and worsen corruption."²⁰Others found that mismanagement, sheer incompetence, and weak government were almost as debilitating.

One way to highlight this point is to examine the corruption perception ranking Transparency International has issued annually since 1995.²¹ Transparency International stresses that because of the ways the rankings are constructed, they cannot be used for quantitative social science analysis. However, given that these rankings parallel information from other sources, they do provide a preliminary way of assessing changes. Thus, most of the nations that had the lowest rankings in 1995 continue to rank low some 15 years later—for instance, New Zealand and Denmark have ranked among the four least corrupt countries in all these years. Likewise, many countries that ranked high maintain their troubled status, such as Nigeria and Venezuela. Indeed, few countries have improved their scores more than a few points in the half-generation that has passed since the rankings began.

Not all waste and corruption is local. Large portions of the aid budgeted for Afghanistan (and others) are handed over to nongovernmental organizations subject to little accountability. Or worse, this aid is spent on Western contractors and corporations for high-fee consultants. (American law requires that 100 percent of food for American foreign aid be purchased from American farmers, and that U.S. freight carriers ship 75 percent of it.)²²

Champions of reconstruction ignore the bitter lessons of foreign aid in general. An extensive 2006 report on the scores of billions of dollars the World Bank invested since the mid-1990s in economic development shows that despite the bank’s best efforts, th e "ac hieve men t of sus tain ed inc rea ses in per capita income, essential for poverty reduction, continues to elude a considerable number of countries."²³ Out of 25 recipient countries covered by the report, more than half (14) had the same or worsening rates of per capita income from the mid-1990s to the early 2000s.²⁴Moreover, the nations that received most of the aid (especially in Africa) developed least, while the nations that received little aid grew fast (especially China, Singapore, South Korea, and Taiwan). Other nations found foreign aid a "poisoned gift" because it promoted dependency on foreigners, undermined indigenous endeavors, and disproportionately benefited those gifted at proposal writing and courting foundation and foreign aid representatives rather than local entrepreneurs and businessmen.²⁵

The Marshall Plan entailed much larger outlays than have been dedicated in recent decades to foreign aid that seeks to help economic development (not to be conflated with military aid). In 1948, the first year of the Marshall Plan, aid to the 16 European countries involved totaled 13 percent of the U.S. budget.²⁶In comparison, the United States currently spen ds less than 1 percent of its budget on foreign aid, and not all of it is dedicated to economic development.²⁷Some of these appropriations are so small that theyseem to indicate that the West is supportive rather than trying to make a serious difference. However, as long as these appropriations are framed and perceived as transforming, they will not generate the public relations—now often called public diplomacy—that advocates hope for.

Moreover, the United States and its allies are entering a protracted period of budget retrenchments in which many domestic programs will be scaled back—including aid for the unemployed and poor, and for education and health care—as well as military outlays. It is a context in which the kinds of funds a Marshall Plan would require are unlikely to be available. Amounts recently dedicated to help the new regimes in Egypt and Tunisia are telling: the United States has pledged a mere $1 billion in debt relief and $1 billion in loan guarantees for Egypt, and the Group of 8 pledged a total of $20 billion in aid for both Egypt and Tunisia. However, a timeframe for delivering these funds was not set "and the Group of 8 countries have in the past made commitments that they did not ultimately fulfill."²⁸If the aid package is delivered, it is unclear how big an effect it will have on an Egyptian economy losing $1 billion each month in the tourism sector (a 40 percent loss).²⁹

Suggestions have been made that the West could provide only part of a massive aid package and that rich Middle Eastern nations, especially Saudi Arabia, could provide large-scale funds. Indeed, oil-producing nations may contribute to the costs involved. However, these nations are basically opposed to the new regimes, which threaten their own; moreover, they face economic and social challenges of their own, which result in lower revenues and increased outlays at home. Multilateral help is richer than a unilateral approach; however, it is unlikely to suffice.

What Can Be Done?

Scale Ambitions and Rhetoric to Reality. The repeated suggestions that the West ought to launch a Marshall Plan for the Middle East— which is widely understood to mean that the West could turn the nations involved into stable democratic regimes and Western-style economies "just as we did in Germany and Japan," and in relatively short order—have backfired. These promises raise expectations that cannot be met and lead to disappointment in the new regimes and in the West. In 2011, only months after the autocrats in Tunisia and Egypt were forced to quit, millions were already disappointed because they still did not have jobs. As already indicated, the precept that the West will provide what the transformation requires delays the point at which local populations realize that they will have to make major efforts, including changing their work, consumption, and governing habits. Instead, the West should stress that most of the transformation will have to be done by the people who seek it and who will benefit from it, and that they will have to find ways to proceed that are suitable to their conditions. The West should be ready to help, if asked, but this help should be by necessity and limited, and conditioned on locals taking the lead and carrying most of the load.

Focus Should Be on Security and Not Regime Change. Western interventions to stop genocides, discourage nations from invading others, and peacekeeping operations—while far from universally successful—have achieved their goals much more often than attempts to usher in new political and economic regimes. These achievements have been made with much lower levels of Western and local loss of human life and economic outlays. To see the point, compare the Western intervention inKosovo, the 1991 pushback of Saddam’s forces in Kuwait, the 1989 intervention in Panama to oust military dictator General Manuel Noriega to Vietnam, the occupation of Afghanistan and Iraq, and the 2011 intervention in Libya.

Local authorities are best advised to focus on restoring basic security. The reverse argument, that development is essential for security and hence must precede it, is erroneous because without basic security, development cannot take place. If oil pipelines laid during the day are blown up at night, oil will not flow far. If electricity stations are constructed at great costs but not secured, they are merely another place where resources are wasted. If professionals fear terrorists, they will leave the country to work elsewhere, and so on.³⁰

Increase Trade, Decrease Aid. Dissatisfaction with the lack of progress made by foreign aid has led several leading economists and world leaders to conclude that aid may not be the most effective tool for promoting development. Proponents of "trade over aid" point to the drawbacks of aid (corruption and mismanagement) and argue that aid can create a culture of dependency in recipient countries. Rwanda’s president, Paul Kagame, argues, "As long as poor nations are focused on receiving aid they will not work to improve their economies."³¹Critics often compare the effect of aid on developing nations’ economies to the "resource curse" experienced by countries that discover oil or mineral wealth. The influx of funds eliminates the need for governments to be accountable to either private lenders or voters.³²Analysts also point out that the infusion of cash can have a negative impact on a country’s exchange rate and can actually "inflict an economic loss even when there is no counterpart reverse transfer of resources."³³ According to Ugandan president Yoweri Museveni, "Aid is a recipe for permanent poverty."³⁴

The alternative to problematic foreign aid is trade, in the form of reducing barriers and tariffs as well as eliminating agricultural subsidies in wealthy countries and encouraging local entrepreneurs. Trade proponents argue that "developing economies are shackled by an array of internally imposed trade barriers, tariffs and regulations that hamper business."³⁵ Dambisa Moyo, the author of Dead Aid, an influential book on the subject, argues that removing these impediments and increasing trade will improve governance in developing nations; governments that wish to borrow money must demonstrate prudence and accountability.³⁶Timothy Cox and Alec van Gelder of the International Policy Network, a nonprofit think tank, cite the economic growth of business-friendly Asian nations such as Singapore and China as evidence that "trade is the surest known route out of poverty." And President Kagame credits Rwanda’s improved trade with an 11 percent increase in growth in 2008 (in the face of the global recession).³⁷ Evidence indicates that trade improvements would have much greater public support in the West than increases in aid. A 2004 survey in France, Germany, Great Britain, and the United States found that 64 percent of all respondents (and a majority in all countries) believe that trade was better for developing countries than aid.³⁸

Focus Aid. Whatever foreign aid can be granted is best delivered directly to those involved in the projects to be aided rather than channeled through the government. Projects that have a high multiplier effect are to be preferred over those that have a low multiplier effect, those that are labor-intensive and not capital-intensive over those that have the opposite profile, and those that use little energy or renewable energy over those that have the opposite profile. In each area, strong preference should be accorded to the completion of a small number of projects over starting a large number. (This is the opposite of the way development has been approached in Afghanistan and Iraq.) As a rule, old elements should be left in place and fixed or reformed gradually rather than replaced. This holds true for equipment and for institutions and their staffs. For instance, tribal chiefs (in Afghanistan) and members of the governing party in public service (the Ba’ath in Iraq) should have been allowed to continue their leadership roles as the United States did at the end of World War II by leaving the emperor in place in Japan.

Advocate That Humanitarian Aid Is Justified. Large-scale foreign aid, the kind of amounts that a new Marshall Plan would entail for the Middle East, cannot be provided given the austere regimes in the West. However, if there are massive numbers of refugees (on a larger scale than those who escaped Libya to Tunisia or Syria to Turkey in 2011) or other forms of massive human suffering as a result of the regime transformations, one can make a case on moral grounds that the West should grant the kind of aid it provided after the 2010 earthquake in Haiti and 2004 tsunami in Southeast Asia. However, one should realize that such funds aim to alleviate immediate suffering; the reconstruction that follows will have to be carried out largely by the local population. PRISM

 

Notes

1. James L. Jones, comments at Stimson Center Chairman’s Forum on International Security Issues, June 14, 2011.
2. Robert M. Gates, comments at Kansas State University, November 26, 2007.
3. Jones.
4. Hillary Clinton, "Secretary of State Hillary Rodham Clinton’s Remarks on Receiving the George C. Marshall Foundation Award," June 2, 2011, available at <www.marshallfoundation.org/SecretaryClintonremarksJune22011.htm>.
5. Glenn Hubbard and Bill Duggan, "A Marshall Plan for the Middle East?" The Huffington Post, February 28, 2011, available at <www.huffingtonpost.com/glenn-hubbard/marshall_plan_mid_east_b_829411.html>.
6. "Senator John Kerry Addresses The Fletcher School Graduating Class of 2011," May 21, 2011, available at <http://fletcher.tufts.edu/news/2011/05/news-update/Kerry-May26.shtml>.
7. Ibid.
8. Robert M. Gates, Testimony on Libya to House Armed Services Committee, March 31, 2011.
9. Ibid.
10. Christoph Bangert, "Pakistanis View U.S. Aid Warily," The New York Times, October 7, 2009.
11. Yaroslav Trofimov, "Egypt Opposes U.S.’s Democracy Funding," The Wall Street Journal, June 14, 2011.
12. Ibid.
13. Ibid.
14. Ibid.
15. Samuel P. Huntington, Who Are We? The Challenges to America’s National Identity (New York: Simon & Schuster, 2004), 92–98.
16. Max Weber, "The Social Psychology of the World Religions," in Essays in Sociology, ed. and trans. H.H. Gerth and C. Wright Mills (London: Psychology Press, 1991). For analyses of Weber’s work, see Mark Thompson, "Whatever Happened to Asian Values?" Journal of Democracy 12, no. 4 (October 2001), 155; and Syed Anwar Husain, "Max Weber’s Sociology of Islam: A Critique," available at <www.bangladeshsociology. org/Max%20Weber-Anwar%20Hosain.htm>.
17. "A war of money as well as bullets," The Economist, May 22, 2008.
18. Matthew Rosenberg, "Corruption Suspected in Airlift of Billions in Cash from Kabul," The Wall Street Journal, June 25, 2010.
19. Dana Hedgpeth, "Spending on Iraq Poorly Tracked," The Washington Post, May 23, 2008; U.S. Department of State Bureau of Democracy, Human Rights, and Labor, "Section 4 Official Corruption and Government Transparency," 2009 Human Rights Report: Afghanistan, March 11, 2010.
20. William Easterly, The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good (New York: Penguin Press, 2006), 136.
21. Transparency International, "Corruption Perception Index," October 26, 2010, available at <www.transparency.org/policy_research/surveys_indices/cpi>.
22. John Norris and Connie Veillette, "Five Steps to Make Our Aid More Effective and Save More than $2 Billion," brief to the Center for American Progress, April 2011.
23. Peter Goodman, "The Persistently Poor: An Internal Report Criticizes World Bank’s Efforts on Poverty," The Washington Post, December 8, 2006.
24. Ibid.
25. World Bank Independent Evaluation Group, "Annual Review of Development Effectiveness 2006: Getting Results," Washington, DC, 2006.
26. Representative Keith Ellison, H.Res.157.IH, 112^th Cong., 1^st sess, March 9, 2011.
27. Office of Management and Budget, "The President’s Budget for Fiscal Year 2012," available at <www. whitehouse.gov/omb/budget>.
28. Liz Alderman, "Aid Pledge by Group of 8 Seeks to Bolster Arab Democracy," The New York Times, May 27, 2011.
29. Egyptian State Information Service, "International Support for Egypt’s Plan of Bridging Budget Deficit," April 17, 2011, available at <www.sis.gov.eg/en/Story.aspx?sid=54900>.
30. Amitai Etzioni, Security First: For a Muscular, Moral Foreign Policy (New Haven: Yale University Press, 2007).
31. Paul Kagame, "Africa Has to Find Its Own Road to Prosperity," Financial Times, May 7, 2009, available at <www.ft.com/intl/cms/s/0/0d1218c8-3b35-11de-ba91-00144feabdc0.html#axzz1QsyTnIdk>.
32. Paul Collier, "Dead Aid, by Dambisa Moyo," The Independent, January 30, 2009, available at <www.independent.co.uk/arts-entertainment/books/reviews/dead-aid-by-dambisa-moyo-1519875.html>.
33. "Aid vs. Trade," Forbes, March 30, 2005, available at <www.forbes.com/2005/03/30/cz_0330oxan_aid.html>.
34. Yoweri K. Museveni, "We Want Trade, Not Aid," The Wall Street Journal, November 6, 2003.
35. Timothy Cox and Alex van Gelder, "Trade, Not Aid, Is the Best Way Out of Poverty," South China Morning Post, June 29, 2010, available at <www.policynetwork.net/development/media/trade-not-aid-bestway-out-poverty>.
36. Dambisa Moyo, Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa (New York: Farrar, Straus, and Giroux, 2009).
37. Kagame.
38. John J. Audley and Hans Anker, "Reconciling Trade and Poverty Reduction," The German Marshall Fund of the United States, 2004, available at <www.gmfus.org/galleries/ct_publication_attachments/TAAudlyTrade_ and_Poverty.pdf>.