- By Daniel RundeDaniel Runde served in the Bush (43) Administration at USAID. He also worked at the World Bank Group (IFC). He currently holds the William A. Schreyer Chair at CSIS. In a personal capacity, he was a foreign policy adviser to Governor Romney's 2012 campaign. He is currently a foreign policy adviser to Governor Walker's presidential campaign.
Seventy years ago this month, at Harvard’s commencement, Gen. George C. Marshall, the “organizer of victory” in World War II as Winston Churchill called him, announced a plan to aid post-war Europe with a massive aid package of $12.7 billion, the equivalent of $142 billion today. The Marshall Plan, as it would come to be known, is now synonymous with “massive foreign aid,” “vision,” and above all, “success.”
America saw this as strategic. We had learned it was important to be magnanimous in victory — and learned it the hard way after World War I. Far more important, we saw this foreign aid package as in our national security interest. Communism was increasingly appealing across Western Europe and it seemed very possible that we could lose a number of countries there through Soviet treachery. Something had to be done.
So our foreign aid has never just been about merely doing good. Ever since the end of World War II, it has always also been recognized to be in our own interest. Rebuilding Europe was a project deeply linked to U.S. national security and U.S. job stability and growth. Communism was a clear and present danger to our way of life then — just as terrorism, drug-financed criminal gangs, and pandemics like Ebola are threats now.
The plan hoped to stabilize European economies, improve their quality of life, and facilitate European cooperation. This cooperation sowed the seeds for what became the European Union. A few years later, in 1949, President Harry Truman expanded the ideas and approaches of the Marshall Plan through the Point Four Program which brought U.S. aid and, as importantly, American technical expertise to other impoverished areas of the world: Latin America, the Middle East, Asia, and Oceania. All these areas also happened to be the battlefields of the new Cold War, where we were going to have to support our allies and undercut our adversaries. Foreign assistance was going to be a part of the arsenal of democracy.
The Marshall Plan was very controversial at the time it was proposed. Truman faced enormous resistance to the plan in Congress, which, with continued filibustering, reduced the president’s original proposal by $4.6 billion; however, the president, along with Marshall, the hero of World War II, rallied the support of Congress and the American people, allowing the plan to be funded.
Although the Marshall Plan ended in 1953, the impact of the program is ongoing: the nations we aided have become some of our top trading partners and greatest allies, particularly in defense issues. Five of these countries (Britain, France, Germany, Italy, and the Netherlands) remain in the top 15 of the U.S. trading partners and are members of NATO.
The United States continued its foreign aid beyond the Marshall Plan and the Point Four program in the 1960s with the formation of the United States Agency for International Development (USAID). U.S. assistance, although different in formation, retained the same central themes of the Marshall Plan, not out of generosity, but to counter communism and to keep us safe. The nations supported by the United State in the 1960s and 1970s — Chile, Costa Rica, South Korea, Taiwan, and Brazil — have now for the most part graduated from U.S. foreign aid and, like the nations of Western Europe, become some of our largest trading partners, defense allies, and supporters. And all the nations we have aided, whether through the Marshall Plan or later programs, remember that the United States was there for them in their time of need.
After the Cold War, Washington reformed its foreign aid again, under President George H.W. Bush, creating new programs such as the European Bank for Reconstruction and Development, Freedom Support Act, and Support for East European Democracy. These helped the United States consolidate its gains and win peace in former Warsaw Pact nations. Now many of these nations are members of NATO and some of the strongest supporters of the United States in the world.
In this improved development atmosphere, things are looking up. Many nations are moving in the direction of South Korea or Chile — toward prosperity. U.S. foreign aid is still needed but it is not our grandparents’ developing world. On the contrary, today’s developing world is richer, freer, and more capable. Also, governmental foreign aid has not been the largest wallet in the room for decades: foreign direct investment, trade, remittances, private philanthropy, savings in developing countries, and the resources of developing country governments are often much larger. Nor is the United States or even the West the only game in town; if we do not meet the hopes and aspirations of these countries they can take their business to China.
At the same time, there are some things that United States just has to do because no foundation, no investor, and no government can or will. Sometimes it is supporting a democratic election; sometimes it is leading from the front on Ebola; sometimes it is doing mind-numbingly boring but important work improving the tax collection systems of a developing country or fixing the plumbing at a border to make trade easier. Much of this is neither photogenic nor easy to explain on a bumper sticker, but it is increasingly the bread and butter of what Washington should be doing — and not necessarily what it or the political constituencies that support development “want” to do.
There are currently 30 or so countries that are fragile and weak. These are where many of our biggest problems come from. These countries are going to generate such problems for decades. Their challenges are hard to tackle. We have only a small ability to make incremental progress, but the United States needs to be in these countries for their own security and ours. These nations will require ongoing U.S. leadership and involvement.
U.S. assistance is a vehicle for helping nations plug into the liberal international order set up by the Washington and its allies after World War II. Can aid be more effective? Yes. Can it be managed better? Yes. But is U.S. foreign assistance still needed? Yes. As we remember the Marshall Plan — that incredible act of enlightened self-interest — let us also recall that our charity of 70 years ago still contributes to U.S. peace and prosperity today.
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