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The Marshall Plan to Mobilize African Development
According to the Population Reference Bureau, Africa’s population will more than double by 2050, from 1.2 billion people to 2.5 billion. Africa already suffers from food, energy and job shortages, and its current population makes up about 17 percent of the world’s population. However, with this current growth, its population would balloon to an estimated 20 percent. As a result, Europe realizes that African development is going to have a large impact on the 21st century and that action is necessary. This action includes the Marshall Plan to mobilize African development.

The Solution

Although Africa struggles with the aforementioned shortages, it withholds 15 percent of global oil reserves. In addition, 40 percent of gold reserves and 80 percent of platinum reserves are located there. The largest expanse of agricultural land in the world is also in Africa. Based on this, Germany is spearheading the Marshall Plan initiative to mobilize African development and promote private investment on the continent. This is part of the G20 (EU in conjunction with 19 other countries). Africa currently relies on donors and other countries for support, but this new initiative will help Africa become more self-sufficient.

With the predicted population explosion, Africa must create more jobs and opportunities. To do so, the G20 needs private investment to make Africa appealing to potential investors. Other changes that will support this initiative include protecting human rights, strengthening the economy and implementing good governance. Through this, the G20 also needs to address and solve problems in Africa. These problematic elements consist of trade, arms sales to crisis areas and illicit financial flows. This will require strong international cooperation and partnerships between developed and developing countries.

The Marshall Plan includes ensuring food and water security, bolstering infrastructure, embracing digitalization, increasing access to energy, health care and education in Africa. To accomplish this, the G20 also plans to give Africa a seat on the U.N. Security Council. This will provide the country with heightened authority in international organizations and negotiations.

G20 Partnership Pillars

Partnership pillars that the Marshall Plan is prioritizing are promoting private investment, developing infrastructure and improving economic growth. Analyzing pre-existing initiatives will promote private investment. Promotion will also include tailoring country-specific measures to improve the framework, involving business and financing. Africa will develop infrastructure by expanding on pre-existing initiatives and sharing any knowledge on infrastructure investment and how to manage it and natural resources. Finally, the creation of an initiative to promote employment via skills development and training (Initiative for Rural Youth Employment) will improve economic growth.

Related Initiatives

Related initiatives include AU’s Agenda 2063, the Addis Tax Initiative, the Programme for Infrastructure Development in Africa (PIDA), the Sustainability, Security and Stability in Africa Initiative and the EU’s European External Investment Plan (EIP). For the Marshall Plan to succeed, it must fit in with the other initiatives and fill in gaps to promote change in Africa. Supporting organizations of the Marshall Plan include the African Union, the EU and the NEPAD Agency.

The Future

As of 2018, the cabinet has already passed the Marshall Plan to mobilize African development; however, it has not taken any further action yet. Experts worry that the plan could become obsolete if people have unrealistic expectations of what it will cover. A common misconception is that the plan will automatically secure peace and create jobs and growth for Africa. It is working towards that, but there is no guarantee. If action follows soon and private investment grows, Africa will be well on its way to self-sustainability.

– Nyssa Jordan
Photo: Flickr

The Trump Administration’s Foreign Aid PolicySince the 1940s, the U.S. has been a global leader in foreign aid. The first U.S. foreign assistance program began when Secretary of State George Marshall enacted the Marshall Plan. The program provided $12 billion to help a war-torn Europe recover after World War II. In 1961, President Kennedy started the United States Agency for International Development (USAID) after signing the Foreign Assistance Act into law. Today, the U.S. operates foreign aid programs with the aid of more than 20 U.S. government agencies, helping more than 100 countries. Since taking office, the Trump administration’s foreign aid policy has consisted of numerous attempts to pare down U.S funding for foreign aid.

The Trump Administration’s Foreign Aid Policy: 2017-2019

  1. The White House proposed a budget requesting a 31 percent cut in funding for several different agencies and programs.
  2. The Trump administration canceled $300 million in aid to Pakistan, claiming the nation had failed to properly combat terrorism in the region.
  3. The Trump administration cut the budget to fund Palestinian refugees through the U.N. Relief and Works Agency to $65 million from the initial promise of $125 million.
  4. The Trump administration ended aid to the Northern Triangle of Central America for not doing more to prevent illegal immigration to the U.S.
  5. The White House froze billions of dollars worth of foreign aid funding. The decision was in an effort to identify “unobligated resources of foreign aid” and “ensure accountability.”

The freeze in August created a logjam that left many officials at the State Department scrambling in the days before the end of the fiscal year. As a result, the State Department was unable to deliver more than $70 million to non-profit and humanitarian organizations in time. To help understand this complex process and the role of the executive and legislative branches in the funding of foreign aid, The Borgen Project reached out to an expert in the field.

An Expert’s Opinion

Dr. Steven Shirley, Ph.D. is an adjunct professor at the University of Southern Maine and Southern New Hampshire University. He earned his doctorate in International Studies from Old Dominion University, has lived and worked abroad in Southeast and East Asia. He has authored several “Op-Eds, articles and books.” According to Shirley, foreign policy is the responsibility of the executive branch. Although Congress provides the budget, it cannot dictate its allocation. That power lies with the executive branch.

Critics see the Trump administration’s move as a “bureaucratic maneuver” intended to surreptitiously cut funding for foreign aid. One official who is familiar with the matter said this method of cutting funds will have “major ripple effects.” Dr. Shirley believes that some good may yet come from these ripples. He thinks it may increase accountability for the agencies in regard to spending. Dr. Shirley says that requiring an account of money spent is “fiscally responsible” although it runs the danger of delaying the disbursement of funds.

Countries That Are Impacted

Because of the Trump administration’s foreign aid policy, various programs are in jeopardy. Due to a lack of funding, four non-profit humanitarian organizations working in China are at risk of shutting down. These NGOs remain unnamed due to the sensitivity of their work in China. The cuts also affected roughly $1 million to support programming in Ethiopia through the non-profit group Freedom House. Freedom House receives its primary funding in the form of grants from USAID and the State Department.

In Ethiopia, Freedom House is working to improve human rights, aid the country in its transition to democracy and establish a free press. According to Freedom House, Ethiopia is an authoritarian state ruled by the Ethiopian People’s Revolutionary Democratic Front. Despite progress toward eliminating extreme poverty, Ethiopia remains one of the poorest countries in the world. Around 30 percent of the population lives below the poverty line and millions suffer from food insecurity. Transitioning to democracy is often the first step in improving these living conditions.

These examples show that U.S. foreign aid does a lot of good around the world. The Trump administration’s foreign aid policy would cut funding to a lot of these programs. What long-term effects this may have globally are yet to be seen.

Adam Bentz
Photo: Flickr

Julián Castro’s Marshall Plan
Presidential candidate Julián Castro has introduced many policies that he would implement during his presidency revolving around protecting indigenous communities, policing and education reform. One of the most pressing policies that Castro proposed revolves around immigration. With a three-part plan, Julián Castro is attempting to create an immigration policy that focuses on reforming the system altogether. However, one of the more ambitious parts of the plan deals with something he has coined as a 21st Century Marshall Plan for Central America. Julián Castro’s Marshall Plan could be a major step in solving immigration issues in both the United States and Central America.

Meet Julián Castro

Castro is no stranger to the world of politics. At a young age, he watched his mother run for San Antonio’s city council as the first woman of Mexican descent to do so. He learned the values of hard work and dedication from both his mother and his grandmother, who was an immigrant from Mexico that started her family with a fourth-grade education and a job as a housekeeper.

However, Julián Castro’s political career did not start when he decided to run in the 2020 presidential election. At age 26, he entered the San Antonio city council. Not only did he make history as the youngest councilman elected in the city, but he began his path to public service that would result in him becoming mayor of San Antonio in 2009 and then the Secretary of Housing and Urban Development in 2014. Along the way, he even became the first Latino to give the keynote speech at the Democratic National Convention in 2012.

The Original Marshall Plan

In 1948, Europe had severly damaged infrastructure. World War II caused strain to Europe’s economies and disrupted agricultural production. To alleviate this issue, George C. Marshall created a plan to give roughly $15 billion to European countries. These countries used the money to rebuild cities and various economic industries for four years. In the process, these European countries and the U.S. created trade opportunities and development programs. The plan created substantial results across the continent. Industrial and agricultural production increased by over 37 percent and the overall balance of trade and economic stability improved as well.

The Marshall Plan differed from other aid programs during the time because it was a joint effort between many nations. The United States created the funding and programs that could benefit Europe, and the nations committed to implementing these programs. This plan benefitted Europe’s economic growth and reestablished the United States’ influence in the region after the war.

The Marshall Plan was also a way to test various programs concerning development and relief efforts. For example, the Economic Cooperation Administration’s model, designed to provide financial assistance to these European nations, was a model to create the U.S. Agency for International Development (USAID). Overall, the 20th century Marshall Plan was a major step in development programs that helped Europe drastically.

A Plan for Central America

In an NPR podcast, Castro describes the importance of working to rebuild Central America for multiple reasons. For one, it helps create stronger relationships with the U.S.’s neighbors to the south. By creating an alliance with these countries, the U.S. can continue being an economic competitor with China, which is on track to pass the U.S. in becoming the largest economy in the world by 2030.

Along with the economic benefits of strengthening a region with potential trade partnership, the second major reason for assisting Central America is immigration issues. Castro states that “…if we want to solve the immigration issue, we need to go to the root of the cause…and that is that people can’t find safety and opportunity in Central America.”

Central America is a region where large numbers leave to seek asylum from violence and corrupt governmental institutions. By 2015, nearly 3.4 million people born in Northern Triangle countries (El Salvador, Guatemala and Honduras) were living in the U.S., with over half being undocumented immigrants.

Julián Castro’s Marshall Plan

Julián Castro’s Marshall Plan would firstly target some of the root causes of violence in the Northern Triangle such as transnational criminal organizations and illicit networks. According to Castro, an increase in law enforcement programs would help eliminate criminal activities such as human and drug trafficking. Also, this plan would require a heavier focus on anti-corruption and government transparency practices. With the cooperation of leaders in Central America and the United States’ resources, the high rates of violence in the region can decrease and create safer environments and sustainable governments less susceptible to corruption.

His policy also provides more funding for programs designed to prevent violence at local levels, create jobs and support health and nutrition across Central America. By stimulating economic development through more sustainable jobs, it allows people to stay and grow their communities rather than leaving them to find better success in the United States.

The final major point that this candidate emphasizes is the importance of prioritizing diplomatic relations with Latin American countries. To ease the instability in this region, all nations have to become part of this plan. Cooperation between these nations and the United States will ultimately be the major stepping stone to creating safe and sustainable communities.

This major foreign policy proposal would only be one component of his push to tackle immigration, but his message stands clear throughout his campaign. Julián Castro’s Marshall Plan intends to put people first, and for millions of people living in Central America, that is something they can begin hoping for in 2020.

– Sydney Blakeney
Photo: Flickr

The Marshall Plan
In 1947, Europe was still feeling World War II’s devastation. Rebuilding was not going as fast as necessary and people of every country were feeling the impacts. Economies had nearly come to a complete halt in most countries and there were up to 11 million refugees that needed to find jobs, homes and food. The United States was the only superpower in the world that could offer any assistance to the people of Europe because the war did not entirely influence its industries. The reason for the implementation of the Marshall Plan was to help people rebuild their homes and industries, as well as provide security and an economic boost to the U.S.

The Marshall Plan’s Origins

The Marshall Plan, formerly called the European Recovery Program, was an initiative proposed by the United States Secretary of State, George C. Marshall, in 1947. The plan aimed to accomplish several things. First, it was to provide aid to kickstart European countries whose economies the war destroyed. The second was to promote free trade that would not only benefit those countries but the United States as well. The third was to contain the spread of communism that was sweeping over Eastern Europe.

The Marshall plan gave aid to 15 countries; the United Kingdom, West Germany, Austria, France, the Netherlands, Iceland, Italy, Greece, Turkey, Denmark, Belgium, Sweden, Ireland, Portugal and Norway. President Harry Truman signed the plan into law on April 3, 1948; it brought aid to Europe in the form of machinery, fuel, food and money.

Aid for the Netherlands

World War II hit the Netherlands hard when the German forces occupied the country from 1940-1945. The war heavily damaged its infrastructure, agriculture and housing and they were in desperate need of repair. To rebuild its infrastructure, The Marshall Plan gave half a million dollars to the cement industry to repair roads, bridges and ports. The port in Rotterdam was particularly important because the country uses it to import goods. The Plan provided more funds to build housing for 9.5 million people living in the Netherlands. Fixing the agriculture of the Netherlands required the country to modernize its practices. It spent funds on new farming equipment and the treatment and repairing of the soil destroyed by years of fighting. In total, the Netherlands received $1.127 billion to rebuild its country.

Aid for Germany

Germany split in two shortly after World War II ended. The Soviet Union controlled East Germany while the United States and its allies controlled West Germany. West Germany received $1.4 billion in Marshall Plan aid although the war heavily impacted it. The whole of Germany had an aggressive bombing campaign to destroy its cities and invading armies from the west and east devastated the country’s communities. Twelve percent of the aid to West Germany went towards housing the nearly eight million refugees that had settled there after the war. These houses were necessary with a population of 67.9 million. Coal was another industry that was in desperate need; 40 percent of funding went towards this so that Germany could fuel its industries and factories. The funds from the Marshall Plan helped the German people find homes, jobs and food.

Aid for the UK

German bombings on British industrial sites had a terrible impact on the production of British goods, particularly on its southern cities. By 1948, the United Kingdom had mostly recovered from the war, but it needed to address more. While the U.K. was able to rebuild, the country was deep in debt and was having a challenging time feeding its people and keeping its industries going. Because of its 1948 population of 50 million people and its contribution to the war effort, the U.K. received the largest sum from the Marshall Plan, $3.2 billion. These funds provided the country with financial stability and allowed it to balance out its economy. While the aid did not go towards helping the U.K.’s economy, it benefited from the food and fuel brought in and the breathing room necessary to stabilize its country.

In total, the United States spent over $13 billion in aid for the 15 countries. These countries were able to provide food, fuel, housing and stability for their people during a devastating time thanks to the Marshall Plan. The average GDP of the nations that received aid increased from their prewar levels by 35 percent, and overall industrial production rose by 40 percent. The U.S. was also a beneficiary of the economic success of the European nations engaging in trade. In the decade following the end of the Marshall Plan in 1951, the GDP of the United States had nearly doubled. The Marshall Plan shows the benefits of providing foreign aid that can help not only those receiving but those giving as well.

– Sam Bostwick
Photo: Flickr

History of The United States Agency of International Development
Foreign aid refers to any donation that one country makes to help another. The United States has proven itself to be a leading figure in foreign aid projects through the work of the United States Agency of International Development (USAID). This article focuses on the history of USAID.

USAID is the United States’ foreign aid branch which is responsible for diminishing poverty, innovating development and ideological progress around the world. The organization harbors an interesting history scattered with different approaches and methods. Each decade has acted as an era to test new theories on how to best assuage purveying poverty.

A Quick Historical View

On November 3, 1961, President John F. Kennedy signed an executive order that created the first U.S. agency that would take on global development challenges. USAID emerged “with a spirit of progress and innovation.”

The need for a specific agency to handle global development projects became clear after World War II. The Marshall Plan, active from 1945 to 1949, focused on rebuilding European nations after the damaging war. This demonstrated to U.S. lawmakers that providing assistance to stabilize countries is an effective way of initiating positive change. The 1960s was the decade of development. International powers united under the belief that poverty was a moral blot in the world. Groups like UNICEF and UNDP formed to strengthen infrastructure and industrialization in third-world countries.

Since its early stages, USAID has morphed and shifted focuses. The 1970s had a humanitarian ideal, the 1980s a market-based one and the 1990s saw an effort to stabilize democracy. The 2000s have thus far been reminiscent of USAID’s original purpose.  The all too numerous episodes of violence and war have caused much of USAID’s efforts to go towards rebuilding destroyed neighborhoods and governments.

How Does USAID Implement Aid?

The history of USAID shows that while the organization has taken on multiple approaches, funding methods have remained stagnant. USAID sometimes gives donations to governments and predominantly channels them through NGOs that use the money for very specific purposes.

Many NGOs use their budget to directly affect the lives of individuals and families. Communities receive humanitarian aid in the aftermath of natural disasters. Events like these are particularly harmful to impoverished individuals, as many of them rely on agriculture as the sole means of income. Education and health services are also a primary focus of NGO groups as these are both methods to bring third-world countries onto the modern development stage.

 Which Countries Receive the Most Aid?

There are over 100 countries that receive foreign aid assistance from USAID. The history of USAID shows that countries riddled with violence are often the highest receivers.

To date, USAID has given Afghanistan the most foreign aid from the United States. The country has received a considerable $4.89 billion in total. About 73 percent of this aid has gone directly to military projects. Counter-terrorist projects are particularly important in Afghanistan, as USAID attempts to stabilize legal and judicial systems that work to hinder the threat of violent groups. This not only protects the domestic Afghan population but also works to improve U.S. national security.

Iraq, Israel and Jordan are the next three countries that receive the most foreign aid assistance from USAID. The purpose of these donations is similar to that of Afghanistan.

Ethiopia, South Sudan and Kenya are also big receivers but for different reasons as economic aid is the primary concern. These programs are diverse and unique to the concerns of each country. Many, however, focus on relieving the spread of disease and allocating food security to suffering populations.

 A Recent Project

When reviewing the history of USAID, it is difficult to pick just one outstanding success. The record has shown that it has integrated democracy, erected countless schools and brought the miracles of modern-day science to neglected regions.

One of its recent projects that focuses on agriculture shows that USAID plans for the future and is also pragmatic. The Avansa Agrikultura Project from April 2015 to March 2020  focuses on farming in East Timor. At its completion, the project should help 5,500 individuals in earning more income and benefitting from a nutritious diet. USAID hopes to improve the daily goings of farm life in East Timor in addition to opening international trade markets to recipients.

A glance at the history of USAID personifies it as an organization dedicated to eradicating worldwide poverty through appropriate methods. With its record, it is no secret that this U.S. foreign aid branch poses as an international leader and will more than likely continue to be so in the future.

Annie O’Connell
Photo: Flickr

Investment in New Markets70 years ago, President Harry Truman’s Secretary of State, George C. Marshall, gave a speech to announce the Marshall Plan, an initiative giving $13 billion in foreign aid to help rebuild Western European economies after World War II. The administration knew it would be a heavy lift, convincing Americans to accept the probability of higher taxes in place of tax cuts they had been promised. Now, it is just as important for leaders to make their case for foreign aid and investment in new markets to the American people, highlighting the twin benefits of security and sustainability for all parties involved.

The Pitch

So how did Secretary Marshall sell his plan?

“Your Eighty Dollars” is one of many short videos designed to explain how the funds spent on the plan, equaling $80 per American taxpayer, would bring positive returns to taxpayers themselves. Marshall had the political savvy to appeal to the self-interest of his countrymen, recognizing that a nation weary from the costs of war would not automatically be eager to shell out more money. The administration also understood the value in emphasizing the relatively small sum—$80—each individual taxpayer would be paying, rather than the much larger $13 billion ($132 billion in 2017 dollars) the United States would spend in total.

The video emphasizes the United States’ myriad strategic advantages in helping rebuild Europe as well as the dire consequences of failing to do so. It asserts the debt of cultural heritage the U.S. owed to Europe, the benefit of having allies in the most populated and pivotal theatre when it came to waging war and the danger of debtor democracies in the West becoming easy prey for dictators and demagogues, both foreign and home-grown.

“Your Eighty Dollars” succeeded in part because it showcased results, not just fuzzy goals, far off in the distance. The narrator introduces the video’s purpose as “presenting documentary evidence of the progress the free world is making toward strength through mutual security,” and evidence of what U.S. dollars had already accomplished would prove to be a powerful motivator.

The video included scenes of the United States helping clear Sardinia, an Italian island in the Mediterranean Sea, of malaria so its fields could be ready for farming. Other scenes which showed Europeans rebuilding and improving their factories with U.S. assistance and techniques, helped make the humanitarian and economic case.

Europe’s Gains — America’s Returns

The Marshall Plan’s greatest success was its stimulation of private investment in new markets. The plan itself was not large in scope: the $13 billion spread across Western Europe did not amount to a huge investment in new markets. Much of that money was spent on imports of American industrial materials, semi-finished products and agricultural goods. American investment had started to pay dividends.

More importantly for Europe, the plan encouraged European governments and privately-held companies to invest more. Research by De Long and Eichengreen shows that countries receiving aid under the Marshall Plan saw more national investment and grew far faster than other wealthy economies (e.g., Argentina) that benefitted from the new post-war economic order under Bretton Woods but did not receive aid. Those examples of powerhouse growth became even more reliable markets for American products—as well as American allies. These countries avoided the fate of much of Europe after the First World War: plagued by crushing debt without relief and, thus, vulnerable to voices of prejudice and division.

Global Poverty and the Road Ahead

In the quest for security and sustainability in the developing world, many themes from post-World War II repeat themselves. As was true in the 1940s and 50s, other world powers—some of which do not share the U.S.’ values of freedom, democracy and open markets—are looking to assert their influence and control over poverty-stricken countries in the developing world.

Chuck Hasenauer

Photo: Flickr

The Marshall Plan
The battles from World War II resulted in some of the worst devastation in history, as military and civilian areas alike were targeted in aerial bombardment, which left millions dead and entire cities reduced to rubble. Devastation and breakdown of social fiber was so prevalent in Europe that the basic building block of civilization — the trade between farmers and urban dwellers offering food for goods and services — began to break down.

George C. Marshall, serving as the newly appointed secretary of state in 1947, outlined a plan to aid Europe with funds for rebuilding key infrastructure and industry. Though it has been criticized for reforming European markets in the style of the U.S. economy, the Marshall Plan undoubtedly helped spur economic recovery in Europe devastated by one of the most destructive wars in history.

The U.S. spent over $13 billion for the economic recovery of Europe between 1948 and 1951. In 2016 dollars the equivalent would be almost $130 billion. By helping to rebuild Europe, the U.S. found a new market for its manufactured goods that helped the country from sliding back into depression following the war. Today, the plan still holds lessons for combating poverty in the 21st Century.

Economic development is critical
Any approach to aid that doesn’t take the economic situation into account is doomed to short term success. The Marshall Plan made a point of focusing on rebuilding the economies of Europe including “…promoting industrial and agricultural production with the object of becoming independent of outside assistance…include(ing) projects for increased production of coal, steel, transportation facilities, and food.”

Oversight is essential
The provisions of the Marshall Plan created a new organization, the Economic Cooperation Administration consisting of an administrator, a deputy and a staff composed of economists, accountants, lawyers and administrative workers. The Act empowered the administrator to create rules and regulations regarding the distribution of aid based on ground conditions. The administrator was on equal footing with the secretary of state, which the president of the U.S. set as the arbitrator in any disputes between them. Other rules outlined two advisory boards and a special “roving ambassador” to aid the administrator. The plan even established a congressional “watchdog committee” for additional governmental oversight. These clearly defined duties helped to ensure the aid outlined in the plan made it to refugees who needed it most.

Confidence must be restored in local economies
The Marshall Plan took measures to restore vital infrastructure and public schooling, which helped to give ordinary citizens the semblance of order necessary to build consumer confidence in their economies. Provisions in the plan also provided for “taking necessary financial and monetary measures to stabilize currency and exchange and balance the governmental budget of the signatory country.” The end goal of the stabilizing effects was to create a favorable environment for American investment in Europe.

Aid should be focused regionally, not on single countries
Experts believe one of the greatest reasons for the success of the Marshall Plan was that it focused on rehabilitating an entire region as an economic unit rather than singling out specific countries. Aid efforts crossed borders and gave a sense that the continent was in the fight together to return to previous levels of economic development. Under the Marshall Plan, assistance was available to countries in the Western Hemisphere. The agreement tasked the U.S. secretary of state with negotiating the free entry of supplies to countries participating in the plan. The administrator was still able to refuse aid in the interest of national security in case it had become clear supplies were supporting military forces. Under this provision, countries in Eastern Europe falling under the Soviet bloc did not receive aid.

Aid should be coordinated through the U.N.
Aid through the Marshall Plan filtered through U.N. organizations for distribution. Also, the rules of the plan required the administrator to send progress reports to the international organization. By coordinating efforts through the U.N., the U.S. increased the legitimacy of its aid programs and allowed some measure of input from U.N. officials.

Marshall himself outlined the reasoning behind the aid in a speech at Harvard University on June 5, 1947. In the address he stated, “It is logical that the U.S. should do whatever it is able to do to assist in the return of normal economic health in the world, without which there can be no political stability and no assured peace. Our policy is directed not against any country or doctrine but against hunger, poverty, desperation, and chaos.”

Will Sweger

Photo: Flickr