(This is an expanded version of an article posted on the Green Party web site more than a year and a half ago.)

Social justice calls for the eliminating poverty everywhere.

The Marshall Plan 1948-1951 was an unselfish effort to restore Europe’s industry and infrastructure destroyed in the Second World War. For many years, organized groups have advocated a second Marshall Plan to eradicate poverty everywhere. Since there are about three billion people living in poverty, a business as usual approach will not eliminate poverty. The rich countries have to make a concerted effort. The United Nations Millennium Goals aim to do this. Great Britain’s Exchequer and later Prime Minister Gordon Brown, Cardinal Oscar Rodriguez from Honduras and former German foreign minister, Hans-Dietrich Genscher are among an increasing number calling for a second Marshall Plan for the world’s poor. There is at least one nongovernmental organization, Global Marshall Plan (www.globalmarshallplan.org) that has been pursuing this goal for years. The second Marshall Plan will be more expensive, complicated and longer than the first one. Since the Apollo 11 rocket had two million moving parts, I do not want to hear complexity as a fatalistic excuse not to engage in the effort.

Where would the money come from? Reduce the world’s military budget by 10% and invest the new 10% in poverty reduction. This is a security investment in reducing conflict and the terrorists’ recruiting pool. Any foreign aid with some due diligence will work better than military expenditures as seen in the total failure to achieve peace in Iraq and Afghanistan.

Considering that foreign aid, except for the first Marshall Plan, has had an overall mediocre record, it is a good idea to see where foreign aid goes right and where it goes wrong.

There has to be international reform in lending practices. Currently, governments and banks give loans to notoriously corrupt dictators with massive human rights atrocities. The dictator and his assistants put their money in Swiss bank accounts or tax havens. When a reform group sweeps the dictator from power, the creditors look to the new government to pay the dictator’s loans. The proposed international rule is that banks lending to dictator governments may only seek payment from the dictator and his followers and the new government is not held responsible for the old debts.

The lending agency will require different reforms from different countries. Tax reform would be a priority in most countries. For example, the CIA handbook lists Colombia as the eighth worst country in income distribution. The Economist reported that the top 20% earn about 25 times as much as the bottom 20%. For aid programs to continue, the national government would have to impose more taxes on those who are earning more. Like many other countries, the government and institutions impose obstacles and read tape to get things done. Streamlining the regulations making life less burdensome for the citizens would be another requirement. Hernando Soto in The Other Path: the Invisible Revolution in the Third World described the endless process and steps to legally (without bribes) get permits in Peru. These burdens sound like something from a Franz Kafka novel.

John Perkins, in Confessions of an Economic Hitman, described his foreign aid consulting career as deliberately convincing foreign government representatives to take on projects far greater than the scope of the problem called for. For example, he would recommend a larger than necessary hydroelectric dam that user fees could not possibly pay back the contracted debt. The recipient country would be in perpetual debt to the United States and more compliant in its votes in the United Nations. Since our government has deceived the public about what happened in the Gulf of Tonkin in 1965 and the Gulf Wars, I find it plausible that government agencies would lie about less important matters.

Rabbi Michael Lerner. In Left Hand of God: Taking Back Our Country from the Religious Right, calls for a Global Marshall Plan directed by an “international body of internationally recognized spiritual leaders, academics, health care workers, educators and community organizers to supervise the expenditures”. This would provide on-going evaluation and transparency that does not exist now. The same board would soften bankers’ influence which is predominant now.
William Easterly, in The White Mans’ Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good, examines the theory that foreign aid has gone wrong because of incompetence, not malevolence. William Easterly is an economics professor who worked in the developing world and was a senior research economist at the World Bank for more than 16 years. He recommends a bottom-up approach rather than top-down. For example, churches, community groups and other entities would draw up proposals for schools, electrification projects, wells, infrastructure, health facilities and everything else. The new agency would give the funds directly to the entity. This would certainly avoid some corruption from governmental entities. In much the same way, the US Education Department gives donations to school districts for specific programs or computers.

Easterly maintains that there are two types of people in aid agencies, the Planners and the Searchers. Think about the Soviet Union when Gosplan, the Soviet planning ministry, organized almost the entire Soviet economy. Then, think of the marketing department of any company. He gave two examples of each type.

Treaded bed nets protect people from being bitten by malaria mosquitoes when they sleep. Traditional aid agencies are usually not successful in delivering these bed nets to the poor. They wind up in the black market or used as fishing nets or wedding veils. A Searcher type organization, Population Services International, was successful at getting bed nets to the poor by selling them for fifty cents to mothers at prenatal clinics in the countryside. A follow up survey showed that almost all nets got used for their intended purpose. In contrast, a study of a program in Zambia, where an agency gave away nets whether the people wanted them or not, showed that 70 percent did not use them.

One almost unreported feature of poverty in Africa and many other regions is indoor smoke from cooking, which increases children’s chances of dying from respiratory diseases. Agencies have attempted to solve this by introducing stoves that reduce smoke without consulting the poor on what kind of stove they wanted and would use.

The Shell Foundation, on the other hand, is attempting a market-based approach where hundreds of microenterprises produce and distribute stoves, adopting them to local customer preferences.
A major difficulty is the number of agencies with different agendas and different bosses with little specialization on what they do best. Working in Bolivia now are “…the International Monetary Fund, the World Bank, the Inter-American Development Bank, USAID [US Agency for International Development], the U.S. Drug Enforcement Agency, the UK Department for International Development (DFID), just about every other rich country’s aid agency, multiple NGOs {non government organizations}, and Bono.” When there is a political and economic crisis as there was in 1999-2005, who can determine which agencies have done a good job?

Bureaucratic Planners get little or no feedback from the poor, who get some things they never wanted and usually do not get what they need.

A major difficulty with foreign aid has been to make a utopian blueprint to fix the world’s complex problems. According to Easterly, the Big Answer is that there is no Big Answer. When development comes, the solutions will be as varied as the countries and their complex histories.

Aid agencies would be more effective by specialization, taking on modest tasks (identifiable projects) and independent review.

They should give up the “do everything” approach and not expect big changes in the recipient government’s bureaucracies. An example is that an aid agency would build a road, school or clinic but refuse to pay for the maintenance and supplies with the idea that this is the government’s responsibility. Since recipient governments seldom take on such responsibilities, agencies should plan on furnishing maintenance and supplies and end this frustration and disappointing results.

Easterly believes that aid agencies should help individuals and not attempt to transform societies. He wants to “get the poorest people in the world such obvious goods as the vaccines, the antibiotics, the food supplements, the improved seeds, the fertilizer, the roads, the boreholes, the water pipes, the textbooks and the nurses.”

Reading this book at times brought me back to reading Dilbert cartoons. Could the people at the aid agencies be as stupid and out of touch as he describes them? Easterly’s recommendations make sense. Hopefully, the people at the aid agencies and Gordon Brown will give them serious attention.

My recommendation for aid advocates is to start a mini Second Marshall Plan now. Pick out two small countries each from Asia, Africa and Latin America to carry out the Big Push. There should be enough support in the European Union to carry this out. Establish a new agency that would incorporate reforms that Easterly, Perkins and Rabbi Lerner advocate. Learn from mistakes. Enforce honest performance evaluations. Give up the idea of always dealing with governments. Poor people through their schools, cooperatives and churches may write grant applications and make things happen.

Aid advocates should also look at other ways of helping the poor. Elimination of agricultural subsidies in the rich countries would make their products competitive on the world market. What is illegal to sell in the United States must also be illegal for export and U.S. military use. Prohibition of international arms sales would be almost a big a step as the international prohibition of slave traffic.

Aid advocates should address the second Marshall Plan as one of the solutions for the immigration in the European Union and the United States. Give the Mexicans and other hard working people the chance to be reasonably prosperous and they will not cross the southwestern deserts to make US poverty wages.

In some countries, foreign aid helps dictators stay in power. In the second Marshall Plan, funders must look to countries where some success is possible, where governments are more responsive and less corrupt. Where aid has had a negative impact, I recommend eliminating aid altogether.

Establish an international treaty and enforcement mechanisms to obtain minimum working conditions, environmental protections and union organizing rights. Signatory countries would only import goods that would meet the minimum conditions.

There has to be international reform in lending practices. Currently, governments and banks give loans to notoriously corrupt dictators with massive human rights atrocities. The dictator and his assistants put their money in Swiss bank accounts or tax havens. When a reform group sweeps the dictator from power, the creditors look to the new government to pay the dictator’s loans. The proposed international rule is that banks lending to dictator governments may only seek payment from the dictator and his followers and the new government is not held responsible for the old debts.

There have to be institutional reforms in the World Bank and the International Monetary Fund that exist largely to protect creditors. The hypocrisy is that when a financial crisis hits a poor country, these institutions demand a balanced budget and slashing programs for the poor. The United States government, except during the Clinton years, has produced record deficits. What is needed is funding social programs for countries in crisis as well as debt assistance. This means a much longer payback period but a lower price in human suffering.

Earth Policy Institute president, Lester Brown, in his book Plan B: Rescuing a Planet under Stress and a Civilization in Trouble, proposes the following funding for a second Marshall Plan:

Goal Funding (billion dollars)

Universal Primary Education 15

Adult literacy campaign 4

Reproductive health and family planning 10

Closing the condom gap 2
School lunch programs for 44 poorest countries 6

Assistance to preschool children
and pregnant women in 44 poorest countries 4

Universal basic health care 21

Total 62

Individual countries will ask for additional funding for environmental projects and social programs. Considering global warming and environment degradation everywhere, rich countries can establish conservancies in the Amazon and probably every poor country. Poor people could be trained to be park rangers, protecting areas from unauthorized mining, hunting and logging. Reforestation and wetland restoration would be worthy projects.

Tina Rosenberg in the New York Times, January 3, 2011 edition reports outstanding success in conditional cash transfers to poor families who keep their children in school and bring them to the doctor for regular checkups. Requirements vary among the 40 countries with such programs. In Mexico, for example, families must attend workshops on subjects like nutrition or disease prevention.
Brazil has had excellent results with their Bolsa Familia (family grant) program. Economic inequality in Brazil is falling faster than in almost any other country. Between 2003 and 2009, income for poor people has risen seven times faster than it has for the rich. Poverty in the same period fell from 22% to 7% of the population. In contrast, look at the US where more than four-fifths the income increase went to the top 1%. These are good results on the cheap.

Water wells are a good investment. In too many countries, women have to walk miles every day to bring a few buckets of water to their families for cooking, drinking and laundry.
I advocate a population decrease in every country to lighten the environmental impact. The world has enough housing developments, shopping malls and streets. Population increase means more farmland, forests and wetlands consumed. Make sure that every female gets education up to and including the eighth grade to give her something to do than housework and having babies.

People new in Twelve Step programs learn early an informal definition for insanity: doing the same thing over and over again but expecting different results. Our human society needs institutional reform and smart foreign aid to lift some three billion out of poverty. With business as usual, there will be increasing poverty and a recruitment pool for terrorists. By abolishing poverty, remembering Winston Churchill’s most famous speech, all humans will “walk in sunlit uplands.”
Main sources:

Brown, Lester. Plan B: Rescuing a Planet under Stress and a Civilization in Trouble. New York: W.W. Norton & Company, 2008.

De Soto, Hernando. The Other Path: The Invisible Revolution in the Third World. New York: Harper & Row, 1989, pages 131- 187.

Easterly, William. The White Mans’ Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good. Penguin (Non-Classics); First Edition, 2007.

Rosenberg, Tina. “To Beat Back Poverty, Pay the Poor.” New York Times, January 3, 2011