Winning peace in Central Asia and the Middle East

Posted: Apr 08, 2003 12:00 AM

Irrespective of the debate over which department and agency should do what in Iraq and what role international organizations should play, there is a bigger issue of how we approach Afghanistan, Iraq and all of Central Asia and the Middle East post-Saddam Hussein and the Taliban. We don't want to make the same mistakes there we made in Europe in 1945-47.

If freedom and democracy are to flourish in Central Asia and the Middle East, a vibrant economy will be an absolute necessity. As we learned from Europe post-World War II, creating economic prosperity will require more than simply restoring order, providing humanitarian assistance and financial aid to rebuild physical infrastructure. We need a program of support and reform available to the entire region - a 21st-century Marshall Plan, if you will, directed, as Secretary of State George C. Marshall put it, not against national enemies or peoples, but against the common enemies of poverty, national rivalries and economic stagnation.

Such an effort must be based on an understanding of what America did wrong between the end of World War II and 1947, what we did right subsequently and why it worked. A review of the real Marshall Plan reveals dangers and pitfalls to be avoided as well as lessons about the ability of the United States and a coalition of willing co-sponsors to transform a region that by conventional wisdom is not ready for capitalism or democracy.

American reconstruction of Europe began with the U.N. Rehabilitation and Relief Administration from 1944-47, which provided food, medicine and emergency assistance. Yet if the goal of the United Nations was to make Europe prosperous again, it was an abject failure. Writing from France in the spring of 1947, Undersecretary of State for Economic Affairs Will Clayton described a "breakdown of the modern economic division of labor," with farmers hoarding goods from the cities and workers in the cities unable to find work, let alone pay for food and energy. Several years of aid had not restored economic incentives or the social fabric of production but arguably had attenuated them.

"The UNRRA," skilled at handing out packages of food and water but lacking any strategic vision of how to lift Europe's economy, "cannot do this job," Clayton told President Truman. "The United States must lead." It wasn't that the UNRRA hadn't done its job. It had. But there was a much broader task - regional economic strategy and growth that those institutions were not capable of carrying out.

In 1997, the Alexis de Tocqueville Institution, led by Gregory Fossedal, published a study of how the Marshall Plan worked and found three strong policy correlates with national recovery: monetary stabilization, tax reform/rate reduction and implementation of free-trade policies. Creating economic prosperity in Central Asia and the Middle East today will also require these kinds of fundamental policy reforms. A reconstruction program must be based on a combination of economic aid and policy liberalization in the countries that participate: free trade, sound money and stable exchange rates, private property rights, tax policies that do not stifle initiative and sensible spending policies that make only necessary public investments.

The president should appoint a special envoy to serve under Gen. Jay Garner, either from an appropriate Cabinet department or a leading businessperson from the private sector with an interest and the experience to help form a plan for growth and prosperity at the earliest possible date. The envoy should have no other responsibility but to move this program to completion and should have complete power and authority to do so across all appropriate federal departments and agencies.

Skeptics of Marshall Plan analogies for the Middle East say we can't repeat history. Actually, leaders can do little but repeat history. In the coming months, the United States will decide whether it wants to repeat the history of 1945-47, with piecemeal aid programs and unambitious goals, or whether we want to repeat the history of 1947-55, and make an entire region of the world peaceful, prosperous, democratic and free. The latter is a history well worth repeating for the world's most devastated region at the start of the 21st century.

Iraq, like Europe, has many physical assets, including its vast oil reserves, to build on. Most important, however, are its human assets - a population that is well-educated, skilled at trading and production, and which understands nearly as much about freedom and democracy as Germans did in 1947. The Iraqi people, as President Bush recognizes, have a deep yearning for these things, whether some Western elites think they are "ready" for democracy or not. All human beings are "ready" for democracy, freedom and equality; they are a part of human nature.