XANDER BLAKELY BLOG

NATION BUILDING (II)

With the war in Iraq underway, and with all pundits predicting a quick resolution to hostilities, I thought it time to revisit the issue of Nation Building. So, the question still stands: Will the US help rebuild Iraq? I know that past performance isn’t a perfect predictor of future performance, but it’s often pretty close.

In recent history there have been many regime changes (e.g. Nazi Germany, Imperial Japan, Soviet Russia, Taliban Afghanistan, and soon Saddam's Iraq). We can learn from how the US, which caused directly or indirectly, partially or wholly, these regime changes, among others, reacted afterwards toward the post-regime nations. And the US response has varied significantly, from the Marshall Plan for Europe to MacArthur's authoritarian tutelage of Japan, from Clinton's co-dependent diplomacy of bear hugs for Yeltsin to Bush's outstanding promises to Kharzai. Based on these examples, and the trend they reveal, Iraqis can probably count on, but not too heavily, the US to help rebuild their country after Saddam is gone.

Remember 1991? It was only...

a dozen years ago and yet what a very different world. The UN and the US successfully acted together to evict Saddam’s invading army from Kuwait. Having relieved the symptom, the coalition of nations decided not to risk their own blood to root out the cause. So, instead, a lot of Iraqi blood was spilled in Kurdish and Shiite uprisings and the subsequent and brutal Baath crackdowns. The world community had expected Saddam to fall. He didn’t. There was no regime change. (Ergo today’s sequel.)

By contrast, only months later that same year, the Soviet Union underwent a regime change that was mostly unexpected in the West and mostly bloodless in Russia. Rather than muster a bold reconstruction plan, like the post WWII Marshall Plan, post-Cold-War America welcomed Russia into the free world with mostly open arms but mostly empty pockets.

I don’t want to leave the impression that the US didn’t help Russia. It did, but slowly, tentatively, and parsimoniously. By 2001, ten years after the fall of the Soviet Union, the US gave more aid to Russia ($1.15 billion) than any other country, more than Israel ($967 million), Egypt ($799 million) and Ukraine ($282 million). In fact, America gave more ($10.9 billion) in total foreign aid than any other country in the world, more than Japan ($9.7 billion), Germany ($4.9 billion), the UK ($4.7 billion) and France ($4.3 billion).

We’re back to America the generous, right? Wrong, as a percentage of gross national product, America is the least generous of the developed nations. For perspective, the Marshall Plan amounted to almost $14B in 1950 dollars, which is nearly $124 billion in today’s dollars, over ten times what we allocate for foreign aid today.

So, will America help rebuild Iraq? Help, yes. But, with the federal government now running budget deficits for the foreseeable future, there will be no Powell Plan for Iraq as ambitious or as generous as the Marshall Plan was for Europe. Uncle Sam doesn't have enough money to keep America's house in the black, much less assume Iraq's remodeling expenses. Then again, some respected economists debunk the idea the Marshall Plan was the key to Europe's recovery. Generous though it was, the American money had only a marginal, though timely, impact to Europe's recovery. In the end, Iraq will need to rebuild itself.

Thanks to Joyce Park for providing some of the insightful new data points above.

Posted by Xander at March 19, 2003 09:18 AM | TrackBack