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Asia's equivalent of Marshall plan

by Juan Carlos Martinez Oliva

Asia's equivalent of Marshall plan

China’s One Belt One Road initiative, a pan-Asian development strategy based on economic co-operation and infrastructure building, portrays relevant parallels to the European reconstruction plan enacted in 1948-52, named after George Marshall, the US secretary of state.

The Chinese plan offers numerous countries the chance to participate in a broad market, and to benefit from improved connectivity and trade networks. The potential advantage is significant for countries still in the early stages of industrialisation, with weak development and poor infrastructure.

The Marshall plan teaches us that the success of a grand initiative like the OBOR will depend on the capability of the proponent and on the collaboration of its partners. The success of the ‘one belt’ plan will depend on China’s ability to achieve common and beneficial goals with its partners.

The European Union represents a crucial partner for the OBOR programme. The trade links between the EU and China are among the largest in the world, and there is great potential to increase them further. Railway connections in place between the two economies represent a cheaper and greener alternative to airfreight.

A large number of projects underline China’s engagement in enhancing European infrastructure. China is gradually shifting its activity in foreign direct investment from the US to the EU, which is seen as a more hospitable business environment.

Economic issues take precedence

The comparison between OBOR and the Marshall plan is sometimes criticised because the latter is viewed as a geopolitical device meant to control western European nations and contain the Soviet Union. On the other hand, China’s OBOR is intended as an alliance where economic issues take precedence, with no political strings attached.

Observers stress that the OBOR is based on ‘open co-operation’ to assist the development needs of China’s neighbours, regardless of their relations with China. The Marshall plan, on the other hand, placed political conditions on its beneficiaries and contributed to Europe’s geopolitical split. As during the Marshall plan, today’s debate on OBOR places a good deal of attention on geopolitical and security issues.

Specifically, some countries involved in OBOR are still in a transitional stage, and therefore prone to political instability and terrorism. Like the US 70 years ago, China today faces a potential dilemma in choosing the right response when security issues that threaten the functioning of OBOR emerge.

The Marshall plan was meant to ‘help Europe to help itself’. The strength and enthusiasm of the European nations in taking the opportunity to build new co-operative institutions, pursue common interests, and accelerate moves towards better living standards represented essential ingredients for the US programme’s success.

The same can be true, 70 years later, of the Chinese plan.

Juan Carlos Martinez Oliva is a Principal Director in the Economics, Research, and International Relations Department of Banca d’Italia. He writes in a personal capacity.