Marshall Plan 2.0

Guest: Mark Malloch-Brown, president of the Open Society Foundations

We live in a global whirlwind of accelerating crises – whether economic, political, social, or humanitarian. Governments and international organizations have failed to produce lasting solutions to growing inequalities and rising tensions – both within and among nations. Sure, it’s time for bold ideas and strategic action. But who will make the first move?   

Countries all over the world are struggling to cope with the onslaught of international and national crises, from climate change to a rising tide of authoritarianism. Developing countries have an even harder time as they face greater inequality with fewer resources to help their citizens. Government and international bodies have been unable to find lasting solutions to growing economic, social, and political tensions. It’s time for bold ideas and strategic action. Lord Mark Malloch Brown, former UN Deputy Secretary General and former UK government minister, suggests that the world needs a new Marshall Plan. Is an old success story a template for renewed action?

Joining us to talk about a new Marshall plan is Mark Malloch-Brown, president of the Open Society Foundations, the world’s largest private funder of independent groups working for justice, democratic governance, and human rights. OSF provides thousands of grants every year through a network of national and regional foundations and offices, funding a vast array of projects. We opened the conversation by reviewing the history of the Marshall Plan. Malloch-Brown said, “After WWII, Americans were losing the peace in Europe with the spread of communism […] so incredibly enlightened leaders, General Marshall and others, persuaded President Truman that there had to be a major investment in Europe to sort of turn this situation around. It was an extraordinary 2- 3% of American GDP.”

Malloch-Brown used the phrase “perfect storm of hardship” to describe today’s global circumstances. Our guest elaborated, “Ukraine is the final trigger of a sequence of events, which over the last decade, has really undermined global integration. It arguably started with the financial crisis of 2008-9. It then went through the trade wars. It went through Trump’s election in the US. It went through Brexit in the UK. It culminated obviously in COVID, but all of these things have disrupted supply chains, driven the world towards a political economy of repartition.”

Altamar’s Muni Jensen asked, “one of the stated goals of the Marshall Plan was to halt the spread of communism on the European continent. But today with the threats that you describe, how is it possible to create one plan, one crisis?” Malloch-Brown answered, “It’s possible that the way something like this will get going this time is organizing against a Russia and Chinese block in the world. […] But actually, I hope in a sense we can get beyond that and look at a more collaborative model where it’s not organized in competition and conflict with China, but around a shared view that China and the US are the two biggest stakeholders in an open global economy, and that it’s in both their interest to try and protect it.”

This plan would have to be enormous. Our guest elaborated on precisely what this plan would look like. Malloch-Brown said, “my calculations working with a lot of colleagues and experts and attending various discussions on this, is if we could sort of set a benchmark of an additional 2% of global GDP a year, which would be approximately $2 trillion a year to invest in this, we would make an incredible difference. […] But I’m thinking of 2% of not just American GDP or donor country GDP, but global GDP, where everybody puts up a share according to their means so that it becomes a great exercise in partnership and collaboration around a shared sense of destiny.”

Sounds great. Is it feasible? Téa Ivanovic asked, given all the political division around us, “how does the world – and particularly the West – unite behind such a big idea?” Malloch-Brown answered, “my suspicion is they ultimately may not. This is holding up this challenge to them, not with an overwhelming sense it’s going to happen, despite the seriousness of the need, recognizing exactly what you’ve said, that the politics couldn’t be worse. […] So, you’re right; horrible context to launch this, but so was 1946/7. It’s about leadership and it’s about identifying problems that are coming and addressing them and understanding that the costs are not just a loss of life in the developing world, but potentially the loss and the loss of a whole political system. This is actually the Western democratic model that’s on trial.”

We asked about how a larger program was going to work when there is currently reluctance to invest in many of the countries in the global south as is. How do you convince countries and investors to contribute even more? Malloch-Brown said, “My own view is that trust is broken. Donors don’t believe developing countries in many cases will make good use of the funds, developing countries resent and have a deep sense of grievance against a kind of short leash donor model of austerity and conditionality. And the private sector looks at both and says, we can make a lot more money investing in a shopping mall in the west, than building a road in Kenya. And so, you’ve got to transform that triangle of suspicion, if you like, into a more virtuous one of trust and performance going forward. […] Secondly, it needs, you know, a relaunched multilateral system where the technocratic expertise of the World Bank or the IMF is reorganized around a much more investment-oriented model of growth rather than of public spending control as in the past. […] Then finally it needs developing country governments to really sort of pledge into this and to recognize that you won’t have the old-fashioned conditionality imposed by the north on the south, but you will have a contract, that these monies flow in return for you hitting certain targets of performance.”

Altamar’s Peter Schechter brought up the biggest political shift in recent history – Ukraine. He asked, “I think you wrote that the G-7 is “missing the point.” Tell us why you think Ukraine is such a paradigm shift for the world.” Malloch-Brown answered, “the first thing is this was a devastating breach of international law by Russia, a P5 member of the security council, and it has shaken the international system to the roots. There’s just no doubt about it. It was a crime of the first order. […] But this needs to go much wider and see Ukraine as just the compounding crisis of a series of crises that, you know need addressing in a systemic way.”

We finished by asking about the core tenant of this plan – the need for leadership. This plan requires an overwhelming amount of mobilization and cooperation. Who is capable of leading this charge? Malloch-Brown said, “there is the leadership out there, it’s just it’s not coalesced around this. […] This needs to be galvanized. Ultimately fate tends to find the right people. [ …]  Leadership isn’t people seizing the ring, but circumstances can make individuals rise way beyond what you anticipate of them.”

Can the world come together to create a global Marshall plan?  Find out more by listening to the latest Altamar episode, available wherever you get your podcasts. You can download the episode here.