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What happened to the Middle East Marshall Plan?

With economic instability and political upheaval spreading through the Arab world, is it time for a Middle East Marshall Plan?

Aida M.Yehia Robert Mason
7 November 2014
General Marshall at Harvard

General George Marshall preparing to announce his economic reconstruction plan. Flickr/OECD. Some rights reserved.

Following the onset of the Arab Spring in 2011, there have been calls by Saudi Arabia and others for a Middle East Marshall Plan to address the unrest, instability and insecurity spreading across the region, but specifically in Egypt and Tunisia. The timing has been inauspicious: first, many potential donors in the west are only gradually emerging from the global economic crisis of 2008, so they are generally out of the game. Second, the Obama administration has taken a “wait and see” approach to the Arab Spring, preferring to concentrate on the twin policies of Iran and the Middle East “peace process” rather than engage in any major economic development plans for the region.

Third, as the former US Secretary of State, Henry Kissinger, argued in 2012, “humanitarian concerns do not abolish the need to relate national interest to a concept of world order. For the US, a doctrine of general humanitarian intervention in the Middle East revolutions will prove unsustainable unless linked to a concept of US national security.” So, as long as counterterrorism cooperation, Camp David compliance and intelligence sharing can be secured by sustaining strong military ties with states such as Egypt, a Middle East Marshall Plan is unlikely to be deemed necessary by policymakers. Right now, American interests have been more clearly focused on providing air support to Syrian Kurds against Islamic State (IS) in and around Kobane, before extending air support to al-Anbar province in Iraq. Fourth, the Obama administration is entering the second half of its second term, when traditionally few policy initiatives, especially grand foreign policy initiatives, are advanced. With the Republicans re-claiming control of the US Senate, the potential for sweeping policy changes has been further diminished.

China, meanwhile, is waiting for a viable economic base to invest in before it replicates its Africa strategy (led increasingly by private enterprise). Meanwhile, although the European Neighbourhood Policy (ENP) has been re-tooled to back nascent political transitions, its conditionality has only made it attractive to states already engaged with Europe, such as Morocco.  

In contrast, most of the Gulf states have the economic resources and political will necessary to support central banks, create jobs and address energy demand in the region. This has been particularly evident in Saudi and UAE support for Egypt. In June 2014, after the election of President Sisi in Egypt, the Saudi government went so far as to call for a donor conference for Egypt and Tunisia. International institutions such as the World Bank have also learnt valuable lessons through decades of worldwide development projects and are therefore in a good position to help target poverty reduction, address skills shortages and boost works programs in the Middle East. There is also a role for private enterprise, through corporate social responsibility projects undertaken by multinational corporations.

However, much of the initiatives taking place in humanitarian and economic terms are just drops in the ocean. 

How big is the ocean? In Egypt alone, 25% of the population was at the poverty line in 2011, so out of 87 million people, 21 million are directly affected. According to Daily News Egypt, that poverty figure may have crept up to 26.3% in 2014, with many more people hovering just above the poverty line, and unemployment stubbornly remaining around 13% over the last couple of years (6.6 million people). This figure is also likely to be higher, up to 50%, in regions such as Upper Egypt, while 17% of the population also suffers from food insecurity.

That said, Egypt could still become an emerging BRICS economy at some point. It has great potential and strengths in population, minerals, geography (as a gateway to the EU, Middle East and Africa through the Suez Canal for instance). It is also the most diversified economy in the Middle East. Couple these features with untapped resources such as gold in the Sinai and Upper Egypt, as well as potential oil and gas fields and the picture looks rosier. Therefore, the 7-8% economic growth achieved during the Mubarak period could return quickly with greater support for tourism and more foreign direct investment targeting infrastructure and public services, especially in areas like Upper Egypt.

Given the scale of the economic malaise in Egypt, Iraq, Tunisia, Syria and Libya, with millions in poverty, unemployed or displaced – but with their high potential yet to be unlocked – an international solution which addresses political chaos and increases economic productivity should be agreed upon soon.

If its implementation is dependent on the US national interest, should we consider Islamic State's use of social services to win hearts and minds, particularly the promise of bread? The US government could employ a strategy to counter IS and other violent Islamist groups based on winning the hearts and minds of millions of Arabs across the entire Middle East. During an era when governments change but populations remain, the US government can no longer afford to marginalise the priorities of the Arab people. In 2014, 85% of Egyptians viewed the USA unfavourably, the highest negative response in the Middle East. The unfavourable figure is also growing. In 2010, before the Arab Spring started, it was 83% and in 2009, it was 73%.Therefore, through this policy shift, the US government could outline a major and long-term policy for the region which links the disparate themes of the Arab Spring across Tunisia, Egypt and Syria, and enhances US legitimacy as a local power in the Middle East.

Such an important foreign policy objective could have stemmed quite naturally from President Obama's “new beginning” speech made in Cairo more than five years ago. Nevertheless, implementing a Middle East Marshall Plan now would signal that during the military intervention against IS and nuclear negotiations with Iran, there are other connected and long-term US interests in the Middle East and North Africa which are being addressed. If the Obama administration is able to utilise its relations with the Gulf Cooperation Council states for funding, Euro-Arab ties for political support, and adopt a leadership position once again in generating, coordinating and sustaining a broad international alliance, Obama could yet achieve a remarkable foreign policy legacy in the twilight of his presidency. 

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