The Marshall Plan still resonates in the Arab world

As Tunisia approaches its presidential election later this month, it’s important to take the long view on the changes that began with the Tunisian revolt in late 2010. In an earlier, more optimistic moment, many believed that a transformation toward a more open, inclusive and prosperous region was underway. Now as a new government is elected, there is a real opportunity to push for meaningful reforms that could stimulate economic growth and job creation. Whatever the outcome of the election, the new president would do well to draw upon the lessons of one of recent history’s big ideas — the Marshall Plan — to inform the building of a strong and durable state.

Perhaps surprisingly, the big ideas of the Marshall Plan of a half century ago continue to resonate in parts of the Arab world, although what these ideas mean to individuals can vary considerably. Pro-Western elites may still hope that large infusions of capital will help calm the turbulence in resource-poor, young countries. But the real meaning of the Marshall Plan is about changing the relationship between the private sector and the state. That work has to be done at home, creating more favorable legal and regulatory environments for entrepreneurship, reforming higher education to provide more useful skills to the marketplace, and dismantling the state-centered enterprises that are inefficient and risk averse.

{mosads}During a recent trip, the Tunisian business community was eager to see the new parliament pass laws to liberalize banking and investment and permit public-private partnerships. But they worry that the country’s new politicians, whether secular or Islamist, are neither knowledgeable nor interested in economics. They also worry about petty corruption, a conventional culture that does not encourage young people to start businesses and a labor movement that resists structural change in the economy.

In Jordan, the legal and regulatory framework is more favorable for private-sector growth, but a bloated public sector, bureaucratic sluggishness and a judiciary that tilts to populism create impediments for the business community. Jordan also remains very dependent on outside funding, from aid donors to investors from the Gulf, and has probably overachieved in creating an nongovernmental organization sector that is not sustainable absent foreign aid.

In both countries, job creation for young people in particular is a key national objective, and even a national security requirement, given the risk of radicalization among disaffected young people. Tunisia so far is more vulnerable to losing young people to the siren call of the Islamic State in Iraq and Syria (ISIS); for Jordan, the most talented young people are eager to leave. Unlike the conditions in post-war Europe, when the Marshall Plan made its extraordinary impact on economic recovery, the Arab world has a surplus of young people who lack not only technical skills but also the “soft” skills related to work ethic, reliability, willingness to work hard, etc. Organizations engaged in helping youth find jobs — such as the Education for Employment Foundation and Injaz — find a critical need for these often intangible qualities that make for workplace success.

At a more strategic level, to transform the region’s economic prospects requires greater attention to economic cooperation and eventually integration. Politicians in North Africa have long paid lip service to the concept of integration, but local tensions and the lack of complementarity have impeded progress. Today we see embryonic forms of integration happening from the bottom up, rather than imposed from above as grand schemes. Joint ventures and cross-border cooperation in industry, agriculture and information technology are occurring, led by the private sector.

The absorption of over 1 million Libyans in Tunisia, and comparable numbers of Syrians and Iraqis in Jordan, creates a new form of economic interdependence and could over time create economic growth and opportunity. Smuggling across borders is another type of economic interdependence that could be channeled into more formal economic behavior. In the short run, the care of refugees and migrants is a burden on state services, but Arab societies are remarkably agile in allowing their “guests” to participate in economic life. New skills mix and even some healthy competition could turn out to have some positive effects. Over time, linking transportation, energy and water resource management would demonstrate a greater commitment to integration, and could well be the transformative catalyst so badly needed.

Transitions in what were called the “Arab Spring” countries have proven to be rocky and rough. Tunisia is on track with a new constitution and contested elections, but its economic policymaking leaves much to be desired. Jordan’s elites embrace reform and modernization, but it remains dependent on the outside world for economic and security support. But one can’t help but be impressed with the seriousness of purpose of many in civil society and in the private sector who are open to big ideas and want to be agents of change in their own countries. The Marshall Plan’s focus on economic growth and regional integration remains a useful guidepost for those who seek a better future for the region. At the very least, the “idea” of a Marshall Plan remains strong.

Laipson is the president and CEO of the Stimson Center. Dr. Havers is the president of the George C. Marshall Foundation. They travelled to Tunisia and Jordan in October.