Sienna Nordquist
Introduction
China’s flagship Belt and Road Initiative (BRI) is often directly compared to the United States’ postwar Marshall Plan. The comparison is made due to the BRI’s scale, global infrastructure investment ambitions, and geopolitical and security ramifications. But how accurate is this analogy, and what do the similarities and differences between the two infrastructure programs tell us about the economic and political anxieties of our time? While there are far more differences than agreements between the BRI and the Marshall Plan, the impetus behind both initiatives reveals important parallels between the postwar reality and post-financial crisis global posture. Through the analysis of several examples, this issue brief provides crucial insights as international political and business leaders once again call for a “new Marshall Plan”—this time to rebuild Ukraine should Russian aggression end.
Comparing the Marshall Plan and the BRI
There are more differences than similarities between the Marshall Plan and the BRI.
First, the method of financing for the two programs are polar opposites. The Marshall Plan was mostly financed through concessions, where countries received funds through grants or in-kind subsidies. The BRI instead relies on loans and liquidity support from the People’s Bank of China.
Second, the two programs were perceived differently. The Marshall Plan was largely celebrated, particularly in Europe. The European Recovery Program train, funded by the Plan, supplied goods and food to millions of European citizens. The Plan ultimately lowered trade barriers and catalyzed economic and industrial advancements. On the other hand, the BRI has received mixed reactions: in areas where it was successful, locals supported the program; but where infrastructure projects failed, delayed, or became more expensive than anticipated, locals blamed the BRI for increasing debt and the withdrawal of public services.
Conclusions
As the United States and the European Union jointly embark upon the G7’s Build Back Better World Initiative (B3W) and as the EU expands its Global Gateway infrastructure program, the successes and failures of the Marshall Plan and BRI provide a few caveats and helpful tips for regional infrastructure and development programs:Local and national leaders should be heavily involved in project development, and an independent third party should monitor public tender. Programs should also work to stimulate and engage local labor markets.
Sources used to fund the proposed infrastructure projects should be made publicly available. A higher grants to loans ratio will likely be more successful.
International actors should prioritize investing in sustainable, future-oriented, renewable energy infrastructure. Officials should consider the long-term economic and environmental benefits of each project before implementation.
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