A Global Marshall Plan

[NATO AIR]

i think its a great idea, sadly it doesn't seem very plausible in its current (very ambitious) scope. we badly need something like this though.

http://www.msnbc.msn.com/id/6063354/

A Global Marshall Plan By Laura Cohn in London

Updated: 8:00 p.m. ET Sept. 21, 2004Pope John Paul II thinks it's a laudable plan. Bono, lead singer of the rock group U2, is on board, too. And the idea originated with Britain's Chancellor of the Exchequer, Gordon Brown. With that kind of backing, a new proposal for linking high finance with the needs of the world's poor has triggered much discussion. The concept is to securitize aid pledges from rich nations by turning these commitments into interest-bearing bonds sold to investors. Money from the sale of the securities could then be funneled immediately to the world's neediest countries.

The goal is to meet a target set four years ago at the U.N. Millennium Summit for substantially reducing hunger, disease, and illiteracy in the world's poorest countries by 2015. Backers estimate the program would cost $100 billion a year. The problem is that current aid adds up to just over $50 billion and is unlikely to increase. Brown would create a mechanism called the International -- Finance Facility, or IFF, which would generate the missing $50 billion by issuing bonds backed by pledges of future aid from developed nations.

Advocates for the global poor love Brown's IFF, which he compares to the post-World War II Marshall Plan. It would double current aid amounts, then lock in long-term commitments from rich nations. Unfortunately, those guarantees may also be the idea's demise. So far only France and Canada have endorsed it, and Canada has said it won't join the IFF unless other nations do. The U.S., for its part, says the idea isn't feasible under its annual budget system. Even the World Bank and the International Monetary Fund have withheld their applause, but will discuss it at their annual meetings from Oct. 1-3. In the end, experts say, the IFF will likely go forward, though on a smaller scale than initially envisioned. But when it comes to development aid, small may be better than nothing at all.

Copyright © 2004 The McGraw-Hill Companies Inc. All rights reserved.