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The Silk Road, Marshall Plan - and you

| October 2, 2018 1:00 AM

By UYLESS BLACK

Special to The Press

A large number of Internet media postings have recently highlighted China’s Belt and Road Initiative (BRI). The subject is also a lead article in many newspapers and journals. Some analysts have compared it to the post-WWII Marshall Plan.

The BRI will significantly affect the lives of Idahoans and the rest of America, comparable to the impact of the Marshall Plan on Western Europe and the emerging Cold War. This two-piece article will discuss and compare these two programs,

BRI

Those who know about BRI are usually not neutral about the subject. They favor it or are against it. But many Americans have no idea what BRI is. We should know about this program because it will affect if not our present generation, certainly our progeny.

BRI is nicknamed the Silk Road in reference to trade routes that existed many centuries ago between East Asia (China and the Malaysian peninsula) and the west (modern-day Europe, the Middle East, and northeast Africa). It derived its name from the enormously lucrative trade in silk and other goods carried forth and bartered along its extensive path.

China’s leader, Xi Jinping, has set up the BRI to be “the project of the century.” China intends to build an infrastructure of sea, land, and air industries across expansive parts of Asia, the Middle East, North Africa, as well as areas in South Africa, Eastern Europe, and locales in Western Europe.

In response to critics about China investing huge sums of money in many parts of the world, Xi Jinping states, “China has no geopolitical calculations, seeks no exclusive blocs, and imposes no business deals on others.”

Before introducing the Marshall Plan, I have one question: If Mr. Xi’s three claims are sincere, why is China embarking on such a grandiose scheme? I doubt it is based on generosity. The Chinese Communist Party is not known for selflessness. It is known for its self-interest and self-promotion. Are there strings attached to countries accepting BRI’s beneficence?

The Marshall Plan

The Marshall Plan is likely more familiar to Americans. Like the BRI, the Marshall Plan was not a noble altruistic experiment. But unlike the BRI, the effect of the Marshall Plan was greatly altruistic, as it staved off post-WWII Europeans from destitution — even starvation. The BRI has not set forth these kinds of goals.

Nonetheless, at its heart, the intent of the U.S.-sponsored plan was to thwart the growth of native Communism in Western European countries, prevent the Soviet Union from making further inroads into Germany, and halt Russia’s drive to consolidate its hold over Eastern Europe. In the short run, the Plan was successful in achieving the first two goals. In the long run (with the dissolution of the USSR), it met all its goals.

To gain a sense of the magnitude of the damage caused by WWII and the salvation of Europe that largely came from the Marshall Plan, consider the 1945 situation in Western Europe:

More than 50 percent of housing in major cities was reduced to rubble.

- In London, 3.5 million homes had been destroyed.

- In Berlin, 75 percent of the buildings were uninhabitable.

- In Germany, 90 percent of the rail lines were inoperable.

- Greece lost two-thirds of its merchant fleet.

- Thousands of bridges throughout Europe were obliterated.

In the second part to this article, we’ll examine these two plans further.

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Uyless Black spent part of his career in the Federal Reserve System. He served as assistant director at the Federal Reserve Board in Washington, D.C., and senior vice president at the Dallas Federal Reserve Bank. He also served two terms as the Board’s ombudsman. He and his wife, Holly, live in Hayden.