Say in the early 1990s the United States were to provide Eastern Europe and the Soviet Union with funds from a Second Marshall Plan in order to help them economically rebuild.

How much money would be needed for this task?

What are the odds of this package passing?

What effect would this have on the economic situation in Eastern Europe.
 
Define Eastern Europe...

Estonia, Latvia, Lithuania, Poland, Hungar Czech and Slovakia..

Bulgaria, Romania, Yugoslavia

Now .. lets add.. Russia, Ukraine, Belarus

even by post 1993 standards we are talking a total boat ton of money.

now say package includes advisors, educators, business and infrastructure investments as well and of course This package would come with strings, such as political and open markets for the west to exploit.

in the first group the money and help would be greeted with great appreciation.
in the second they would be wary but thankful
in the third: skeptics, thankful, but it will take considerable honest effort to drop the east-west branding and work to integrate and include the former USSR into the west and not exclude and hope they never rise again.

In Russia while I do believe it would be very beneficial it would have to be cautious and well thought out, the nation is very large and just a few years prior our mortal enemy so there will be lots of off limit places and things we can and can not do.

in Belarus it might help to bring them closer to the west, In Ukraine as well. The real trick would be not to disrupt the perceived balance of power and influence and being all inclusive of member states while at the same time showing contrition on the western side to show that we are not trying to over run them culturally.

also on a note: Ukraine and Belarus are only 7-8 years removed from Chernobyl
 
There was a substantial amount of aid and loans that was given; I can't remember the exact quote, but I remember that one article or paper had said that it was often being compared to a second Marshall plan during the 1990s.

To express how pumping a huge amount of money into a country lacking in market institutions, with unstable political structures, an elite which has managed to loot the proceeds of their economic base for themselves, and which is lacking in the rule of laws and a host of vital assets that are simply missing despite their vital nature in Western countries will go, the second portion of the following quote will shed light on this situation;

An African dictator paid a visit to an Asian dictator in his home country. He noted the lavish private airport, the richly planted gardens surrounding the official palace, and the fabulously expensive furnishings of the official residence. Knowing that this country was as poor as his own, he asked the Asian dictator "However could you afford such things"? The Asian dictator smiled, and pointed out the window to the new bridge being built with funds from international aid agencies. "You see that bridge?" he asked. He then smiled, tapped his finger on his chest, and said "Ten percent. Did you see that new dam being built on the river?" Again, he smiled, tapped himself on the chest, and said "Ten percent. You see, that is how I can afford such things". Now the African dictator was smiling too, and thanked the Asian dictator for the valuable lesson.

A couple of years later, the Asian dictator visited the African dictator in his country. He noted the airport was even more lavish than his own, the gardens even more lush, and the official palace even more palatial. Astounded at the African dictator's sudden wealth, he asked "However could you afford all this?". The African dictator pointed out the window. "You see that new bridge being built?". The Asian dictator scanned from horizon to horizon, and said "But I don't see any bridge!". The African dictator smiled, thumped himself on the chest, and said "One HUNDRED per cent!"


Russia seems to be the eternal example of that if it functions properly, no amount of foreign help is necessary, and if it doesn't, then no amount of foreign help is going to fix things. The Marshall plan worked in Europe because it had a base of market institutions (re)build on; Russia did not, which means that for a Marshall Plan type project its just a gaping hole for money to vanish into, and into oligarch's pockets. I'm sure there was some corruption in the Marshall Plan, but its the 10% style of corruption, a bit into the pockets but the project gets done; in Russia the money is going to vanish to no usage, whether it is in formal corruption or just a complete inability to properly allocate the money outside of a communist context when there is no market context. Ultimately, building up institutions for the market economy will be immeasurably more useful than a Second Marshall Plan; Russia. would have been far better served if the IMF stopped giving it so much "help" in the way of their suggestions and guidance, than by any conceivable amount of Western financial assistance.
 
[QUOTE="
Russia seems to be the eternal example of that if it functions properly, no amount of foreign help is necessary, and if it doesn't, then no amount of foreign help is going to fix things. The Marshall plan worked in Europe because it had a base of market institutions (re)build on; Russia did not, which means that for a Marshall Plan type project its just a gaping hole for money to vanish into, and into oligarch's pockets. I'm sure there was some corruption in the Marshall Plan, but its the 10% style of corruption, a bit into the pockets but the project gets done; in Russia the money is going to vanish to no usage, whether it is in formal corruption or just a complete inability to properly allocate the money outside of a communist context when there is no market context. Ultimately, building up institutions for the market economy will be immeasurably more useful than a Second Marshall Plan; Russia. would have been far better served if the IMF stopped giving it so much "help" in the way of their suggestions and guidance, than by any conceivable amount of Western financial assistance.[/QUOTE]


I agree with this assessment. Throwing money at Russia in the mid 1990's wouldn't have helped as much as targeting the money to help build the infrastructure of the economy. Granted the wests track record at nation building is kind of low.. however if the idea to help them and not sustain them, then I think it would be a go. after the collapse of the Soviet Union stemming the tide of corruption, mafia, and whole sale auctioning of the nation would be a great benefit.

Biggest issues to face are that of the xenophobia that is quite real coupled with 70+ years of communism. People who worked under the system and paid their dues are out pensions, rampant inflation and rising costs that they can ill afford. tackling that with some form of a marshal / new deal plan tied with competent advisors who honestly understand Russia and encourage Russian leadership to actually to care for things out side of Moscow/ Petersburg and other large cities would be a plus as well.

It was hard for all of eastern Europe to change. yet the Warsaw pact nations WANTED to shift to the west. Russia wanted this as well, but no one was steering the ship through the darkness and the west honestly wanted to keep the Russians down for as long as they could.
 
I keep posting this link :). It is an article by Jeffrey Sachs who was an advisor in late USSR/early Russia. It is almost on topic - about (admittedly in one biased opinion) what should have been done and why it failed. He thinks the help to Russia should be no less then 150 billion to have a desirable effect.
 
The question is how much can US make out of this?

I read that the original Marshall plan generated 300% ROI to US industry thanks to captive markets, in addition to then political clout it gave US (don't ask me for a quote, I don't remember where I read that). Would a 2nd Marshall plan get as good for US industry?
 
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