TEXT OF COMMENTARY
SCOTT JAGOW: Sixty years ago this month that the world first heard about the Marshall plan. In a speech at Harvard, Secretary of State, George Marshall, unveiled his ideas for rebuilding Europe after the war. Some people believe its time for another Marshall plan, this time for Africa. Commentator Glenn Hubbard shares his thoughts.
Glenn Hubbard: Given that Africa is poorer today than 20 years ago, it's only logical that some leaders have called for a Marshall Plan for Africa. But let's not confuse aid with business ingenuity.
The original Marshall Plan was less a grand aid program than a targeted effort to restore the power of business as a growth engine. Under the plan, America gave Europe grants to restore production. Then, European countries made loans to local businesses that eventually repaid them. Repaid funds were spent on business infrastructure, things like restoring ports and railways.
By contrast, grand foreign aid plans emphasize government-led development and social services. But Africa has never had a major business sector support project like the Marshall Plan.
Under a plan like that, an international organization would collect and manage donor funds. A country's eligibility would depend on its policies to foster business development.
Countries would compete for the funds, just as they did in the original Marshall Plan. What if they spend some funds on purposes other than starting businesses and promoting growth? Well, we could turn to other countries who would be happy to take the funds.
Of course, charity touches the heart, and business does not. But it's time for American business leaders who've been conspicuously absent from the growing debate on African poverty to step in.
George Marshall was very clear that the breakdown of Europe's business structure was the problem aid must solve. Let's build profitably on Marshall's logic today.
JAGOW: Glenn Hubbard is former head of President Bush's Council of Economic Advisors. He's now the Dean of Columbia's Graduate School of Business. In Los Angeles, I'm Scott Jagow. Thanks for tuning in and have a great day.