Document Type : Original Independent Original Article
Authors
1 Energy Department, Sharif Policy Research Institute, Sharif University of Technology, Tehran, Iran
2 Assistant Professor, The Research Institute for Science, Technology, and Industrial Policy, Sharif University of Technology
Abstract
Highlights
Introduction
Literature comparing China's Belt and Road Initiative (BRI) with other international projects to create a political, economic and trade bloc is very limited. For example, the Belt and Road Initiative was first used in 2014 by the Marshall Plan of the US government after World War II (Chen, 2014) and received more serious attention around 2016. Since then, this issue was raised in the media and online networks.
However, many analysts disagree with such a comparison (Chen, 2014). The first reason is that the scale of the Belt and Road Initiative is global, while the Marshall Plan is only in Europe. Such a comparison has been rejected by some other scholars because the investment involved in the Belt and Road Initiative is much larger in size than the Marshall Plan. Also, the Road and Belt Plan is ideologically boundless, unlike the Marshall Plan, which was limited to Western Europe and an anti-Soviet plan. Although it may be confusing to consider the fact that the US government organized parallel aid programs to Asian countries such as Japan and the then Nationalist government of China, which received less aid than many European countries that benefited from the Marshall Plan, their economic performance was probably even more successful than some Western European countries today. It is difficult to compare the verbal promises and amounts stated in the agreements made under the BRI with what has already been done with the successes and limitations of the Marshall Plan in the past. The main question that this article seeks to answer is to examine the similarities and differences between China's Belt and Road Plan and the Marshall Plan and the Molotov Plan.
In the literature related to the Belt and Road Initiative, the lack of literature comparing this plan with other similar international plans is evident. For the first time, this article compares the Belt and Road Initiative (BRI) from an economic, social, political, commercial and geopolitical perspective with the US Marshall Plan and the Soviet Union's Council for Mutual Economic Cooperation (CMEA or Comecon).
Methodology
This article has applied a comparative approach to compare BRI with Marshall Plan and Molotov Plan from different aspects.
Results and Discussion
One aspect that was challenging regarding the effectiveness of the CMEA was currency and monetary relations in planned economies. Zwass (1989) cites the observations of Franklin D. Holzman, a US monetary expert, who described the financial disparities in the CMEA as follows: "The various currencies of Eastern Europe are all inconvertible because, in the first place, the exchange will be When rates equate to irrational price systems, they mean nothing. When there is inconsistency in terms of the commercial medium used, it arises as a logistical problem, which in turn affects the viability of the organization in question. This therefore highlights the problems or obstacles of CMEA as a viable organization for profitable economic integration."
Another aspect that undermined the CMEA's decision was a procedural flaw in the organization. Schrank (1991) points out that inherently cumbersome and inefficient procedures and red tape have hindered multilateral trade within the organization. Instead of extensive multilateral interaction, trade became largely bilateral despite strategic decisions due to procedural complexities. This in turn led to trade compression rather than intended trade expansion and more or less commodity specialization, which in turn affected the efficiency of multilateral trade within the organization.
It is safe to say that the Marshall Plan and the CMEA were both initiatives to rebuild and revive the European economy after World War II. However, political issues underlay the OEEC and CMEA organizations. Basically, the formation of these two was in line with the struggle between socialism and capitalism, in which capitalism prevailed. Moreover, it was a struggle for geopolitical dominance ideologically, systematically, and economically.
Although it is not possible to completely compare what has already been implemented in the Soviet Marshall Plan and the Molotov Plan with what is proposed in the perspective of China's Belt and Road Initiative and the initiative to build a better world of the United States and the Group of Seven, however, comparing the background and The political and economic goals behind these big development plans are still significant. Both the Marshall Plan (1948) and the BRI (2013) were proposed at times when the global system was not functioning properly. For Marshall, two world wars and the Great Depression were in an era that, with the growing threat of communism from Russia, completely destroyed the lives of two generations of Europeans. For the BRI, this is the longest recession in the global economy, especially since the global financial crisis in 2007. Both the United States and China at their own times designed their packages to simultaneously improve their global leadership status. On the other hand, the plan of the Council of Cooperation and Mutual Cooperation of the Soviet Union was presented in response to the Marshall Plan and to prevent American influence in Eastern Europe.
From the perspective of increasing exports, both the United States in 1945 and China in 2013, the world's leading industrial economies, have faced problems of overcapacity and weak demand in global markets, so they want to offer these two plans to create export demands for investment in other countries. Countries take steps. Similarly, the Soviet Union sought to strengthen economic cooperation between socialist countries and exports to Eastern Europe with the plan of the Council for Mutual Economic Cooperation (CMEA or Comecon).
Conclusion
Therefore, it can be concluded that the Belt and Road Plan is similar to other plans in six areas, which include, respectively, increasing exports, exporting foreign currency, confronting competitors, strengthening strategic demarcation, weakening diplomatic alliances with competitors, and confronting similar or common threats. The general context includes the difference in the state of the world order and the difference in perspective and approach with other plans
It should also be noted that although the Belt and Road Initiative is a systematic alternative to US economic and financial dominance, the relative weakness of China and the Belt and Road Initiative may limit such potential. Lack of financial resources at the government level has weakened the effectiveness of China's infrastructure-oriented investment. Therefore, reliance on the private sector and foreign financial markets is always a potential threat to Beijing. Developing economies may fail to repay loans to China's private sector, resulting in an unhealthy domestic and private credit crunch that is detrimental to China's economy. China's excessive expansion in developing economies, especially providing loans in infrastructure projects, may result in reactions of economic nationalism in developing countries and lead to a decrease in China's political influence.
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Main Subjects
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