Kate Mackenzie and Tim Sahay in Polycrisis: At September’s UN General Assembly in New York, Brazil’s President Lula described the international financial system as a “Marshall Plan in reverse” in which the poorest countries finance the richest. Driving the point home, Lula thundered, “African countries borrow at rates up to eight times higher than Germany and four times higher than the United States.”
Lula is not alone in this diagnosis. Centrist technocrats par excellence Larry Summers & NK Singh coauthored a report earlier this year arguing that the development world’s mantra to scale up direct financing to the global South—from “billions to trillions”—has failed. Instead, global finance seems to be running in the opposite direction, from poor to rich countries, as was the case last year. Summers and Singh summarize the arrangement thusly: “millions in, billions out.” Added to this is the great global shift to austerity that makes a mockery of climate and development goals.
It’s in this context that talk of “green Marshall Plans”—proposed by Huang Yiping in China and Brian Deese in the US—must be received. Negotiations over technology transfer, market access, and finance deals are a permanent feature of the new cold war: call it strategic green industrial diplomacy.
Both the American and Chinese proposals, such as they exist, aim to subsidize the export markets of allied countries to build foreign support for domestic industries. For developing countries, this could mean manufacturing green goods to grab a slice of the trillions of future green economic output and develop themselves, and a policy choice to meet their development goals by either making or buying cheap, clean energy generation, electricity storage, and transport.
Putting aside the dubiousness of the historical analogy to the United States’ postwar aid program to Europe, the critical element—and the one that seems least likely for either China or the US to pursue in earnest given their domestic political obstacles—is the provision of the kind of financial and industrial support that low- and middle-income countries need. The geoeconomic contest between the US and China rests on which of the two can forge domestic political coalitions that meet the demand of developing countries for local manufacturing value add in green value chains, without which the South will remain merely an export market or a resource colony.
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