Local View: Marshall Plan Reboot Needed for Central, South America


The U.S. should help to industrialize countries in South and Central America and Mexico, similar to how the Marshall Plan helped rebuild Europe from 1948 to 1952. The Marshall Plan was quite a feat of organizing and financing following the Great Depression and World War II. The cost to rebuild Europe was something on the order of $400 billion in today’s figures, if the relief efforts up until 1947 are included.

The Allies had learned their lesson from beaten and downtrodden Europe after World War I that had led to the rise of fascism. Former President Herbert Hoover advised that only rebuilding Germany could lead to a prosperous Europe. The Republican Congress supported the plan because it was a boon to our business community. The U.S. bought stock in U.S. businesses, which provided “technology, expertise, and materials as a strategic partner to Europe,” as Wikipedia states. The U.S. would be reimbursed later when they sold their stock.

Nation-building has often gotten a bad rap and failed in recent decades by focusing on large infrastructure projects which embroiled the developing country in debt and corruption without involving the business community and, too often, where we were trying to fight an insurgency simultaneously.

A Marshall Plan for the Americas would accrue multiple benefits to the U.S. “De-risking,” or off-shoring/near-shoring U.S. investments from China to Vietnam, India, or the Americas has already begun, with concern over Chinese war-planning for Taiwan.

It is believed that raising the level of income per year to $8,000 per person of Gross Domestic Income will lead to a reduction in U.S. immigration, as occurred after NAFTA in Mexico in 2005. Income in Honduras, Guatemala, and El Salvador is about half of this. Immigration ballooned across our border after President Donald Trump cut economic aid by 75%.

President Joe Biden is increasing aid to $4 billion over four years to Central America, but it mainly seems to focus on roads, bridges, and ports. What will happen when those job creators are finished? Like the European Marshall Plan, the administration needs to engage business with whatever subsidies are necessary to defray risk while business invests in “technology, expertise, and materials as a strategic partner.” The U.S. could also work through Mexico’s development plan for the region and CAFTRA, the Central American Free Trade Association.

Mexico demonstrates what can be done with $3 billion of direct investment into auto parts exported to the U.S., as well as exporting digital processors, televisions, and other computer equipment. Total Foreign Direct Investment, or FDI, in Mexico the first half of 2022 rose 25% to $27 billion.

The U.S. could encourage the industrialization of the labor-intensive textile industry in low-wage El Salvador, Honduras, and Nicaragua. Since the U.S. forbade cotton used in China from Xinjiang Province due to Uygher slave-labor conditions, the imports of U.S. cotton to China have doubled for textiles that could be near-shored. Another area also impacting national security would be to diversify our PPE imports , which had a huge increase from China in 2021 and corresponding decrease in 2022.

We still import 92% of laptops and computer monitors from China, 90% of video-game consoles, 83% of board games, and 74% of smartphone assembly from a genocidal and threatening regime, while sanctions have failed completely in Venezuela, Cuba, and Nicaragua, as poverty reigns and populations migrate. Capitalism should be tried, as Iran is doing in boosting trade agreements with these governments for a rebirth of freedom.