Josef Riegler Franz Josef Radermacher

Global Marshall Plan

balance the world with an Eco-Social Market Economy
Global Marshall Plan
balance the world with an Eco-Social Market Economy

Vision
Justice, peace and sustained development for the whole world

Path
Global Partnership – a worldwide Eco-Social Market Economy

Strategy
To create a „win-win situation“ for everybody

Fair development opportunities for all through the financing of the

Millennium Development Goals

Fair market economy for all through ecological and social standards that
are binding for every country in the world, the opening of markets and
(co)-financing

A world economic miracle and boost to growth through investment

initiatives and increased purchasing power

A project for hope 3

 In May 2003, a group of individuals from the worlds of academia, politics,
the media, culture and international development got together to try to do
something about the ever more alarming problems facing human development.
They decided that the development goals set by the UNO should be linked
with the creation of an eco-social framework for a globalised economy, and
the concept of a „Global Marshall Plan“ was born! This initiative has developed
with great dynamism and is now supported by more than 50 non-governmental
organisations as well as many prominent individuals.

The original initiators – the Club of Rome, Ecosocial Forum Europe, Stiftung
Weltvertrag and the Club of Budapest – were soon joined by important
economic and non-governmental organisations such as VENRO (Association
of non-governmental development organisations), national sections of Friends of
the Earth and the student organisation AIESEC, the BWA (Federal association
for economic aid and foreign trade) and the international member group of
JCI (Junior Chamber International).

The Initiative has also met with a very positive response at an international
level. It has organised a number of conferences in various European countries
and has attended many international events including the World Social Forum
in Mumbai, the recent meeting of the Parliament of World Cultures in Ankara,
the conference of the Parliament of the World’s Religions in Barcelona and
the World Summit on the Information Society (WSIS) in Geneva and Tunisia,
to name just a few.

Prominent figures from all areas of society have expressed their approval and
pledged their support for the Global Marshall Plan Initiative.They include
German Federal President Dr. Horst Köhler, Austrian Federal President Dr.
Heinz Fischer, EU Commissioner for External Relations Dr. Benita Ferrero-
Waldner and the President of the Club of Rome, Prince Hassan of Jordan.

4 A project for hope

Global Marshall Plan
balance the world with an Eco-Social Market Economy

The EU as the focus of world hope

The European Union is an important focus of hope for our project and for
many people throughout the world. For this reason the Global Marshall Plan
Initiative is addressed explicitly in the first instance to decision-makers within
the EU.The first step in the development of a Global Marshall Plan is to be
the setting up of a European Union advisory committee.This committee is
to include representatives of civil society and economic organisations from
„North“ and „South“ and its task will be the drawing up of a detailed pro-
posal for the financing and implementation of a Global Marshall Plan.

I. Ideas on the Global Marshall Plan for a worldwide eco-social

market economy
The following remarks are offered as discussion points and stimuli.The aim
of this text is to demonstrate the plausibility and viability in terms of financing
of a global strategy of this kind for a more balanced future. Economics,
science, politics and global civil society need to work actively together to
draw up the content of a Global Marshall Plan along the lines of a „global
solidarity plan“ or „planetary contract“.The quality and success of our project
depends to a great extent on the commitment and contributions of these
participants.

This phase of agreeing globally responsible goals and steps must then be
replaced as a matter of great urgency by a phase focusing on the decisive
implementation of global change.The initiators of the Global Marshall Plan
Initiative see the replacement of a state of paralysis (in terms of the imple-
mentation of globally acceptable standards) by the creation of frameworks
and systems that operate to the benefit of all concerned as the most important

A project for hope 5

 issue of the next few years and as a way of bringing about a new kind of global
power to act. In particular this relates to the financing and implementation
of the appropriate mechanisms for a Global Marshall Plan of this kind, in
conjunction with the creation of binding ecological and social standards.

II. The United Nations’ Millennium Goals

At the UNO Millennium Summit Meeting held in 2000, 191 heads of state
agreed a set of worldwide development goals to be realised by 2015.These
goals form the focus of the first phase of the Global Marshall Plan:

1. Halve the number of people throughout the world living on less than
one dollar a day (currently more than a billion people)
2. Ensure that all children have access to a full course of primary education
3. Promote gender equality and increased influence for women
4. Reduce infant mortality to one third of its current rate
5. Bring about substantial improvements in maternal health
6. Reverse the spread of HIV/AIDS, malaria and other major diseases
7. Reverse the loss of environmental resources and halve the number of
people without access to safe drinking water (over a billion today)
8. Bring about a new form of partnership for development:
a) create a worldwide open trading and financial system with the
appropriate background conditions
b) tackle poverty, in particular with respect to the debt problems of poor
countries
c) create meaningful and productive employment opportunities
d) ensure access to essential drugs
e) make the benefits of modern technology available to all.

All the major international organisations have since adopted these goals and made
them their own, e.g. the World Trade Organisation (WTO), the International
Labour Organisation (ILO), the United Nations Environment Programme
(UNEP), the World Bank (WB) and the International Monetary Fund (IMF).

III. Finance requirements for the Global Marshall Plan

The „Zedillo Report“, published by the United Nations in 2001, calculated
that the volume of finance (not yet secured) required to achieve the Millennium
Development Goals amounts to some 50 billion US dollars per year. On top

6 A project for hope

of this a further 20 billion US dollars a year is required for the provision of
global public goods in order to create the right basic conditions for an opti-
mised worldwide eco-social market economy. Firm commitments totalling
12 billion US dollars have already been made, starting in 2006. As the studies
published to date have been based on the provision of aid from 2001, in order
to achieve the Millennium Development Goals by 2015 and implement a
Global Marshall Plan (which will probably not be possible until 2008), from
2008 new money of around 100 billion dollars a year will be required, a sum
that will need to be made available progressively.

Here are some comparative figures to help us put this amount into perspective:

International development aid currently amounts to a total of approximately

55 to 60 billion US dollars.This is around 0.2 per cent of the gross domestic
product (GDP) of the donor countries. Under the proposed Global Marshall
Plan, this would rise to 0.5 or 0.6 per cent of GDP.This would still be below
the 0.7 per cent figure agreed as a target by the international community as
long ago as 1970. Another useful comparison is the volume of aid provided
by the USA to Europe after the Second World War under the Marshall Plan.
This plan was financed over a period of four years by an average of 1.3 percent
of the USA’s GDP.The total budget of the EU is currently around one per-
cent of the GDP of the EU member states.

These figures demonstrate clearly that the proposed Global Marshall Plan can
be financed. Experience shows, however, that the increase in resources needed
for the realisation of the United Nation’s Millennium Goals is unlikely to be
found from national budgets due to the current overstretched state of public
finances.

The plan’s initiators are therefore proposing new, innovative and uncon-
ventional ways of raising funds, based in part on ideas suggested by the British
finance minister Gordon Brown and financial expert George Soros.

The basic idea is as follows: a global tax in order to prevent distortions to

regional competition and because global economic activity contributes dis-
proportionately little to tax revenues; extremely low taxation rates in order
not to overburden business or the consumer; administrative simplicity based
on existing institutions.

A project for hope 7

 The following three examples are intended as stimuli for further discussion:

1. International Monetary Fund (IMF) Special Drawing Rights

Financier George Soros’ suggestion of using IMF Special Drawing Rights for
development finance has been taken up by both the Zedillo Report and
Gordon Brown.

Special Drawing Rights are loans that are made available to a country in pro-
portion to the amounts paid into the IMF by that country. One benefit of
this is that developing countries pay into the fund in their own, often weaker,
currency, but are able to access loans from it in hard currencies. George
Soros suggests authorising such Special Drawing Rights on an annual basis
in future. His proposal would mean that a sum in excess of 10 billion dollars
would flow to the poorer countries for development projects. In addition,
the rich countries should make their share of the corresponding allocation
of 18 billion dollars available for development financing as well.This could
form an important basis for a Global Marshall Plan.

The Global Marshall Plan Initiative suggests transferring to the South a total
of between 30 and 40 billion dollars in SDRs a year.The opportunities for
money supply expansion available to the central banks of rich countries or
groups of countries would be reduced, but not by an untenable amount.

2. Low-level taxation of financial transactions

The suggestion has been made from various quarters for a so-called „Tobin
Tax“ on global financial transactions which would be used to finance global
development goals. Our proposal is based on an extremely low level of taxation,
a prudent use of this instrument, which would be implemented on a global
level only.

Thus a cautious initial worldwide tax of 0.01 per cent on global financial
transactions might be considered. If this meets with success it could be raised
to 0.02 per cent. A minimal Tobin Tax of this sort could generate between 30
and 40 US billion dollars annually for the Global Marshall Plan’s proposed
Planetary Contract.

3. A „Terra Tax“ on world trade

In addition to financial arguments, there are also serious systemic arguments
in favour of the possible introduction of a world trade tax that goes against

8 A project for hope

market fundamentalist positions. A „Terra Tax“ would take up the principle
of „fair trade“ for which the church, non-governmental development orga-
nisations and even certain industrial associations have, among others, been
fighting for years.

Over the last few decades, the world economy has undergone radical change.
A section of the economy and the companies behind it have become exten-
sively globalised. Partly for structural reasons and partly because of the strong
regional affinity of its products, another section of the economy has been
unable to share in this process.The globalised portion of the economy has
been able and continues to be able to evade national taxation and compliance
with nationally imposed standards and has thereby gained an enormous
competitive advantage over companies that are subject to national controls.
This has contributed to a situation in which the turnover of the world’s 15
largest transnational companies is higher than the total economic output of
the 60 poorest countries. Individual countries can only make this shortfall in
taxes up through a combination of economy measures and increasing the tax
burden on private individuals and the mainly small and medium-sized
businesses based firmly in the relevant home country. A corollary of this has
been the inevitable scaling down of social projects.

This situation has resulted in a far-reaching systemic problem whose causes

and effects are still far too little discussed. If equal competitive conditions
with fair and balanced taxation of all areas of the economy and its players
are not restored in the very near future, it is not only local and national
budgets that will suffer.The existence of the regionally based, predominantly
small and medium-sized businesses will be seriously endangered, as will the
eco-social market economy altogether. Against this background, the introduction
of a world trade tax is a systemic necessity as an initial step towards a fair
worldwide tax system. Despite the need for reform (aimed at introducing
greater personal responsibility) in traditional social systems, it is not desirable
for the financial basis on which public investment in social welfare, education,
research, health, infrastructure etc. rest to be undermined in this way as it
would mean our societies would be poorer in future than they needed to be.

The third element that should be considered as a possible component in the

financing of the Global Marshall Plan is therefore the creation of a „Terra
Tax“ on world trade in the region of 0.35 to 0.5 per cent.This tax would be
levied equally on all areas of international trade. As the world trade element

A project for hope 9

 makes up only a small proportion of the price of the end product, this tax
will hardly be noticed in terms of individual end products. Given the current
level of world trade of 8.5 trillion US dollars, a tax of this kind would
generate 30 to 40 billion dollars per annum.

Each of these three ideas for discussion also offers the following advantages:

The provision of these resources necessitates almost no additional bureau-

cracy as the recording of most of the required values is already carried
out as part of the customs clearance procedure and calculation of VAT
or else through the documentation and tracking of financial market
transactions.

As the proposed measures encourage the entry of new players into the
world markets, they are also tools for the strengthening of competition
and dismantling of existing barriers to fair competition.

The manner in which the resources are to be invested will increase

worldwide growth and contribute to an urgently needed world eco-
nomic upswing, thereby boosting employment opportunities.

The proposed measures concerning the Special Drawing Rights and Tobin
Tax would be realised by the IMF.The proposal for the introduction of a
„Terra Tax“ needs to be discussed at one of the forthcoming WTO meetings
within the framework of the wider efforts to introduce a Global Marshall
Plan for a worldwide eco-social market economy.

Alongside the three possible sources of finance outlined here, the introduction
of a Global Climate Certificate System (GCGS), the establishing of a „Future
Loan“ scheme and Gordon Brown’s proposal for the creation of an „Inter-
national Finance Facility“ also have a valuable contribution to make to the
debate. Of special importance too are proposals regarding the writing-off of
development countries’ international debt, as set out in the UN’s Poverty
Reduction Strategy Papers (PRSP). In addition, the closure of off-shore tax
havens, which cost national budgets some 50 to 60 billion US dollars a year
in lost tax revenues, should finally be tackled energetically by the international
community. Desirable too would be agreements on minimum taxation levels
dependent upon stage of development. All these measures are already being
pursued internationally.This is welcomed by the Global Marshall Plan

10 A project for hope

Initiative. Finally, efforts to dismantle protectionist structures should be
intensified – with respect also to present agricultural policy – as should the
debate over the creation of an international cartel authority.

IV. Realisation of a worldwide eco-social market economy

It is important that comprehensive, internationally agreed standards are
implemented step by step in tandem with the Global Marshall Plan! Earlier
mistakes in development cooperation must be avoided in the implementation
of the plan.This is essential if the effects aimed for by the plan are to unfold,
allowing it to win broad and sustained support from civil society as well as
from economic and political bodies.The most appropriate way of achieving
this is by combining a programme of the kind outlined with a set of ethical,
economic, ecological, social, cultural and democratic standards in order to
create an „eco-social market economy“.The distribution of resources must
be influenced neither by the short-term economic interests of the donor
countries nor by the short-term power-related interests of the elite in the
recipient countries.The best way of ensuring this is through rigorous adherence
to a set of standards, an associated duty of accountability and the active and
transparent involvement of economic and non-governmental organisations.

Application of the following set of standards, which have already received

broad consensus among UN members, is to be targeted during the first
phase of the Global Marshall Plan:

a) The basic standards of the International Labour Organisation (ILO)

such as the right to organise, equal treatment of men and women,
prohibition of child labour etc.These correspond by and large to the
fundamental economic, social and cultural human rights which should
also be taken into consideration.
b) The standards of the international agreement on the environment.When
applying these criteria in the distribution of resources it is important
to be aware that in many areas, non-adherence to some of these eco-
logical and social standards represents the main competitive advantages
of the (usually economically disadvantaged) regions concerned.The
example of the EU, however, shows that agreements on the application
of common high standards and levels of protection can be achieved if
finance for the development of their weaker partners is simultaneously
being guaranteed by the developed nations.This coupling of the two

A project for hope 11

 is of benefit to all concerned. In addition to the continued opening
up of markets, the Initiative therefore sees a well-balanced partnership
between standards implementation and financing as being of crucial
importance to the success of the Global Marshall Plan.
c) The crucial role played by the World Trade Organisation (WTO), which
has been responsible for the most effective enforcement of standards at
a global level to date.The WTO differs from other international orga-
nisations in two crucial respects. Firstly, its decision-making procedure
is based on the principle of consensus and it therefore gives an effective
right of veto regarding future developments not only to the richer
countries but to the poorer ones too. Secondly, the WTO has extremely
effective powers of jurisdiction with far-reaching authority to impose
sanctions based on of penal tariffs.

Yet the WTO has been the target of more criticism than any other inter-
national organisation.This is mainly because in keeping with its mandate, it
has focused exclusively to date on topics connected with the promotion of
free trade and in doing so has taken no account of the ecological, social or
cultural dimensions.

The initiators of the Global Marshall Plan for a worldwide eco-social market
economy therefore propose the linking of trade regulations with social,
ecological and procedural standards to form a balanced and convincing Global
Governance System (= worldwide eco-social market economy) orientated
towards sustained development.The same social and ecological standards
should apply to all global agreements and institutions with the same binding
force and backed up by the same powers of enforcement.

The equal status of trade, environmental and social standards through a partner-
ship with the WTO – in conjunction with the provision of the necessary
resources for the Global Marshall Plan – thus lies at the heart of the „Global
Marshall Plan for a worldwide eco-social market economy“ project. It is
anticipated that the proposed method of (co-)financing will pave the way for
consensus within the EU but also facilitate the linking of its own regulatory
framework with those of the other named bodies in a process analogous to
the expansion of the EU.

12 A project for hope

V. Employment of the Global Marshall Plan’s resources
In a globalised world each different level must fulfil its indispensable tasks.The
subsidiarity principle needs to be systematically applied.The transfer of
knowledge, empowerment and efficient investment in education and health
must have priority here.The following criteria and experiences are to be
taken into consideration in the distribution of resources:

The strengthening of entrepreneurial ability and ability of every individual

to assume personal responsibility must be prioritised in all future aid
programmes.

The inclusion of local and global civil society in the planning process is
becoming increasingly important.

The democratic requirements are growing at all levels.

It is becoming essential that all people of all nations feel they can play
an equal role in the creation of basic global conditions.

Against the background of these considerations we consider the following

principles and suggestions to be worth mentioning in particular:

The actual aid programmes should be coordinated via the corresponding

organisations and programmes of the United Nations.The role of the
United Nations, whose total annual budget for administration, program-
mes, all its sub-organisations and peace initiatives is roughly the equivalent
of what New York City spends on education, must be strengthened.

The example of The Global Fund to fight AIDS,Tuberculosis and Malaria,

with a good two billion US dollars of funding, should be studied in
order to assess whether the creation of UN-related funds of this type,
benefiting from partnerships with economic organisations and civil
society, would help the Global Marshall Plan achieve its key goals.

Where resources have been raised from a tax on world trade, careful
consideration would need to be given to whether these resources should
be used to fund development goals falling within the same economic
sectors, e.g. in the telecommunications or energy sectors, from which

A project for hope 13

 the revenues stemmed.This could substantially increase the willingness
of business to endorse such an initiative as it would relate the raising of
resources directly and transparently to the spending of resources. As in
other areas, however, care would need to be taken to ensure the imple-
mentation of suitable technologies.

An essential tool in the employment of resources should be the public

tendering of proposed programmes among non-governmental organisations
in order that healthy competition results in maximum cost effectiveness.
This could be done via a neutral committee attached to the IMF but
materially independent in its decision-making.

A clear priority should be given not to projects run by experts and firms
from the donor countries, but to projects that are based on the entrepre-
neurial potential of people in the specific region or locality concerned –
for example micro-credit loan banks (Grameen Bank) and development
schools (such as Fundaec in Colombia) that train local people to become
development promoters.

In the case of technology transfers, the selection of projects to receive

aid should be made on the basis that as wide a cross section of local
people as possible (instead of small groups of the elite) should be able to
use the technology autonomously, quickly and efficiently. A successful
example of empowerment of this kind was the Woman’s Empowerment
Programme in Nepal.

The search for particularly successful and effective social and ecological
projects and their criteria for success should be defined and promoted as
a new focus for international research.The efficiency of many current
forms of development support can be massively increased through the
identification and promotion of best practice projects.

VI. The EU as the focus of world hope

The initiators of the Global Marshall Plan are addressing their ideas and
proposals to a number of bodies and organisations simultaneously:

1. To European governments and national parliaments, the EU Parliament

and the EU Commission with the proposal that an EU advisory com-

14 A project for hope

 mittee be set up at the beginning of 2005. Including representatives from
civil society and economic organisations from both „North“ and „South“,
the task of this committee would be to draw up a detailed EU initiative
to be known as the „Global Marshall Plan for a worldwide eco-social
market economy“.The EU would subsequently present the concept as a
joint EU position at all future world summits and negotiations.This is our
Initiative’s most urgent practical interim goal.
2. To the UNO (United Nations Organisation), in whose hands the Planetary
Contract of a Global Marshall Plan would ultimately lie and whose sub-
organisations would play a central role in the implementation of this project.
3. To various international organisations – UN special-purpose organisations
as well as international economic and other bodies – with the request
that they intervene actively on behalf of the Global Marshall Plan and
thus enable the Millennium Goals of the United Nations to be achieved
after all.
4. To representatives of international business in the hope that they will adopt
the Global Marshall Plan as a cause that is in their own interest – both as
a lever with the potential to unleash a comprehensive worldwide economic
miracle and as a tool for the promotion of good corporate governance
and social responsibility.Without the support of business the implementation
of the Planetary Contract of a Global Marshall Plan would be unthinkable.
5. To global civil society as represented by non-governmental organisations
in the hope that they will adopt the Initiative as one of their key causes
for the next few years. NGOs have an important part to play in helping
raise awareness of the need for a Global Marshall Plan.They should also
be given responsibility for monitoring and supervising the development
of the process once it has been set in train.

In addition to the groups named above, the Initiative is also directed at

academia, the media, the arts and the great humanitarian movements and
religions, all of which are extremely important to the goals formulated in
this text. If the support for this Initiative from the various quarters addressed
reaches the level hoped for by the initiators, a Global Marshall Plan for a
worldwide eco-social market economy could be adopted at a world summit
in 2007, the year of the „Rio+15“ meeting.The key points need to be
drawn up by an EU advisory committee well before this, however, by the
end of 2005 at the latest.The first implementation phase for the achievement
of the core goals described above (corresponding to the Millennium Develop-
ment Goals) could then run from 1.1.2008 up to and including the year

16 A project for hope

2015.Without a plan of this kind, the Millennium Goals will to all intents and
purposes no longer be achievable.The most recent State of Food Insecurity
in the World report shows clearly that the trends in those areas of vital concern
that constitute the Millennium Goals have worsened further.

Any subsequent deterioration of the problems would make the implementation

of delayed countermeasures considerably more difficult – if not impossible!

VII. The determination of the initiators

A sensibly developed Global Marshall Plan for a Worldwide Eco-Social
Market Economy is in the best short-term and long-term interests of both
the marginalised countries and the rich countries, of committed global civil
society and business, of national and international politics. In conjunction
with the implementation of major ecological and social objectives, it has the
potential to be the most effective economic development and peace pro-
gramme within our grasp today – and one whose benefits will be felt for
decades to come.

Hence our vision

Justice, peace and sustained development for the whole world!

Hence our path

Global partnership through a worldwide eco-social market economy!

Vienna/Ulm, May 2005

A project for hope 17

Declaration of support. Please fax to: +43 (0) 1 533 07 97-90
Global Marshall Plan – balance the world with an Eco-Social Market Economy

I/We support the Global Marshall Plan Initiative for a worldwide Eco-Social
Market Economy.

Organisation: ………………………………………………………

Name: ………………………………………………………

Position: ...……………………………………………………

Address: ...……………………………………………………

e-Mail: ...……………………………………………………

I would like to receive further information and the GMP newsletter by e-mail.

I would like to personally collaborate with the initiative.

I would also like to support the initiative financially.

Date: Signature:

Authors:
Josef Riegler, former Vice Chancellor, President of the Ecosocial Forum Europe,Vienna;
Franz Josef Radermacher, member of the Club of Rome, Curator of Stiftung Weltvertrag,
Director of the Research Institute for Applied Knowledge Processing, Ulm, Germany
(FAW/n), Ulm; Editor: Ernst Scheiber; Layout: Roland Wallner

Sources:
Ecosocial Forum Europe, Franz Josefs-Kai 13, A-1010 Vienna, tel: +43 (0) 1-533
07 97, fax: +43 (0) 1-533 07 97-90, e-mail: info@oesfo.at
Global Marshall Plan Initiative, Rissener Landstraße 193, D-22559 Hamburg, tel:
+49(0) 40-822 90 420, fax: +49(0) 40-822 90 421, e-mail: info@globalmar-
shallplan.org

A project for hope 19

Info links:

www.globalmarshallplan.org
www.oekosoziales-forum.at

Website credits:

www.iufe.at
www.umweltdachverband.at
www.komment.at/ziele/ziele.cfm

Contact:

info@globalmarshallplan.org
austria@globalmarshallplan.org
muzak@oesfo.at