Aspen: Development Finance Introducing considerations of strategy into development is a very sharp two-edged sword. On the one hand, the Cold War focused the attention of the entire American government on making the redevelopment of northwest and the development of southwestern Europe and of East Asia—Korea and Taiwan and Japan—a success. That was of enormous value in making the US development efforts the greatest successes we have ever had.
In addition, as Barney Frank once said when my colleague Barry Eichengreen was testifying in front of him, the Cold War was worth 60 votes in the House of Representatives. Now we have a much harder row to hoe.
On the other hand, there have been many times over the past 70 years in which strategic logic has overcome development logic. And there are dangers in poisoning the entire effort to the extent that strategic logic takes on too large a place. Walt Whitman Rostow had John F Kennedy primed up talk to Sukarno about all the wonderful things the US was going to do for Indonesian development. But Suharto—sorry, Sukarno, Sukarno, Sukarno—was interested in two and only two things: Irian Jaya, and free cash flow that he could use to reward elements of his political coalition...
