Daily Times

By early 1945, it was clear that the war was all but over. It was merely a matter of time. Both principal opponents, Germany and Japan were on the run. In the Pacific, Gen Macarthur had returned, as he promised when he left. And, was swiftly clearing remnants of areas still held by the Japanese.

In Europe, due to Monty’s insistence that the slow-marching British forces must enter Berlin ahead of the Americans, the Russians won that race, to enter Berlin first and so, what is known in history as the “Battle of Berlin”, was authored by Russians. British and American forces could only claim left over portions. Hitler committed suicide on April 30 and the fighting ended on 8/9 September.

In America, FDR also died earlier than Hitler, but before completing his record fourth term in office. FDR was succeeded by Harry S. Truman, FDR’s Vice President. As VP, Truman had not been in FDR’s inner circle, which explains why he wasn’t, until after he became President, aware of “The Manhattan Project”; the name given to a research program intended to create nuclear weapons, let alone that it was near completion.

Truman learnt that he possessed this amazing weapon system after assuming office, when it was due to be tested. His amazement was shared by all present at the test/demonstration. Was he also excited?

In early August, a Japanese Ambassador in USA was repeatedly seeking an appointment with Truman to seek terms for surrender and was not granted audience. On August 6, Hiroshima was the location where the nuclear weapon was tested live. It wasn’t enough. On August 9, Nagasaki was bombed. The US wasn’t offering terms. It too wanted abject, unconditional surrender. And, perhaps Truman, whose term was famed most for corruption, wanted to find a place in history.

In Wikipedia, while narrating the announcement of his surrender, Emperor Hirohito, is referred to, in what I can only infer, in mocking terms as,”Japan’s supreme Divine Being” who, did “something no other Emperor had done before: he went on the Radio”. Factually true, since the Emperor’s voice was considered sacred and not to be heard in public.

Interestingly, the Japanese produced a real live “Rambo”. Lieutenant Hiroo Onoda couldn’t believe that Japanese could surrender and, held out with his handful of soldiers in the Philippine jungle, for 29 years after the surrender till he, the last Japanese veteran, surrendered in March 1974.

But, let’s go back a little.

They gathered in July 1944, at Bretton Woods and, decided upon the creation of two institutions: The International Monetary Fund, IMF, which was to “promote stability of exchange rates and financial flows”;

The post-WW 1 experiences of these countries were still fresh in the minds of major actors. Europe was again going to be rebuilt and, this time, the US wouldn’t be left out. To this end, a master plan for its rebuilding was required and, international financing needed to be institutionalized. Surprisingly, this meeting of members of all forty-four Allied states occurred, well over a year before the war ended. Perhaps the allies were already confident of victory.

They gathered in July 1944, at Bretton Woods and, decided upon the creation of two institutions: The International Monetary Fund, IMF, which was to “promote stability of exchange rates and financial flows”; and the World Bank [which later became the World Bank Group, WBG], to “speed reconstruction [initially of Europe] and foster economic development through lending”.

The basic concepts for these institutions were built around Keynes’ theory that tottering [or weak] economies could be strengthened by infusing wealth so as to increase demand and thus, increase economic activity.However, the “lending” in the WBG’s function was based on another economic concept that began as a banking concept, “Credit Creation”.

To bankers and economists, the intricacies of this concept would be clear but to the lay person like I, it seems like “giving loans without collateral; without actually any cash transfer, in the expectation of receiving returns in the future”.

Young enterprisers [service providers], with nothing to offer as collateral, like a young Bill Gates, went to a bank and convinced the bank that his ideas would generate wealth. The bank would open an account in his/her name and open a credit line of a sum. This sum which has not yet changed hands, is “Creating Credit”. This concept was the additional one, espoused by the WBG and, later, by all other international banks and IMF.

Another credit to Truman is his execution of the Marshall Plan. This was the plan for the reconstruction of Europe, named after its author, George Marshall. This Marshall was no economist, nor construction expert, not even a service provider. He was a former soldier. Why this task was assigned to him remains a mystery. Or, is it?

Eisenhower, Ike, a protégé of Gen Marshall, became President of the US in 1953. Just over a year after Marshall’s death in 1959, Ike bade farewell to the White House in 1961, handing it over to a young John F. Kennedy. In his final address to the nation Ike warned the people repeatedly, to guard against the “Military Industrial Complex”.

He omitted to mention that this nexus of retiring senior officers and military industries, the bane of many a country, including US and today, us, was [probably] institutionalized by the Marshall Plan. And that this happened on his watch, or at least, when he could have objected, but didn’t. I am sure I did mention that Ike was diplomatic.

The writer is a retired brigadier. He is also former vice president and founder of the Islamabad Policy Research Institute (IPRI)