New International Economic Order

The New International Economic Order (NIEO) represents an alternative worldview of the global political economy to emerge during the 1970s.[1] More specifically, this worldview included a reconsideration of existing relationships, structures, and processes that were dominant in the global political economy of that time, and advocated for the universal integration of classical liberalism in the global economy.

First introduced in 1972 through the Santiago United Nations Conference on Trade and Development, developing countries of the Non-Aligned Movement would critique increasing global inequality and promote their interests by improving their terms of trade, increasing development assistance, developed-country tariff reductions, and other political agreements designed to reduce trade barriers[2]. These proposals included the revision of the international economic system in favor of Third World countries, replacing the Bretton Woods system, which had benefited the leading states that had created it – especially the United States. This set of proposals proclaimed that facilitating the rate of economic development and market share among developing countries will fight global issues such as hunger and despair more effectively[3]. However, these proposals would ultimately fail, contributing to the formulation of the "Right to Development" in 1986 [4].

History

The New International Economic Order would first emerge through the various Algiers Conferences held between the Non-Aligned countries [5]. More specifically, this mission to achieve a more equitable international system was motivated by an increasing inequality in the share of global national income between developed and underdeveloped countries, which more than doubled between 1938 and 1966 [6]. Key themes of the New International Economic Order included both sovereign equality and the right of self-determination, especially when it comes to sovereignty over natural resources [7]. This particular agenda of negotiating a new commodity order within the United Nations Conference on Trade and Development (UNCTAD) would become a central issue of the North-South Agenda from 1974 to 1977[8].

This advocacy among nations of the Non-Aligned Movement can also be interpreted as an extension of the decolonization movement that was present in many developing countries during that time [9]. In this perspective, economic equity was perceived as a metric to measure the success of Independence movements and completing the decolonization process.

This increasing sentiment among nation states would not be formalized until the Declaration for the Establishment of a New International Economic Order, adopted by the United Nations General Assembly in 1974 [10]. This followed an agenda for discussions between industrial and developing countries, focusing on restructuring of the world's economy to permit greater participation by and benefits to developing countries (also known as the "North-South Dialogue"). Along with the declaration, a Programme of Action and a Charter of Economic Rights and Duties of States.[11] were also adopted.

In the 1970s and 1980s, the developing countries pushed for NIEO and an accompanying set of documents to be adopted by the UN General Assembly. Subsequently, however, these norms became only of rhetorical and political value, except for some partly viable mechanisms, such as the non-legal, non-binding Restrictive Business Practice Code adopted in 1980 and the Common Fund for Commodities which came in force in 1989.

Tenets

The main tenets of NIEO were:

  1. Developing countries must be entitled to regulate and control the activities of multinational corporations operating within their territory.
  2. They must be free to nationalize or expropriate foreign property on conditions favourable to them.
  3. They must be free to set up associations of primary commodities producers similar to the OPEC; all other States must recognize this right and refrain from taking economic, military, or political measures calculated to restrict it.
  4. International trade should be based on the need to ensure stable, equitable, and remunerative prices for raw materials, generalized non-reciprocal and non-discriminatory tariff preferences, as well as transfer of technology to developing countries; and should provide economic and technical assistance without any strings attached.
  5. Creating a more cooperative negotiating climate between developed and developing countries, and streamlining the global bargaining process by reducing the total number of participants involved [12].

Resource allocation mechanisms

Haggard and Simmons claimed that:

A number of social mechanisms are possible to affect resource allocation in any economic order. An authoritative allocation mechanism involves direct control of resources while, at the other end of the spectrum, more market-oriented private allocation mechanisms are possible. Most of the debates within the NIEO occurred over allocation mechanisms, with the southern hemisphere countries favoring authoritative solutions.

Ideology

NIEO proposes central planning, as opposed to free markets.[13] It is based on the (French) mercantilist idea that international trade would be a zero-sum game (i.e., causes no net benefits), and on the view that it does not benefit the rich at the expense of the poor. Some American economists challenge the idea of trade as a zero-sum game transaction.[14]

Legacy

Virtually no part of the New International Economic Order was implemented. Instead, from the 1980s onward, the Bretton Woods framework would be replaced with the Washington Consensus and economic globalization on terms often described as neoliberal. The economic reach of multinational corporations, rather than being circumscribed, would be expanded significantly. Trade in commodities would shift away from state-dominated cartels towards increasingly financialized markets. The NIEO's emphasis on central planning and state-oriented resource allocation mechanisms would be almost wholly rejected, even amongst the (former) Socialist bloc, in favor of economic liberalization. The formation of the World Trade Organization and the proliferation of free trade agreements would compel the reduction of barriers to trade, generally on strictly reciprocal terms.

In Matsushita et al.'s World Trade Organization, the authors explained part of the legacy of the NIEO:

... tensions and disagreements between developed and developing countries continue: the latter expect a greater degree of special treatment than industrialized countries have afforded them. This demand was expressed comprehensively in the New International Economic Order and the Charter of Economic Rights and Duties of States promoted by UNCTAD in the 1970s. Although the Charter was never accepted by developing [sic] countries and is now dead, the political, economic, and social concerns that inspired it are still present. The Charter called for restitution for the economic and social costs of colonialism, racial discrimination, and foreign domination. It would have imposed a duty on all states to adjust the prices of exports to their imports. The realization of the New International Economic Order was an impetus for developing country support for the Tokyo Round of trade negotiations. Critics of the WTO continue to state that little of substance for developing countries came out of either the Tokyo or Uruguay Rounds.

The NIEO can be considered to have something of a spiritual successor in the alter-globalization movement, which, like the NIEO, owes much to French academic criticism (generally rooted in Marxist economics) of international trade.

Criticism of price regulation

Economist Harry Johnson argues that the most efficient way to help the poor is to transfer resources from those most able to pay to those most in need. Instead of this, NIEO proposes that those poor countries that have monopoly power should be able to extort these transfers. In practice such power has caused most harm to other poor countries.[15]

Commanding prices above their natural level usually reduces consumption and thus causes unemployment among producers. Moreover, price regulation typically gives the extra income to those in control of who is allowed to produce, e.g., to governments or land-owners.[16]

gollark: It may be good to avoid this because events are !!GLOBAL!! mutable state.
gollark: Bytecode *can* be decompiled though.
gollark: What you can do is compile to bytecode or minify it.
gollark: The fundamental issue is that the computer has to have/generate some runnable form of the code at some point in order to, well, run it.
gollark: <@!209142270195138560> SKyCrafter0 is wrong and you cannot just encrypt it to protect it, since the computer must obviously store the encryption key.

See also

References
  1. Cox, Robert W. (1979). "Ideologies and the New International Economic Order: reflections on some recent literature". International Organization. 33 (2): 257–302. doi:10.1017/S0020818300032161. ISSN 0020-8183.
  2. Cox, R.W. (1979). Ideologies and the new international economic order : reflections on some recent literature. OCLC 769979274.
  3. Horn, Norbert. "Normative problems of a new international economic order." Journal of World Trade 16.4 (1982): 338-351.
  4. Anghie, Antony (2019). "Inequality, Human Rights, and the New International Economic Order". Humanity: An International Journal of Human Rights, Humanitarianism, and Development. 10 (3): 429–442. doi:10.1353/hum.2019.0016. ISSN 2151-4372.
  5. Cox, Robert W. (1979). "Ideologies and the New International Economic Order: reflections on some recent literature". International Organization. 33 (2): 257–302. doi:10.1017/s0020818300032161. ISSN 0020-8183.
  6. Anghie, Antony (2019). "Inequality, Human Rights, and the New International Economic Order". Humanity: An International Journal of Human Rights, Humanitarianism, and Development. 10 (3): 429–442. doi:10.1353/hum.2019.0016. ISSN 2151-4372.
  7. Anghie, Antony (2019). "Inequality, Human Rights, and the New International Economic Order". Humanity: An International Journal of Human Rights, Humanitarianism, and Development. 10 (3): 429–442. doi:10.1353/hum.2019.0016. ISSN 2151-4372.
  8. "Chapter 4. Commodity Bargaining", Global Bargaining: UNCTAD and the Quest for a New International Economic Order, Princeton University Press, pp. 103–166, 31 December 2015, ISBN 978-1-4008-6854-4, retrieved 11 May 2020
  9. Anghie, Antony (2019). "Inequality, Human Rights, and the New International Economic Order". Humanity: An International Journal of Human Rights, Humanitarianism, and Development. 10 (3): 429–442. doi:10.1353/hum.2019.0016. ISSN 2151-4372.
  10. Declaration for the Establishment of a New International Economic Order: United Nations General Assembly document A/RES/S-6/3201 of 1 May 1974
  11. Charter of Economic Rights and Duties of States: United Nations General Assembly document A/RES/29/3281 of 12 December 1974
  12. Rothstein, Robert L. (31 December 2015). Global Bargaining: UNCTAD and the Quest for a New International Economic Order. Princeton: Princeton University Press. ISBN 978-1-4008-6854-4.
  13. The New International Economic Order, Harry G. Johnson, professor of economics, Woodwart Court Lecture, 5 Oct 1976, p. 6
  14. The New International Economic Order, Harry G. Johnson, professor of economics, Woodwart Court Lecture, 5 Oct 1976, pp. 1–2
  15. The New International Economic Order, Harry G. Johnson, professor of economics, Woodwart Court Lecture, 5 Oct 1976, pp. 6–7
  16. The New International Economic Order, Harry G. Johnson, professor of economics, Woodwart Court Lecture, 5 Oct 1976, pp. 11–12

Sources

Further reading
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.