New International Economic Order
by Robert Looney
(Prepared for R.J.B. Jones ed., Routledge Encyclopedia of International Political Economy (London: Routledge, 1999).
Formal proposals for a New International Economic Order (NIEO) were put forth by developing countries at derive from a summit meeting of the nonaligned movement in 1973. The origins of the NIEO however, can be traced back to the Havana Conference in 1948 and stem from economic and political tensions that had been building between the developing and developed nations.
On an aggregate level, the economic performance of the developing countries had been fairly good in the 1950s. By the early 1960s, however, many developing countries were frustrated with their growth prospects and started demanding a better deal. Rallying in such organizations as the Non-Aligned Movement they created the United Nations Conference on Trade and Development (UNCTAD) where they argued for fairer terms of trade and more liberal terms for financing development. The North responded with pious declarations of its good intentions - but also with a hard-nosed insistence that the proper forum for any economic changes continued to be the Bretton Woods institutions where they held the balance of power. By the early 1970s, however, the postures of the developing countries were changing:
A substantial shift occurred in the developing countries’ perception of the gains to be had from economic relations with the developed countries under the existing rules of the game; the shift was toward the gloomier side.
At the same time, the developing countries perceived their own economic and hence political power via-a-vis the developed countries to be sufficiently substantial to warrant a strategy of effective trade unionism to change the rules of the game and thereby to wrest a greater share of the world’s wealth and income.
Finally, a straightforward political desire to participate more effectively in decision making on the international economic matters was evident. Participation was demanded not merely to ensure that the developing countries’ interests were safeguarded, but equally as an assertion of their rights as members of an international community, and as a desired feature of a just international order.
The success of the oil producing countries of OPEC in increasing petroleum prices substantially, starting in 1973, served as a catalyst to pull together the developing countries in support of a call for a New International Economic Order