What are the different levels of the New International Economic Order?


Efforts for the establishment of a New International Economic Order are, therefore, being made at four different levels. These are at the level of:

(1) The United Nations;

(2) Non-aligned Summits; and


(3) Developed Countries;

(4) Developing Countries.

At the Level of United Nations:

The efforts for the establish­ment of NIEO (New International Economic Orders) at the level of the United Nations are made through two devices—UNCTAD and the UNIDO.


(i) At the level of UNCTAD’s:

Various U.N. Conferences on Trade and Development have been held since 1964. The first UNCTAD was held at Geneva in 1964, the second at New Delhi in 1968, the third at Santiago (Chile) in 1972, the fourth at Nairobi in 1976, and the fifth at Manila in 1979.

The idea underlying these UNCTADs is to make efforts for the reorganisation of international economic relations on the basis of the principles of sovereign equality and co-operation of all States regard­less of their socio-economic system, with a view to removing discrimina­tory practices from international economic exchange.

The developed countries are to be encouraged to. deploy their resources as equal partners in the world. The developing countries are to receive a greater share of world’s wealth and a more equitable, just distribution and utilisation of the resources of the world.


The efforts of the various UNCTAD’s to achieve various ends is discussed as under. These ends are—

(a) Formulation of Progressive Principles:

These Conferences have underlined certain basic, fundamental and progressive principles on the basis of which NIEO can be built. The UNCTAD-64 documents contain a number of such principles.

The first (general) principle says ; “Economic relations between countries, including trade relations, shall be based on respect for the principle of sovereign equality of States, self-determination of peoples and non-interference in the internal affairs of other countries.”


This principle stresses on the sovereign equality and non-interference in the internal affairs of other countries as the only basis for the expansion of equal and mutually beneficial commercial and economic relations between all States.

The sovereign equality of States entitles every State to dispose of her own economic resources and to secure effective control over her economy including the right to nationalise.

This principle was also specified in the Third UNCTAD held in 1972 whereby it was resolved that “Every country has the sovereign right freely to trade with other countries and freely to dispose of its natural resources in the interest of the economic development and well-being of its own people.”

Unquestionably, the right to nationalise and establish control over foreign-owned property is the basic condition for abolishing the exploitative foundations of the capitalist system.


The Fourteenth Principle aims at blocking the attempt of big monopolies as Multinational Corporations to retain their privileges in the sphere of international trade and finances the exploitation of the natural resources of the Third World countries.

This principle says: in Complete decolonisation, in compliance with the United Nations Declaration on the granting of independence to colonial countries and people and the liquidation of the remnants of colonialism in all its forms, is a necessary condition for economic development and the exercise of sovereign rights over natural resources “

These principles were further developed and consolidated in the Dec­laration about the establishment of a New International Economic Order adopted at the Sixth Special Session of the U.N. General Assembly in April, 1974,

There is no denying the fact that principles of UNCTAD-64 had a great influence on the elaboration of the Charter of Economic Rights and Duties of States that was adopted by the U.N. General Assembly in December, 1974.

(b) Peaceful Co-existence:

In fact, the UNCTAD principles governing International Trade Relations and Trade Policies are based on the principle of peaceful co-existence.

Peaceful co-existence means develop­ment and expansion of economic co-operation on the basis of complete equality and mutual benefit, equal rights, mutual understanding and trust between States, consideration of each other’s interests, non-interference in each other’s internal affairs, recognition of the right of each State to solve independently all issues relating to its own country, and strict respect for the sovereignty and territorial integrity of all other countries.

The great importance of mutually beneficial co-operation among all countries is stressed in the sixth principle of UNCTAD-64 which calls on States to co-operate in the creation of such conditions of trade that would promote the general “expansion and diversification of trade between all countries, whether at similar levels of development or having different economic and social system.”

‘The principle of peaceful co-existence was further developed and consul ‘dated in a number of other important international acts and documents regulating economic relations.

The Charter of Economic Rights and Duties of States proclaims this principle in particular is one of the main foundations for building internal economic relations between States.

(c) Rejection of Most-favored Nation Treatment:

Most- favour nation treatment refers to the trade relation between two or more countries that have concluded a treaty pledging to grant to each other in their mutual trade the same rights, privileges and concessions they grant or will grant in future to the other.

The most-favoured nation principle is widely applied in international economic relations and figures in most trade economic agreements. Examples of such treatment are afforded both GATT, EEC (European Economic Community), and the COMECON (Council for Mutual Economic Assistance).

The COMECON is an association of East-European Communist Countries while EEC is an association Western European countries, such as France, Great Britain- West Germany etc. The GATT has a membership of 85 countries-

Eighth principle of the UNCTAD prohibits most-favoured nation treatment that goes against the trading interests of other countries. It reads : “International trade should be conducted to mutual advantage on the bass most-favoured nation treatment, and should be free from measures detrimental to the trading interests of other countries’.

The EEC inflicts big damage on the interests of the developing countries of Asia, Africa and Latin America. Its practice shows a patent departure from the essence and meaning of the most-favored nation UNCTAD principle.

Such measures are in direct contradiction with the Ninth principle of UNCTAD-64, which says, “The economic unification of any two or more countries should be carried out in such a way as not to hurt or unfavorably affect the expansion of their imports from the Third-World countries.”

(d) Common Fund:

At the UNCTAD-IV held at Nairobi in 1976, achievement in two fields was marked integrated commodity programme and creation of a common fund for easing the debt burden of the develop­ing countries.

This Conference laid down a time-bound programme on commodity negotiations within an integrated framework. The developed countries gave a broad acceptance of this programme.

On the creation of a common fund for easing debt-burdens, the developed countries showed their willingness to go to a preparatory conference to discuss its objectives and modalities.

(ii) At the level of UNIDO:

At the UN level, the second forum for making efforts towards the establishment of N1EO is the UNIDO (United Nations Industrial Development Organisation).

As its name shows, this organisation aims at industrialising the Third-World countries. UNIDO-III meeting was held at New Delhi in January-February 1980- In terms efforts at furthering international co-operation and peaceful changes towards a just and equitable new world order, UNIDO-I11 was a complete failure. The Western group was not prepared to negotiate on any of the concrete issues and demands.

They backed out of the idea of a global fund to help industrialisation of the Third World. It was at the UNIDO-II held at Lima in 1975 that it was agreed that the Third World should contribute 25 percent of the world-manufacturing value added by the year 2,000. But this is possible only if a fund is created to help them industrialise themselves.

The U.S A., Japan and the European Economic Community countries (particularly the U.K. and West Germany) took hard position. The sympathy of the socialist countries was with the Third World, but even then they were not prepared to commit anything. Consequently UNIDO-III failed to reach agreement and adopted the final documents by a mojority vote.

(2) At the Level of Non-Aligned Summits:

The newly emerged nations of Asia and Africa came together in the shape of Non-aligned Movement for political, social and most importantly economic reasons.

They were faced with an international economic system that encouraged unequal exchange and a feeling of dependence upon the world capitalist system. It was with a view to extricating themselves from such a situa­tion that they had to create not only national societies but also to create a system of economic equality in the world.

It was for the first time at the Lusaka Conference of the Non-aligned countries held in 1970 that an increasing concern over economic prob­lems was shown. Simultaneously, the activities of the ‘Group of 77’ at the UNCTAD’s had brought home to the poor and dispossessed nations of the pitiless nature of the world economic order.

It was at the Algiers Summit of the Non-aligned countries held in 1971 that they wanted to develop an economic strategy to counter the West. Many of the countries producing raw-materials decided to come together and act in unison to increase the prices of their commodities.

It was this strategy in Algiers on the part of the non-aligned nations that gave birth to the demand for a New International Economic Order at the sixth special session of the UN General Assembly held in April, 1974.

This strategy, which was later used with great effect by the OPEC (Organisation of the Petroleum Exporting Countries), provided a major threat for the world capitalist powers. The OPEC has, so far, raised prices of their oil by four times, shaking the economy of the developed countries also.

This radical departure on the part of the non-aligned countries to go in for economic matters, gave the non-aligned movement a new structural meaning in international politics. The non-aligned countries, in effect became a powerful bargaining group in the context of international econo­mic relations. This bargaining power gave new meaning to their political demands, especially Racialism and national liberation.

The Economic Declaration made at the Colombo Conference (1976) of the non-aligned was still more important. It said: “The Conference noted with satisfaction that non-aligned meetings are giving increased importance to economic affairs. This is a reflection of the fact that the great majority of the non-aligned States are poor or under-developed.

Economic affairs must, therefore, be their primary concern if political independence is to have real meaning, so as to promote the development of the process of non-aligned State, strengthen their complementarity and eliminate social evils and all aspects and all traces of backwardness, inherited from colonial times.

It cannot be denied that there is an integral connection between Politics and Economics, and it is erroneous to approach economic affairs in isolation from Politics. A complete change of political attitude and the demonstration of a new political will are indispensable p re-requisites for the realisation of the New International Economic Order.

The Economic Declaration noted that the basic contradiction in the world today was primarily between the producer countries and the buying countries. It took note of the phenomenal rise in the deficit in the balance of payment of developing countries which had increased from $ 12.2 million to $ 40 million in 1975.

Some estimates indicated that this figure could rise to $ 40 billion by 1980 if the present trend continued. The declaration noted that “This unprecedented situation is not the reflection of the structural crisis that characterises the present economic relations which originate in the colonial and neo-colonial policy of Imperialism.

As a result, most developing countries have over the years run down their resources, accumulated large external debts, a good portion of which carries heavy interest and amortisation obligations.

It has been estimated that the external indebtedness of these countries, which was over $ 100 billion in 1973, will double itself by the end of 1976.”

“The Bureau re-affirmed its strong support to the position adopted by the group of 19 in its negotiations in the Conference on International Economic Co-operation being held in Paris.

The Bureau expressed its sense of deep concern over the lack of progress at the Conference. The developed countries have not yet responded positively to the Concrete proposals submitted by the developing countries in spite of the fact that strenuous efforts have been made for over a year to reach agreement.

In this way, at the Colombo Summit, the non-aligned countries attemp­ted for the first time to link Politics and Economics together.

At the Bureau meeting of the non-aligned countries, held at Colombo in June, 1979 (preparatory to the Havana Summit), it was resolved that “The Bureau recognised that the economic malaise in the international economic system is not a phenomenon of a cyclical nature but a system of underlying structural maladjustment characterised, inter alia, by increas­ing imbalances and inequities that operate inexorably to the detriment of the developing countries.

This has made it imperative for the non-aligned and other developing countries to intensify their struggle to ensure the early establishment of the New International Economic Order and their efforts to achieve collective self-reliance…”

This economic declaration was particularly important because the Bureau meeting was held shortly after the UNCTAD-V meeting started at Manila. It was commonly agreed that the UNCTAD meeting was a total failure and the Western countries were in no mood to negotiate most of the issues raised by the demands of the NIEO.

The Secretary-General of the UNCTAD, Dr. Gaminea Correa, came to Colombo during the Non-aligned Bureau meeting and gave a detailed report to the Chairman about the nature of the UNCTAD crisis. Thus, it became clear that if the Havana Summit was to succeed, it must take due notice of the crisis that was emerging in world politics, namely the capacity of the small and poor nations to survive in the global economy.

The main thrust of Mrs. Gandhi’s speech at the seventh summit of N.A.M. held at New Delhi in March, 1983 was on disarmament and a new economic order. She reiterated the commitment to the establishment of a new international economic order based on justice and equality. The New Delhi declaration called for attaining the 0’7 per cent of G.N.P. as official development aid by 1985.

3. At the Level of the Developed Countries:

As a result of the pressure exerted by rise in the prices of petroleum on the economies of the developed countries and otherwise, the developed countries have also started discussions in an effort to bring about a New International Econo­mic Order.

It is most encouraging that even in institutions run or domina­ted by the developed countries, solid support to most of the demands of the developing countries is growing.

Thus, the Secretariat of the OECD (Organisation for Economic Co-operation and Development), the Overseas Development Institute of Washington, the World Bank, the IMF and GATT have been cautioning the developed countries against the dangers of Protectionism, and urging them, even in their own interest, to take up steps for the transfer of resources to the developing countries to help build a New International Economic Order.

An Independent Commission of international development issues with Willy Brandt, the former Chancellor of West Germany, as Chairman, had been appointed in 1977 to look into the matter and make recommen­dations by the beginning of 1980.

There are eighteen members of the Brandt Commission. These members which have been chosen for their practical experience, and most importantly their independence from official government policy, belong both to the developing and developed countries.

The Commission includes men such as Edward Heath, former P.M. of Great Britain; of Palme, former Prime Minister of Sweden; Pierre Mendes, former, P.M. of France; and Edurado Frei, a former President of Chile; Shridath Ramphal, the Commonwealth Secretary-General and L.K. Jha of India.

The Commission has since submitted its recommendations in December, 1979, in which it has brought out the urgent problems of inequality and the inadequacies of the prevailing system. This independent commission on international development issues come to the conclusion that major international initiatives are needed if mankind is to survive.

For the hundreds of millions of people who live on the edge of starvation in the developing countries (the South) it is not possible to cope with the existing conditions.

At the same time, the industrialised and rich countries of the North have not been willing in the past to accept the South’s case that the world economy works to the disadvantage of the South.

The eighteen member Commission, coming from five continents, agreed on a set of bold recommendations including a new approach to international finance and the development of the monetary system.

They, proposed long-term reforms by the year, 2,000, priority programmes for the eighties, and an emergency action to avert an imminent economic crises.

It has suggested that the rich countries should set up a super fund to assist the development of Third World nations. This is the key recom­mendation of the Commission, which is similar to the Marshall Plan devised by the U.S. to channel (send) dollars to Europe for reconstruction after the World War II

The Commission has prepared a radical new strategy for the deve­lopment of the Third World over the next 10 to 15 years.

This strategy aims at the establishment of a new multi-billion dollar financial institution to be known as the ‘ World Development Fund’ for the massive transfer of resources from the North to the South with a view to achieving “a global new deal, a building of a now order and a new kind of a comprehensive national and international approach to the problem of development.”

The reasoning behind this recommendation is the ‘mutuality of in­terests’ between the industrialised and developing countries. The development of the South is becoming increasingly more important to the economic stabi­lity of the North.

In addition, such a kind of relationship is important for maintaining international stability. Without the development of the poor countries, the future of the world would be dangerous.

There would be increasing conflicts over trade and protectionism, retarded growth and growing unemployment, monetary anarchy, and a rapid spread of regional tensions. More than that, the world would face a severe problem of supply of energy, food and raw-materials, and this would lead to world-wide conflict.

The proposed new Fund is not intended to replace the existing institutions such as the I.M.F. and the World Bank. It would act as a complementary facility of financing the Third World. Unlike the existing international financial institutions, decision-making within the Fund would be evenly distributed between the developed and the developing countries.

The amount of money involved would be substantial. It is estimated that the least developed countries would require financial transfers of $ 11 billion each year during the next decade. During the 1990’s the figures would rise to $ 21 billion a year. To raise such huge sums of money, the Commission put forward the idea of a system of international taxation.

Actual Performance of the Developed Nations. However, the actual performance on the developed nations is quite disheartening. It is clear from the discussions and achievements of the meetings hold under UNCTAD-V and Cancun.


The debate at the UNCTAD-V showed that in spite of strong denunciation of Protectionism by the developing countries, the developed countries made a strong defence of multilateral trade obliga­tion packages.

West Germany’s Economic Minister, Dr. Leaf Lambsdroff, sought to play down the central there of restructuring world economy by saying that UNCTAD-V should concentrate more on issues of immediate importance rather than the whole range of economic policy.

Actually, Protectionism is playing hell with the Third World. In the year 1979-80, the developing countries, excluding the OPEC, were running a combined-payments deficit of $ 40 billion.

There was a great deal of discussion but little evidence of positive action. Even the old commitment of providing 0.7 per cent of the Gross National Product by the developed nations to the developing nations, as provided in the UN resolution, was not re-affirmed.

West Germany promised to increase the amount of poor-aid-level. But she indicated that the amount of increase would not be enough to reach the UN target of one per cent of GNP and added that “we are doing our best to come close to it.”

The foreign debt of the recipient countries, according to I.M.F. esti­mates, now comes to nearly 30 per cent of their gross national produc­tion, and is, therefore, difficult to repay. No developed country dare say that it would write off the amount of loan as was done by Spain some time ago.

No developed country was prepared to revise the terms of trade which were favourable to them. By pricing their products at a dispropor­tionately high level in relation to the prices of raw-materials and primary products, the industrialised nations have been fleecing the developing countries. This big swindle has resulted in neutralising the benefits of the foreign aid received by the developing nations.

No concrete proposal for restructuring the World Bank and I.M.F. was made. Both these institutions need to be restructured to enable the deve­loping countries to have an effective voice in their working. The World Bank needs to enlarge the area of its soft loan assistance. The I.M.F. should increase the S.D.R.s (Special Drawing Rights) available to the developing countries.

The only achievement of the Manila Conference is the establishment of a Commodity Fund designed to reduce fluctuations in the prices of Third World products. But here also the picture is far from reassuring as the U.S.A. remained reluctant to extend its whole-hearted support to the idea.

(b) Cancun Meeting:

Towards the close of 1981, a meeting of 22 heads of state and government from both the rich and poor countries, representing two-thirds world population, was held at Cancun (Mexico). For the first time in recent years, this conference addressed itself specifically to issues that divide the rich North and the poor South.

It was an effort to widen the areas of agreement between the rich and poor nations. But nothing concrete emerged from the deliberations.

The conference did not go beyond the pious recognition of the need to banish hunger by the end of 2000 A.D. with redoubled efforts by the existing international agencies like the Food and Agriculture Organisation, and the World Food Council, and by canalizing additional funds to help the poor countries to develop their energy resources.

The rich countries showed no willingness to increase their official assistance during the eighties bring it closer to the target of one per cent of the GNP which they accepted two decades ago. They are not enthusiastic in helping the countries to stabilise the prices of their raw materials and commodity which constitute the major source of their export earnings.

The OPE countries, on their part, refused to be bound by any discipline that would make their oil output and prices predictable for the non-oil producing countries. So, the Cancun summit failed to produce any positive result.

(4) At the level of developing countries:

For the first time the developing countries held a meeting at New Delhi in February, 1982 at the initiative of India, with a view to forging self-reliance among the poor nations of the south.

Inaugurating the south-south dialogue, Mrs. Gandhi expressed concern over the visible deterioration in the global economy since the Cancun summit and lashed out at the developed coun­tries for continuing to resist the launching of global negotiations -vital to the economic survival of the Third World.

She placed before the meeting an eight-point programme make international co-operation more effective which, among other things, called for the present disturbing trend in the flow of concessional assistance, the lifting of protectionist barriers in-developed countries and urgent measures, including regional arrangements, to lighten the financial burden of increased oil prices.

Critics, however, point out that not even the primary objective of promot­ing co-operation and solidarity among the developing countries could be achieved. The meeting rather sharpened the differences of outlook and approach among the Third World.

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