What is New International Economic Order?

The New International Economic Order (NIEO) is a proposal put forward by developing countries in the 1970s to address what they saw as the unjust global economic system that favored the developed countries and perpetuated the economic disparities between developed and developing countries.

Background of NIEO

Most countries involved in the Non-Aligned Movement were newly independent, which had just been freed from the colonial clutches, whose economy was in shambles, and difficult problems like poverty and unemployment were standing before them.

The goal of the Non-Aligned Movement was not only to mediate between the two superpowers during the Cold War but to develop their countries’ economic development, get the people out of poverty, and give the country a respectable place. Their economic development was necessary to maintain the independence of these countries. In these circumstances, NIEO (New International Economic Order was born.

Proposed Changes Under NIEO

The proposal under NIEO called for a number of changes to the global economic system, including:

  • A fair and more equitable distribution of the world’s wealth and resources
  • Greater participation by developing countries in the decision-making processes of international economic organizations
  • A greater role for the United Nations in overseeing the global economic system
  • An end to the exploitation of developing countries by developed countries through the protection of the rights of developing countries to control their own resources
  • The reduction of the trade gap and external debt of the developing countries
  • The establishment of a New International Economic Organization to replace the International Monetary Fund and the World Bank.

In 1972, a report titled “Towards a New Trade Policy for Development” was presented at United Nations Conference on Trade and Development (UNCTAD). In this report, reforms in the global trading system were proposed. Its goal was:

  1. Underdeveloped countries will have control over their resources which are exploited by the developed countries of the West.
  2. Underdeveloped countries will have access to the markets of western countries from which they can sell their products. In this way, the business will be profitable for them.
  3. Western countries will reduce the cost of technology being given to underdeveloped countries.
  4. Least developed countries will be given an important role in international economic institutions.

After this, in the Non-Aligned Movement, more emphasis was started on economic issues. The economic aspect was not so important in the first conference held in 1961. But in the fourth conference held in Algiers in 1973, NAM became an economic pressure group due to the demand for the formation of NIEO among the 76 present members.

In subsequent conferences, Havana (1979), New Delhi (1986), Belgrade (1989), Cartagena (1995), Kuala Lumpur (2003), and again Havana (2006) for economic cooperation based on equality and fairness. The South Dialogue was called upon, while the idea of ​​NIEO began to falter in the 1980s as developed countries mobilized against underdeveloped countries. Due to the opposition of developing countries, such unity had to be done in non-aligned countries.

The NIEO was discussed in various international forums, such as the United Nations Conference on Trade and Development (UNCTAD) and the Non-Aligned Movement summit meetings, but was not fully implemented. However, some of the ideas proposed in the NIEO have been incorporated into international economic policy and agreements, such as the creation of the United Nations Conference on Trade and Development (UNCTAD), and the adoption of the principle of common but differentiated responsibilities in the United Nations Framework Convention on Climate Change (UNFCCC).

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