The New International Economic Order (NIEO) is a set of proposals advocated by developing countries to end economic colonialism and dependency through a new interdependent economy. The main NIEO document recognized that the current international economic order "was established at a time when most of the developing countries did not even exist as independent states and which perpetuates inequality." In the spirit of "trade not aid," the NIEO called for changes in trade, industrialization, agricultural production, finance, and transfer of technology. The United Nations General Assembly adopted the Declaration for the Establishment of a New International Economic Order and its accompanying program of action on 1 May 1974.
History
The idea of a new international economic order emerged from the experiences of decolonization after the Second World War. Newly decolonized countries gained political sovereignty but "felt that their de jure political colonization ended only to be replaced by a de facto economic colonization." This mission to achieve a more equitable international system was motivated also by increasing inequality in the share of global national income between developed and underdeveloped countries, which more than doubled between 1938 and 1966. From its beginnings in 1964, the United Nations Conference on Trade and Development (UNCTAD), along with the associated Group of 77 and the Non-Aligned Movement, was the central forum for discussions of the NIEO.
Key themes of the NIEO included both sovereign equality and the right of self-determination, especially when it comes to sovereignty over natural resources. Another key theme was the need for a new commodity order through international commodity agreements and a common fund for commodity price stabilization. Restructuring international trade was also central as a means to improve developing countries' terms of trade, such as by diversifying developing economies through industrialization, integrating developing countries economies into regional free trade blocs like the Caribbean Community, reducing developed-country tariffs and other obstacles to free trade, expanding generalized trade preferences, and designing other agreements to reduce trade barriers. These proposals to restructure the international economic system also sought to reform 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 than the current focus on philanthropy and development aid. This advocacy among nations of the Non-Aligned Movement can also be understood as an extension of the decolonization movement that was present in many developing countries during that time. In this perspective, political and economic equity were perceived as a metric to measure the success of independence movements and completing the decolonization process.
In 1974, the United Nations General Assembly adopted the Declaration for the Establishment of a New International Economic Order along with its accompanying program of action and formalized this sentiment among nation states. A few months later the UN General Assembly adopted the Charter of Economic Rights and Duties of States. Since then, there have been many meetings to realize the NIEO. In 2018, the United Nations General Assembly adopted the resolution "Towards a New International Economic Order," which reaffirmed "the need to continue working towards a new international economic order based on the principles of equity, sovereign equality, interdependence, common interest, cooperation and solidarity among all States."
Principles and proposed reforms
The main principles of the NIEO are: The sovereign equality of all States, with non-interference in their internal affairs, their effective participation in solving world problems and the right to adopt their own economic and social systems; Full sovereignty of each State over its natural resources and other economic activities necessary for development, as well as regulation of transnational corporations; Just and equitable relationship between the price of raw materials and other goods exported by developing countries, and the prices of raw materials and other goods exported by the developed countries; Strengthening of bilateral and multilateral international assistance to promote industrialization in the developing countries through, in particular, the provisioning of sufficient financial resources and opportunities for transfer of appropriate techniques and technologies.