NEW INTERNATIONAL ECONOMIC ORDER

Introduction
The New International Economic Order (NIEO) was a set of proposals put forward during the 1970s by some developing countries through the United Nations Conference on Trade and Development to promote their interests by improving their terms of trade, increasing development assistance, developed-country tariff reductions, and other means. It was meant to be a revision of the international economic system in favour of Third World countries, replacing the Bretton Woods system, which had benefited the leading states that had created itespecially the United States. Contents 1 History 2 Tenets 3 Resource allocation mechanisms 4. Ideology 4.1 Mercantilism and Marxism 4.2 Central planning vs. free markets 5. Legacy 6. Criticism 6.1 Price regulation is inefficient 6.2 Free trade and investments are needed instead 7. References

History

The term was derived from the Declaration for the Establishment of a New International Economic Order, adopted by the United Nations General Assembly in 1974, and referred to a wide range of trade, financial, commodity, and debt-related issues (1 May 1974, A/RES/S-6/3201). 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 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: Developing countries must be entitled to regulate and control the activities of multinational corporations operating within their territory. They must be free to nationalize or expropriate foreign property on conditions favorable to them. 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. 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.

Resource allocation mechanisms Haggard and Simmons claimed that: A number of social mechanisms are possible to effect resource allocation in any economic order. An authoritative allocation mechanism involves direct control of resources while, at the other end of the spectrum, more marketoriented 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 Mercantilism and Marxism NIEO is based on the mercantilist idea that international trade would be a zero-sum game (i.e., causes no net benefits), and on the Marxist view that it benefits the rich at the expense of the poor [citation needed]. Some American economists challenge the idea of trade as a zero-sum game. Central planning vs. free markets NIEO also proposes central planning, as opposed to free markets. Legacy 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
3

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. CRITICISM Price regulation is inefficient The powerful countries of North America and Western Europe felt threatened by the NIEO and continuously tried to criticize and minimize it; according to professor Harry Johnson, 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. 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. Free trade and investments are needed instead It is possible to argue that the most efficient ways to promote the development of poor countries (according to rich Westerners) would, instead, be that their governments would govern in a reliable, predictable way and allow their citizens to invest. Also free trade would help the poor countries. This requires also the poor countries to give up protectionism.

Least Developed Countries and Right to Development

For the millions of men, women and children living in the least developed countries (LDCs), development is one of the most urgent of human rights imperatives. Development is a human right for all individuals and peoples. The formulation of development as a right is based on the idea that it is not merely an equivalent to economic growth. The Declaration on the Right to Development describes development as a comprehensive economic, social, cultural and political process, which aims at the constant improvement of the wellbeing of the entire population and of all individuals on the basis of their active, free and meaningful participation in development and in the fair distribution of benefits. LDCs demonstrate increasing commitment to respecting and promoting human rights. Out of 48 LDCs, 37 ratified the International Covenant on Economic, Social and Cultural Rights (ICESCR); 40 ratified the International Covenant on Civil and Political Rights (ICCPR); 39 ratified the Convention on the Elimination of Racial Discrimination (CERD); 46 ratified the Convention on the Elimination of Discrimination against Women (CEDAW); 47 ratified the Convention on the Right of the Child (CRC); and 29 ratified the Convention against Torture (CAT). Twenty-six LDCs ratified ICESCR, ICCPR, CERD, CEDAW, CAT and CRC: Afghanistan, Bangladesh, Benin, Burkina Faso, Burundi, Cambodia, Chad, Congo (DRC), Equatorial Guinea, Ethiopia, Guinea, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Nepal, Niger, Rwanda, Senegal, Sierra Leone, Timor-Leste, Togo, Yemen and Zambia. There remain critical deficits in LDCs in the areas of human rights, democracy, the rule of law and citizen empowerment, particularly with regard to women and marginalized groups. OHCHR supports LDCs in several areas, including human rights monitoring, peace-building, democratic elections, transitional justice, conflict and post-conflict situations, protection of civilians and victims of sexual and gender-based violence, human and institutional capacity-building especially working with the army and police as well as civil society and national human rights institutions.

OHCHR has country offices in 6 LDCs: Uganda (set up in 2005), Togo (2006), Guinea (2009), Nepal (2005), Cambodia (1993) and Mauritania (2009). It supports human rights components in Peace Missions in 11 LDCs: Sudan, Burundi, Democratic Republic of the Congo, Liberia, Sierra Leone, Central African Republic, Guinea Bissau, Somalia, Haiti, Afghanistan, and Timor-Leste. The Office also has Human Rights Advisors in UN Country Teams covering 6 LDCs: Niger, Rwanda and Great Lakes (Burundi, Democratic Republic of Congo, Rwanda, Tanzania, and Uganda). OHCHR delivered training on Human Rights Monitoring for National Human Rights Institutions (NHRIs), including civil society, in Djibouti (2008), Ethiopia (2008), Timor-Leste (2008) and Tanzania (2009). UN LDC IV The Fourth United Nations Conference on the Least Developed Countries (LDC-IV) took place from 9 to 13 May 2011 in Istanbul, Turkey, and adopted the Istanbul Declaration and Programme of Action for LDCs for the decade of 2011-2020 (IPOA). Compared to the Brussels Programme of Action (BPOA), the IPOA has an increased number of references to human rights including the right to development and, for the first time, the right to food, the right to health, sexual and reproductive health, as well as a new section on "Gender equality and empowerment of women". Apart from the Introduction, all parts of the IPOA contain references to human rights. Protecting and promoting human rights is acknowledged as part of:

the important lessons learned for the IPOA from the reviews of the BPOA for the past decade; the specific objectives of national policies of LDCs and international support measures; and The principles guiding the implementation of the IPOA.

The IPOA recognizes that "Development requires and strengthens freedom, peace and security, good governance, respect for all human rights, including the right to food, the rule of law, gender equality, respect for nature and an overall commitment to just and democratic societies" and "development
6

strategies and programmes of least developed countries and their partners should strive to enhance the participation and empowerment of the poor and marginalized in their own development, benefit the most vulnerable, ensuring social justice, democracy, gender equality, and sustained, inclusive and equitable economic growth and sustainable development". Under the IPOA, the LDCs are required to:

promote and respect all internationally recognized human rights, including the right to development; strengthen good governance, the rule of law, human rights, gender equality and empowerment of women, and democratic participation, including by enhancing the role of parliaments; take steps to realize the right of everyone to the enjoyment of the highest attainable standard of physical and mental health, including sexual and reproductive health; achieve equal access of women and girls to education, basic services, health care, economic opportunities; accelerate efforts to promote womens rights and gender equality, including women with disabilities; establish and continue implementing national development plans to take account of the needs of women and girls; provide women and girls with full access to education and training, basic services, health care and economic opportunities, including ownership and control over land and other forms of property, inheritance, financial services and social protection; strengthen support to maternal health and increase access to family planning resources for women, men and young people; take resolute action against violence, abuse and discrimination to ensure that women and girls have the full enjoyment of all human rights and can attain the highest living standards possible and equal participation in the economic, social and political life of their communities; strengthen the role of relevant national mechanisms and scale up resources for gender equality and empowerment of women;
7

Promote effective representation and participation of women in all spheres of decision-making, including the political process at all levels.

Development partners are requested to support the LDCs in their implementation of the above tasks.

Trade and LDCs

Trade and LDCs Issues surrounding global trade regulations and LDCs have gained a lot of media and policy attention thanks to the recently collapsed Doha Round of World Trade Organization (WTO) negotiations being termed a development round. During the WTO's Hong Kong Ministerial, it was agreed that LDCs could see 100 percent duty-free, quotafree access to U.S. markets if the round were completed. But analysis of the deal by NGOs found that the text of the proposed LDC deal had substantial loopholes that might make the offer less than the full 100 percent access, and could even erase some current duty-free access of LDCs to rich country markets. Dissatisfaction with these loopholes led some economists to call for a reworking of the Hong Kong deal.[citation needed] Dr. Chiedu Osakwe, as of 2001 the Director, Technical Cooperation Division at the Secretariat of the WTO, and adviser to the Director-General on developing country matters, was appointed as the WTO Special Coordinator for the Least Developed Countries beginning in 1999. He worked closely with the five other agencies that together with the WTO constitute the Integrated Framework of action for the Least Developed Countries. They addressed issues of market access, special and differential treatment provisions for developing countries, participation of developing countries in the multilateral trading system, and development questions, especially the interests of developing countries in competition policy.

Trade Reforms in LDC

The decade ahead represents a unique opportunity to build on successful reforms in developing countries to expand trade and reduce
8

poverty. This is especially true for the least developed countries (LDCs). There is also a high priority on advancing in concrete ways -- the aid effectiveness agenda to further anchor policy reforms with respect to trade facilitation and competitiveness. With the Global Review of Aid for Trade set for July 2011 and the Cannes G20 Summit to take place in November, trade facilitation and development priorities will be at the forefront of multilateral policy discussions in the coming months.

Monetary reforms
Monetary reform is the demand for good economic in LDC countries. A monetary reform is rests on the relationship between the rates of interest in an economy, that is the price at which money can be borrowed, and the total supply of money. Monetary policy uses a variety of tools to control one or both of these, to influence outcomes like economic growth, inflation, exchange rates with other currencies and unemployment. Where currency is under a monopoly of issuance, or where there is a regulated system of issuing currency through banks which are tied to a central bank, the monetary authority has the ability to alter the money supply and thus influence the interest rate (to achieve policy goals). Least Developing countries face formidable institutional challenges in implementing for the purpose of high level education. Since the majority of least developing countries with limited technological and scientific capacity have little to gain in the medium term from implementing TRIPS obligations, a major concern must be to limit the human and resource cost of establishing IP regimes. At the same time, these nations need to ensure that their national IP regimes operate in the public interest and are effectively regulated. The more technologically advanced developing countries will also want to ensure that their IP regimes complement and enhance their broader policies for encouraging technological development and innovation.

Economic Modernization
Modernization theory is a theory used to explain the process of modernization within societies. The theory looks at the internal factors of a country while assuming that, with assistance, "traditional" countries can be brought to development in the same manner more developed countries have. Modernization theory attempts to identify the social variables which contribute to social progress and development of societies, and seeks to explain the process of social evolution. Modernization theory is subject to criticism originating among socialist and free-market ideologies, world systems theorists, globalization theory and dependency theory among others. Modernization theory not only stresses the process of change but also the responses to that change. It also looks at internal dynamics while referring to social and cultural structures and the adaptation of new technologies.

Political and economic sovereignty

Process of developing countries in international economic organizations, was accompanied by economic globalization, growing up under the big development of the situation of international organizations. After the end of World War II, with the acceleration of economic globalization, the international communities increasingly close political and economic relations, entered the era of interdependence in the world, promoting the rapid development of international organizations. More rapid development of international economic organizations, GATT, the World Bank, International Monetary Fund after the end of World War II. Founded in 1995, after the cold war, there is economy of the United Nations, said the World Trade Organization, its forces continue to grow, and more marked development entered a new phase of international economic organizations. Currently, the international economic organizations growing impact on international economic affairs, striking impact on the sovereignty of the developing countries.

Greater Labour Migration

10

For centuries, people have moved across borders in search of better opportunities. The potential of contemporary Labour migration to strengthen the global economy is undermined by the inconsistent values of globalization. Ideological passion for free movement of goods and capital is not extended to people. Instead, the richer countries allow short term political pressures to restrict movement of migrant workers and impinge on their rights. Long term drivers of migration suggest that both rich and poor countries might be wiser to encourage its flow to meet their respective interests.

References
1. 2. 3. 4. 5. 6.
7. 8. 9. 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 Jagdish N. Bhagwati (editor) (1977) The New International Economic Order: The North-South Debate. ISBN 0-262-52042-7. Cox, Robert. (1979) Ideologies and the NIEO: Reflections on some recent literature. International Organization 33 (2): 257-302. Sud. Le Monde diplomatique. Pages 20 and 21. Adam Sneyd (2005) New International Economic Order in Globalization and Autonomy Online Compendium edited by William D. Coleman and Nancy Johnson Op-Ed by the High Commissioner for Human Rights Human rights crucial for development, OHCHR feature story OHCHRs statement to the UN LDC IV text video OHCHRs written contribution to the UN LDC IV UN LDC IV

11