Question

What do you mean by New International Economic order? What were its results?

Hint:

Connect the NIEO to the broader context of the Cold War and decolonization. Newly independent countries sought not just political but also economic independence, which was the driving force behind this movement.

Answer 1

Step 1: Understanding the Concept:
The New International Economic Order (NIEO) was a demand from developing countries, primarily through the Non-Aligned Movement (NAM) and the G-77 group, to create a more just and equitable global economic system. It was formally adopted by the UN General Assembly in 1974.
Step 2: Detailed Explanation:
Meaning of NIEO:
The core idea of NIEO was to address the perceived inequalities of the existing economic system, which was seen as favoring developed countries. Key demands included:
1. Sovereignty over Resources: Giving developing countries full control over their natural resources and regulating the activities of multinational corporations.
2. Fairer Trade Terms: Improving the terms of trade for developing countries by stabilizing prices for their raw material exports and giving their manufactured goods better access to developed countries' markets.
3. Technology Transfer: Facilitating the transfer of technology from developed to developing nations on more favorable terms.
4. Financial Reforms: Reforming the World Bank and the International Monetary Fund (IMF) to give developing countries a greater say in decision-making and increasing development aid.
Results of NIEO:
The NIEO initiative had very limited success and ultimately failed to be implemented. The primary results were:
1. Resistance from Developed Countries: The major industrialized nations, particularly the United States, strongly opposed the proposals, viewing them as a threat to the free market system.
2. Lack of Cohesion: The unity of the G-77 began to weaken, especially after the oil crisis of the 1970s created divisions between oil-exporting and oil-importing developing countries.
3. Debt Crisis: The global debt crisis of the 1980s further weakened the bargaining power of developing nations, making them more dependent on the IMF and World Bank, whose policies were contrary to the NIEO's principles.
Although it failed, the NIEO dialogue raised global consciousness about developmental inequalities.
Step 3: Final Answer:
The NIEO was a comprehensive proposal by developing nations to reform the world economy for greater equity. Its results were minimal as it faced strong opposition from developed countries and its momentum was lost due to internal divisions and the 1980s debt crisis.