New International Economic Dispensation Needed; NIEO was not an order

  INTRODUCTION

The New International Economic Order (NIEO) was a set of policy proposals put forward put forward in the 1970s through the United Nations Conference on Trade and Development (UNCTAD). Third world countries were seeking ways of making their terms of trade favorable and maximize its benefits from its involvement in international trade. NIEO aimed at overhauling international political and economic order so as to reduce the adverse effects of third world involvement in international trade. NIEO was simply seeking a reversal of the global trading practices institutionalized by the Bretton Woods system.

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. It happened within the framework of North-South dialogue.

It is very important from the onset to really excruciate what the New International Economic Order really is and its ramifications especially to the third world in the current global economic order.  Primarily NIEO connotes policy directives adopted by the G-77 with a view of stemming out the west’s hegemonic influence in the global economic pecking order. The inspiration behind the NIEO can be traced to the came with the Bandung plan where optimism from the newly independent countries of Asia, Africa and Latin America were looking for ways of reforming the global trading and political system. The main aim was to find a framework within which the third world would find the solutions to their problems of underdevelopment within the ideologue of interdependence imposed by the world economy.

The crux of this essay is to make an inference whether economic parity between the west and third world countries is possible in the global capitalist system. The begging question has always been whether the world would move towards a more poly-centric economic balance of power or whether it would be locked indefinitely in the cocoon of mono-centrism, with USA as the axis of the western capitalist camp in their bid to maintain the status quo as pertains to the global balance of power and continually fleece of the third world off valuable resources often with inadequate financial remuneration.

But as the third world were as passionate as ever about coming up with a new world order the west coalesced behind the so called Washington consensus and met the pro-third world movement with equal passion and desire to maintain the status quo.

NIEO was an order that aimed at achieving the following;

·        Ensure that third world countries were able to benefit from extraction of third world resources.

·        Ensure that there was adequate capital flow from the centre to the periphery coupled with infusion of efficient and cost effective technologies in the third world countries.

·        Rally for a reform of the global order and correct the mistakes arising from the Bretton woods order and institutions.

·        Ensure that the third world got fairer terms of trade in the global trading system, together with reasonable value for exports to the periphery.

·        Enhance the strength of regional organizations within the third world like the EAC, COMESA and others in Asia and Latin America, this was aimed at increasing the volume of trade within the third world and improve general economic and technology transfer engagements  within the third world. And also enhance the third world’s right to set up regional marketing and producer organizations.

·        NIEO also aimed at controlling the activities of Multi National Corporations, their activities and their roles as agents of transfer for ecology and capital to third world states.

After a detailed study of the objectives of NIEO we can then begin the odyssey in discovering whether NIEO in its entirety was or is international and whether it qualifies to be referred to as an order.

NIEO AS AN INTERNATIONAL CONCEPT

The inclusion of the term ‘international’ in NIEO is a major crisis point. By virtue of the desire of NIEO to come up with a uniform and homogenous global economic culture, the most persistent question in many scholars’ minds has been whether that aim is remotely possible.

The rally for NIEO was structured in a bipolarized form. With the North and the global south as different entities in different sides of the economic divide The idea of NIEO has been to rationalize the world economic structure in order to come up with a semblance of parity and to bridge the economic gap between the two ‘worlds’ .

Whereas the north has pretty universal economic structure within it, the biggest problem lies within the third world itself. The problems of definition of what really constitutes the third world give a valuable insight into this problem.

The third world in itself is a generalized term that refers to countries that span at least three continents and are not homogenous in the least way possible. The third world is term that generally refers to countries are mostly south of the equator, that have different political and economic structures, that have different colonial heritages, that have very different cultural and religious structures and

Are at different levels of industrialization. The ideological frameworks guiding these countries are also very different with the democratic capitalist countries against like India pitied against the not so democratic and socialist countries like china and Cuba.

Industrialization disparity within the third world

It has been noted over time that there is a huge gap in the industrialization levels of the world. The newly industrialized countries (NIC) in south east Asia have been unevenly lumped with countries especially in Africa that have minimum levels of industrialization to say the least countries like Chad and East Timor some of the poorest countries on earth have been lumped unholily with countries like south Korea which is in the group of the worlds ten most industrialized and other countries like Malaysia which is an immensely industrialized country.

According to realist perspectives on international political economy, such disparities in the third world may prevent these countries from pursuing common agendas. This is because the realist theory asserts that for states the biggest obsession is that of protecting self interests and gaining unilaterally from international commerce.

The role of sub-imperialist within the third world

Among the third world there are countries that have been identified by the west as nodes for which resources can be siphoned through from the third world to the west. This includes countries like Malaysia, Singapore among others in Asia and South Africa, Egypt and Algeria among others in Africa 

 Here the west makes capital investments in countries with semblances of political and social stability, that have solid infrastructural bases and countries that have a pretty well educated labour force. Here the west injects massive amounts of their economy with the hope that the industries of this countries will export to other third world countries. Thus the west creates a chain of repatriation of profits with the profits passing through this sub-imperialist countries and finally to the west.

This in itself works against the gains envisioned by NIEO. It retards the growth of a new economic order. Financial capital injections to some selected countries serve to widen the gap among the third world itself.

THE COLLOSAL GROWTH OF THE CHINESE ECONOMY

The third world has also had to grapple with the problem of the exponential growth of the Chinese economy. Due the ambiguous state not being easily classified as a developed country or a developing country the third world has found itself at pains of developing a policies that govern its economic engagement with china The Chinese has taken that advantage continued to exploit the third of useful resources often. This has left most third world countries at positions where they are exploited both by the developed countries and countries that are look warm in character as pertaining to their economic strength.

The volume of oriental trade with Africa has increased over time; the nature of the trade in itself makes third world countries vulnerable to dumping of sub-standard goods and technology.

REGIONAL TRADING AND ECONOMIC BLOCKS

Another factor that has affected the implementation of NIEO is differentiation of the world into regional economic groups these groups have different agendas and come from different cultural backgrounds. This regional differentiation takes on continental and sub continental forms with countries in Africa, Asia, and Latin America preferring to pursue agenda their agenda in different platforms.

For example the south east Chinese countries prefer lobbying for favorable terms through (ASEAN)*, whereas Latin America uses (SELA)* Latin American Economic System. Other third world countries choose to negotiate bilateral terms with the North; for example Mexico uses NAFTA* as body that maximizes its markets in total disregard of its third world status even though the other members of NAFTA are not third world countries namely; Canada and USA.

NATIONAL ECONOMIC SOVERIGNITY

It is very important to note that NIEO does not purport to force countries to country to change their policies to so as to have a synergy with the principles of NIEO. Propaunders of NIEO hope international good will would ensure that developed countries would adopt more egalitarian policies in their dealings with third world countries.

Australia provides a perfect example of how national economic interests affect the achievement of NIEO. Policy makers in Australia for example asserted that Australia should consider herself an independent decision making unit and not a satellite of the developed world. Thus Australian decision makers aimed at making policies that were not stipulated in NIEO. Thus Australian technocrats came up with an alternative plan to integrate the needs of third world into their national policy blueprint, they audaciously called this plan the Fraser plan. Karunarate (1976).

NIEO AND THE CRISIS BETWEEN THE CAPITALIST’S AND THE SOCIALISTS’.

NIEO has itself brought some antagonism between the worlds socialist camp and the capitaist camp. A once USA ambassador, Jeanne Kirkpatrick terms the UN’s call for wealth distribution global socialism. She states that “the dominant ideology of the United Nations concerning economic regulation is a crude version of Marxist class war”. The General Assembly led this attack on the market-orientated “Declaration.

Of the Establishment of a New International Economic Order” and

The “Charter of Economic Rights and Duties of States” Among

other things the declaration endorsed the right of nations to nationalize

foreign businesses concerns and develop cartels.

She goes on to argue that there is nothing new about NIEO and says that “it is just old time socialism showing its ugly head again. Geldargad(1984). This example shows how NIEO serves as critical polarizing point between the socialist and the capitalist, thus NIEO in itself is not a universal international concept but rather a concept that is conceptualized differently depending on the ideologies that guide different states be it laissez faire or neo-Marxism.

NIEO IS NOT AN ORDER

Empirical analysis of NIEO comes up with the inference that NIEO is not the order it purports to be. This is because of various reasons that are easily identifiable.

·        NIEO does have the characteristic of previous historical economic orders that defined the economic dispensation of the world previously. This includes mercantilism which was prevalent in Europe and the world in the 17^th and 18^th centuries. NIEO has failed to synthesis itself as feasible economic order and is fronted within a strong international capitalist society.

·        NIEO lacked sufficient institutional framework that would have helped countries achieve the policies of NIEO though third world countries have a majority in the UN’s general assembly they are affected by the veto power of the G-8. There was also no charter that was adopted in order to.

·        Another area that NIEO has miserably failed to make any semblance of order is in the area of Multi-national corporations. This is because most multi nationals often have sovereignty in their when it comes to decision making. MNCs have been known to meddle in the affairs of third world countries. For example most MNCs operate on turnovers that are colossal. Most MNCs also have many assets in many in all most all parts of the world. Perhaps the reason why MNCs are difficult to control is because they infiltrate into all aspects of society; finance, technology, food, entertainment, mining and industry. MNCs have also been documented to cause social and civil strife in third world courtiers this include companies like firestone and its involvement in the Liberian crisis, another company that has had detrimental effects on the third world is the international mining consortium De Beers and its involvement in fuelling the civil conflict in the DR Congo.

Some of the MNCs that enjoy amazing sovereignty include companies like Coca Cola (soft drinks) USA, Toyota (Auto motives) Japan, AIG (insurance) USA, De Beers (mining) Dutch, Barclays plc (banking) Britain, and Mc Donald’s fast foods. From this few examples we can see how MNCs have extend ended a firm grip on the world.

CONCLUSION

The inference that NIEO is not an order or neither is it international is an obvious one. The average casual reader can be in a position to point out at the inadequacies of NIEO in actually achieving what it purports to achieve. However those who excriticately explore the facts discover an even greater problem with NIEO, it has not failed to achieve but stagnated third worlds attempt to come up with feasible policy directive that would address asymmetry as appertains to the balance of power between the west and developing nations.

Those who continue to hold to NIEO as a possible way out of underdevelopment do so for sentimental reasons rather than practical ones.

REFERENCES

·        Frederick H. Gareau, The reassertion of united hegemony: evidence from the United Nations General Assembly. International Journal of Comparative Sociology, Vol. 35, 1994

·        Patrick Streeten, Thinking about development,Cambridgeuniversity press. Thinking about development.

·        Rchard c. longworth, 1999 Encarta Yearbook article,

·        Sassen, Saskia. Globalization and its Discontents. The New Press,

·         Buchanan, Patrick J.1998 The Great Betrayal: How American Sovereignty and Social Justice Are Being Sacrificed to the Gods of the Global Economy. Little Brown and the company

·        Greider, William. One World, Ready or Not: The Manic Logic of Global Capitalism. Simon & Schuster, 1997.

NOTES

 *ASEAN , ASSOSIATION FOR SOUTH EAST ASIAN NATIONS.

 *NAFTA, NORTH AMERICAN FREE TRADE AGREEMENT.

 *SELA, Spanish synonym for Economic community for Latin American      states