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International trade law assignment which is very effective for examination purpose.
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The Third World regards the securing of NIEO as a vital necessity of contemporary international relations. It feels that this is the only alternative for halting the fast deterioration of their economies in the present state of international economic order. The developed countries, on the other hand, are not willing to accept the abandonment of their existing strong and dominant economic positions and their key role in international economic relations. They feel that NIEO would be harmful to their interests and objectives. The existing system has been helping them to maintain an economic and political control over the economies and policies of the under-developed countries. They do not want to part with their dominant position in the United Nations and other international economic institutions like World Bank, IMF etc. They advocate that the existing economic institutions, particularly after the birth of the new GATT—the WTO, are capable of all actions in international relations and these can be amended and used for accommodating some of the demands of the Third World countries. They are, therefore, neither serious nor keen to participate in North-South dialogue over NIEO. This difference in approach between the developed North and the Third World, the South, has made the issue of NIEO a highly controversial issue. The developed countries are not at all willing to go in for it. As against this, the developing countries are committed to secure it. The issue of NIEO continues to be a major issue of contemporary international relations.
The movement for the establishment of the NIEO is caused by the existing deficiencies in the current international economic order and the gross failures of the GATT and the UNCTAD in fulfillment of their vowed objectives The present international economic order is found to be a symmetrical in its working. It is biased. It is favouring the rich-advanced countries. There has been over dependence of the South on the North. Rich countries tend to have major control over vital decision making in the matter of international trade, terms of trade, international finance, aids, and technological flows. As a matter of fact, the basis for the NIEO is constituted by the U.N. Resolution in 1971, in the seventh special session on “Development and International Economic Co-operation” with various reforms in the area of international monetary system transfer of technology and foreign investment, world agriculture and cooperation among the Third World Countries. The Resolution categorically mentions that “Concessional financial resources to developing countries need to be increased substantially and their flow made predictable, continuous and increasingly assured so as to facilitate the implementation by developing countries of long-term programmes for economic and social development.” It emphasises global interdependence. It seeks radical changes in allied social, economic, political and institutional aspects of international relations.
The Developing Countries must keep up their efforts for securing NIEO. For this purpose they should:
In essence, the UNCTAD resolutions provide a source of programme of action for the international economic order. The NIEO is not in favour of the existing system of free market orientation. It is biased in the less developed countries through interventionist approach. Its action programme narrates the need for a more rapid economic development of the poor countries and their increasing share in the world’s trade at favourable terms of trade. Its line of action is to adopt discriminatory approach in trade favouring the LDCs. It also insists on de-politicalisation in the flow of official as well as private direct investment from the rich to the poor countries. It contains that aid has to be of multi-lateral form with a view to facilitate structural adjustments in the less developed countries. It also stresses the need for restructuring the international monetary system.
(1) The big gap between the Developed and Developing countries: A big economic gap exists between the developed and the lowly developed countries. The former with about 20% of world population, control more than 80% of world income and wealth. The latter has to satisfy the needs of about 80% of world population with the help of less than 20% of
resources. The per capita income of the two dozen industrialized countries is between $ 3,000 to $ 6,000, where as that of the developing countries is about $100 to $300. This wide gap between the North and the South seriously limits the scope of economic relations and trade between them. The affluence of the developed compared with the poverty, scarcity and under-development of the developing world makes the existing international system unequal and imbalanced. (2) Continuously Increasing Gap: The existing big economic and development gap between the North and the South has been increasing at an alarming rate. The developed are becoming richer and the developing are becoming poorer, By virtue of being technologically advanced and industrially developed, the countries of the North are strengthening their control over international trade and income. Both UNCTAD and WTO have virtually failed to prevent this widening gap between the rich and the poor. (3) Global Interdependence but continued low role of the Developing Countries: Despite the big gap that exists between the developed and the developing countries, the global interdependence has increased in our times. Both the developed and the developing countries today find themselves increasingly dependent upon each other. However, this global interdependence continues to be exploited by the former for strengthening their economic positions. The hope that the developed countries would come forth with international actions augmenting the transfer of resources and liberalisation of trade, has proved to be wrong. In actual practice the developed countries have failed to appreciate properly the global interdependence and have continued to pursue their desired objectives in international trade and economy without much regard to the perceptions and needs of the developing countries. This has been a source of grave dissatisfaction for the developing countries. (4) Economic Neo-Colonialism: Despite the sovereign equality of all the members of international community, the developing countries find themselves living in an era of neo-colonialism in which the developed countries continue to control their economies and policies. The dawn of independence and the resulting sovereign status has made them free only politically, economically and in actual practice they continue to be dependent upon the developed countries. Being poor and under-developed they find themselves helplessly dependent upon the developed states for securing foreign aid. They are very sore at the situation because they feel that their present position has been the result of the exploitation they had suffered in the past and are still suffering at the hands of the developed countries, most of which happen to be the former imperial masters. Developed countries continue to exercise a neo-colonial control over the economies and policies of the Developing Countries. The attempts of the latter to get rid of neo-colonialism have found manifestation in their demand for a new international economic order.
(8) The Need to protect the Rights and Interests of the Third World countries in the era of Globalisation and WTO: The dawn of the era of globalisation and WTO regime has given rise to the new need for securing the rights and interests of the developing countries against the attempts of the developed countries to hijack WTO and to establish their hegemony in the grab of globalisation. All these factors have combined to make the Third World countries rally around the demand for NIEO.
The Non-Aligned Movement emerged as a response to the intense Cold War rivalry that results in a clear division of the world in to two opposition blocks led by the USA on one side and USSR on the other front with contradicting political and economic ideologies. As a result of this fraction between these groups developing countries were forced to take side either of this two superpowers. In 1974, NIEO, therefore, came up as a response to the need to change the existing international economic system which benefits developing countries nothing. NIEO calls for correcting the unfair global political and economic order so to benefit all countries and their citizens equally and fairly. During the colonial period, the then colonized countries, today known as the least developed countries (LDCs) were immorally and irresponsibly exploited their resources and man power. After the end of colonial rules, developing countries are still under dominance and exploitation of their former colonizers. In this regard, NIEO failed to meet its objectives. Developing countries remain to be suppliers of raw materials to the west, suffering from trade imbalances, unemployment and are still backward.
