BULLETIN OF
PEACE
PROPOSALS
to motivate research
to inspire future oriented thinking
to promote activités for peace
O F F P R I N T
V O L U M E
7
1976
UNIVERSITETSFORLAGET
OSLO — BERGEN — T R O M S Ö
Introduction
The Politics of
the 'New International Economic Order'
The 'New International Economic Order'
(NIEO) is not only a vague concept that a
series of international conferences in 1974 and
1975 have tried to define, it is a contested
and conflicting concept that is deeply political.
An imminent danger with such a concept is
that it can become a slogan, a weapon in the
'diplomacy by terminology' that Gunnar Myrdal
pointed out is a cover-up for the lack of international development efforts. Nice words, but
no deeds. New concepts are introduced to
'cover up' for real reform. The spiralling bureaucratization of international development efforts
now taking place is not necessarily a sign that
governments are beginning to take them seriously. It could just as well be a function of a
goal which organizations are often set up to
serve: to get the hot, burning issues out of the
fire and into the slow and technical, non-public
and business-like atmosphere of the bureaucratic
process. True, some participants really do want
the current negotiations to produce some concrete results. It is often the case, however, that
others do not share this view, and the outcome
of negotiations thus depends largely on the relative power of the respective sides.
These are some of the questions that must be
raised after the 7th Special UN Session and
the first round of negotiations in the Conference for International Economic Co-operation
(CIEC). These conferences came up with very
little new when compared with what has already
emerged from the series of conferences held
since 1974. While the previous gatherings were
particularly instrumental in mobilizing the periphery (developing) countries into a unanimous
front, the strength of which surpassed what
they had ever reached before, the conferences
of the last fall have had a certain demobilizing
effect on that same front. And whereas the
previous gatherings also represented the so far
most serious and persistent manifestation of the
contradictions and conflicts between the center
(developed) and the periphery, or rather underdeveloped world, this situation of 'confrontation' also has become less prominent in the
last few months. Below, we shall look briefly
at some of the main reasons for these trends.
The contents of the NIEO
An authoritative definition of what the NIEO
means would be the one given in the resolutions
and programs passed by the periphery countries
themselves. To the programs resulting from the
Algiers, Dakar and Lima meetings in 1974 and
1975 should be added the Action Program adopted by the 6th Special Session of the UN and the
UNIDO conference in the 1975, both the results
of the developing countries' majority voting,
with some of the major developed countries,
notably the United States, voting against. Many
of the demands raised in these documents have
been voiced repeatedly for more than a decade
and thus represent nothing new. What is new in
the situation is that demands are put more concretely than before, some points of major importance (such as the request for national control over resources) have taken on a more
'aggressive' form, and demands are backed up
by real bargaining power - the OPEC position.
The treatment of the six issue areas dealt
with by the 7th Special Session must be evaluated on the basis of the developing countries'
demands for changes in power relations: First,
that periphery countries should take over control
of their natural resources and economies, and,
secondly, that they would form producer cartels
and other forms of cooperation to bargain more
effectively in vital areas of technology and
trade, and, thirdly, that the power (formal) of
periphery countries in multilateral international
organizations be radically increased in order to
improve their influence over vital decisionmaking processes.
These fundamentals are set down in Articles
2, 5 and 10, respectively, of the Charter of
3
Bulletin of Peace Proposals, V o l . 7, N o . 1, 1976
Economie Rights and Duties of States (see pp.
45-46). True, the Charter also contains paragraphs which set out a 'harmony of interest' relationship between the periphery and the center.
But the three paragraphs mentioned are the ones
over which there is conflict, precisely because
they most directly challenge the established
order; in other words, they represent the political elements in the quest for a NIEO. If
proposals on trade, resource transfers, technology, industrialization and food security are not
related to these elements, such proposals become
mere technical matters, unrelated to their deeper political roots. To make the NIEO a technical matter is a deliberate strategy on the part
of several countries, particularly some of the
developed ones.
Of the demands and proposals which developing countries have been relating to their quest
for a new political-structural order, the following
would seem the most important:
- As exports of raw materials are still the chief
source of income of most developing countries, and as these have been systematically
underpaid and/or affected by adverse terms
of trade and political and economic barriers,
export incomes should be stabilized and increased, through price stabilization, indexation and by facilitating the access of developing exporting countries to a higher added
value in marketing, processing, etc.
- While trade reforms are still considered more
important than increased and improved aid
and assistance, transfer of real resources which persistently occurs from developing to
developed countries - should be radically reversed through increased aid volumes, codes
of conduct to stop exploitative practices and
an assistance more suited to the real needs
of the developing countries.
- The international monetary system should be
radically reformed in order to abolish such
institutions and practices (the IMF structure,
the gold standard, monetary reserve policies
and limited access to SDRs, etc.) which have
adversely affected the periphery, and the
spiralling debt burden of the periphery should
be relieved.
4
- Radically new forms of technology transfer
to periphery countries should be established
and agreed upon (a code of conduct prior to
1977) so that modern technology is really
aiding the development of (and not, as is
presently often the case, is underdeveloping)
the periphery.
- A system of food security should be organized
internationally in a way which guarantees an
international distribution of food surpluses
to poor nations and thus increases the security
of any country against hunger and malnutrition, without impairing its political-economic
independence.
What are the probabilities that such reforms
will be implemented in the 1970s?
The strategy of the dominant centers
The means which the global periphery possesses to bargain and enforce the reforms it requires, are limited. And a policy of restructuring
international exchange patterns into more cooperation among periphery countries to substitute the historically determined dependence on
the center has just been initiated. If a NIEO is
to come about, thus, it will to a considerable
extent have to come through concessions by the
dominant economic units, the big transnational
firms and their 'home' nations.
The resolutions and the policy statements
made at international conferences are only part
of the basis on which the intentions of policymakers is evaluated. But even that part is revealing. A close look at the statements of the representatives of the three dominant center nations - the United States, the Federal Republic
of Germany, and Japan - shows that they are
in fact arguing in favor of the old order. All
of them refer to growth and the transnational
firms as main prerequisites, in fact the way
by which development globally comes about.
But it is precisely in a period, in the 50s and
60s, when economic growth through the firms
globally has been unprecedented both in volume
and in endurance, that the process of unequal
development - an increasing center-periphery
gap and development mostly for the center -
has been most advanced. In the same period the
principles of free trade which the Japanese
foreign minister so strongly advocates, even for
the post-1975 period, have led to a growth in
international trade also unprecedented in history.
But at the same time, the share of the periphery
countries in world trade has been halved over
the last twenty years (oil being excluded) and
their relative (in many cases even absolute)
export income reduced. And periphery societies
linked to the center in a colonial type of production-export dependence have become even
more marginalized, insecure and dependent on
fluctuating markets. Events in the oil industry,
notably the OPEC actions, have not appreciably
affected these general trends for which the
dominant economic units over the decades have
carried and still carry the main responsibility.
There are, however, certain signs of a new
conciliatory mood among center leaders. The
oil experience and a more united periphery front
may have had an effect toward creating such
a mood. But most probably the main reason for
it is the increased competition between the
various centers and the growing economic crisis
in the centers themselves, the roots of which
predate the 'oil crisis'. The new mood could
perhaps best be characterized as a 'stick and
carrot' policy. The stick is still there, when
common interests (safeguarding investments) prevail, to be jointly applied toward periphery
interests through center-dominated institutions
like GATT and IMF, or bilaterally as when
national business interests are challenged (cf.
the tough West German response to oil countries' bid to buy up shares in West German
industry). The carrot is there because the various
centers are competing for materials, markets and
positions in the periphery and offer a carrot in
return for some 'special' favor. The resultant
mixture of cooperation and competition among
the centers and the double policy of sticks and
carrots in their relationship to the periphery
will heavily influence the outcome of current
negotiations on a NIEO.
The policy of the United States is perhaps
the best illustration of this new and complex
game. From the 'oil crisis' and until after the
first preparatory Paris meeting in April 1975,
the US policy was one of applying a stick and
carrot medicine toward her center allies trying
to enforce a united front against OPEC, while
prescribing only the stick for treating the
periphery. OPEC was castigated as the major
new threat to international welfare. The aim
was to destroy OPEC and the new all-periphery
front cemented around the OPEC countries.
The strategy turned out to be a complete
failure. It was a first warning that the US
position at the 6th Special Session of the UN
in April 1974 became rather isolated, even
Japan and the Germans maintaining some distance to it (see Bulletin of Peace Proposals,
1974, No. 3). The failure was obvious at the
French-sponsored, but US-mastered Paris meeting. In the course of a few months, the State
Department got the upper hand with the Treasury and reformulated US policy. Instead of
threatening the non-oil rich periphery to keep
away from OPEC front operations and accept
the old order pretty much as it was before the
'oil crisis', the new policy was to speak more
softly about 'confrontation' and 'cartels' and
promise some carrots to enlist support in the
periphery in the positive way. The goal would
be the same: to preserve of the old order what
it would be in the interest of US firms and
government to preserve and to prevent a strong
united periphery front from entrenching itself
under radical leadership.
It is in this context that the US intervention
at the 7th Special Session must be viewed - an
intervention which also has laid much of the
'tone' in the CIEC negotiations this winter.
It contains few proposals of concrete measures
to be taken. Those which are concrete and address themselves to major periphery demands,
like on export income stabilization, are mostly
conceived within the older order: the IMF,
World Bank and G A T T systems. Continued US
opposition to restructure power relations within
these institutions (as e.g. at the IMF annual
meeting just before the 7th Special Session)
indicates that the US ' N I E O ' at best is a modification or an adjustment of the old order
and at the same time a 'technical economic'
solution. Also, the US proposal to create a
number of new institutions where institutions
5
already exist within the UN family to handle
the fields concerned, is indicative of the same
strategy: take the development effort out of
institutions which the periphery controls politically and now wish to revitalize and reorganize
to make them more effective development instruments (cf. the recommendations to reorganize UNIDO and the whole of the UN development bureaucracy).
What way of development?
The ability of the periphery to respond to
the strategies of the dominant centers and stick
to its demands for radical changes will depend
on several factors:
Firstly, the capacity of the periphery to maintain a strong and homogeneous common front
in current bargaining processes. In the lobbies
of the 7th Special Session and the CIEC, a
number of periphery negotiators have shown
enthusiasm toward the US proposals and ECACP (Lomé Convention) type of market arrangements, a very modest improvement of the
old order and not really restructuring it. That
is no surprise when the neo-colonial or 'elitist'
character of some of the regimes which these
negotiations represent, is taken into account. The
'softer' US policy and a widespread preparedness among periphery leaders to respond favorably to it has no doubt weakened periphery
unity. When in addition OPEC has been too
slow in responding to requests from other
periphery countries for financial contributions
out of the huge oil surpluses, the problems of
maintaining the unity have been aggravated
since last spring, when unity was at its height.
Secondly, the ability of the periphery to impose its agenda on current negotiations. One of
the crucial points in the periphery's demands has
been the comprehensive approach: problems of
development and underdevelopment should be
viewed and treated together because they are
linked up de facto. This view won through in
the first CIEC rounds. It will be up to the
periphery negotiators, however, to ensure that
it is not lost in the tedious and technical deliberations now taking place. Also, while there
is a certain understanding that the CIEC negotiations should be related to the agendas and
6
time-schedules of the UN process, notably preparations of UNCTAD IV, the work of UNIDO
and of FAO, there is a considerable danger
that these processes will become competing
ones and the net result will simply turn out to
be the type of bureaucratic fragmentation and
red-tape that we referred to at the beginning.
Preparations of UNCTAD IV, for instance on
the integrated commodity program, obviously
already to some extent suffer from the fact that
CIEC commissions have taken some of the steam
out of their engine. The periphery, which enjoys considerable power over the UN process
and at the same time has limited capacities in
terms of manpower and organization to coordinate negotiations, would do best in concentrating its efforts on the UN process.
Thirdly, the periphery will have to define
more concretely what it wants and under what
time-perspectives. Lack of homogeneity and
unity, which was referred to above, is not
simply a political and organizational problem.
It also refers to the fact that the very concept
of development, of what purposes international
restructuring serve, remains pretty much a
question-mark too. This was the gist of the
report from the Dag Hammarskjôld Foundation
and it is a prominent feature in the first statements of the Third World Forum, the association of Third World intellectuals, international
and national civil servants.
The problem may be subdivided in two. First,
there is the obvious lack of consensus over what
development really means to people in the periphery, not the least among periphery leaders
themselves. And if consensus is there verbally,
in actual practice there are vast differences.
Secondly, and related to the first aspect, there
remains a problem with precisely the meaning
of the international restructuring to the national
and local development work. Are export income
improvements positive if they increase both the
export orientation of the economy and the
power of upper class export interests, and result
in few, if any, benefits 'trickling down' to the
people? Does increased aid matter if it is prevented by political and social barriers from
reaching the people in the village?
cont. on p. 33
'The Politics of the "New International
Economic Order'", cont. from p. 6.
The meaning of a 'true' NIEO is not that it
will solve the development problem, but that
the processes of underdevelopment and maldevelopment which largely originates in the
center of the international system are checked
and eventually stopped. It is not even certain
that a NIEO constructed more or less in line
with the Action Program of the 6th Special
Session will result in the decisive, massive
development effort which many people, includ-
ing 'progressive' governments in the center, seem
to believe. Here lies the challenge of the selfreliance, local, national or 'collective', as a
development strategy. Periphery leaders who
increasingly believe in that concept would do
well in thinking more about how a new international order should be constructed to serve
increasing self-reliance, or, in other words, to
make the periphery a center of its own.
Helge Hveem
International Peace Research Institute
Oslo