The New International Economic Order is a call for “fairer treatment” for developing countries in the world trading system. It is an International Economic Institution dominated by advanced countries.
The New International Economic Order proponents seek to alter market outcomes to redistribute income from richer nations to poorer nations. They have urged for equity in the sharing of the world’s resources, and are no longer satisfied with the status quo where economically developed countries have dominated the world economic scene, while less developed countries live on loans and aids; suffer decline in the prices of //exports, rise in inflation rate, high mortality, increase in debts and falling standard of living. Thus, a call for international economic order becomes imperative.
Therefore, the main proposals which have been made in the New International Economic Order include:
(a) Demands for changes in the structure and distribution of world production.
(b) Demands for changes in the structure of market systems to permit increased financial transfers from the industrialised world to the third world countries.
(c) Demands for changes in the structure of international decision making.
(d) Liberalisation of trade by industrialised nations through reduction or outright elimination of tariffs on imports from Third World.
(e) Raising and stabilising export earnings from primary products of the developing countries through commodity agreements such as the indexation of export prices to tie them to rising price of developed countries manufactured exports.
(f) Formulation of policies to control the activities of the multinational corporations in the third world countries.
(g) The linkage of development aid to the creation of special drawing rights by the international monetary fund.
(h) Payment of compensation to the under-developed countries by the advanced countries.
The New International Economic Order really represents an attempt by less developed countries to use international commerce to get a larger share of the world’s income and wealth. This is why it is not surprising that the reactions of developed countries to the demand for a New International Economic order has not been a welcome one. The Group of 7 (Less developed countries) hails New International Economic Order as a major new order that will greatly increase global welfare, while many of the developed countries have reacted with suspicion and confusion over what the New International Economic Order means.
Therefore, the only feasible outcome of the emerging new international economic interdependence is one in which everyone neither wins nor loses. This is because no nation can develop in complete isolation. The development of all nations is intimately bound. The less developed countries can offer their raw materials while the developed countries can make available their technological know-how in order to establish and
sustain a viable global economic environment.
For sanity to prevail, all nations, whether rich or poor, must see each other as sharing a common economic destiny. There must be mutual respect and peace if nations are to survive in the future.