The New International Economic Order

The New International Economic Order (NIEO) was a set of reforms introduced in the 1970s by African, Asian, and Latin American nations seeking to dismantle the economic vestiges of imperialism. This was a diplomatic attempt to tackle the exploitive and unfair global financial regulations, structures, and trade relations that continued stunting postcolonial economies’ sustainable and independent development.

Championed by the Non-Aligned movement and initially passed through the ‘Declaration for the Establishment of a New International Economic Order’ adopted by the United Nations (UN) General Assembly on 1st May 1974, its promising radical vision for a fair and just postcolonial world was voted down by Western powers and has had its material implementation blocked on more than one occasion, most recently on 14th December 2022. This raises a question (among many) of worldwide concern: Why have Europe, North America, and their allies, who all see and describe themselves as the champions of civilisation, democracy, international law, equality, and human rights, stood so unashamedly against economic decolonisation and the global tide of progress? This article will explore the NIEO and analyse the drive behind the West’s awkward and nakedly hypocritical hindering of the NIEO before briefly evaluating the political consequences this has for an increasingly multipolar 21st-century world.

The 1974 NIEO declaration was the result of a collective reformist project and effort on behalf of most of the world’s nations. It calls for cooperation, solidarity, equality, sovereignty, and, critically, a material commitment to principles protected and enshrined by international law. The very need for such a declaration came from the observation that rather than stabilising and regulating the global economy, the ‘international rules-based order’ and the Bretton Woods system actually destabilised and disadvantaged developing postcolonial economies. The Western-built financial order structurally maintained US global hegemony at the expense of African, Asian, and Latin American lands, labour, and livelihoods. In other words, the post-Second World War planet that was politically and economically reshaped by Western powers, founding today’s global institutions such as the UN, the World Trade Organisation (WTO), and the International Monetary Fund (IMF), had dishonest and unjust colonial rules at its foundation – regulations that continue to benefit Western nations today. After all, such institutions were created while a majority of the world’s population remained smothered under the chains of formal colonialism. The British, French, Belgian, Spanish, and Portuguese empires were still alive, although on the decline and becoming effectively subordinate to the interests of the budding United States (US) empire.

Completing the decolonisation process and tackling the institutionalised uneven advantage for developed Western nations meant the world would need to revisit such rules and structures, radically reforming them to truly serve the principles of the Charter of the United Nations – that is, to promote the economic advancement and social progress of all peoples. It should be noted that the US was the first nation to sign and ratify the UN charter and, therefore, should be among the strongest defenders of the very principles that its political class took a prominent role in drafting. However, controversies such as President Nixon’s New Economic Policy, which saw a rash hiking of import tariffs and the suspension of the US dollar’s convertibility into gold to benefit the US economy at the expense of others, evidenced concerns that the ‘rules-based order’ failed to prevent “worrisome unilateralism” on behalf of the interests of American finance. Another evidenced concern was over resource control. Many postcolonial nations had achieved political independence (though Western-backed coup d’états in Iran, Ghana, Chile, and elsewhere would suggest even this political independence was purely nominal). However, they found their national resources and mineral wealth were still in the hands of Western nations, typically through corporate possessions whose origins could be directly traced to the colonial intervention. One such example would be the French-headquartered TotalEnergies, a $320 billion-dollar Fortune 500 corporation with interests in petroleum, natural gas, and oil refining. The company’s colonial-era predecessor had secured exploration rights in French-occupied Algeria and broadly throughout France’s other African colonies, exploiting imperial lands and labour whose generation and expropriation of raw materials would join the slave trade as an extremely profitable economic venture that facilitated French development at the brutal cost of African underdevelopment.

Royal Dutch Shell, Unilever, and James Finlay & Co. join a host of other western-headquartered (and therefore, Western-taxed!) corporate entities whose fortunes can also be directly traced to the granting of imperial ‘resource exploration’ charters and/or agro-colonialism such as plantations in occupied India where coerced, underpaid, and underage labour was not uncommon. Another significant point to be made on this specific matter is that colonial economies were directed towards the monocultural cultivation of raw materials, as dictated by such companies or demanded by the evolving needs of the Western European and North American metropoles. Many postcolonial economies, particularly on the African continent, failed to change this precarious focus and dependency on exporting one or a few commodities, leaving their national prosperity to the mercy of unstable and volatile global markets. This came alongside an inherited economically-suicidal reliance on importing western-manufactured commodities as basic and straightforward as matchsticks! A final vestige of the colonial intervention was the lack of (or if existent, very weak) labour legislation to guard against the proliferation of child workers and work conditions that we would designate today as ‘modern slavery’. Forced labour, including the coercion of children, was an extremely profitable norm under Western European colonial rule.

The fault and responsibility for this dire economic outlook lay equally at the feet of both postcolonial leadership – who were either violently removed from power if they challenged this status quo, or happily declined to make any changes so long as their own neocolonial and compradorial class interests remained secure – and the western corporate interests who were often the external sources of corruption and the instigators and benefactors of regime change, evidenced by the case of the United Fruit Company (UFC) and their role in the Central Intelligence Agency’s (CIA) illegal and violent overthrow of Guatemalan president Jacobo Árbenz. The democratically-elected President Árbenz had committed the unthinkable crime of introducing a national minimum wage, overseeing land reforms for the impoverished peasantry, and leading efforts to end the exploitive and ecologically-devastating labour practices of companies like the UFC, who in turn lobbied the US government for regime change. The failure of the ‘rules-based order’ to prevent and address this blatant disregard for the principles of the UN charter was noted by concerned governments around the world, especially those driven by a concern for developing their national economies and adhering to the UN principle of ‘promoting the economic advancement and social progress of all peoples’, which had to begin with their own.

Addressing such concerns and seeking to combat the vestiges, the legacies, the afterlives of such exploitive imperial endeavours, non-interference and sovereignty – critically over national resources – were among the main principles of the NIEO as debated and set out through the diplomacy and the collective efforts of nations we would today group as the ‘Global South’:

1. The sovereign equality of all States, with non-interference in their internal affairs, their effective participation in solving world problems and the right to adopt their own economic and social systems;

2. Full sovereignty of each State over its natural resources and other economic activities necessary for development, as well as regulation of transnational corporations;

3. Just and equitable relationship between the price of raw materials and other goods exported by developing countries, and the prices of raw materials and other goods exported by the developed countries;

4. Strengthening bilateral and multilateral international assistance to promote industrialisation in developing countries through, in particular, the provision of sufficient financial resources and opportunities to transfer appropriate techniques and technologies.

This was the battle braved and championed unsuccessfully in the 1970s and again in the 21st century by the underdeveloped postcolonial economies of Africa, Asia, and Latin America; this is what has been consistently rejected by the overdeveloped imperial economies of Western Europe, North America, and their allies in Australia and Israel. A few exceptions exist, such as Cameroon and Chad, two African nations I would describe as neocolonial satellite states that remain strictly adherent to French business interests, acting within the confines of Françafrique. Micronesia, Marshall Islands, and Palau also joined the underdeveloped economies that voted against the NIEO. Like their Francophone counterparts, these nations are firmly under the economic and political orbit and influence of the US; reflecting this, all three countries officially use the United States dollar as their currency.

The figure below shows the full outcome of the UN General Assembly vote:

A picture containing graphical user interface Description automatically generated


So, three months after the West’s most recent rejection of the NIEO, what does this mean for an increasingly multipolar world?

The hypocrisy of such a naked contradiction of the Western-led global financial order has resulted in a predictable and justified response from the rest – Russia, China, India, Brazil, Iran, and other industrial(ising) nations have in recent months agreed to drop the dollar and adopt alternative currencies like the Russian Rouble or the Chinese Renminbi, for “payments between Russia and countries of Asia, Africa, and Latin America”. This means the ability of the US to mobilise the dishonest advantages baked into the rules and structures of the global financial order it constructed now faces a direct challenge. As China increases its proportion of global trade and the West becomes increasingly displaced as the centre of global commerce, unipolar moves such as Nixon’s New Economic Policy would be rendered less effective, if not ineffective, in the future. This is perhaps the dawn of a truly multipolar world where the ‘rules-based order’ actually works for all nations – sovereign and equal nations according to the NIEO, though the Russian invasion of Ukraine calls into question whether this sovereignty will truly be respected – and not the exclusive advantage of Western powers. Western sanctions, currently levied against the national governments and/or prominent individuals of Cuba, North Korea, Zimbabwe, China, Russia, Belarus, Syria, Venezuela, Iran, and Myanmar, will also lose their potency as sanctioned governments and/or individuals can increasingly trade and operate without the US dollar and beyond the reach of the Bretton Woods system.

Guarding against sanctions was one implication of the NIEO that the world would’ve benefited from had its policies not been blocked in implementation by the West. Such recent events indicate that some NIEO reforms are set to take place with or without the West’s consent; an economically decolonised world is inevitable! A primary concern here, however, is that these changes were spurred on by and a consequence of the illegal Russian invasion of Ukraine – will it take more wars, more needless shedding of working-class blood and inter-imperialist rivalry, for multipolarity to gain traction and for Western powers to end their rejection of diplomatic efforts resisting Western supremacy and hegemonic control of the world economy and global institutions? Sadly, the US and its allies approach the question of global economic reform as a zero-sum game, thus seeing a fair and just evening of the playing field, as embodied by the NIEO, as nothing but their loss – even if it’s the world’s gain. This perhaps illustrates part of the drive behind their consistent resistance against such reforms.

Approaching this discussion from a Revolutionary Humanist and Marxist standpoint, we observe an important summarising consideration that provides a significant insight into the position of the West. The national bourgeois classes of Western European and North American nations have always used and abused humanist, democratic, egalitarian ideals according to their needs. For example, let’s examine two seminal documents for the Western European humanist and liberal traditions; the first is the French Declaration of the Rights of Man and of the Citizen, guided by the principle of “Liberté, égalité, fraternité” – the national motto of the French Republic and the war-cry of the French (bourgeois) revolution. The second is the UN Human Rights Charter, which established the foundation of human rights legislation for nations across the globe. The first document was celebrated as a breakthrough for mankind, while direct slavery was still practised towards African labourers. The second was signed and ratified by literal empires… violent, genocidal, continent-occupying, forced labour-exploiting cartels, drafting and affirming a charter on ‘Human Rights’. We can look at a third example to hammer in this point; “All men are created equal” – another essential pillar stone of the humanist tradition and a famous part of the US Declaration of Independence – was enshrined in the US constitution by the slave-owning Founding Fathers.

The lesson is clear. Any document, writing, speech, principle, or idea championed by national bourgeois actors cannot be trusted to put people before profit. Bourgeois interests are restricted to profit and profit alone, hypocritically and unashamedly using and abusing whatever ideology or tradition they can get their hands on to advance their material interests. As Walter Rodney declared in The Groundings With My Brothers, “It took Africans some time to realise that Europeans worshipped strange gods called money and profit”. The corrupt and shameless pursuit of money and profit drives and sustains the hypocrisy of the Western rejection of the NIEO. What Rodney correctly recognised in the European colonial powers, Marx saw in the bourgeoisie:

“[The Bourgeoisie] compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.”

The world, indeed, has been created after its image; national bourgeois powers dominate every continent on Earth. Therefore, while celebrating the game-changing recent multipolar victories won by the likes of Russia, we must guard against the fact that it, too, is a nation governed and oppressed by a bourgeois regime. The Russian national bourgeoisie has already shown that they are also willing to hypocritically use and abuse whatever they can get their hands on to justify the violent pursuit of their (nationalist) class and material interests – in this case, anticolonial discourses are being appropriated by Putin for the sake of what is undoubtedly an imperial war of expansion.

Ultimately, a unipolar or a multipolar world led by either (or both!) of the rival (imperialist) national bourgeois forces is not one where ordinary people are free from economic exploitation, free from national domination, and free from class oppression. With that said, a multipolar world is, regardless, a step in the right direction – especially in contrast to the unipolar neoliberal hangover following the fall of the Soviet Union. The West’s rejection of the NIEO remains as telling as it is unfortunate. Still, the steps taken towards multipolarity, despite the fact, indicate a world in which the concentration of political and economic power in Western Europe and North America is soon to be a thing of the past.

But for those of us who ground and avow our interests with the principle of freedom from exploitation, for all and without condition, we must align our politics, our perspectives, and our political concerns with the fighting, struggling, sweating, toiling, resisting, labouring, peasant and working masses of all nations. From such a standpoint, one can never go wrong.

Malick Doucouré is a researcher on Cedric Robinson’s Black Marxism. He is currently investigating the role of cocoa farmers in Gold Coast anticolonial nationalism, through a MPhil/PhD European & International Studies at King’s College, London.