What was the Thrust of the NIEO and What was its Success Rate?– Answered

The Non-Aligned Movement came up as a response to the intense Cold War rivalry that forced states to take sides with one or the other superpower.

Developing countries realised quite early that taking side with one or the other superpower was not necessarily the best strategy for development, economic and political.

Third World states concluded that this route of involvement in the Cold War was too detrimental to their interests. In the initial years of NAM, no Latin American states were involved.

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The early conferences (Bandung, 1955; Belgrade, 1961) laid the basis for this movement. After 1961, the Latin America states began to be admitted, and eventually 16 of them would join as full members, with a few others as observers.

But the chances of any influential role that could have been played by the Latin American region as a whole were dashed, in large part, due to the disagreement in NAM over the role that the communist bloc would play.

With Cuba assuming presidency of the movement in 1979, it was unclear as to how NAM could claim to be neutral to the superpower rivalry. The presence of a staunch Soviet ally at the helm of affairs did nothing to enhance the credibility of the organisation.

Just as NAM had been formed as a response to the superpower struggle, the NIEO came up as a response to the need to reform the global trade and development agenda in line with the needs of the Third World countries. Latin American involvement in the NIEO was ^ore than in NAM.

Though the G-77 countries officially formed NIEO in 1974 at the! United Nations, its antecedents lie in the first United Nations! Conference on Trade and Development in 1961, under the leadership of Raul Prebisch of Argentina.

The NIEO gave rise to the North-South concept; the idea being that most of the rich countries were in the northern hemisphere, while the poor countries were in the south.

The G-77, which was influential in advocating the NIEO, was¹ successful in creating UN bodies like the Special United Nations Fund for Economic Development (SUNFED), the UN Capital Development Fund (UNCDF) and the International Development Association (IDA).

The group also organised a series of special UN conferences on issues it regarded as crucial to the development of the south such as the environment, women, technology transfer, rural development, population, disarmament, and food.

Latin American nations were prominent in this as a bloc. The state-centered NIEO was now quite irrelevant, though its basic ideals and objectives do remain the same to this day. For many of the countries of the Third World, including Latin America, one crucial element for economic growth is an access to the markets of the developed countries.

So far, it just seems that markets in North America and the EU have become a little more protectionist. This has been one of the biggest issues on the table during the Uruguay Round of trade talks and the ongoing Doha Round.

Latin America and much of the developing world rely on agricultural and other primary products as their main; source of foreign exchange. Till the time this problem is not addressed, suspicion about the motives of developing countries will continue.

A more direct method adopted by the Third World, including Latin America, was that of commodity agreements. A lot of these countries that produce primary products decided to form cartels in order to control the market for their exports, to get the optimum returns.

The Organisation of Petroleum Exporting Countries (OPEC) has been one of the most successful of these groupings. The 1970s was their heyday, when they were able to control prices of oil, by fluctuating production. Venezuela and Ecuador have been participants in the OPEC, though Ecuador dropped out in 1990.

In the 1970s, the rise in oil prices sent huge amounts of ‘petro­dollars’ to the OPEC countries. But disagreement between OPEC members and the oil-glut that came about in the 1980s reduced the effectiveness of the organisation.

Venezuela remains a member of OPEC, and in recent years, the Chavez regime there has caused considerable instability in the oil market stemming from the domestic political upheavals there. An earlier commodity agreement was the International Coffee Agreement that came into being in 1961.

The participants in this were mainly Latin American and African countries. They were able to control coffee prices to a certain extent, helped by cooperation from consumer states.

Even though the agreement expired in 1974, the need to regulate coffee production and prices remained and the producers in Latin America did try to do so. They were aided in part, in the early 1970s, by oil profits donated by Venezuela. There were other such cartels also which saw the participation by the Latin American states.

These included the Intergovernmental Council of Copper Exporting Countries (CIPIC), the Organisation of Iron Ore Exporting Countries (IOEC), and the International Organisation of Banana Exporters (IOBE). Maintaining successful cartels is very difficult, which is why most of the failed.

It is difficult for the producers to withhold sufficient quantities of the produce, while expecting consumer demand and choice remains the same. Internal bickering has also been a problem always. For Latin American countries these cartels were never a major tool for economic growth, and did not involve any fundamental policy changes.