In the 1970s, Third World Leaders Wanted a New Economic Order
Fifty years ago today, Mexican president Luis Echeverría outlined a vision to remake the relationship between rich and poor countries. It became part of a broader struggle for a more equal international order.
Fifty years ago today, Mexican president Luis Echeverría addressed the audience of the third session of the United Nations Conference on Trade and Development (UNCTAD) in Santiago, Chile. There, he outlined his vision for a new economic relationship between rich and poor nations:
A just order and a stable world are not possible unless obligations and rights are created to protect weak states. Let us detach economic cooperation from the field of goodwill to crystallize it in the field of law. Let us transfer the consecrated principles of solidarity among men to the sphere of relations between countries.
Within a month, the conference had adopted Echeverría’s proposal to draft a Charter of Economic Rights and Duties of States, and on December 12, 1974, after two years of planning and deliberation, the UN General Assembly adopted the charter by a vote of 115 to 6. The United States and its allies opposed.
Echeverría’s speech, and the Charter that resulted, were part of a broader international movement to restructure relations between developed and developing countries. From this movement would spring not only the Charter, but also its better-known cousin, the set of proposals known as the New International Economic Order (NIEO).
Fifty years later, the dream embodied by both has been deferred, and the power of the movement they represented has been decimated. The world of 2022 is built on the ruins of their defeat. But the Charter and NIEO have not been forgotten. They stand today as monuments to the aspirations of the Third World, and inspiration to all who continue the struggle for a more equal international order.
The Moment and the Movement
When Echeverría outlined the failings of the international order and the urgent need for change, he did so to an audience that would have been familiar with both. After centuries of struggle, the decades that followed World War II saw a wave of victories for decolonization movements, and political independence was won for dozens of countries across Asia, Africa, and Latin America. At the time of Echeverría’s remarks, however, this emancipatory wave was subsiding, and the hopes of a new era of Third World prosperity were floundering.
By the 1970s, it had become apparent that formal political independence did not mean substantive economic independence. These hopeful new states had not been admitted to a family of equal nations, but yoked into a sharply hierarchical world order. Here, the rules of the game were designed to subordinate the interests of the weaker nations to those of the wealthy. In this world order, the pursuit of economic development — that most urgent priority — was not merely ignored, but actively undermined, in order to maintain the South’s role as provider of exploitable labor and resources.
Thus, as historian Adom Getachew describes in Worldmaking After Empire, many Global South leaders centered their political visions on the principle of sovereignty — not the nominal sovereignty of a legally independent nation, but substantive sovereignty, for a people to shape their own political and economic destinies free from predation.
Realizing this vision of sovereignty, they understood, was not merely a question of national policy, nor could it be achieved through retreat into autarky. Rather, it would require a global political project for an alternative international order in which all nations, not merely the wealthy, could thrive.
Third World leaders, despite their many differences, therefore turned to collective power. Through groupings like the Non-Aligned Movement and the G77, they sought to build a movement of solidarity strong enough to assert their interests on the world stage.
Luis Echeverría was on the moderate end of this spectrum of Third World leaders; in fact, he violently repressed radical movements at home. Nonetheless, he was committed to the developmentalist project, which, as argued by Christy Thornton in her recent book, forms part of a long tradition of Mexican activism in the international sphere. It was in this context that Echeverría stood in Salvador Allende’s Chile and proposed the Charter of Economic Rights and Duties of States.
The Charter and the Order
As is evident in the name, the Charter sets out a twofold vision of both rights (of developing nations to implement the policies necessary to pursue the path of development) and duties (primarily of developed nations, to enable and not interfere with this pursuit) all under the principle of sovereignty: “Every State has the sovereign and inalienable right to choose its economic system as well as it political, social and cultural systems in accordance with the will of its people, without outside interference, coercion, or threat in any form whatsoever.”
These include: The right to regulate transnational corporations; a nation’s right to its own natural resources; the right to nationalize foreign property; the right to form groups of commodity producers; the right to regulate foreign investment; and the right to pursue industrial policy; among others.
It also includes the duty of wealthy nations to provide developing nations preferential treatment in trade and other forms of economic cooperation; the duty to increase financing and net flows of real resources to developing nations; the duty to share knowledge and technology; and more.
Soon after the Charter’s proposal, plans for a “New International Economic Order” were put forward at a summit of the Non-Aligned Movement. This would ultimately take the form of a Declaration and Programme of Action, adopted by the UN General Assembly in a special session called for that purpose in September 1974. The NIEO was influenced by the Charter’s conception and development, enshrining many of the same principles, and even praising the as-yet-unfinished document by name.
The NIEO, however, went further, elaborating on issues not included or fully developed in the Charter. These included issues like food sovereignty, reform of the international monetary system, the creation of liquidity through Special Drawing Rights, the democratization of institutions like the International Monetary Fund (IMF), the creation of an international code of conduct for transnational corporations, and the easing of sovereign debt burdens.
Where the Charter largely frames its demands in terms of mutual global benefits — the product, Thornton points out, of Echeverría’s hesitance to anger his Northern neighbor — the NIEO is more forceful in denouncing those responsible for colonialism and neocolonialism, and turns its principles into a more substantive plan of action than that of the Charter, laying the foundation for the South-South cooperation needed to realize its agenda.
Whatever their differences, the entwined political projects of the Charter and the NIEO together sought to reshape the relationship between the Global North and South — to enshrine the sovereign right to pursue development, and to equalize a vastly unequal global economic system.
That the UN General Assembly was the vehicle for the enactment of both was no coincidence. In contrast to the powerful UN Security Council, in which five powerful countries hold veto power, every member state in the General Assembly has an equal vote. The General Assembly was not merely the body where the Charter and NIEO were most likely to pass, but the closest approximation to the egalitarian democratic order they sought to construct.
These documents, adopted by the vast majority of world nations, to the consternation of the wealthy, and in more-or-less naked opposition to the order they represented, were not the first visions of a reordering of global relations. Nor were they intended to be the final word. Rather, the Charter and the NIEO were to serve as guides, or blueprints, in service of the struggle ahead.
That struggle soon met serious obstacles. Assassinations, coups (like that against Allende in 1973), wars, and even genocides (many led or supported by the United States) destroyed many of the political leaders and movements that had fought for the rights of the Third World. Recurrent debt crises — the product of the collision between economic aspirations and the limits of the existing system — stalled developmentalist projects and paved the way for “structural adjustment.” The collapse of the Soviet Union left behind a unipolar world with little to counterbalance the United States’ preferred order; the movements working for a fairer international system were crushed.
The world system was indeed reordered after the early 1970s, but not as envisaged by the Charter and the NIEO. Instead, with the onset of neoliberalism and the “Washington Consensus,” the Global North’s dominance only deepened. As IMF programs, trade agreements, and the power of unfettered global finance capital took over, the rights stipulated in the Charter were systematically eroded. Any notion of sovereignty was subordinated to the market.
The so-called East Asian “Tigers” and China were among the few that managed to maintain or rebuild some form of state developmentalism, but for the most part, the Global South suffered through entire “lost decades” of development. In the end, the rift between rich and poor has only widened, producing a backlash to neoliberalism in the form of antidemocratic, right-wing nationalist movements in the North and South alike.
COVID-19, and its economic fallout, have made the divisions of this new order even starker. Where Northern countries have been able to use their monetary strength to soften the fall and pull their economies toward recovery, however uneven, Southern nations have lacked the means to do the same (and in many cases, were prevented from doing so by US sanctions).
For those countries, further indebtedness has been the only option, creating the conditions for a looming global debt crisis — a powder keg that the North, now far enough past the economic slump to be raising interest rates, may soon set off; another lost decade is in the making. It bears remembering that this economic fallout is the result of a health crisis that could have been significantly mitigated had the North followed the Charter’s prescribed duty to share technology and knowledge.
The climate crisis — caused primarily by countries in the Global North — is both paragon and culmination of this system. The utter failure of Global North governments to meet the exigencies of climate change contrasts sharply with Echeverría’s half-century-old words on the subject:
The progressive deterioration of the environment affects humanity as a whole. There is, on the other hand, a close link between environmental problems and industrial progress. However, the serious issues generated by pollution should not be translated into measures that curb the aspirations for economic progress of peripheral countries. Likewise, it is a fundamental duty of the most industrialized nations to carry out research and finance the policies adopted to correct a situation for which they are primarily responsible.
As we seek solutions to the intertwined crises of today, the histories of the Charter and NIEO have much to offer us.
To study and learn from these past experiences is not to idealize them. Solutions to today’s problems cannot be taken from those devised in 1972 whole cloth. Even then, the Charter and NIEO were not faultless programs but aspirational compromises to protect against a predatory international order, and a new Charter or NIEO today would have to contend with a new set of problems, particularly the climate crisis.
Not all of the governments involved in this movement were paragons of social justice and democracy. Echeverría’s was, as Thornton puts it, “soft-authoritarian,” and waged a dirty war against domestic left-wing opposition. (It is a sign of just how far the project for international equality has fallen that what today sounds so bold was espoused by governments that were by no means radical.) But this does not negate the ideas for which they fought, or the broader movement of which they were a part.
For those across the Global South that have persevered despite that movement’s dismantling, the Charter and NIEO have remained sources of inspiration for a new global order. And in the North and South alike, these histories are gaining renewed attention. The UNCTAD proposals for global economic reform, the Democratic Socialists of America’s International Committee’s call for a “Green New International Economic Order,” the work of the Progressive International, and the Tricontinental- and ALBA-TCP-led “A Plan to Save the Planet,” among others, all draw, more or less explicitly, from this history.
In the present political context, it is hard to imagine a global movement with the power to pass a vision like the Charter or NIEO, much less one that could overcome the forces that decimated those efforts the last time around. But we have little choice but to try.
Half a century ago, Luis Echeverría addressed a crowd in Santiago, declaring solidarity “a condition for survival.”
The task to be fulfilled is the responsibility of the present generation, and postponement is not an option. We are on the threshold of a structural change in human society that can only be achieved if all nations participate equally for its benefit. . . . The task of our time is to convert all the ferments of non-conformity into an organized energy of progress in freedom.
His words are all the more imperative today.