FCO, UN Department Paper, ‘The New International Economic Order’, January 1975

“The aspect of the New International Order [sic] which has attracted most attention is the altered distribution of economic power, as exemplified with particular prominence by…OPEC… The so-called ‘new international economic order’ is, in fact, a set of demands by developing countries for control of their own natural resources, transfer of resources to them by the developed countries, and a greater say in the world’s affairs… Although the developing countries did benefit to some extent from increased world prosperity [postwar] the growth of economic interdependence and of the intercommunication of news and ideas made these countries more and more conscious of the gap between themselves and the richer nations – a gap which often widened in spite of the aid that was meant to diminish it. The established economic order did not seem to be working to the advantage of developing countries and they became increasingly disinclined to regard themselves as bound by rules devised by the rich in their own interests… The growing discontent of the developing countries found expression first of all in a drive for greater control over their own economies… Most developing countries made very considerable progress in the assertion of national control and in the eradication from positions of domestic dominance of foreign trading extractive [sic] or manufacturing concerns. Early examples were Iran’s nationalisation of her oil industry and Egypt’s takeover of the Suez Canal Company. There was a trend in favour of the concept of national sovereignty and state control in the economic sphere and against that of the international validity of private property rights… It was the power demonstrated by the oil producers… which first suggested to developing countries as a whole that the economic dominance, so long resented, of the industrialised countries might not be inevitable or eternal”.

Developing countries are now united in a group of 77 at the UN in support for NIEO. Their demands are most comprehensively formulated in documents adopted by the UN special assembly in spring 1974. Measures include more aid for developing countries, a transfer of technology to them on a preferential basis, and improved terms of trade including prices. “Overall, they are based on the thesis that, in an increasingly interdependent world, it is essential for the developing countries to be brought more fully into the world market place, through a greater flow to them of real resources, and through their more effective participation in the decision-making process of international economic bodies”.

The paper argues for strategy of engagement with some developing countries, not opposition to this agenda. It argues to recognise that oil producers have a strong claim to a greater stake in “world economic management”, that “we should try to pick out some of the more sensible and powerful countries and discuss relevant matters with them more fully than we have done in the past” such as Mexico and Brazil. Also, the UK should offer “concessions” in some areas though some demands are “totally contrary to our interests”. Overall the UK should seek to attain “consensus on a generally acceptable reform of the international system”.

National Archives: FCO49/573

Permanent Under Secretary’s Planning Committee, Minutes of the 65th meeting, 19 December 1974

Discussion of the paper on the NIEO [above]. Discussion on the basic policy recommended in the paper to work for dialogue rather than confrontation, which was seen as “undoubtedly right”. “It was argued that at present the developing countries had got the bit between their teeth, and were not in a mood for dialogue. It might be better to wait for splits to develop in the group of 77 and to analyse what policy options we would then have… in other [ie, some] areas, it was hard to see how our interests would be served by a more forthcoming attitude to the developing countries”.

National Archives: FCO 49/502