New International Economic Order

By the early 1960s the South had started demanding a better deal. Rallying in such organizations as the Non-Aligned Movement and the Group of 77, they created the United Nations Conference on Trade and Development (UNCTAD) where they argued for fairer terms of trade and more liberal terms for financing development. The North responded with pious declarations of its good intentions - but also with a hard-nosed insistence that the proper forum for any economic changes continued to be the Bretton Woods institutions where they held the balance of power.

By the late 1960s, however, the Bretton Woods dream of a stable monetary system of fixed exchange rates with the US dollar as the only international currency was collapsing under the strain of US trade and budgetary deficits. A guarded optimism took hold in the South fuelled by moderately high growth rates and a boom in the price of Third World produced primary commodities, particularly oil. This came to a head in 1974 with the declaration of principles for a New International Economic Order. The response to these sweeping demands for change was a few tinkering, inconsequential reforms.