Unit 4

Q1) What is New International Economic Order? (3-5)

Q2) What are its characteristics? (3)

Q3) Explain about the various means possible to be employed through

which NIEO can be achieved (10)

Q4) why is there a demand for New international Economic Order by the
developing countries of the world? (10)

Q5) discuss the concept of globalization. What are its positive impact on
world politics (5+10)

Q6) discuss the concept of globalization. What are its positive and
negative impacts on world politics (5+5+5)

Q7) ) define the term globalization. Discuss its features. Examine its
negative impact on state system (2+5+8)

Ans 1: In the early 1970s a coalition of Southern states presented to the

United Nations a programme for the reform of international economic
relations, a programme that became known as the New International
Economic Order (NIEO). NIEO is mainly an economic movement
happened after WWII with the aim of empowering developing countries
politically through economic growth. Ahmed Mahiou, a member of the
institute of international law, defined NIEO as the means through which
the new states that emerged as a result of decolonization from European
colonial rule get an opportunity to participate effectively in international
political, social, cultural and economic arena. Thus, NIEO mainly reflects
the political claims of the called Least Developed Countries (LDCs) in the
post-colonial era.

Ans 2:

Ans 3: The shortcomings of the existing economic order, prompted the

demand for the new international economic order. During April-May 1974,
the Sixth Special Session of the UN General Assembly called for the
establishment of a New International Economic Order and similar appeals
have been made since then on a number of occasions. So far ten sessions
of UNCTAD have been held where in this issue was fiercely discussed.
The Conference on International Economic Cooperation also known as
North-South Conference was held in Paris in May 1977. After that Third
World countries raised this demand for several times in the UNO and
outside it especially in NAM summits, CHOGM, Conferences of G-77, G-
15, Cancun Summit and regional organisations. But these efforts have not
yielded much and a lot needs to be done in order to establish a NIEO.

The ways and means in which NIEO can be established are discussed
below:

a) Food and Agricultural Productivity. Substantial increase in food

productivity in the Third World is required which will help to
cushion their terms of trade against adverse demand conditions
affecting commercial crops. An increase in agricultural productivity
especially in foodgrain production is essential if the international
economic order is to be restructured. Ensuring food security is
paramount to establishing a new international economic order and it
must be kept in mind that food, just like oil, can be used as a
weapon; a case in point being the US grain embargo against the
soviet union in response to the Soviet Union's invasion of
Afghanistan in 1979.
b) Trade: The gains from trade, or any other advantage, get
accumulated in the developed countries while they do not seem to
 get consolidated in the less developed countries. One way for the
developing countries to gain more benefit from trade is to increase
trade with their fellow developing nations. This may help LDCs
overcome limitations of domestic market size, offer possibilities for
realisation of economies of scale, lead to a decrease in transportation
costs and, in the long run, foster indigenous technological
development.
c) Regional Cooperation. It may be both a feasible and a desirable
strategy to opt for regional cooperation on related mutually agreed
upon items, selected cooperation between countries who agree on
the issues based on mutual advantage, and concentrate ‘on areas of
like mindedness rather than conflict. This could be a transition
strategy, creating the necessary precondition for more global
cooperation. Developing countries could also promote cooperation
among themselves through initiatives such as South-South trade
agreements, technology sharing, and development assistance. This
would help to build solidarity and mutual support among developing
countries.
d) Changes in International Economic Institutions like WB, IMF: The
existing rules governing international economic – and trade relations
as well as the international institutions, favour the interests and
needs of the developed countries. The World Bank, the IMF, the
conventions governing “intellectual property” (patents, copyright
etc.) and other economic institutions stand dominated by the
developed countries. thus, a reform in these institutions is required in
order to establish NIEO which may include measures like increasing
the voting power and representation of developing countries within
institutions like the IMF and the World Bank, as well as establishing
new institutions focused on issues such as commodity pricing and
technology transfer.
e) Regulation of TNCs: Several multinational corporations have been
playing a big role in international economy, trade, technology and
industrial production. They have been controlling most of the
international patents in respect of advanced technology. These have
been acting as the instruments of the developed countries for
maintaining their control over international economy and trade as
well as for directing and controlling the economies and policies of
the developing countries. The role of MNCs in international
economy has been damaging as it has been a source of maintaining
and increasing the gap between developed and developing countries.
 These have always acted as instruments of neo-colonialism of the
rich over the poor countries. The developing countries want an end
to the menace of MNCs.
f) Technology transfer The role of transfer of technology from
developed to the developing countries is identified to be of crucial
importance in view of the wide disparity between the technological
levels in the two groups. The disparity in the level of technology is
conceived to be one that was leading to an accentuation of income
disparities between the nations. The widening technology gap was
not only due to the much higher expenditure on their R & D effort
by the North compared to the South, but also due to the former’s
capacity to realise the fruits of respective innovations by inducing
changes in the global pattern of production and trade. For the
developed countries, technology has in fact become an instrument of
domination. It is stressed that acquisition of technological capability
and technological autonomy by the developing countries are
prerequisites for reducing the technology gap. Developing countries
cannot solely depend on technology transfer from developed
countries for increasing productivity. The need for and the
possibility of autonomous technology development in developing
countries is emphasised. Many of these countries have the required
capabilities and, in the absence of an adequate domestic effort, their
capabilities are under-utilised or leached away in the form of a ‘brain
drain” to the developed countries. In the long run, autonomous
technology development is necessary for changing the present
patterns of dependence. It is realised that this technology
development cannot be restricted to the low-level labour intensive
“appropriate technology” but would have to extend to many areas of
high technology which are also required for the efficient
development of national resources.°
Ans 4: VK
Ans 5: Globalization is the system of interaction among the
countries of the world in order to develop the global economy.
Globalization refers to the integration of economies and societies
all over the world. In other words, we may call globalization a
process by which the population of the world is increasingly
bonded into a single society. In the social front, globalization
signifies closer interaction of people and homogenization of culture
and values and the world being transformed into a global village
 Politically, it refers to the complex networks of global governance
and shared political values resulting in the development of a
tendency towards homogenization oof global political culture
Economically, it is manifested in the form of liberalization
tendencies, privatization, and deregulation, which promote a free
market regime.
The term Globalization which was first used by German
American Economist Theodore Levitt, in a 1983 article titled “The
Globalization of Markets.” Is marked with controversy because the
meaning of the term is different for different people and can mean
different things depending upon the context. In the words of
Rubens Ricupera, Secretary-General of the UNCTAD,
“Globalisation is the integration of the world economy as the result
of three main forces: (i) increase in trade in goods and services (ii)
the increase in the investment of transnational companies and the
consequent change in nature of production. Production becoming
no longer national but as a process that takes place in different
countries; and (iii) international financial and exchange rate
transactions.” According to the International Monetary Fund,
“Globalisation is characterised by increases in flow of trade, capital
and information, as well as mobility of individuals, across
borders.”

While some view globalisation as a process that is beneficial to

world economic development and is inevitable and irreversible,
others believe that it increases inequality within and between
nations, threatens employment and living standards increases
dependency, expands neo-colonialism and thwarts social progress.
Globalisation has proved to be very beneficial to all countries
and especially to developing countries. Its merits are as under:
a) Flow of foreign capital: Capital: Globalisation encourages, flow
of foreign capital in the form of direct foreign investment,
commercial borrowings, collaborations etc. Transference of
capital from developed to underdeveloped countries will be
mutually beneficial. The developed countries have surplus
capital. Globalisation helps in flow of surplus capital of
developed countries to underdeveloped countries. As a result of
 this transference of resources, developed countries earn profit
and in case of underdeveloped countries, investment in
productive activities increase. For example, Japan is set to invest
almost Rs. 13,000 crore for 9 projects in various sectors in India.
Some of the investments and collaborations include Guwahati
sewage project in Assam, North East Road network connectivity
improvement project which is spread over Assam and
Meghalaya, North East network connectivity improvement
project in Meghalaya, Biodiversity conservation and forest
management project in Sikkim, sustainable management project
in Tripura, etc. It is also important to note that Japan has
invested in several other projects, including the development of
primary schools in Manipur.
b) Beneficial to consumers: Globalization has brought about cost-
effective economies and increased competition. Globalisation
promotes competition. Under the pressure of competition human
beings will strive to give best of their effort. There is NO
denying the fact that competition brought the world economic
order many benefits in terms of a very efficient economy at a
very low cost. Global competition puts an emphasis on
consumer concern, delivering the consumer the very best quality
and variety of goods. This helps to bring down prices because
consumers have a choice and can drive inefficient operators out
of business. Xiaomi, a Chinese mobile manufacturer, has been
able to offer quality smartphones at cheap prices by setting up
manufacturing units in India, capturing nearly 20 percent of the
Indian mobile market share.
c) Access to Education and Information: Globalization has enabled
students to access education, knowledge and information
resources on a global scale through the internet, online courses
and digital libraries. In today's world, a student from Meghalaya
can easily attend an online lecture on computer science being
delivered by a Harvard professor.
d) Socio Economic Transformation: Globalisation is not only an
economic phenomenon. It is also a cultural and social
phenomenon. It is found that due to globalisation, personnel in
management and other superior positions will come to
 underdeveloped countries with their own life styles which will
have good influence on these societies. If those attracted by
Euro-American life styles also adopt some good features of
these societies-such as dignity of labour, responsibility for
neighbourhood or community welfare, respect for law and order
and respect for knowledge and character, there would be
positive advantages in terms of social change.
e) Technology and Marketing: Modern technology and managerial
services are made available to enterprises established in
different parts of the globe by the multinational corporations. As
a result the productivity of these enterprises increases and
resources are optimally utilised. It is due to globalisation that
technology has been transferred from developed countries to
developing countries. The multinational corporations which
flourished in this era of globalisation make available marketing
services, especially export related marketing research,
advertisement, spread of marketing informations, storage
facilities, transport, packing designs-etc.
f) Developed world trade: Globalisation has extended world trade.
The establishment of World Trade Organisation in 1995 aimed
to discourage bilateralism and encourage multilateralism.
Globalisation is reflected in the rising share of international
trade in world output. The volume of world merchandise trade is
estimated to have increased at an annual rate of more than 6
percent, compared with an output growth of less than 4 percent.
This means that each 10 percent increase in world output has on
average been associated with a 16 percent increase in world
trade. On account of globalisation, world trade and investment
barriers fell rapidly. There was dramatic decline in
transportation and communication costs.
The negative impacts of globalization will be discussed below:
a) Neocolonialism: Neocolonialism is the continued exploitation of
former colonies by external powers even after they have
achieved independence. This exploitation is often economic and
political in nature, with outside forces directing the policies of
the supposedly independent state. Nigeria's vast oil reserves
have been subject to this exploitation, with foreign companies
 accused of benefiting at the expense of local communities, the
environment, and social stability. Meanwhile the profits of the
oil extraction are largely being enjoyed only by the Nigerian
elite and foreign share holders
b) Cut Throat Foreign competition: The critics are of the view that
globalisation will lead the foreign countries to cut throat competition.
It will weaken political, social and economic independence.
Multinationals might be in a position to manipulate things to their
advantage, which will prove detrimental to the interests of the poor nations. By
making use of improved technology in their production system these
corporations fix lower price of their products and thus compete out
local producers. Once the indigenous industry is completely destroyed
by this competition, multinational corporations have full control over
the market.
c) Globalization of terrorism: Globalization has enabled terrorist
groups to establish transnational networks, making it easier for
them to recruit members, raise funds, and coordinate attacks
across borders. The internet and social media, in particular, have
provided platforms for disseminating propaganda, recruiting
followers, and coordinating activities globally. Moreover,
Globalization has made travel and communication more
accessible and affordable, allowing terrorists to move across
borders more freely and maintain connections with supporters
and collaborators around the world. This has facilitated the
planning and execution of attacks in different countries. for
example: ISIS leveraged globalization to spread its extremist
ideology, recruit foreign fighters, and coordinate terrorist
activities across borders. The group utilized social media
platforms and online propaganda to radicalize individuals
worldwide, attracting recruits from various countries to join its
ranks in Iraq and Syria. The ease of travel and communication
enabled foreign fighters to travel to conflict zones, receive
training, and participate in terrorist operations, contributing to
the globalization of the ISIS threat.
d) Adverse Effect on Balance of Payments: Globalisation has adversely
affected balance of payments position of most of the underdeveloped
countries. Their imports usually consist of capital goods and
intermediate products. After independence several of underdeveloped
countries tried to adopt import substitution as a vehicle for their
 development. Rather than effectively replacing the imports, their
demand for capital goods rose sharply, which required increased
amount of foreign exchange. Moreover, Globalization has intensified
competition in international markets, making it challenging for
developing countries to export their goods and services competitively.
Developed countries often have technological advantages, economies
of scale, and established brands, putting developing nations at a
disadvantage in global markets. Additionally, fluctuating exchange
rates and trade barriers further hinder the export competitiveness of
developing nations. Thus, globalization has had an adverse affect on
the balance of payments of the developing nations.
e) Erosion of cultural identity: Globalization has been viewed as a threat
to cultural identity because it can homogenize diverse cultural
expressions into a single global culture, especially when Western
forms are dominant. This can lead to the erosion of local cultures and
traditions, as people may start to adopt Western lifestyles, values, and
beliefs, thereby losing their cultural identities. For instance, with the
onset of globalization, English becomes increasingly important for
education, employment, and communication in a globalized world,
thus, younger generations may prioritize learning English over their
native languages, leading to language shift and loss of linguistic
diversity.
f) Economic Dependence: Globalization has created economic
interdependence among countries, making them vulnerable to global
economic crises. Financial instability in one country can quickly
spread to others, leading to economic recessions and hardships for
millions of people.
g) Health risks: Globalization has significantly contributed to the rapid
spread of diseases like COVID-19 by facilitating increased
international travel and mobility, urbanization leading to densely
populated areas, global trade and supply chains allowing for the
transmission of pathogens through goods and surfaces, enhanced
communication networks disseminating information rapidly but also
misinformation, and the globalization of food systems increasing the
risk of foodborne and zoonotic infections. These interconnected
systems create ideal conditions for the rapid transmission of infectious
diseases across borders and continents