Non-Aligned Mations Moderate Calls for New Economic Order

A new series of economic proposals made at this year's seventh conference of non-aligned countries - held March 7-11 in New Delhi, India - could serve as the basis for negotiations to solve the monetary and debt payment crises which threaten hopes for global economic recovery. The proposals, in their moderate and pragmatic appeal, represent a marked shift by the non-aligned countries away from confrontation with industrial nations towards a policy of negotiated cooperation.

"We ask not for charity or for philanthropy, but sound economic sense," Indian Prime Minister Indira Gandhi said in an address to the conference. "We want an equal voice in the operation of international institutions."

The economic proposals, as outlined by the conference's Economic Committee, were drawn up to help Third World countries develop the "means of self-reliance." To work towards this goal, the committee:

• called for an international conference of developed and developing nations which would "suggest comprehensive reforms of the international monetary and financial system," according to Mrs. Gandhi;
• proposed the creation of a Bank for Developing Countries to replace or augment the World Bank and the International Monetary Fund (IMF); and
• called for discussion on a major restructuring of Third World debt at this month's meeting of the development committees of the IMF and the World Bank.

The non-aligned conference also issued a special declaration on collective self-reliance within the Third World and a detailed "Action Program for Economic Cooperation," by which the non-aligned pledged greater mutual assistance to develop raw materials, trade, transport, industry and financial infrastructures.

The tone of the New Delhi conference was a far cry from last year's meeting in Havana, which was marked by sharp criticism of the United States. The buzz words of this year's meeting were "mutually beneficial North-South cooperation," "relations on a friendly basis," and "immediate measures." Although the conference took strong stands on eliminating apartheid, restoring Palestinian rights and finding a solution to the problems of Central America, the overall emphasis was on finding relief from the drastically high debt in the Third World (now standing at over $600 billion), and obtaining development financing. There was little open criticism of the U.S.

This moderate tone was exemplified in the conference's discussions on Third World debt. While criticizing the draconian solutions favored by conservative economists like Milton Friedman - which would result in massive cuts in domestic social programs - the conference rejected proposals advanced by Cuba, Nicaragua and Grenada for a debtors' strike to frighten Western banks.

The new proposals reflect the nonaligned countries' deep dissatisfaction with the present global financial system, first developed at Bretton Woods in 1944 and implemented through such institutions as the World Bank, the IMF and the General Agreement on Tariffs and Trade (GATT). In a series of talks last year, L.K. Jha, chairman of the Economic Committee, presented the Third World argument. Under GATT, he said, developing countries have been unable to protect and nurture their industrial base. While free trade has been beneficial to industrial states, he said, developing nations have been forced to import cheap manufactured goods, leading to trade deficits. Jha criticized the IMF, which he said forces "countries facing balance of payments difficulties to devalue their currencies and pursue deflationary policies." The World Bank, Jha claimed, has shown "little understanding" of Third World problems, and has been locked into an economic philosophy "oriented towards helping the private sector only," leaving the public sector, which develops the necessary economic infrastructure, unaided.

The new proposals from the nonaligned conference also marked a break with past calls for a New International Economic Order. In the mid-1970's, the non-aligned movement was at the forefront of Third World calls for the New International Economic Order, which was to be brought about through negotiations and a series of international agreements on debt restructuring, finance, commodity prices, trade tariff's and monetary exchange rates. In 1974 the United Nations passed a resolution endorsing the movement and urging "global negotiations" for multilateral economic cooperation.

But as the economic declaration of the New Delhi conference noted, numerous conferences held since those resolutions were passed "had not yielded significant results." In particular, industrialized nations have been unwilling to permit a transfer of economic controls, commodity price controls, technology, or easing of trade restrictions to the extent Third World nations would like.

Because of its more pragmatic tone, this year's conference's calls have drawn strong support from powerful elements in the international banking community. In particular, there was wide-spread interest in the calls for debt restructuring and new financial assistance programs.

The movement's calls for an international conference on debt may be seconded from an unlikely source: U.S. Treasury Secretary Donald T. Regan. Late last year, in the wake of rescue efforts saving Brazil and Mexico from default, Regan rocked the banking community by calling for a top-level conference to restructure the international financial system.

But Third World moderation has limits. If industrialized nations show themselves unwilling to make concessions (for example, by restructuring debts and approving more funds for international development), the non-aligned may seek more radical economic solutions. As one shrewd political observer at the nonaligned conference bluntly put it, "There is a narrow-eyed national self-interest here at least as dominant as among powerful states." For now, the non-aligned are trying honey. But they are reserving the option of economic vinegar, in the form of debt strikes, defaults and commodity dislocations, if their call for negotiations is ignored.

Josh Martin is a freelance journalist based in New York.