New Economic Order and International Development Law

152 Pages·1980·7.152 MB·English

by  Oswaldo De Rivero

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NEW ECONOMIC
ORDER AND INTERNATIONAL
DEVELOPMENT LAW
by
OSWALDOde RIVERO B.
CENTRO DE ESTUDIOS
ECONOMICOS Y SOCIALES
PERGAMON PRESS DELTERCER MUNDO
OXFORD • NEW YORK • TORONTO Corl. Porfirio Diaz No. 50
San Jeronimo Lidice,
SYDNEY • PARIS • FRANKFURT Mexico 20, D.F.
U.K. Pergamon Press Ltd., Headington Hill Hall,
Oxford OX3 0BW, England
U.S.A. Pergamon Press Inc., Maxwell House, Fairview Park,
Elmsford, New York 10523, U.S.A.
CANADA Pergamon of Canada, Suite 104,150 Consumers Road,
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AUSTRALIA Pergamon Press (Aust.) Pty. Ltd., P.O. Box 544,
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75240 Paris, Cedex 05, France
FEDERAL REPUBLIC Pergamon Press GmbH, 6242 Kronberg-Taunus,
OF GERMANY Pferdstrasse 1, Federal Republic of Germany
Copyright © 1980Oswaldo de Rivero B.
All Rights Reserved. No part of this publication may be
reproduced, stored in a retrieval system or transmitted
in any form or by any means: electronic, electrostatic,
magnetic tape, mechanical, photocopying, recording or
otherwise, without permission in writing from the
publishers.
First edition 1980
British Library Cataloguing in Publication Data
De Rivero, B. Oswaldo,
New economic order and international development law.
1. International economic relations
2. International law
I. Title II Centro de Estudios Econ6micos y Sociales
del Tercer Mundo, Mexico
341.7'5 HF1411 79-41222
ISBN 0-08-024706-7
Printed in Great Britain by
Biddies Ltd., Guildford, Surrey
Foreword
FOR the best part of this passing decade the international community has
been engaged in shaping its economic future, in constructing a more lasting
and equitable relationship between the peoples of the North and the South,
in restoring vitality and relevance to the international institutions which
serve it and, above all, in resuscitating the spirit of internationalism which
had characterized the post-war era. It was a time of transition from an era
largely preoccupied with the pursuit of prosperity through national sover-
eignty and power to an era characterized by concern for the quality of life
and for safeguarding human survival itself through international action.
These issues of transition will probably continue to dominate the conduct
of international economic relations through much of the remainder of this
century.
But, as with the post-war restructuring of the political order through
self-determination, general precepts deriving from the imperatives of econ-
omic change have outpaced the development of complementary rules of
law needed to give them strength and validity. Advocacy of change in the
existing economic order has therefore tended in the main to appeal more
to principles of social and economic justice, and even to hard-headed
mutual interest, rather than to the legal norms which should also underlie
the new order. Not that the law offers no assistance - there is certainly no
dearth of legal norms which could be called in aid; but, until now, there has
been a noticeable lack of any comprehensive and coherent attention to and
study of such norms. Oswaldo de Rivero's seminal work on New Economic
Order and International Development Law is a major and timely contri-
bution to filling this gap. As such, alone, it should be warmly welcomed;
but it is, above all, its admirable quality that will make it an indispensable
companion for so many of us on the journey towards the new order.
The book traces the legal doctrines of the old order fashioned for con-
trolling relations between the peripheral economies of the South and the
industrial centres of the North — doctrines which themselves helped to
vii
viii Foreword
entrap the developing countries in a state of perpetual dependency. These
dogmas, which more or less extrapolated into global economic relations
such principles as "the sovereign equality of states" and classical theories of
laissez-faire, largely ignored the economic inequalities between the North
and the South and instead sustained assumptions which were as false as
they were cruel. Not until OPEC action in 1973 induced the inauguration
of the North-South dialogue did there emerge within the affluent North
an awareness of the systemic causes of the backwardness of the South —
an acknowledgement (however reluctant) not only that the old order was
not right, but also that the interests of human society in general (including
the interest of the North) demanded that the wrongs it inflicted on the
human condition must be righted - and righted by structural changes of a
global character. The challenge to traditional dogma was unmistakable.
Negotiations within appropriate organs of the United Nations have given
rise to the development of new principles of economic policy contained in
a plethora of resolutions and recommendations which, though not legally
binding, have nevertheless grown into a body of law in the making. With
the passage of time and the consistency of their application by states, these
principles will come to invalidate and replace the traditional legal norms (of
international trade, for example) upon which rested the passing economic
order. Meanwhile, in spite of their present evolutionary character, they can-
not be disregarded by states without their overstepping the imperceptible
line between impropriety and illegality, between discretion and arbitrari-
ness, between the exercise of a legal right to disregard a recommendation
and the abuse of that right. Even in such a twilight zone the defaulting state
would soon find that it has exposed itself to consequences that follow with
all the legitimacy of a legal sanction.
In such principal areas currently under negotiation such as commodities,
credit and investment, manufactures and transfer of resources, Oswaldo de
Rivero's book catalogues some of the new rules which have developed. They
include rules relating to trade and investment and involving the adoption
of obligations in favour of developing countries; exceptions to the most-
favoured-nation clause and the establishment of a preferential system of
tariffs; acceptance of the principle of non-reciprocity; the establishment of
legal machinery for the settlement of trade disputes between countries with
different levels of development; the adoption of new forms of co-operation
between countries with different economic and social systems; the adoption
Foreword ix
of new legal rules and economic theories relating to foreign investment;
the affirmation of the right of nationalization; and the establishment of
organizations, such as producers' associations for strengthening the position
of primary producers, and an international fund for price stabilization in
relation to their products.
But despite these normative advances, contemporary economic experi-
ence shows that the South is still largely a supplier of primary commodities
and fuel to the industrial North and a purchaser of manufactured and capi-
tal goods from it. The case for accelerating global structural change is daily
becoming clearer, save only to those who will not see, as is the mutuality
of interest between the countries of the North and the South in ensuring
such progress. What is lagging now is the reality of change — change pro-
found and fundamental enough to produce a less unequal, a more stable
and more peaceful, world.
In making such change more probable a major responsibility rests upon
the developing countries themselves, and Oswaldo de Rivero renders a
service in calling attention to current deficiencies in Third World effort. He
addresses an urgent and important message to the countries of the South,
calling for a greater collective effort for strengthening their bargaining
power both by developing their national productive strengths and through
closer institutionalized co-ordination. This is an appeal that must not go un-
heeded by the countries of the South. Neither in the Non-aligned Movement
nor in the Group of 77 is there any permanent machinery for carrying out
the collective technical work of analysis of co-ordination or of planning
of which the Third World stands so desperately in need. There is no per-
manent machinery for exploring the collective policy options of the
developing countries nor is there any established cadre of professionals
engaged on developing a negotiating strategy for the South. Although a
modicum of work is being done at the informal level through agencies like
the Third World Forum and the Universities of the South, they can make
only minimal impact. The end result of all this is that the South is almost
wholly unorganized in terms of negotiations with the North and even in
terms of relations within the South. It is important that the South recog-
nizes the need to maximize its collective strength and optimize its gains by
the establishment of this necessary technical support machinery. It is an
imperative which the South can no longer afford to ignore.
No reader of Oswaldo de Rivero's work can fail to commend it for its
x Foreword
enlightened exposition of the complex problems associated with the search
by the international community for a new economic order and its treat-
ment of the various processes by which international economic relations
might be brought closer to the realities of interdependence. These qualities
together make this work both an important record of what has been done
to date and a contribution to ensuring that it has not all been done in vain.
As such, it deserves a wide audience in both the North and the South and
its author our encouragement to continue to explore, in the erudite and
enlightened character of this book, the still emerging pathways of the New
Economic Order and International Development Law.
15 May 1979 Shridath S. Ramphal
London
Prologue
AT a moment when perhaps the most far-reaching problem facing humanity
is that of organizing a new just and rational international economic order,
the publication of Oswaldo de Rivero's book New Economic Order and
International Development Law could not be more timely. It will take its
place among the most useful works for study and consideration by those
concerned about this highly topical question. Of course since it covers a
limited period of time, the book does not comment in detail on recent
events, such as those relating to the Integrated Programme for Commodities
and its cornerstone, the Common Fund, which are still under negotiation.
The author is a personal friend and colleague whom I have seen display
conviction and an increasingly reflective mind which have taken him not
only to positions of great responsibility in his own country but which lead
him to be considered in Latin America and beyond as one of the most
promising figures of a new generation concerned with understanding and
interpreting the critical situation which constitutes a decisive challenge for
all of us.
During my years with UNCTAD I found it very constructive to exchange
ideas with a group of young diplomats as well as with their superiors on
problems of vital importance for the future of humanity. De Rivero, at that
time a member of the Permanent Mission of Peru in Geneva, was among
them.
It was a difficult task because of the inertia and powerful opposing
currents faced by Raul Prebisch, the pioneer and instigator, and later by
myself when I took over the responsibility of continuing his endeavours. In
the last few years new possibilities have unfolded for UNCTAD, possibilities
which, with the leadership of Gamani Core a, we must all exploit towards
the achievement of our common cause.
Oswaldo de Rivero's book points out quite accurately that UNCTAD
did not originate from a void but from many years' determination within
the United Nations and elsewhere. The need for a change in international
xi
xii Prologue
economic relations began to be felt from the moment of its birth but
Oswaldo is not given to speculation and does not even take a guess at the
moment when our ambitions will be achieved. However, his approach is
optimistic. He feels that the consolidated action of the Third World and
those who share the conviction of fighting for a just cause combine with
the inexorable process of social dynamics to lead the way towards the
fundamental change awaited by these grave problems which we must con-
front together with growing efficacy.
Conscious of our common responsibility, it would be foolish, if not im-
possible, for those with the greatest resources not to understand that now is
the time when action must be taken with determination and perseverance.
These resources cannot be wasted in prolonging the life of an outdated
economic system but must be directed towards easing the transition to a
new international economic system. No attempt to return to the old bonds
of dependence even in a more subtle manner through the transnationaliz-
ation of the international economy can be accepted, and in practice it
would be condemned to failure. Transnational enterprises, when they are
subject to standards of conduct and supervision, can play a useful role. But
their innate incapacity to preside over international economic relations has
been clearly demonstrated because their actions can claim no legitimacy
and they are not inspired by the best interests of states which ultimately
affect those of the entire international community. Only by a combined
effort aimed at achieving the economic independence of the developing
countries can the interdependence between all the nations of the world
be established on a fair and durable foundation. The author has reflected
this in one passage of the book: "Underdevelopment is thus not a state of
backwardness that is unique in history; nor is it a 'Rostowian' stage which
may be passed over by applying the political, social and economic formulas
and cultural patterns followed during the nineteenth-century industrial
revolution. It is, rather, a new historical fact which national efforts are hard
put to overcome and which means that large amounts of creativity are
required for the establishment of new development models which make it
possible to deal with and, where possible, overcome dependence . . .". This
implies a constant effort to co-ordinate action taken at a national regional
and international level. On the other hand, it should not be forgotten that
the less need there is to depend on one country, or group of countries, the
more independence exists.
Prologue xiii
I am sure the reader's interest will be aroused by the references to such
basic documents as the Declaration and the Programme of Action on the
Establishment of a New International Economic Order, and the Charter of
the Economic Rights and Duties of States, as well as to the OPEC and other
producers' organizations. They provide food for thought.
This book traces the path followed by the Third World, with its successes
and errors but with an increasingly coherent line, directed towards those
who will allow our voice to be heard, eager to reach valid agreements in
the interests of all. It is quite unacceptable that the Third World countries
should not play their full role in the decision-making process. If it is ac-
cepted that the world cannot find a lasting solution to the problems that
besiege it without fair and equitative attention being paid to the legitimate
claims of the developing countries, there can be no doubt that the developing
countries themselves must contribute actively to seek and achieve these
solutions of common interest to all, laying aside forever the paternalistic
attitudes of the rich and the poor. We cannot be satisfied with timid no-
tions of what is possible in the face of what in reality should be considered
indispensable. In spite of its limited results, the Conference of Paris did at
least serve to dispel these doubts and hesitations.
Written by a young man experienced in the problems of the Third World,
with a constructive spirit and clear ideas, Oswaldo de Rivero's book reminds
us of the constant effort, of the past, present and future, aimed at taking
advantage of the prevailing conditions to bring to reality the better world
we are all seeking. It is a difficult task but there is no valid alternative.
23 January 1978 Manuel Perez Guerrero
New York
(Dr. Manuel Perez Guerrero was formerly Secretary-General of the United
Nations Conference on Trade and Development and Co-Chairman of the
Conference on International Economic Cooperation, Paris (North-South
Conference).)