Excellencies, Ladies and Gentlemen,

It is an honor to be here to celebrate and reflect over the legacy and actuality of the 1974 New International Economic Order. I would like to thank Progressive International for its invitation and for having made possible such an impressive and world-historical gathering. The choice of Havana as the place to commemorate the 50th anniversary of the New International Economic Order is commendable. As an African, I would like to acknowledge and praise the unshakeable solidarity of Revolutionary Cuba with Africa. Between 1960 and 1991, Cuba was the country that sent the highest number of military troops to support African liberation movements in their struggles against imperialist powers.

The inputs I am now going to share are the joint work of Professor Jason Hickel and myself.

Our point of view is that it is important to learn from the past in our quest for a better and equalitarian world system. Learning from the past implies namely to retrospectively assess what did not work with the 1974 New International Economic Order agenda.

The New International Economic Order agenda clearly articulated the perspective and concerns of what was then called the Third World. Next to their ambition of promoting more South-South cooperation and a “self-reliant” development, the NIEO proponents argued for stable and higher prices for the South’s raw materials, better access to Northern markets for its manufactured products, technology transfers, and debt relief. Demands that are still relevant and still not met.

However, the New International Economic Order agenda was not flawless. Indeed, from the mid-1970s, there have been two major friendly leftist criticisms against it.

The first criticism was about the realpolitik of the NIEO and could be summarized as follows: it is naive for Global South countries and movements acting in their interests to think that their quite legitimate and reasonable demands with regard to the international system can be accepted by the core/imperialist countries. The faith in a possible cooperative behaviour of the Global North finds its limit in the fact that most of the demands coming from the Global South will likely reduce the profits of capitalists in the Global North who will therefore oppose them.

Given that Global North governments are not inclined to accommodate demands from the Global South, their approach has usually consisted in using delaying tactics and promoting counter-proposals that maintain the status quo. Unfortunately, the leftist but friendly critics of the NIEO were proved right. The West practical and immediate response to the NIEO agenda was the imposition of structural adjustment programs on the Global South which resulted in “lost decades” during the 1980s and the 1990s.

The second leftist and friendly criticism against the NIEO was about the political economy of underdevelopment under capitalism. It can be formulated as follows: no international reform can ever be beneficial to the Global South countries if the latter leave aside the need to transform the internal articulation of their economies and the class structure associated with it. As long as internal economic structures are of a colonial or semi-colonial type, international reform, however substantive, will not result in shared and sustainable prosperity for the majority of their peoples. In other words, international reform should go hand in hand with internal reform towards non-capitalist and equalitarian development models.

Professor Jason Hickel and myself do not dismiss the importance of fighting for multilateral changes to the international economic, financial and tax system in order to make the world economy fairer and less exploitative for developing countries. But we think that this approach is unlikely to yield results given the core states’ long-term resistance to any significant global reform. It is therefore necessary for global South governments to develop clear strategies to achieve unilateral decolonization and economic sovereignty by leveraging multipolarity. In contrast to the context of the 1970s, now the Global South is the home of global manufacturing and technological centres and has the possibility to devise alternative payments systems that help to go beyond the current monetary and financial system based on key-currencies standard.

To achieve unilateral decolonization and economic sovereignty, we identified six principles of action.

1. Reduce material-technical dependency on the global North

Countries that are dependent on imports from the global North are under pressure to acquire large volumes of foreign currency to pay for it. This means they must mobilize production around exports to the North (or take on external debt). But because Southern exports are cheapened compared to Northern goods, this arrangement entails large net transfers of goods from South to North. This should urgently be avoided, as it drains Southern countries of resources that are urgently necessary for development. This pattern of material-technical dependency, compounded by a transfer problem – the need to earn the foreign means of payment - can be reduced in the following ways:

(a) curtail imports of unnecessary luxury goods from the core (e.g., SUVs, private jets, champagne, etc) (b) for necessary goods, substitute them where possible with domestic production (e.g., food is a major import category, which in most cases can be reduced dramatically by pursuing a policy of increased food sovereignty) (c) for goods that cannot be provided domestically (e.g., rare materials or advanced technologies), establish swap lines to obtain these through trade with other global South countries (e.g., with regional neighbours and with China) in a way that circumvents the use of dominant currencies and promotes trade with national currencies. (d) for products that must be imported from the North, ensure they are long-lasting and repairable in order to reduce total import requirements.These steps enable a country to either reduce its exports to the core (thus making production available for other purposes, including for South-South solidarity trade) and/or increase its international payment possibilities

2. Regain national control over foreign exchange earnings.

At present, foreign exchange earnings are generally controlled by private producers – often foreign companies – who send their profits abroad, or use accounting tricks to avoid taxes and steal real resources. The result is that foreign exchange earnings are not available to the state and cannot be used for development. Governments can increase control over foreign currency earnings in the following ways: (a) nationalize resource deposits and major export industries where possible, so that foreign exchange goes directly to the state (b) Coordinate with other global South producers to increase the prices of exports (e.g., OPEC) (c) introduce capital controls and other similar measures to prevent destabilizing profit repatriation and illicit outflows of foreign currency by private exporters (d) tax the foreign currency earnings of private exporters (and reduce taxes on the national currency earnings of firms producing socially necessary goods)

3. Make strategic use of foreign exchange for national development.

Foreign currency should be leveraged strategically. It should only be used for necessary imports that cannot be substituted domestically. As much as possible, it should be used in the following ways: (a) to import capital goods and technologies that are necessary to develop national industries that can help reduce dependence on imports from the North. (b) to increase value-add (e.g., to develop capacity to refine resources or to manufacture finished products rather than exporting raw materials or intermediate parts) (c) to finance industrial projects that will earn more foreign exchange than they require as inputs or that will have an import substitution effect.

4. Mobilize production around human well-being and national development.

Reducing dependence on imports from the North means countries can reduce their export-orientation (and therefore reduce the scale of drain through unequal exchange), thus liberating productive capacities (like labour, land, resources and factories) to be used for other purposes. This remobilization can be done by issuing the national currency to employ domestically available labour and resources for development. Because the state is the currency issuer, there is no limit to the state’s capacity to finance projects whose inputs can be paid in the national currency, so long as it is within the productive capacity of the economy (as Keynes put it: anything we can actually do, we can afford).

(a)establish a national public job guarantee, with a living wage, to employ people in necessary public works. (b)produce necessary goods and universal public services (nutritious food, good housing, water, sanitation, electricity, healthcare, education, public transit, recreational facilities, etc). (c)ensure that these are available on a decommodified or price-controlled basis to all, as this is critical to achieving rapid improvements in social outcomes. (d)initiate a state programme to achieve rapid decarbonization (by increasing renewable energy capacity) and ecological regeneration. (e)establish centers for research and innovation, to develop appropriate indigenous technologies that can further reduce dependence on Northern imports. (f)establish training centers to improve the skills of the labour force. (g)invest in building national industrial capacity (e.g., capacity to produce vehicles and pharmaceuticals) that can further reduce dependence on Northern imports.

5. Establish industrial policy focused on well-being, ecology, and sovereignty

The primary development objective should not be to increase aggregate GDP as such (i.e., just any form of production). The objective should be to increase the specific forms of production that are necessary to improve human well-being, meet ecological objectives, and achieve national development. Therefore it is necessary to establish an industrial policy to determine what new industries need to be started, what existing industries need to grow, and what industries are unnecessary and should be scaled down so that capacity can be diverted elsewhere.

(a)use subsidies and tariffs to support strategic industries in their early stages of development and protect them from being crushed by foreign competition. (b)use credit regulation to increase private investment in targeted industries and reduce private investment in unnecessary industries.

6. Cooperate for collective abolition of onerous/odious debts if necessary

If the above measures are precluded by creditors or under the terms of a structural adjustment programme, those terms should be ignored and a managed default should be pursued if necessary in order to assert sovereignty over economic policy. This is best done in cooperation with other governments (a “debtors’ club”) in order to improve the negotiating position. Default can make it more difficult to access international finance for a time, but the steps indicated above can help to mitigate this problem by reducing dependency on foreign finance.