What was the Bretten Woods System? Why were the developing Countries not satisfied with International Economic order? For 5 Marks.
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Approximately 730 delegates representing 44 countries met in Bretton Woods in July 1944 with the principal goals of creating an efficient foreign exchange system, preventing competitive devaluations of currencies, and promoting international economic growth. The Bretton Woods Agreement and System were central to these goals. The Bretton Woods Agreement also created two important organizations—the International Monetary Fund (IMF) and the World Bank. While the Bretton Woods System was dissolved in the 1970s, both the IMF and World Bank have remained strong pillars for the exchange of international currencies.
Though the Bretton Woods conference itself took place over just three weeks, the preparations for it had been going on for several years. The primary designers of the Bretton Woods System were the famous British economist John Maynard Keynes and American Chief International Economist of the U.S. Treasury Department Harry Dexter White. Keynes’ hope was to establish a powerful global central bank to be called the Clearing Union and issue a new international reserve currency called the bancor.
The New International Economic Order (NIEO) represents an alternative worldview of the global political economy to emerge during the 1970s [1]. More specifically, this worldview included a reconsideration of existing relationships, structures, and processes that were dominant in the global political economy of that time, and advocated for the universal integration of classical liberalism in the global economy.
First introduced in 1972 through the Santiago United Nations Conference on Trade and Development, developing countries of the Non-Aligned Movement would critique increasing global inequality and promote their interests by improving their terms of trade, increasing development assistance, developed-country tariff reductions, and other political agreements designed to reduce trade barriers[2]. These proposals included the revision of the international economic system in favor of Third World countries, replacing the Bretton Woods system, which had benefited the leading states that had created it – especially the United States. This set of proposals proclaimed that facilitating the rate of economic development and market share among developing countries will fight global issues such as hunger and despair more effectively[3]. However, these proposals would ultimately fail, contributing to the formulation of the "Right to Development" in 1986 [4].
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