Question

Explain what is referred to as the G-77 countries. In what ways can G-77 be seen as a reaction to the activities of the Bretton Woods twins? - GK Q&A

Answer 1

G-77 is also known as the Group of 77. G-77 is a group of developing countries which organised themselves into a group as they did not receive any benefits from the fast growth, experienced in the 1950s and 1960s by the Western Economies.

• G-77 demanded a New International Economic Order (NIEO).

New International Economic Order (NIEO) – Meaning

New International Economic Order (NIEO) meant by the G-77 countries are given below:

• Better access for their manufactured goods in developed countries’ markets
• Fairer prices for raw materials
• More development assistance, and
• Real control over their natural resources.

Reasons for Forming G-77 Countries

• Many of the less developed regions of the world had been part of Western empires as colonies.
• Under the guidance of international agencies, newly independent countries tried to lift their populations out of poverty. But, these international agencies were dominated by former colonial powers.
• In the former colonies, important resources like land and mineral resources were still under the control of former colonies.
• Even the large corporations of countries like the US, often managed to exploit natural resources of developing countries very cheaply, as they often managed to secure the rights.

Bretton Woods Twins

The World Bank and the International Monetary Fund (IMF) are referred to as sometimes the Bretton Woods twins or the Bretton Woods institutions.

• At Bretton Woods in New Hampshire (USA), in July 1944, a framework was agreed upon at the United Nations Monetary and Financial Conference.
• To deal with deficits of its member nations and external surpluses, the International Monetary Fund (IMF) was established at the Bretton Woods Conference.
• As per the agreement at Bretton Woods conference, to finance postwar reconstruction, the International Bank for Reconstruction and Development (popularly known as the World Bank) was established.
• The World Bank and the IMF commenced their financial operations in 1947.
• The Bretton Woods system unleashed an era of rise in trade and incomes in Japan and Industrial nations in Western world.
• Western industrial powers control the decision making in these institutions.
• The Bretton Woods system is often referred to as the post-war international economic system.