In September 1973, in Algiers, the Arab petroleum-exporting countries discussed the possible uses of oil as a political weapon. When a new Arab-Israeli conflict broke out on 6 October, the Arab countries reduced the flow of oil to Europe and Japan and suspended exports to the US, the Netherlands, and Portugal. The embargo against the US was lifted in March 1974, that against the Netherlands in July 1974, and that against Portugal after a new regime instituted a policy leading to independence for African territories under Portuguese administration in 1974 and 1975. However, the measures taken by the petroleum-exporting countries marked a turning point for the world economy. Members of the Organization of Petroleum-Exporting Countries (OPEC) undertook a long-term study of the collective fixing of oil prices and increased them periodically thereafter.
On 31 January 1974, President Boumedienne of Algeria requested a special session of the General Assembly to consider the question of all raw materials and relations between developed industrial and developing states. Within two weeks, 70 nations endorsed his proposal.
Sixth Special Session of the General Assembly. The special session, held in April–May 1974, adopted a declaration and program of action on the establishment of a new international economic order. The declaration and program of action called for a fundamental change in the international economic order, in the absence of which the gap between developing and developed countries would only continue to widen. Such a change would require the industrial countries to make adjustments in their policies and economies for the benefit of the poorer countries, which in turn were determined to control their own resources.
The program of action called for efforts to link the prices of exports of developing countries to the prices of their imports from developed countries. It suggested the formation of producers' associations, orderly commodity trading, increased export income for producing developing countries, and improvement in their terms of trade. It also looked to the evolution of an equitable relationship between the prices of raw materials, primary commodities, and semi-manufactured goods exported by developing countries and the raw materials, primary commodities, food, manufactured and semimanufactured goods, and capital equipment imported by them.
In the declaration, UN member states proclaimed their determination to work urgently for "the establishment of a new international economic order based on equity, sovereign equality, interdependence, common interest, and cooperation among all states, irrespective of their economic and social systems, which shall correct inequalities and redress existing injustices, make it possible to eliminate the widening gap between the developed and the developing countries and ensure steadily accelerating economic and social development in peace and justice for present and future generations."
Though the program and declaration were adopted without a vote and enthusiastically supported by almost all developing and socialist countries, most Western European and other industrialized states with market economies entered reservations, often very far-reaching. They warned against constraints to the flow of trade that might result from the establishment of producers' associations and argued that nationalization should be carried out in accordance with the existing rules of international law.
Charter of Economic Rights and Duties of States. At its regular session in 1974, the General Assembly adopted a charter of Economic Rights and Duties of States. The charter affirmed that every state has the right to exercise freely full permanent sovereignty over its wealth and natural resources, to regulate foreign investment within its national jurisdiction, and to nationalize, expropriate, or transfer the ownership of foreign property. The charter provided that appropriate compensation should be paid in cases of nationalization and that any controversies should be settled under the domestic laws of the nationalizing states unless all states concerned agree to other peaceful means. It also set forth the right of states to associate in organizations of primary producers in order to develop their national economies.
Seventh Special Session of the General Assembly. The General Assembly held a seventh special session devoted to development and international cooperation in September 1975. The polemical atmosphere in which the program and declaration on the new international economic order and the charter on the economic rights and duties of states had been adopted was replaced by a pragmatic approach. Negotiations were carried on chiefly in private meetings between "contact groups" representing the developing countries and the Western European and other states with market economies. Since the market economy states were the buyers of approximately three-quarters of the exports of the developing countries, agreement between the two groups was essential to significant progress. At the close of the session, Secretary-General Kurt Waldheim declared that it had been "about change rather than the smoother management of the status quo."
The results of the special session were embodied in a resolution that proposed a large number of initiatives and was unanimously adopted by the General Assembly. It reaffirmed the target, originally defined in the strategy for the second Development Decade, of 1% of the GNP of developed countries to be devoted to official assistance to the developing countries, and it called for the accumulation of buffer stocks of commodities in order to offset market fluctuations, combat inflationary tendencies, and ensure grain and food security.
In 1979, the General Assembly called for the launching, at the third special session on development in 1980, of a round of global and sustained negotiations on international economic cooperation for development. The negotiations, however, failed to achieve the hoped-for progress at the special session held in September 1980, but at the regular session that year, an international development strategy for the third UN Development Decade was adopted.