The Second World War proved even more catastrophic than the First World War. It witnessed the death of millions of civilians all over the world.
Fought between two opposing military groups, the Allies and the Axis, it was the first time that nuclear bombs were thrown and artillery attacks were used to raze down cities. The post war years were marked with a lot of social, political and economic instability.
After the war, the United States and the Soviet Union emerged as the two major superpowers. The main focus of the post war economic system was to maintain economic stability and full employment. The framework of the post-war international economic system was agreed upon at the United Nations Monetary and Financial Conference held in July 1944 at Bretton Woods in the USA.
The Bretton Woods conference established two important institutions, The International Monetary Fund and the World Bank. The International Monetary fund was created to help with the external surpluses and deficits of the member countries. The World Bank was to finance the reconstruction after the war. Bretton Woods ushered in an era of economic growth, world trade and the exchange of technological knowhow. The western countries experienced immense growth after the war but it did not help the developing countries so much.
When the European nations and Japan had strengthened their economies, the Bretton woods institutions began focusing more on the developing countries.
The developing countries collectively formed a group known as G-77 to boost the growth of their economies. The aim of this group was to demand a New International economic Order or NIEO to control their natural resources and get better trade opportunities.
The last years of 1970s witnessed a shift in the business operations of multinational companies to countries such as India, China, and Brazil. The cost of labour was comparatively low in these countries.