RESOLUTION LFC 322

FORUM: LEGAL & FINANCE COMMITTEE

QUESTION OF: Proactively putting methods in place in the anticipation of state debt following the COVID-19 crisis

SUBMITTED BY: Oman

CO-SUBMITTERS:Malta, Slovakia, Uganda, Ukraine, United Kingdom, Austria, Burkina Faso, Germany, Indonesia, Israel, Lao PDR, Saudi Arabia, Singapore, Sweden, Tunisia, Romania.

STATUSPassed

THE LEGAL AND FINANCE COMMITTEE,

Deeply concerned about the current outbreak of the highly infectious Coronavirus respiratory disease (COVID-19) that first appeared in late 2019 in the Chinese city of Wuhan and was recognized by the World Health Organization (WHO) as a global pandemic in March 2020,

Bearing in mind that the rapid spread of COVID-19 introduced immediate national and global restrictive measures and mitigation strategies including the suspension of schools, prevention of social gatherings, restriction of flights,

Observing the devastating effect of the pandemic and the necessary measures enforced, on governments’ and individuals’ financial states globally, due to the burden on the tourism industry, business closures, suspension of the work force and increase in unemployment which led to short-term and long-term repercussions such as recessions, significant contraction in global GDP and amplification of global debt,

Viewing with appreciation the support and response of the International Monetary Fund (IMF) in their effort to restore global economic stability, which has secured an amount of 1 trillion USD accessible in lending capacity to over 90 member states of the organization, which have been dealing with financial emergencies,

Acknowledging the absence of proactive solutions enforced by governing bodies in situations of sudden economic crises and the lack of a clarified and feasible set of guidelines stating clear measures that respond to the needs of societies amid health disasters, to be taken prior to the peak of a global emergency,

Suggesting that Member States refrain from lockdowns where possible to minimize the risk and further boost development in the economy, however recognizes this should be determined by the individual state, yet should still follow an economic approach with other measures to maintain their citizens’ economic, social security and health,

 

  1. Strongly urges the United Nations (UN) to follow the safety and health measures provided by the World Health Organisation (WHO) and construct a global and feasible set of regulations for all Member States that targets general traits of pandemics and proposes various economic measures, governmental strategies, and essential preparation during a health crisis for a sustainable recovery, prior to the end of the emergency;
  2. Encourages Member States and governments to focus on the economic and financial stability of states and individuals in order to boost economic development and social prosperity after the serious contractions in GDP and fall of prices and demand, due to the COVID-19 outbreak, by:
    1. implementing welfare plans, providing necessary commodities, and focusing governmental funds on installing funding programs and providing subsidies to people and businesses affected by the spread of Coronavirus, including but not limited to:
      1. self-employed and micro-enterprises
      2. individuals left homeless and unemployed due to the lack of stable working conditions
      3. businesses and individuals that had to close or temporarily abstain due to direct contact with the pandemicensure greater consumer confidence, thus higher revenue from the goods civilians purchase
    2. allowing the temporary postponement of municipal taxes and some government payments as well as suspending rent fees for companies and loan servicing for bank debtors
    3. enabling businesses in wholesale and especially retail trade to offer special prices and sales to consumers in order to reinvigorate demand
    4. applying regulations that forbid businesses to discharge employees due to a difficulty to access means of attending the workplace, suggesting instead that businesses tailor the work of their employers allowing these individuals to work from home
    5. putting measures in place such as allowing for further purchasing and mass production of Personal Protective Equipment (PPE) as this will ensure that the protection of workers thus minimising deaths, while ensuring they can complete their jobs effectively;
  3. Requests that the World Bank in cooperation with the UN and the Ministries of Health prioritize financial aid and funding programs to restrict and monitor the rapid spread of the virus, thus assisting the substantial recovery of national and global economy by:
    1. supplying economic assistance for the construction of health institutions and testing and vaccination facilities
    2. providing growth funds and programs for sectors most affected by the pandemic, tailored to the sectors most affected by each individual nation state
    3. allocating funds to support World Health Organisation and promote research on the virus and possible health threats that might arise in order to continuously adapt the public health guidelines;
  4. Further encourages Member States to continue to keep their national borders open, as they’re presently operating and allow commercial and international flights to support the revival of the tourism sector and precipitate the elaboration of projects, through strict procedural measures to simultaneously hinder the expansion of the pandemic, including:
    1. asking for a mandatory quarantine for international travellers arriving at the country that will last 7 days regardless of the travellers’ stay period before which travellers will be required have undergone a COVID PCR test, 72-hours prior to their scheduled trip and requesting verified certificates of negative results
    2. asking that travellers undergo a COVID Lateral Flow Antigen Test  (LFD) test at the end of their 7-day isolation period, requesting verified certificates of negative results to prevent the spread of virus to the state of travel;
  5. Requests the continuation of trade overseas as it recognises its vitality to many nations’    economies, and draws attention to the issues which may occur and industry which may be lost if states become further isolated:
    1. notes the issues with supply and demand as if there is a further economic crisis and lack of prosperity then there will be fewer opportunities for industry to develop in producing commodified goods thus leading to further economic decline thus, urges the remembrance of LEDC’s who rely on this trade to ensure some level of economic growth
    2. recognizing the speciality of nations in different areas of industry thus the need for global trade as it increases the efficiency and quality of the global economy;
  6. Recommends greater leniency in relation to loans and interest with particular consideration to LEDCs who tend to be in greater danger from fiscal instability and Nations that have experienced a significant rise in national debt during the pandemic while calling upon a budget to be introduced to minimise state debt by allowing for further spending in the anticipation of further health crisis;
  7. Urges all states to confidentially share all data regarding debts and its increase in the context of COVID-19 with the UN, ensuring transparency and allowing the UN secretary general to compile data and alert in anticipation about debt situations that might spiral out of control, in coordination with the agencies that might bring a relief such as the International Monetary Fund (IMF);
  8. Requests all states who have a significant amount of national debt to create a pension system meaning the states will save a portion of their annual income aside as a long-term debt relief system which will function under some ground rules which are:
    1. the states will have to confidentially share the following informations with UN:
      1. the period of time they will implement this pension programme
      2. the amount of debt the state has currently
      3. the amount they will hope to target as a part of the pension programme
    2. the states will not be able to spend the revenue they put aside as a part of this pension programme until the period of time they have previously announced elapses and it will be states call to decide which percentage of their revenue will be put into the pension programme
    3. suggesting that states who are a member of the pension programme to optionally participate in the creation of conjoined pensions with other member states, which will be monitored by UNCC (United Nations Convention against Corruption) and will function under the following ground rules such as:
      1. the length of the pension programme
      2. which member gets which percentage of the total amount of money when the time for the pension programme elapses
      3. whether the states in question will receive any other benefits from this agreement
    4. no state can force another state to create a conjoined pension by using the following actions:
      1. enforcing an embargo on the targeted state or states
      2. breaking or pulling out of previously signed trade agreements
      3. cutting off or threatening to cut off any energy sources of the targeted state
      4. threatening to cut off any supply of products
      5. prematurely asking back any financial aid that was given to the targeted state
      6. any other action that was done with a motivation to force the targeted state to join into a conjoined pension.