RESOLUTION LFC 332

FORUM: LEGAL & FINANCE COMMITTEE

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

SUBMITTED BY: Viet nam

CO-SUBMITTERS:India, Saint Vincent & the Grenadines, Kuwait, Peru, Bangladesh, Hungary, Lebanon, Venezuela, Congo, Pakistan, Arab League.

STATUSApproved

Keeping in mind that 63% of all jobs require the workers to physically be present at site and with the implementation of national lockdowns, most businesses collapsed with millions of citizens losing their jobs,

Deeply disturbed by the fact that every single country in the world took a hit on their economy due to the COVID-19 pandemic,

 

Acknowledging there are three different approaches to reviving the economy and public punctuality being the “Anthropocentric approach”, “Economic approach” and the “Balanced Approach”,

 

Reminding there are three levels for prevention of public health crises being disease prevention before it occurs, detection of disease and its harmful aspects and lastly, treatment of disease “with cost-effective interventions to slow or reverse disease progression” according to the WHO,

 

Alarmed by the rapid increase in extreme poverty due to the COVID-19 pandemic, which is estimated to push an additional 150 million people into extreme poverty by the end of this year,

 

Aware of Less Economically Developed Countries’ (LEDCs) increased inability to provide their people with basic needs such as healthcare, food and clean water,

 

Desiring increased solidarity between member nations in coping with state debt following the COVID-19 crisis,

 

  1. Urges all member states to invest their resources by redirecting funds, personnel, equipment etc. within their borders for  improving their public health infrastructure, which can help combat the pandemic, which reduces the economical damage to Member States:
    1. Which contains many bodies including but not limited to:
      1. laboratories
      2. information networks
      3. emergency operations centers
      4. surveillance systems meant to track COVID-19 cases
    2. Under several aims to benefit each member state including but not limited to:
      1. Increasing the chances of resulting with clearer and more effective treatments for many health conditions including COVID-19
      2. Increasing healthy employment that is currently absent in most member states
      3. Easing the detection of public health crises before they spread
      4. The opportunity to gain a “head start” for future public health crises;
  2. Invites member states, who are able to, to recognise the effectiveness of contact tracing systems for the proper containment of the infected during the current global COVID-19 pandemic and therefore encourages member states to:
    1. initiate contact tracing systems in their countries if they haven’t yet done so in
      1. K-12 schools and non-health workplaces by health department-initiated interviews, site visits, and reviews of K-12 school records, initiating agreements with K-12 school occupational health, medical programs, or trained occupational safety and health personnel, or simply collaborate with said establishments and advise action plans
      2. Communities based on evidence development for transmission risk from asymptomatic or presymptomatic citizens, and social distancing
    2. Upgrade and develop their contact tracing systems if they already equipped their nation with it
    3. advise their health departments to refer to the advances of several international organisations such as the World Health Organisation (WHO) who have been conducting similar studies when performing the aforementioned operations
    4. conduct all tracing systems without missing to ignore certain sensitive areas including:
      1. Human rights of the individuals being traced
      2. The economic state of member states
      3. Case numbers of a nation;
  3. Endorses Member States’ governments to release effective plans for the financial quarter ahead:
    1. since yearly plans may be debunked with critical last-minute changes about the COVID-19 virus or its spread
    2. Which will contain statements and measure on the country’s social and financial situation concerning the pandemic that includes
      1. reports of case numbers and financial development from their previous financial quarter
      2. action plans on the financial quarter ahead, talking about new measure that may be initiated
      3. analysis of the expected financial growth/shrink the nation is foreseeing to experience in the quarter
      4. measure that will be initiated/continued in order to result in the best possible financial outcome whilst avoiding the risk of endangering citizens lives
    3. Which will all be released on the 21st of the final months of each financial quarter:
      1. Giving the nation the rest of the month to prepare for the measures that are planning on being initiated
      2. On platforms visible by the UN, its agencies, other member states and its citizens
      3. and be broadcasted by news channels on local channels in order to inform citizens of the approach being taken for the financial quarter
    4. In case of a mutation of the virus or another deadly wave approaching the country
    5. Through action that may differ according to the severity of the crises in the moment including but not limited to:
      1. Starting COVID-19 testing on citizens or the at-risk population which would be decided by each member state
      2. Optional commercial border closures in order to captivate the spread of COVID-19 in definite borders;
  4. Suggests member states implement a new system for businesses that require the employees to be present at site and can’t be managed by fully working from home to send small portions of their staff to operate on field for 14 days, and switch this portion on every turn:
    1. in order to reduce the risk of spread of the virus among employees who don’t have the option to fully work from home
    2. without overlooking action plans for COVID-19 and precautionary measures in the workspace, which would evidently slow businesses, however is the better alternative rather than complete shutdowns;
  5. Urges the International Monetary Fund to distribute the 250 billion USD dollar available to LEDC’s member states who need them, in the form of installments, while recommending the use of bank statements of member states provided by the World Bank to accurately and effectively decide which member state need the aid provided by the IMF, and in what quantity:
    1. urges the UN to consider aspects such as GDP and GDP per capita outside of data provided by the World Bank
    2. initiate or implement a system where the IMF oversees what each nation has done with the instalment and will then take into consideration whether or not to provide more instalments, so as to prevent misuse of the money;
  6. Requests that the United Nations and its agencies provide LEDCs with financial and in-kind aid to help them recover from the financial and COVID-19 crises, including in the form of, but not limited to:
    1. increased access to COVID-19 vaccines and treatments provided under the World Health Organisation’s ACT Accelerator initiative
    2. the mobilisation of humanitarian aid programs by the Office for the Coordination of Humanitarian Affairs (OCHA)
    3. grants from member nations that will be raised in collaboration with the International Monetary Fund and that will be provided free of demands or interest;
  7. Endorses all member states to support and contribute to the sharing and expansion of hospital facilities and other technology allocated within newly organized FSA (Foreign Stability Aid);
  8. Urges the formation of a new, temporary group under the name of COVID-19 Induced Debt Distress Relief and Development Group, which would be supervised by the World Bank Group and be essentially a risk group that will consist of the Member States that are under the excessive burden of state debt and maybe even endangered by the risk of bankruptcy, especially during COVID-19, starting with the International Development Association\’s (IDA) borrowing countries, HIPCs, and any other developing and emerging economy that experienced a GDP decline over 17% during the year 2020 of the coronavirus pandemic in order to:
    1.  tackle the negative economic, social, and financial impacts of the pandemic which most hit the highly indebted and low-income Members, while also prioritizing the economic vulnerability of the Member States touching upon the Gross National Income (GNI) and state debt rate
    2. provide fiscal privileges to the countries that confronted absurd economical declines regarding the fact that the amount of debt a state owes is proportional to the rate of Gross Domestic Product (GDP) shrinkage it faces during the pandemic, by means of:
      1. providing extra low-interest rates for loans given by the IFIs, starting with the IMF
      2. providing development grants from various IFIs, starting with the WB Group
      3. securing the conditions that are required to attract foreign investment in those specified countries by the leading policies of IFIs, such as but not limited to encouraging the increase of interest rates for states which face high inflation
      4. resorting to austerity-measure-free bailout requests from IFIs, for extreme amounts of debt occurred specifically due to the COVID-19 pandemic, in which the eligibility to apply for a bailout request will be decided by the criteria that a commission from UN budgetary and WB will specify;
  9. Emphasizes the need of adopting in countries with fiscal space and deeper scarring, temporary expansionary measures, implying a slower reduction in the fiscal deficit and a further increase in debt in the short term which would appropriately balance the pro-growth and debt sustainability objectives over the medium term while in countries with limited fiscal space, especially those with tighter financing constraints fiscal deficits would need to be reduced faster to prevent debt distress or increases in borrowing costs that could derail the recovery.