RESOLUTION PC 121

FORUM: POLITICAL COMMITTEE

QUESTION OF: Measures to develop broader cooperation among states following the COVID-19 crisis

SUBMITTED BY: Venezuela

CO-SUBMITTERS:Australia, Azerbaijan, Bolivia, Czech Republic, Denmark, DR Congo, Ecuador, Eritrea, Ethiopia, France, Israel, ITALY, Latvia, Saudi Arabia, Oman, Tunisia, Uganda, Turkey.

STATUSApproved

THE POLITICAL COMMITTEE,

Recognizing the challenge every nation has faced when fighting COVID-19,

 

Reminding the committee that there is a vaccination program and international cooperation is vital on this issue,

 

Acknowledging the United Response Against Global Health Threats: Combating COVID-19, with none against,

 

Remembering that the generations to come will have to deal with the consequences if we do not act efficiently and cohesively,

 

Further reminding all nations that the developing and less financially stable countries should be prioritized in such circumstances,

 

Noting further the three pillars of operation and how a large-scale health response must be coordinated particularly,

 

Deeply concerned for the global economic future,

  1. Calls for the formation of a sub-commission under the International Monetary Fund (IMF) to promote incentives for the temporary readjustment of the financial sector to aid those in need, this can be done by means such as but not limited to:
    1. the reduction of taxes for Small and Medium Enterprises (SMEs):
      1. between 5% and 10% tax reduction
      2. companies with between 10 to 1,000 employees
    2. loans for small and medium enterprises:
      1. low-interest loans for these enterprises
      2. micro-credit to individuals or small-scaled firms in impoverished communities that lack employment stability, a verified credit history, or collateral
      3. the small businesses must be prioritized, if within a specific range of revenue based on the nation’s current guidelines
      4. having the rent for their retail or hospitality rates lowered or subsidized by the government for them to continue in business
    3. salary support for low to medium-income households, prioritizing families, those working in strongly affected sectors, and whose education has been compromised
    4. cutting the interest rate of the national banks to allow the economy to stabilize;
  2. Draws attention to preventing further damage towards the goals by encouraging states to:
    1. promote environmentally friendly products when the economy stabilizes
    2. focus on the provision of necessities for their people by bringing their attention to states who are in dire need of humanitarian assistance and willing to accept the aid;
  3. Calls upon all Member States to communicate with their population to address the issues that the local economy will face after coronavirus to aid the domestic community in stabilizing the nation’s economy;
  4. Encourages the Member States to reduce trade barriers to lower world prices, thus creating increased demand and consequently creating jobs, including but not limited to the following:
    1. tariff reductions increasing foreign exports, though it is essential to note tariffs should not be reduced so far that governments lose substantial revenue
    2. import quotas shall be removed completely, thus increasing global output and employment
    3. subsidies should be given to small businesses to counter the influx of foreign production
    4. notes that subsidies will be funded by the World Bank;
  5. Requests the Member States to recognize the importance of collaborating with the World Bank and United Nations Central Emergency Response Fund (UN CERF)  along with their Central Banks to ensure financial stability and to provide sustainable resources throughout the pandemic while implementing necessary measures or policies such as but not limited to:
    1. putting wage subsidy in motion, which is defined by the act of governments issuing payments for workers, either directly or through their employers, with specific requirements for eligibility such as:
      1. demanding the presence of reports that show evidence of the applicant company’s having had at least a30% drop in gross revenues compared to the previous month
      2. fixing a constant percentage variable as the wage subsidy which will be offered to every eligible company with the explicit confirmation from the aforementioned company that they are financially capable of paying the remaining amount
      3. obligatory reapplication for wage subsidy every month regarding the fact that short-run profit maximization may or may not achieved due to the uncertainty of the pandemic
      4. ensuring that non-eligible SMEs will have the opportunity to take on a wage subsidy of a smaller percentage in order to eliminate business discrepancy
    2. creating welfare programs established in accordance with the country’s economic situation and ability to provide the promised welfare program, with the help of the World Bank if needed, along with regulations including but not limited to and in the aim of:
      1. elevating citizens’ diminished standards of living due to pandemic conditions in terms of healthcare, nutrition, and education
      2. determining whether or not the individual or the family need to be integrated into a welfare system by assigning each candidate or group a caseworker,  paid by the government, who will determine their eligibility, by analyzing necessary documents, such as a report on their monthly income, housing condition, and living expenses
    3. establishing stimulus checks and packages to revive the national economy in the hopes of diminishing the global recession, as well as boosting the country’s annual Gross Domestic Product (GDP) by:
      1. regarding the need for a set of rules and obligations in order to get the aforementioned stimulus checks and stimulus packaging, which could include Annual Gross Income (AGI) limit according to the number of people living in a household, the number of children in the household, the job status of the person and other necessary factors
      2. urging their central banks to reduce the interest rate thus naturally boosting aggregate demand and augmenting the money supply whilst implementing another way to revive the economy without taxing the wealthier population and putting more stress on the public;
  6. Recommends individual and global efforts on the continuous supply of food within compliance with the Food and Agriculture Organization’s (FAO) COVID-19 guidelines with actions such as but not limited to:
    1. preserving critical food supplies, humanitarian food, livelihood, and nutrition assistance to vulnerable groups
    2. expanding the use of food security monitoring systems to provide up-to-date information on the impacts of the outbreak and understand better who is most at risk
    3. maintaining liquidity and promoting financial inclusion in rural areas by ensuring relief and stimulus packages along with expanding credit supplies
    4. promoting the agriculture sector and taking necessary steps to ensure that the impact of the pandemic is minimal, keeping in mind that the agricultural sector is a vital element in pandemic conditions, especially for Least Economically Developed Countries (LEDCs);
  7. Further Encourages all willing member states, namely More Economically Developed Countries (MEDCs), to comply with the guidelines and guidance made by the IMF experts, which have been specifically designed to facilitate the recovery from the pandemic’s forced economic regression that is an estimated 4.4% drop on the world output in order to:
    1. diminish the impact job losses, income reductions, income inequalities, and price inflations have made on the countries’ citizens by:
      1. implementing newer and improved taxing regulations taking into account critical issues, such as but not limited to, inclusiveness and being growth-friendly which accounts for taxes being applied progressively and obliging to horizontal equity
      2. executing taxes in a manner in which the decisions are taken will minimize adverse effects on investment, savings, employment, productivity, and consumption for sustainable long-term growth, keeping in mind that income taxes are more harmful to the country’s development than consumption and property taxes
      3. stimulating the stagnant economy by introducing a balancing act under the name of the fiscal policy theory whose main objective is to find a balance between taxes and government spending, depending on the country’s stance on national tax policies, if necessary
    2. strive towards a global society with well incorporated social expenditures and strategic social spendings alongside the existing efforts of the Organization of Economic Development (OECD) in order to:
      1. increase per capita education and health spending which is believed to be a vital source of combat against economic regressions due to worldwide disasters
      2. lay the foundations of an environment which consists of social benefits delivered through the private sector, also known as private social expenditure, to bolster the aforementioned sector
      3. achieve better regulations in the public expenditure domain which targets inflation, tax policy, and exchange rates among many other factors
    3. acknowledge the effect stock markets have on the public and private sector along with the disproportionate gap between the rise of stock market valuations and the economic regression which may eventually lead to market euphoria and taking necessary actions against this lack of balance such as:
      1. providing labor and capital to Small and Medium-Sized Enterprises (SMEs) and giving loans as mentioned in the first clause, seeing most central banks that have introduced significantly low-interest rates won’t be able to stay self-sufficient for much longer
      2. ii. straying away from the risk of taxpayers being forced to cover the financial losses in the long run due to the lack of funding or effort for reviving the economy which could be prevented by reducing taxes for SMEs and implementing a job market focused government spending technique.