EcoFin Study Guide

Rotaract Model United Nations www.rotrum.org EcoFin Study Guide

Rotaract Model United Nations The Economic and Finance Committee


Committee Introduction The Economic and Finance Committee (ECOFIN) is a committee within the United Nations that

solves problems in the area of global finances and economics. It is one of the six standing

committees of the General Assembly, and also referred to as the "Second Committee".

The Second Committee deals with economic questions; its purview includes issues relating to

economic growth and development such as macroeconomic policy questions (including international

trade, international financial system, and external debt sustainability), financing for development,

sustainable development, human settlements, poverty eradication, globalization and

interdependence, operational activities for development, and information and communication

technologies for development.

The Second Committee makes recommendations on means to improve the economic development

of Member States and maintain the stability of the international financial and trade network. The

economic issues considered by the Second Committee are distinguished from those considered by

the Fifth Committee in that this Committee deals solely with financing the economic assistance to

Member States, whereas the Fifth Committee address the budgetary issues within the UN System.

The Second Committee does not address social issues that affect development; such issues are

considered by the Third Committee. The committee can discuss issues dealing with global economics

and make recommendations, but it is very important to keep in mind that ECOFIN can only make

nonbinding recommendations to nations – it cannot force these nations to comply with these

recommendations. A resolution is only effective if member states agree to uphold it. Likewise, the

ECOFIN committee cannot force a nation to lower trade tariffs or change its exchange rate, but can

only recommend these actions.

At the sixty-fourth session of the United Nations General Assembly, the Second Committee took

action on 45 draft proposals. The Committee is expected to act on a similar number of proposals

during this year’s session.

As a General Assembly committee, ECOFIN is one of the largest committees in the United Nations.

While some nations might appear to be more actively involved and invested in these issues we have

chosen to address, this committee and the UN in general strives for international cooperation. The

best ideas come not from the countries that are the most powerful or the wealthiest but from those

nations who can present a fair-minded solution or mediate between two sides. Nations of varying

degrees of power are expected to come into ROTMUN with a profound understanding of the issues

outlined in this guide and be able to develop a way forward as per the purpose of this committee.


TOPIC A: RE-THINKING THE

INTERNATIONAL FINANCIAL SYSTEM.

REGULATIONS IN THE NEW ECONOMIC WORLD

ORDER

For a quarter of a century, it has been conventional wisdom among policy makers, academics, and

journalists that the neo-liberal policies that have governed the global economy are a great success.

We have been assured that the costs of global deregulation of capital, labor and commodity markets

- including the dislocation of workers and communities - are "transitional" and more than

compensated by the benefits in overall economic growth, rising standards of living and a narrowing

of the income gap between rich and poor. Indeed, poor nations have been told that their only hope

for prosperity lies in opening all national markets and pursuing an export-led growth strategy.

Yet there is no convincing proof that the so-called "Washington Consensus" has delivered on its

promises. Most of the claims are based on anecdotal evidence and typically count just the benefits

and ignore the costs. More systematic efforts to find a positive net impact by comparing economic

performances of countries according to some crude assumptions of "openness" have met with

skepticism from honest professionals.

Even World Bank president James Wolfensohn in 1999 was moved to admit, "At the level of people,

the system isn't working."

The global financial crisis, brewing for a while, really started to show its effects in the middle of 2007

and into 2008. Around the world stock markets have fallen, large financial institutions have

collapsed or been bought out, and governments in even the wealthiest nations have had to come up

with rescue packages to bail out their financial systems.

On the one hand many people are concerned that those responsible for the financial problems are

the ones being bailed out, while on the other hand, a global financial meltdown will affect the

livelihoods of almost everyone in an increasingly inter-connected world. The problem could have

been avoided, if ideologues supporting the current economics models weren’t so vocal, influential

and inconsiderate of others’ viewpoints and concerns.

With the neglect of financial intermediation as a central macroeconomic feature, financial regulation

and supervision focused on individual institutions and markets and largely ignored their

macroeconomic implications. Financial regulation targeted the soundness of individual institutions

and aimed at correcting market failures stemming from asymmetric information, limited liability,

and other imperfections such as implicit or explicit government guarantees. In advanced economies,

its systemic and macroeconomic implications were largely ignored. This was less true in some

emerging markets, where prudential rules such as limits on currency exposures (and sometimes an

outright prohibition against lending to residents in foreign currency) were designed with macro

stability in mind.


The creation of new frameworks for global governance will be a defining challenge

for the twenty-first century world, and the attitude of the United States will be

among the most important factors in determining the shape and stability of the

world order that results from these efforts. The need for a reformed, robust

system of multilateral cooperation has never been more obvious. Today’s global agenda is

dominated by a host of issues—from terrorism to climate change to the proliferation of weapons of

mass destruction—that no single country, no matter how powerful, can address on its own.

Tomorrow’s challenges and policy agendas will only be more transnational in scope.

At the same time, existing multilateral institutions are increasingly divorced from global realities,

hindering their capacity to deliver global public goods and mitigate global “bads.” Since the end of

the Cold War, world politics have been transformed in fundamental ways. As outlined in the

accompanying box, these changes include an ongoing shift in global power to non-Western

countries; the rise of transnational threats to the top of the global security and development

agendas; a growing concern with state weakness, as opposed to state strength; the emergence of

agile and increasingly powerful non-state actors (both malignant and benign); the evolution of new

norms of state sovereignty and new criteria for armed intervention; the proliferation of regional and

sub-regional organizations; the increasing importance of cross-border networks; and a growing

reliance on ad hoc “coalitions of the willing” as an adjunct to—and sometimes a replacement for—

more formal, standing international bodies.

In reality, the global financial system is governed by ad hoc crisis management, characterized by late-

night phone calls from U.S. Treasury officials to the world's financial tycoons, IMF officials flying to

Third World capitals in disguise, and Wall Street lectures to recalcitrant politicians in developing

nations. The crisis-management style has one big advantage for those who attempt to manage the

global economy. It avoids the politically difficult questions of accountability and sovereignty. When

the world faces a crisis, issues of fairness, economic sustainability, and democracy are brushed aside

as secondary to the emergency task at hand: restoring investor confidence. When the crisis is over,

the global policymakers turn to other issues, and the opportunity for serious public debate is lost -

until the next crisis, which must be managed again at still higher levels of risk.

In the absence of institutions that can maintain and stabilize global demand, the deliberate

encouragement of export-led development strategies places the fate of the global economy on the

willingness and ability of the large advanced economies - Japan, the European Community and the

United States - to provide the markets and capital investment needed to accelerate growth in the

rest of the world.

There is a strong prime facie case that the net impact of neo-liberalism has been negative. For

example, in a study for the United Nations, British economist John Eatwell pointed out that financial

liberalization of the 1970s was supposed to:

move savings from developed to developing companies

lower the costs of borrowing

increase economic growth


Instead, by 1992:

savings flowed from developing to developed countries

interest rates generally rose

economic growth slowed down

We have experienced the Mexican peso collapse, the East Asia financial crisis and, now a worldwide

recession, all of which have diminished performance of the neo-liberal regime even further. One

recent study compared the rate of growth in real GDP from 1960-1980, with the growth from 1980

to 2000 for 116 countries divided into quintiles according to per capita income. It found that the

growth rate fell for every quintile from the earlier to the later period. Among the poorest countries

in the lowest quintile, the 1980-2000 growth rates turned negative. Ironically, those nations that

have grown the fastest over this period were those that most resisted the advice of the "Washington

Consensus."

Inequality has also gotten worse. The median income of the richest ten countries was 77 times that

of the poorest ten countries in 1980, and 149 times in 1999. The incomes of the richest 10% of the

world's people were 70 times that of the poorest 10% in 1980, and 122 times in 1999. Within

nations, inequality also seems to have worsened.

During periods of boom, people do not want to hear of criticisms of the forms of economics they

benefit from, especially when it brings immense wealth and power, regardless of whether it is good

for everyone or not.

It may be that during periods of crisis such as now, the time comes to rethink economics in some

way. Even mainstream media, usually quite supportive of the dominant neoliberal economic

ideology entertains thoughts that economic policies and ideas need rethinking.

Markets do not exist in a state of nature. They are social constructs, with defined customs and

regulations that are established through political struggle and compromise. The generation and

distribution of income, wealth, and power is as much a political as an economic phenomenon. In the

famous words of one political scientist, politics is the art of "who gets what". Therefore, every

market has a politics.

The expanding global market system is no exception. Thus, according to a former director-general of

the World Trade Organization, the WTO represents the "constitution" of the new global economy.

This may be an overstatement. But the policies of the WTO, the IMF, the World Bank, and other

global regulators, represent the dominance of the investor class in the politics of the emerging global

economy.

No one can deny the existence of a global investor class. Electronic technologies and modern

transportation and communications system allow for extremely effective business and financial

networking. Increasingly, the top echelons of transnational business are managed by multinational

personnel, who have little or no loyalty to the country whose passport they happen to hold.


A global investor class implies a global working class, even though the

international organization of workers is far behind that of investors. Therefore we

cannot fully judge the impact of globalization without reference to the share of

benefits and costs going to capital and labor. The questions of "who wins?" and

"who loses?" from particular policies of the global institution cannot be answered on the basis of

separate national identities alone because every country has an investor and a working class, i.e.,

there are rich people in poor countries and poor people in rich countries. In 1996, for example, 22%

of the world's billionaires were from the developing nations.

In most cases, international agreements are negotiated by elites that have more in common with

each other than with working people in the countries that they represent. As a retired U.S. State

Department official put it to me bluntly a few years ago, "What you don't understand," he said, "is

that when we negotiate economic agreements with these poorer countries, we are negotiating with

people from the same class. That is, people whose interests are like ours - on the side of capital."

The history of successful national economies tells us that markets need to be regulated by political

institutions in order to work effectively. Government regulation is necessary to enforce contracts,

assure transparency, and protect citizens from the brutalities of the unrestrained market. Central

banking and discretionary fiscal policy are essential to maintain macroeconomic growth and stability.

But today, the leadership of the world's advanced nations, driven by multinational financial interests

and rationalized by an extremist "free market fundamentalism," are attempting to create a global

marketplace without the political institutions needed to make it work.

The International Monetary Fund (IMF), for example, is not a central bank for nurturing global

growth and stability. It is rather a lender with an ideological agenda, conditioning its loans to

troubled nations with austerity and anti-labor policies aimed at giving priority to debt repayment

through exports rather than domestic growth. Although it demands that individual client nations

open their financial markets to competition, the IMF itself is the center of a credit cartel; it has

agreements with other financiers to assure that projects it does not like will be blacklisted from

receiving assistance from the World Bank and other international lending institutions, as well as

governments and large private lenders. Like all cartels, the IMF uses its oligopolistic power to pursue

political objectives. It therefore has a decided bias toward countries whose leaders are in sync with

the bank's major supporters. A former chief economist of the IMF has openly acknowledged that the

staff of the IMF makes no important decision without checking with the U.S. Treasury.

Some have been writing for many years that while the current economic ideology is flawed, it only

needs minor tweaking to correct it and make it work for everyone; a more compassionate

capitalism, but capitalism nonetheless. Others argue that capitalism is so flawed it needs complete

doing away with. Others may yet argue that the bailouts by large government will distort the

markets even more (encouraging bad practices by the big institutions) and rather than more

regulation, an even freer form of capitalism is needed.

Until recently, the politics of the global economy has been largely viewed as "international," i.e.,

focussed on the questions of "which nation gets what," with the central conflict between countries

that are rich and poor, developed and developing, oil haves and oil have-nots, etc. From this

perspective, the institutions of international economic governance (e.g., the International Monetary


Fund, the World Bank, the World Trade Organization) are presented to the global

public as a sort of legislature of different geographic interests; those representing

the poor countries from the South argue for redistribution and those representing

rich nations from the North argue for fiscal discipline. Geographic conflicts are

certainly a primary feature of global politics - as they are of national politics. But the underlying

political conflicts in the global economy are not exclusively among nations. Borderless finance and

production, administered by an international managerial class, has crippled the ability of most

nation-states to regulate their own markets for social purposes. Increasingly, the people of any given

country cannot rely on their corporations or their banks to promote their interests. The worker in

Brazil, the worker in Japan, and the worker in the United States may well have more in common with

each other than they have with those that manage and prosper from enterprises that are nominally

Brazilian, Japanese, or American.

Towards the end of September 2010, the World Bank admitted that developing countries have

“come to the rescue” of the global economy, picking up the slack of the advanced economies which

were hurt the worst by the financial crisis.

World Bank President Robert Zoellick noted that “The developing world is becoming the driver of the

global economy. Led by emerging markets, developing countries now account for half of global

growth and are leading the recovery in world trade.” He also acknowledged that as economic power

has shifted, a multi-polar world economy is emerging.

Current growth trends in the developing world means the collective size of developing-country

economies would surpass that of developed-country economies in 2015, the Bank estimates.

The Bank believes the following factors help to explain this:

Faster technological learning

Larger middle-classes

More South-South commercial integration

High commodity prices, and

Healthier balance sheets that will allow borrowing for infrastructure investment

These factors further strengthen the long-time chorus of voices demanding Bank and IMF

governance reform to share more power with developing countries which have long been side-lined

by these influential international institutions.

The assumption that the G-3, the G-7, or the G-8 can somehow provide overall management for the

global economy is likewise misplaced. The leadership of these advanced countries has even less

capacity to plan for global stability than does the IMF or World Bank. Thus, despite the expressed

concern of the world's great economic powers after the Asia crisis of the 1997 that a new financial

"architecture" was needed, very little reform has taken place.


lthough international cooperation among those in the opposition is certainly

growing, in a world of about 190 separate countries (most of which are desperate

for investment) and more than six billion people (most of whom are poor), the

development of a global political movement powerful enough to bring the

investor class to the bargaining table is clearly a long way off.

Nevertheless, it is not so difficult to imagine an effective cross-border politics among limited groups

of countries in subglobal geographic regions. People who live in countries in the same region tend to

have more in common with one another. Language barriers are not as great. Culture is similar. And

trading relations are usually the strongest. From a development perspective, regional clusters of

nations can provide the economies of scale so that small third-world countries can take advantage of

new technologies. From a political perspective, a path to global integration built on expanding

regional markets could provide a more accommodating arena for a social-democratic alternative.

Indeed, regionalism has long been a project of the mainstream left around the world. The European

Union grew out of a French socialist's dream of burying Franco-German enmity. African regionalism

was the vision of the late Julius Nyerere of Tanzania as a way of progressing beyond tribalism and

colonialism. In Latin America, there is a history of efforts to bring together economies in the

Southern Cone, in the Andes, and in Central America. On the other hand, the European Union

illustrates the greater potential for sustained economic integration when policy is focused on the

development of a diverse domestic market. The extent of social protection in Europe and the rich

debate over the restructuring of a continent-wide social contract reflect a comprehensive notion of

economic integration as a tool for political and social development. Ironically, the European Union

was inspired by U.S. economic history, which can be read as a process of regional integration

supported by a federal constitution that nurtured (not without struggle) the growth of trade unions,

civil rights, and a modest welfare state.

One of the hallmarks of the past two decades has been the formation, deepening, and enlargement

of formal regional organizations in many corners of the globe. The mandates, competencies,

capacities, and effectiveness of these heterogeneous bodies vary enormously. The United States has

a critical interest—and a central role to play—in ensuring that these bodies play their full and

appropriate role in managing global insecurity and in providing public goods for their respective

regions. The committee intends to examine the current status and potential role of multilateral

bodies in at least some of the following regions:

− Europe, including the North Atlantic Treaty Organization, the European Union, and the

Organization for Security and Co-operation in Europe (OSCE).

− Asia-Pacific, including the Asia-Pacific Economic Cooperation (APEC) forum, the Association of

Southeast Asian Nations (ASEAN), the ASEAN Regional Forum, and potential sub-regional security

architecture for Northeast Asia.

− Africa, notably the African Union (including its new Peace and Security Council), the New

Partnership for African Development (NEPAD), the Economic Community of West African States

(ECOWAS), the Southern African Development Community (SADC), and other relevant organs.


− South and Central Asia, including the South Asian Association for Regional

Cooperation (SAARC), the

Shanghai Cooperation Organization (SCO), and other potential multilateral

arrangements for these two sub-regions.

− Latin America, including the Organization of American States, the Summit of the Americas, sub-

regional trade groupings (e.g., NAFTA, CAFTA, Mercosur), and potential groupings of like-minded

countries to manage transnational challenges like energy security, migration and narcotics.

− The Middle East, including the G-8 sponsored Forum for the Future, the Arab League, and the

Organization of the Islamic Conference (OIC).

Fundamental reforms in the global financial system were inevitable given how deep and prolonged

the economic crisis facing the world community would be, the General Assembly was told on 27

March 2009 as it concluded its three-day interactive dialogue on the World Financial and Economic

Crisis and Its Impact on Development. “These reforms will occur and the only question is whether

they will occur in a random and ad hoc way or if they will be orderly,” Nobel Laureate Joseph Stiglitz

said in his capacity as Chairman of the Commission of Experts of the President of the United Nations

General Assembly on Reforms of the International Monetary and Financial System. He said the

Commission believed the more proactive approach of a top-down global strategy was preferable.

Among the new institutions, the Commission was calling for a global economic coordination council

at the level of the General Assembly or Security Council; a global reserve system; a new credit facility

to provide developing countries with greater resources; a financial products safety commission; a

global financial regulatory authority; a global competition authority; and an international bankruptcy

court.

Mr. Stiglitz argued that the critical difference between the current crisis and past ones, like the Asian

crisis when talk of reform had been mere words, was the developed world’s position at the

epicentre. “This is not a downturn that happened on the periphery. It began in the centre and has

gone to the rest of the world with devastating effects on the periphery.”

In that way, the crisis had exposed flaws in the global economic system and in globalization, making

a return to the world of the past impossible, he said. It was, therefore, in the interest of every

country -- rich and poor, debtor and creditor alike -- to create the kind of strong institutions the

Commission had proposed. Indeed, since instability in the international economic structures

affected each country, global action would be critical.


TOPIC B: PROMOTING SUSTAINABLE

DEVELOPMENT – THE INTERNATIONAL

STRATEGY FOR DISASTER MITIGATION AND

RELIEF

On today’s globalized information highway it comes as no surprise that the delivery of news is

lightning fast, be it about a World Cup game-predicting octopus, or a sad disaster. While the number

of disasters has stayed, more or less, cyclically constant through much of human history, the

resulting burden of disaster faced by humans is ever-increasing. The vast amount of blame for this

can be placed on growing global population that now borders on 6.8 billion people (CIA World

Factbook 2010).

While some United Nations (UN) publications insist that disasters are on the rise since the 1990s

(EGM/NATDIS 2001), there is little statistically significant evidence to suggest that such is the case.

What is evident, however, is that disaster loss is on the rise, and is becoming a substantial global

concern, one that needs to be met head-on, with swift relief efforts and redevelopment (in most

cases, premiere development). Disaster mitigation and relief are fundamentals for recovery

processes and without them the world’s economy and population come under threat, since in the

modern world, disturbances in one region have a ripple effect on several other regions,

interconnected by globalization (World Conference on Disaster Reduction 2005).

The field of disaster management is relatively young and still evolving. Due to its multi-disciplinary

approach, an overarching definition of disaster is hard to produce. The United Nations (UN) did,

however, decide upon a working definition, which is as follows:

“A serious disruption of the functioning of society, causing widespread human, material or

environmental losses which exceed the ability of the affected people to cope using its own

resources. Disasters are often classified according to their cause viz. Natural or man-made”

(DHA/IDNDR 1992).

Examples of disasters that the UN has considered in the past include the 2004 tsunami in Indonesia,

the 2005 earthquake in Pakistan, the 2010 earthquake in Haiti, the 2010 flood in Pakistan, and the

ongoing Israel-Palestine conflict, among myriad others.

The UN is allotted billions of dollars in every fiscal year to support populations that are disaster-

struck, to try to provide nutrition, hygiene, health and education, essentially for a rebound to pre-

disaster livelihoods, at the very least.

With record number of people living in urbanized areas today, a few facts are becoming clear: the

trend of urbanization is ongoing and irreversible, dense living conditions create unsanitary living

conditions, and finally, urban areas are of the highest risk in case of a disaster as they are generally

based around areas of higher disaster risk. It makes sense when one considers that most of the

world’s largest urban centers are located around areas of high disaster risk, be it through


earthquakes, floods, volcanic activity and landslides, among others. Keeping these

facts in mind, it becomes apparent that post-crisis management must concentrate

mostly on urban areas and that to a large extent, it is due to the poor urban

planning that extensive disaster mitigation is necessary (SUSTAINABLE RELIEF IN

POST-CRISIS SITUATIONS). But that is neither here nor there.

While the UN does have a Total Disaster Risk Management Approach that outlines the protocol

involved in determining the who, what, where, why and how of disaster mitigation, the concept,

being relatively new, does not perform exceptionally well in practice (de Guzman 1). For starters, the

lack of efficiency in disaster management is a problem – probably the major issue that needs to be

addressed and tackled by the Model UN (MUN) delegates.

There is definitive market failure when such a monumental task has to be undertaken. The costs of

disaster are clear: population displacements, be it due to war, weather or other natural disasters. All

of these situations impact the health, hygiene, nutrition, education, and shelter of said populations

(UN Humanitarian and Disaster Relief Assistance), as well as economic growth and development. The

final point is the true social cost of not participating in relief efforts.

On the other hand, the social benefits of disaster mitigation and relief allow for stability of people,

helping the affected get back on their feet, so to say. In essence, rebuilding and the development

projects that should be follow-ups to the initial relief efforts (to ensure that people survive) are

central to creating a sort of self-sustaining system that would guarantee that in the future, nations,

or peoples, can pick up the pieces after themselves. Currently, we are nowhere near reaching the

equilibrium point between the social costs and social benefits, hence, the market failure, and global

economic loss. It is in the interest of society as a whole to achieve that equilibrium, although the

Tragedy of the Commons would let us know that rational calculations make it hard for individuals

and nations to make decisions based on collective good.

Keeping that concept in mind, the end result that everyone involved must be looking to achieve has

to be a resolution of these developmental retardants, in such a way that the most economically

efficient reallocation of funds can be achieved. Needless to say, the obstacles and human

transactions/interactions involved in reaching these decisions are what the delegates will be faced

with, including time constraints, opposing agendas, breakdown of dialogue, earmarks, accountability

and string attachments to any aid that may or may not be forwarded for disaster relief.

In large part, a lot of our actions, decisions and regrets in life are dictated by randomness; who we

are, or who we consider ourselves, is due mostly to chance encounters that shaped us. Of course,

certain things were more likely to happen and they probably did, while other things in the same boat

did not happen. This is randomness, clear and simple – and the concept begs us to clear our mindset

in regards to it, to show us how little control we have over order within chaos that is life. Allow

yourself to understand that, and let the conclusion seep into you that disasters will happen, mostly

randomly. Ethically speaking, the UN feels it is its duty to come together to provide relief assistance

where it feels it is necessary, once a disaster has taken place.

While luck (or probability, depending on your leanings) does play an important factor in determining

how much is doled out to each nation, in terms of disasters, the point remains that at the end of the

day certain nations are faced with far more serious crises than others. And a meeting of delegates is


generally called to ensure who has to hand out what, at what cost and for what

benefit. That is part of the job delegates’ undertakings for this committee’s

sessions. It must be within their ability to establish a resolution that arches over

all sorts of situations that may spring up in the future, regarding disaster

mitigation and relief.

That statement holds true most of the time, and in coming to a consensus, the committee members

must consider what the average amount of disasters occurring in various places are. Each delegate

must look into his or her own country and determine how likely disaster scenarios are and how often

in the past they have occurred (Mlodinow 7-9). The Pacific Disaster Center has come up with a

Disaster Resilience Visualization and Assessment Tool (DRVAT) that measures disaster risk and post-

disaster management of different regions based on indicators and metadata. Their argument is that

disaster risk is a function of the actual hazard and the vulnerability to disaster inherent in the living

conditions. Each delegate should consider the implications of disasters listed on their website and

how they relate to their country, in order to gain an understanding of their country’s relative

disaster potential and the subsequent response to it.

While we cannot predict disasters, analysis of historical data does provide clues into what to expect

in the future. It is more about preparedness and planning than about forecasting doom.

The purpose of these sessions is more than just to create a draft resolution in line with previous UN

entries. It is to provide participants with a platform to indulge their delegation skills and to develop

the deep analysis and teamwork that are associated with such jobs.

The UN makes daily decisions that affect billions of people so, in short, the work that they do

matters. The delegates have to understand that completely and so plenty of reading into the

workings of the UN as well as the issue at hand is required. Questions that should go through each

committee member’s mind should be as follows: What does the topic mean? How does the UN

relate to this topic? How does my country relate to this issue? We are all meant to come together to

create legislation that is circumspectly expansive, one that takes into consideration all the

permutations of situations that may crop up in the future. This document must answer all such

questions and must be imbedded in the philosophy of the UN and provide clear cut answers.

Dependency exists everywhere, especially between nations. The poor will always look up to the rich

to help them out, and most people consider it right to provide assistance in such situations. With

sustainable development, yes the rich do help out the poor, but with the final goal being that the

poor should eventually stand up on their own. The old adage, “Give a man a fish and he will eat for a

day; teach a man to fish and he will eat for a lifetime” certainly rings true here. In a nutshell, that

concept is sustainable development.

Inter-dependency, a result of globalization, has managed to create nations that specialize in the

production of goods and services. While this has spurred global economic growth through increased

production of said goods and services, it has also made the world captive to the effects of disaster,

even if it is only in one area. That is not to say that inter-dependency is a bad thing – just one that

requires greater preparation in the future, through careful planning and development.


The other dependency, that has become commonplace, is not recommended. It is

analogous to giving a man a fish. However, it is the one that occurs most often.

Again, that’s not to say that the relief funds being sent in are just being thrown at

the problem. Certainly, a variety of UN agencies are working to put the money to

good use, creating shelters, building bridges, et cetera. In fact, clear resolutions passed by the UN

have got specific protocol with long-term sustainability and safety goals in mind.

The delegates should read into such documents, which are available on the UN website, as well as

elsewhere on the web, with comprehensive explanations and summaries of the sometimes tedious

reading. With a picture of methodology of relief financing firmly in mind, the delegates can begin to

assess how the interactions between different nations will play out during the sessions and what can

be accomplished.

While in the conference room, each delegate is a representative of his or her own country and

should act as such. Any decision or action you take is meant to be a direct reflection of your

country’s opinion, so always speak appropriately, stay on topic and provide the utmost respect to

the other delegates. Keep in mind that the point of everyone coming together for these committee

sessions is to produce a document that finalizes the UN opinion and procedure for disaster

mitigation and relief provision. That means listen to others and try and find common grounds for

reaching that goal.

All nations agree that disasters are not pleasant and ought to be dealt with. However, the methods,

finances, responsibilities and accountability that come with disaster management vary from nation

to nation, policy to policy and situation to situation. In bringing this commitment/resolution to life,

all of these aspects must be clarified and built upon.

The objective of this committee is to come up with a succinct and economically sound resolution

that provides policies to educate and inform the public, through open communication, of disaster

preparedness measures, as well as disaster recognition and prevention (UNESCO Bangkok). In order

to achieve that sustainable sort of development, there needs to be the involvement of stakeholders

from the country itself, so that the system can become self-renewing once the initial investments

are made by the UN. While this sort of thinking is hard to quantify, it does have a lasting effect on

the awareness of the affected population and exponentially increases their abilities to withstand any

future ordeals.

Take the case of Greg Mortenson as an example. His book, “Three Cups of Tea” illustrates his work

to build schools in rural Pakistan, especially in the north. While his story is not a scientific account,

he noted a direct correlation between the level of education of women and the social development

of a society. The UN itself goes to great lengths to involve women from the local region, as to the

World Bank and the Asian Development Bank. Websites showcasing their results are listed below.

Returning to Mortenson’s story, his involvement of locals and their jirgas also helped establish him

as an insider and created opportunities for better bargaining and a more laissez-faire management

system that reduced costs tremendously – so much so that he was building schools for a quarter of

the price that the Pakistan government or any other NGO was building them in, without cutting back

on quality.


More importantly, however, scientific journals world over are filled with similar

examples of successful development project based on this philosophy. Typing

“Sustainable Development” into any economic or policy journal (or Google

Scholar) will provide numerous results that delegates ought to peruse, especially

those involving their own nations, either as benefactors or beneficiaries, so as to better acquaint

themselves with the ins-and-outs of disaster response.

The nature of disaster mitigation is changing because of the increasing regularity with which such

problems are occurring. Human population, being the main culprit, is in definite need of being

controlled. However, it is next to impossible to control it through ethical (i.e., debatable) human

means. Sure, positive controls will keep the population from exceeding its maximum threshold, but

that is unforeseeable by humans and not something to be excited about because it will involve more

warfare (generally over resources), famine and the like.

Education and preparation are the keys. The question is: In the context of sustainable development

after crisis, how can the UN implement both education (awareness) and preparation in the future, in

a justifiable and economically feasible way? That is something the delegates of this committee must

also to tackle.

The Asian Conference on Disaster Reduction (ACDR) 2008 highlighted the goals of any disaster

reduction strategy into four points:

• “Integrating disaster risk reduction into sustainable development agenda and strategies;

• Translating political commitment into action for effective mainstreaming of disaster risk

reduction;

• Promoting a more enabling policy environment for public-private partnership for disaster

risk reduction [and];

• Making available and accessible effective disaster risk reduction tools using advanced

science and technology and knowledge management resources.”

This ought to be the type of thinking going through the delegates’ heads, and all their decisions

ought to revolve around them. Keep in mind, however, that the example above only looks at disaster

risk reduction, while the committee’s topic is disaster mitigation and relief through sustainable

development. The two are interlinked, but not the same.

Policy wise, the ACDR example is the best set of solutions to reach. Whether the ROTMUN ECOFIN

committee can reach a similar conclusion is based entirely on the delegates’ performances,

motivation and bargaining abilities. In the real world, there is no right answer for such questions. It

all boils down to compromise. What and how much is each country willing to do, for whom and

when? The why is each country’s motivation, which can either be specifically expressed or not. That

leaves behind the how.

Again, this situation is not so much about whether it is morally right or wrong to help people in need.

Being a MUN committee already puts it on the moral high ground. The major points that need to be

confronted would be in regards to funds and their allocation. Managerial tactics are the most


noteworthy issue to consider in this field, with many success stories to use as

practical guides. Micro-financing in Bangladesh, market-based diffusion of LED

lighting in Malawi and better urban planning are the tip of the iceberg in terms of

examples of sustainable development in the face of crises. Use the web, and read

up on how Non-Governmental Organizations (NGOs) function and why they function the way they

do.

It cannot be emphasized the need for educating and involving the local population in the ways of

sustainable development. A culture of disaster prevention and preparedness needs to be highlighted

in the resolution that links the local population to the bigger picture. After all, it is them who are

affected at the end of the day, so make it about them being able to take care of their region once

the UN goes off duty.

However, this does not mean that the committee will bore itself over the tiniest details of every

project that will come the way of the UN. The creation of actual action is to be left up to the

agencies. This committee’s job is to evaluate the major problems with the economic feasibility of

disaster mitigation and relief, as well as to present the agencies with the means to secure funding

for their future. The resolution is meant to be a comprehensive yet interpretive document that the

agencies can base their regulations off of as they deem fit and necessary.

The long-term sustainability goals of disaster mitigation and relief are the crux of this committee, but

they should not come at the cost of fast response in early emergency situations. It is likely that the

real UN has two agencies (or inter-agency divisions) that cooperate with each other in such a way

that one handles the emergency needs of the few, while the other looks after the long-term needs

of the many.

The main concern with the rapid response system that is likely to be employed in an emergency

situation is its ad-hoc nature. While it is understandable that the set-up would be based on several

mitigating factors, like terrain, type of disaster and funding, certain scenarios should be

premeditated so as to minimize the confusion once temporary shelters have been created.

Once a semblance of permanency begins to establish, a unique opportunity can be taken advantage

of. The recovery process can illustrate areas that are more disaster-prone, and policy revisions can

take place to enhance the area against future disasters, or better yet, relocation of population to less

disaster-prone areas. The latter is much harder to do, as people tend to have sentiment attached to

their homes and land. The idea is that better urban planning can also reduce the risk of disaster

damage by keeping the natural environment intact, which reduces the power of disasters. Consider

a riparian corridor: as rain water runs off it will be slowed by the trees and vegetations, taking it

longer to get to the stream. By removing those trees for the construction of hypothetical mall, the

runoff increases in speed and fills up the stream faster, resulting in a flash flood that could cause

severe damage if enough rain occurs. Extrapolating that concept to a macro-scale would lead one to

believe that certain disasters could be mitigated by good foresight.

If the heart of long-term relief efforts is providing education and creating opportunities in post-crisis

areas that are the backbone of sustainable development, then the funding to get there is certainly a


matter of the brain. Keeping costs low without sacrificing quality will get the job

done, and once again, training and education will create the sort of culture that,

through regional or national self-regulation, can ensure that the best allocation of

resources occurs.

Since Pakistan’s recent flooding disaster, the outpouring of donations is significantly low in

comparison to other disasters. It is assumed that most of the world is suffering from disaster fatigue,

and Pakistan is not receiving as much help from other nations because of its reputation in the new

millennium as well. That is not to say that the amount of donations so far is not enough to get the

job of population redistribution and renewed development done appropriately. The lack of structure

in the government is a major factor in the failure of the country to adjust itself to the floods. The

other factor that plays a critical role is that this flooding is long-term. Most disasters are done and

over with quickly, with the work of rebuilding beginning immediately afterwards; this flood,

however, is a “slow-motion tsunami,” in the words of Ban Kimoon, UN Secretary-General. So as yet,

no clear assessment of the damage has been made, and so no true allocation of funds can occur.

This again is something that needs to be understood for the creation of the resolution. Once damage

assessment is completed, the resolution’s implementation is best left to the discretion of the

agencies out in the field.

The stage has finally been set for the real debate, if the committee gets this far. All the background

information provided up until now is meant to prepare delegates for the question above. Every

nation will have its own opinion on the matter, and while the UN system is meant to be democratic,

equality is rarely transparent. Certain nations have more pull than others, especially because money

talks. Negotiations will be based on how much is doled out by whom, for the most part. And bringing

in the money is top priority.

A recent article on currency speculators in Newsweek could be one way the resolution may go – as

in, the creation of a subsidiary UN agency with the sole purpose of earning quick cash on the foreign

exchange. Certainly there are problems inherent in any scheme to make a fast buck, but experts and

policy advisors agree that earning money rather than relying on government donations is the better

route to take.

The whole sustainable development angle adds pressure to relief budgets as is, so the best

utilization of the money is important. But without the funds coming in, the whole act is useless. And

yes, most UN activities run on national coffers, but innovative thinking to break out of that cycle of

begging is also something recommended for delegates to bring to the table. Note the article above.

That should get the ball rolling. Aside from the obvious praise from other delegates, introducing

innovative money earning ideas may also allow delegates leverage in the debate and accentuate his

or her country’s impact on future committee decisions.

Note that being a delegate in a MUN conference also means understanding how much different

countries are willing to provide for humanitarian aid purposes. Most countries release this type of

information in their national financial publications. Do have a look at them so as to gauge the

amount of aid the honorable delegate from Ukraine (just a thought) could expend. And remember

that the resolution is in fact a check being handed over with lots of strings attached to it, so it is

important to set up a system of accountability.


This study guide has repeated a few times that it is the moral duty of richer

nations to help out poorer nations in time of disaster. While that sort of

conjecture works well in siphoning money into developing nations that are

struggling after a disaster, it is not entirely just. Recent evidence seems to suggest

that poor country’s may not always need a monetary crutch but have become used to demanding it

as they seem relatively powerless in the face of nature’s wrath, at times. The fanfare with which the

media and rescuers prance about the disaster zone is all too well known. However, the presence of

the cameras is short-lived, and most NGOs follow suit. This is the sort of behavior that needs to be

addressed and curbed through the use of the resolution. But who will decide what the time-frame of

their arrival and activity will be? That is again something up for discussion.

Documents

EcoFin Study Guide