Committee: ECOSOC

Topic B: International debt relief for heavily indebted developing countries

 

Director: Miguel Ángel Jiménez Siller

Moderator: Ana Cecilia Flores Gómez

 

Globalization, modernization, income these are only economic stimulants that have boosted many poor countries in drastic ways around the world. These factors are very sensitive and can be easily affected by war, crisis, and debts; for instance during the period of 2^nd world war 1930s as The world focused their economic resources on war Mexico grew tremendously it even achieved a higher socio economic level than the USA’s, however this status did not lasted long since the development of nuclear energy, high tech weaponry etc the USA became a world leader economically, military and socially. With America being the most powerful country in the world weak and least developed countries took America as a big brother as it could satisfy the economic needs of their people and their government.

 

Economy is seen in many different ways around the world since people have different economic systems as in Russia socialism and in  America capitalism this is the main reason of debts, people spend more than they have and for this they have to borrow money.

 

 Debts are made when they aren’t capable of satisfying their needs by themselves. And this is not only speaking about people as individuals but countries as well since they have a need to give the basis for life which is: food, education, medical care etc to their people.

 

 Through history nations of the world have indebted themselves to satisfy their basic needs since they are not able to satisfy them by themselves; however it was never as serious as the economic crisis we are living today. The World Bank and the international monetary fund have taking have been working on it since the 1960’s, they created the group of heavily indebted countries or HIPC was created. It is constituted of the 40 poorest countries in the world mainly from Africa that are still in development, the main objective of the HIPC is to provide debt relief and low interest loans to reduce external debt repayments to sustainable levels.

 

The HIPC offers a long term program to turn poor nations into economically self sufficient countries that not longer need the economic support of other nations; these is named the ‘’Completion point ‘’ of the HIPC  program.

 

Most of these African countries are indebted with the united states for military reasons, they boy military equipment, these countries are constantly involved in fights with each other since there are frequently in disputes between revolutionaries against the actual government, however achieving the HIPC ‘’Completion point ‘’ means that eventually they would be indebted away because of their politic, economic, and social instability.

 

Some of the solutions the HIPC give are to give free debit saving cards to inhabitants to start businesses these cards are free of any commission in any ATM or bank from the world, these are under the world bank jurisdiction, also they generate an agreement with banks so they don’t charge interest in debts and sometimes even to solve the debts. This has not made any improvement since such a drastic change in the banks economy may lead them to bankruptcy and that would cause a further and more serious damage to the economy in such a poor country. 

 

The main problem with money is that all the nations around the world or at least most of them are greedy but in cases like this they are right to b greedy since they need that money as fast as they can get it since it is urgent for everyone everywhere to get basic needs like medical care and more now than ever since the sudden increase in sexually transmitted diseases and the present problem of swine flu. 

 

As long as money exists debts will, the problem are not debts themselves but the lack of money to pay them , and this is getting worse since today there is no one else to ask money from since everyone is loosing their job. Now that America is in times of crisis they need their money faster to solve the debts their banks have with banks around the world.

 

People in the world have lived with the present fear of losing their job, their house and their family, they live with the fear of what is it going to happen tomorrow, Are my kids going to school?  Am i going to be able to pay for their collage? What am I going to do to keep my job? Why am I being replaced my a machine? These are questions people ask themselves every day because of the damage that debts have caused to the economy and what globalization has done to employment worldwide.

 

These divides the problem of debt relief into two sides of the controversy, pro HIPC action and cont HIPC action, is it prudent to let the HIPC provide debt relief to countries or is it not, if it is why or if it is not why not.

 

Pro HIPC action:

The debt relief the HIPC is providing to nations of the world is, was and would always be needed because of the evil way nations like the USA treat their indebted countries. They cruelly request the nations to pay at once and even sometimes treated to take the problem to the ICJ and if so to take military action. The way indebted countries are treated is not fair since they do not posses the necessary economic or military strength to stand up against the oppression that rich and powerful countries have upon them.

 

There is now way both sides ( the one paying for and the one lending ) would come to a common agreement since there is always someone that looses money, however if it was a solvable debt it could be agreed to have a contract to prolong the dead line or to reduce the interest these is the reason why the HIPC was created so that the poor nations in Africa could become self sufficient to give them the opportunity to  have a stable economy and to solve their debts in a peaceful way in which no is harmed and everybody agrees with a payment program. 

 

The most viable solution is to allow the HIPC to intervene in the economic disputes that nations have with each other because of the debts they have between them so the HIPC can lead them to make a common agreement in which they both agree to give up something so that in that way they both win. This would form a friendly relationship between countries and even create possibilities for an alliance between them like the G8.

 

Cont HIPC action:

The debt relief the HIPC is not giving any help to nations of the , the only thing they are doing is making the rich countries that lent money to them lose it since they provide them debt relief.

 

 Neither the UN nor the HIPC that provide debt relief have nothing to do with the economic argument countries have with each other.

A good reason for nations of the world wont agree with the HIPC in their peaceful solutions is that it would eventually lead them to a loss of money, and it is in fact true since providing debt relief is leaving other countries with no money or with less money than what they were supposed to receive.

 

Rich countries that have lent money need it more than ever since they are going through one of the worst economic crisis of their history.  They are not willing to leave their debts  and forget about them that easily because the money doesn’t comes out of nowhere they would have their money back and they are not taking a no for an answer; we are talking about an exorbitant amount of money here that would not appear in an instant nor a year or two.

 

The most viable solution is to exclude the HIPC from the decisions one nation does with another one about economic affairs since it has nothing to do with them. Also to create an alternate organization to regulate the economic affairs of one nation with another one, one that is impartial and that is in no way linked to the UN.

 

 

QUESTIONS TO THE DELEGATE:

 

-What is the reason for debts?

-What is the importance of debts in the current economic crisis America is suffering?

-Do you think that providing debt relief for heavily indebted countries is the best solution? Explain why or why not.

-Is the HIPC program helping developing countries? How?

-What is the main function of the HIPC?

-What does HIPC stand for?

-Do you think that it is convenient for other nations to take the US as a big brother in these situations of crisis? Why?

 

 

BIBLIOGRAPHY

 

- http://www.johnmorrow.info/projects/books/won.pdf

Book name: An Inquiry into the Nature and Causes of the Wealth of Nations