LETTER FROM THE CHAIR Honourable Delegates,

It is with utmost privilege that I welcome you to the world of international trade and economics. First of all, I would like to congratulate you for taking this step towards MUNs and debating . All those considering this to be a beginners’ committee, don’t mistake it to be easy. I expect hardcore debates from everybody, backed by facts and figures rather than just vague explanations.

I will be serving as your chairperson for the eleventh edition of DPSSMUN.As a student with keen interest in law and economics, I believe in voicing ones’ opinions in a politically correct manner. I assure you that you will have a fruitful experience in the committee given that you participate will full zeal and enthusiasm. The agenda chosen is one that is relatively new and thus allows you to actually analyse and study the economic environment to come up with new and innovative solutions. Although this guide is to give you a start, that is all this is. I hope that each and every one of you go beyond this write-up to explore and scrutinize the world.

As a twenty-first century child and future of the world, it is of utmost priority that you start taking the lead from now. I am confident about the fact that everyone in the committee is a leader and that each person has the calibre to escape mediocracy and reach heights of success. It is to be noted that the procedures and rules of the committee must be adhered to with respect and strictly. I fondly expect your participation in the conference and hope you have a great experience.

You can contact at

Rishika19@icloud.com Chair of

Economic and Financial Committee

Rishika Agrawal

Letter From The Vice-Chair

Honourable Delegate,

It is my distinct pleasure to welcome you to UNGA 2nd committee Economic and Financial Committee in the eleventh edition of DPSSMUN. Prepare yourself for one day of heated yet fruitful debate and being challenged as a delegate. Model United Nations is a great way to explore and inform yourself about the world and the current geo-political scenario. As a global citizen it is more important than ever to stay updated with the latest information.

I will be serving as your vice-chairperson. My name is Adhyan Patel currently in class XI-A aiming to pursue Biotechnology and Biophysics. I attended my first MUN in grade 8 and found that as an introvert MUNs have helped me a lot in developing social skills which have proven to be invaluable. To date I’ve attended around 8 MUNs.. Economics is one of those subjects that very few people understand yet the entire world revolves around it. I expect all the delegates to do diligent research and come prepared; going beyond the background guide of the conference aside from research an important takeaway for delegates should be etiquettes and diplomatic courtesy.

I look forward to seeing you all, I promise you will have an unforgettable experience and will have something valuable to take home. In the meantime, please do not hesitate to contact me should you have questions or concerns.

Email :- adhyanpatel@gmail.com

Adhyan H. Patel

Vice-Chairperson of Economic and Financial Committee

INTRODUCTION TO THE ECONOMIC AND FINANCIAL COMMITTEE

Economic and Financial committee is one of the six committees of the UN General Assembly also known as the second committee. Like other committees it was formed after the WW1. ECOFIN is open and equal to all 193 member states of the UN. All resolutions passed in ECOFIN are non-binding, nonetheless hold immense importance in the international community. Through policy dialogue and oversight for specialized agencies, functional commissions, and regional commissions, ECOFIN’s mandate allows for the responsibility to address problems with comprehensive approaches.

In the past ECOFIN has addressed issues of financial sustainability and economic cooperation between countries. From general to specific groups of countries, the committee has laid great stress upon the issue of Least Developed Countries and Landlocked Developing Countries. Moreover discusses variety of International Measures for preventing financial crisis.

It plays a unique role within the United Nations as a primary organ tasked with discussing crosscutting issues related to development, cooperation financial stability. In addressing these issues, ECOFIN may make recommendations, initiate studies and submit draft conventions to the General Assembly. The General Assembly Plenary Second Committee the delegates will not just propose solutions only but instead be able to debate the events leading to these concerns. Unfolding these scenarios and understanding of current events is essential for a productive discussion in the committee session.

MANDATE OF THE COMMITTEE

As the name implies the primary aim of ECOFIN is the promotion of economic development. ECOFIN was created with the purpose to “promote international co-operation in the economic field,” as outlined in Article 13 of the United Nations. Charter of 26 June 1945. According to its mandate, ECOFIN aims to discuss “macro economics policy questions like financing for development, globalization and eradication of poverty.’’

It plays a unique role within the United Nations as a primary organ tasked with discussing crosscutting issues related to development, cooperation financial stability. In addressing these issues, ECOFIN may make recommendations, initiate studies and submit draft conventions to the General Assembly. It also prepares the EU’s annual budget and coordinate EU positions in the international meetings such as G20, the IMF, World Bank.

The mandate of a committee is the expressed powers or topic areas that it has jurisdiction to cover and discuss. According to the United Nations, ECOFIN functions to discuss issues relating to economic growth and development (including international trade, international financial system, external debt sustainability and commodities), financing for development, sustainable development, human settlements, poverty eradication, globalization and interdependence, operational activities for development, and information and communication technologies for development. Its mandate further explores

groupings of nations such as Least Developed Countries to encourage regional growth and support for all nations, which is just one of the many subgroups that are formed under ECOFIN to be able to substantively solve niche issues.

INTRODUCTION TO THE AGENDA

Over recent years, universal basic income (UBI) has become an important reference point when discussing innovative basic income policies as promising alternatives to address shortcomings resulting from the changing nature of traditional employment patterns and work. Related to this is the notion of new insecurities that have arisen, which existing welfare state arrangements are not in a position to adequately tackle.

Changing employment and income patterns, the impacts of technological change, austerity, and structural trends in providing and reforming income security have rendered increasingly insecure the provision of income security through employment and social protection mechanisms. The rise in non- standard employment as a consequence of increasing globalization and liberalization of trade makes it increasingly difficult to obtain income security through work. Automation is compounding these effects, in particular for low-income population groups and those with lower levels of education. At the same time, non-standard employment patterns increasingly limit access to welfare state provisions, which in turn is linked to a large extent to the capacity of workers to contribute.

Austerity measures since 2008 have led to increased use of targeted approaches, which further limit access to basic social welfare schemes. The economic crisis has reinforced the use of behavioural condition as a punitive approach aiming to promote labour market participation; it has also increased the application of sanctions regimes in response to failure to comply with requirements relating to work searches and employment offers.

Recently, several countries and cities within Europe and North America have embarked on basic income experiments in order to

test some of these assumptions. The rationales behind the experiments are fourfold: (1) anti-poverty and health-linked rationales, which are very prominent in countries with mid-sized welfare states and higher levels of poverty (and their associated health inequalities) (e.g. Canada and Scotland); (2) a self- motivation and socio-psychological rationale, focusing on positive motivational impacts of controlling resources in relation to labour market participation, which has

been strong in countries with high income dependency (e.g. Denmark, Finland and the Netherlands); (3) administrative efficiency, which has played a role in particular within welfare states with strong income behaviour control systems; and (4) concerns about labour market change (automation and increasing non-standard employment) and preparing for a new model of social protection to better fit the modern labour market have also been mentioned among stakeholders.

While these basic income experiments mimic only some features of UBI, in particular un-conditionality, they mark a significant turning point in moving the emphasis away from disqualifications and sanction- based regimes to self-motivation.

With increasing income inequalities and almost all firms moving towards capital intensive techniques of production, some governments have tried introducing the strategy of universal basic income in their economic policies, with 2020 presidential candidate Andrew Yang promising monthly payments to each American. Some more questions that the committee looks answers to is whether we really need UBI. In case of developing countries, what will the impact of UBI on their economic structure and how it may be beneficial to them, how should UBIs get funded and should everyone be eligible to access UBIs? If granted what could be the impact of UBIs on the international financial market if they are legalized? How will the labour market react to UBIs and what is the scope in political context?

WHAT IS UBI?

Universal basic income (UBI), a type of social security that guarantees a certain amount of money to every citizen within a given governed population, without having to pass a test or fulfil a work requirement. Every UBI plan can be different in terms of amount or design. Some features of UBI:

1. Unconditional: A basic income would vary with age, but with no other conditions, so everyone of the same age would receive the same basic income, whatever their gender, employment status, family structure, contribution to society, housing costs, or anything else.

2. Automatic: Someone's basic income would be automatically

paid weekly or monthly into a bank account or similar.

3. Non-withdrawable: Basic incomes would not be means- tested. Whether someone's earnings increase, decrease, or stay the same, their basic income will not change.

4. Individual: Basic incomes would be paid on an individual

basis and not on the basis of a couple or household.

5. As a right: Everybody legally resident would receive a basic income, subject to a minimum legal residency and continuing residency for most of year.

WHY DO WE NEED UBI?

1. Rise of automation and A.I

In a report to the Congress, the White House estimated that a worker earning less than $20 an hour in 2010 would eventually lose their jobs to a machine with 83% probability. Even workers earning as much as $40 an hour faced a probability of 31%, With a rising unemployment rate, poor communities would become more impoverished worldwide.

Proponents of universal basic income argue that it could solve many world problems like high work stress and could create more opportunities and efficient and effective work. Besides technological unemployment, some tech-industry experts worry that automation would destabilize the labour market or increase economic inequality.

2. Income inequality

With the top 1% of rich families earning a disproportionately high income, UBI seeks to increase equality amongst fellow citizens by eradicating income and wage differences to a certain extent.

3. Anti-poverty rationale: An anti-poverty and health-linked rationale has been very prominent in experiments in countries with mid-sized welfare states, higher levels of poverty and associated health inequalities, for example Canada and Scotland

4. Self-motivation and socio-psychological rationale: focused on positive motivational impacts of controlling resources in relation to labour market participation – has been more dominant in experiments in countries with more established welfare states, less poverty and associated health inequities, but high rates of income dependence, for example Denmark, Finland, and the Netherlands.

Administrative efficiency: within income security behaviour control systems has been an associated rationale, particularly in more established welfare states that spend more on administration, for example Denmark, Finland and the Netherlands.

SOME PROMINENT CASE STUDIES

Kenya

Give Directly is a U.S. non-profit organization that has recently established the world’s largest UBI experiment in Kenya. Give Directly has raised a lot of money and because Kenya has such deep poverty. Some villages will receive a UBI of as little as US$0.50 per day. Others will receive $1 or perhaps more. The low level of the UBI in the Give Directly project is necessary because of the great poverty and inequality in Kenya. Many of the villages where Give Directly operates have average incomes less than $1 per day. If Give Directly were to give everyone in one village $2 per day, they could easily make that village four- times-richer than the control or non-participating village down the road. This could create animosity and resistance to the program. Until they can afford the give the grant to everyone in Kenya, it has to be small.

Finland As of now, Finland is in the middle of a small-scale, two-year UBI experiment, which is being conducted by Kela, the Finnish Social Insurance Institution. It involves about 2,000 participants between the ages of 25 and 58, selected by a nationwide random sample of people receiving unemployment benefits. The experiment replaces unemployment insurance benefits of €560 per month with a UBI, of the same size. The Finnish parliament rewrote the law to make participation in the experiment mandatory for unemployment benefit recipients who were selected.

Canada

In Manitoba, Canada, in the city of Dauphin, 10,000 people received UBI during several years. The experiment also included a random sample from the city of Winnipeg.

The experiment was cut short when it ran out of money and stumbled on political and academic disagreements. The results were concealed from researchers for decades.

It’s believed that the fact that the experiment was launched as a pilot that was supposed to be adopted on a larger scale later influenced the behaviour of the participants.

As to the results, especially old and low-income participants benefited from the experiment. Receiving a secure income was especially beneficial to farmers and entrepreneurs. Young people studied longer than before or after the experiment. Also the physical and psychological well-being of the participants was higher than that of the control group.

Brazil 1995

In Brazil, a program called Bolsa Família has given financial support to the participants that meet the conditions of allowing their children to go to school and participate in health examinations.

According to the results, families that have met the criteria for being payed the support have spent more money on education, vaccinations, and healthcare, than the control group.

The program doesn’t really count as a UBI experiment, but I find it compelling nevertheless.

India 2010–2013

The experiment covered several villages. The participants were given support for buying e.g. a sewing machine or farming tools and starting as entrepreneurs.

The biggest impact was detected in girls’ healthcare and education, as parents had more money to promote those things. The researchers described the results with the term empowerment effect: When women had money at their disposal, they also started to have more say in the issues of their families and their villages.

The USA 1968–1980

There were several different experiments in the USA, starting in 1968.Participation was voluntary. The participants received a certain amount of money, and if their income increased, the money received was gradually taxed away.

The most important experiment was the Seattle–Denver Income Maintenance Experiment (1970–1977). The participants were low-income families, they were chosen by lottery, and the experiment lasted for three or five years. In addition, 93 families were covered by negative income tax for 20 years.

The results showed a decrease on the employment rate of the participants. The participants were offered fewer jobs, and long- term unemployment rate increased especially among women and young men. Later it was concluded that this happened due to the absence of maternity/parental benefits in the country; the negative income tax was used as a substitute of maternity grant, which undermined the participation of mothers in the labour market.

The experiment didn’t include long-term monitoring, since there weren’t registers available for that. The long-term impact on employment rate is therefore not known.

Other notable examples

Alaska Permanent Fund The Permanent fund of Alaska in the United States provides a kind of basic income based on the oil and gas revenues of the state to nearly all state residents, however the payment is not high enough to cover basic expenses and is not guaranteed hence, cannot be called basic income.

QUASI-UBI PROGRAMMES

1. Old age pension is a payment which in some countries is guaranteed to all citizens above a certain age. The only difference from Basic Income is that it is restricted to people over a certain age.

2. Child benefit - A similar program to old pensions but is

restricted to children, or more precisely it is given to parents for each child they have. It is also like Basic Income except that is restricted to children.

3. Conditional Cash Transfer - This is also a regular payment

given to families, however it is only given to the poor and is usually dependent on basic conditions such as sending their children to school or having them vaccinated. Programs include Bolsa familia in Brazil and a similar program in México.

4. Guaranteed minimum income - Despite the name, this differs

from a Basic Income in that it is restricted only to those in search of work. Example programs are unemployment benefit in the UK and RSA (Revenu de solidarité) in France.

PROMINENT ADVOCATES OF THE UBI PROGRAMME

• Economics Nobel Prize winners Peter Diamond and Christopher Pissarides

• Tech investor and prominent engineer Elon Musk • Political Philosopher Philippe Van Parijs

• Former finance minister of Greece Yanis Varoufakis

• Founder and CEO of Facebook Mark Zuckerberg

• 2020 POTUS nominee Andrew Yang

PROMINENT CRITICS OF THE UBI PROGRAMME

• American economist Pavlina R. Tcherneva Robert Greenstein

• Political Commentator Ben Shapiro Economist Lawrence F.

Katz

• Former Chief economist of World Bank Lawrence H.

Summers

QUESTIONS TO CONSIDER

1. What is the current state of your country’s economy in

terms of its position to adopt UBI?

2. If a country does decide to implement UBI, how will it be funded?

3. What will be the legal, economic and social impact of UBI?

4. How will UBI affect the labour market?

5. Moral challenges for UBI? Is UBI moral and fair?

6. Design of UBI and role of local government.

7. Effect of UBI on the social fabric? Would people just stop

working

8. Consequences of UBI on economy; would it just cause

inflation?

9. Should everyone receive UBI? Should there be an

eligibility criteria?

10. Are robots really replacing us and taking our jobs and

do we really need UBI?

11. Will this lead to mass immigration to the US?

12. Wouldn't employers start paying their employees less?

CLAUSES TO BE USED IN THE RESOLUTION

PRE-AMBULATORY CLAUSES

Affirming. Alarmed by. Approving. Bearing in mind. Believing. Confident. Contemplating. Convinced. Declaring. Deeply- concerned Deeply- conscious Deeply- convinced Deeply regretting Desiring Emphasizing Expecting Emphasizing Expecting Expressing it’s appreciation Fulfilling Fully aware Further deploring Further recalling Guided by Having adopted Having considered / examined Having received Keeping in mind Noting with deep concern Nothing with satisfaction

Observing Reaffirming

Recalling Recognising Referring Seeking Taking into consideration Taking note

Viewing with appreciation Welcoming

OPERATIVE CLAUSES

Accepts. Affirms.

Approves. Authorizes.

Calls upon. Condemns.

Confirms. Congratulates.

Considers. Declares accordingly.

Deplores.

Designates Draws the attention Emphasizes Encourages. Endorses Expresses its appreciation Expresses its hope

Further invites

Deplores Designates Draws the attention Emphasizes Encourages Endorses Further proclaims Further reminds Further recommends Further requests Further resolves

SAMPLE RESOLUTION PAPER

ECOFIN, General Assembly Second Committee

Resolution ECOFIN/1/1.1

Co-Sponsors: Antigua and Barbuda, Democratic Republic of the Congo, Federal Democratic Republic of Ethiopia, Federative Republic of Brazil, Islamic Republic of Afghanistan, Islamic Republic of Pakistan, Japan, Kingdom of Spain, People’s Republic of China, Republic of Serbia and The Russian Federation.

Topic: Microfinance

Deeply Concerned that 80% of the world ́s population still lives on less than $10 per day, and nearly 50% on less than $2.50 per day,

Recalling December 15, 1998, the UN resolution 53/197 passed without vote. 53/197 “Proclaimed 2005 as the International Year of Microcredit,”

Recognizing that microfinance has helped promote economic development by improving the standard of living and overall health of micro and small entrepreneurs,

1. Requests that everyone shall have access to microloans;

2. Calls upon the creation of more microfinance institutions (MFI) to help safeguard

peoples money;

3. Endorses the creation of an Non-Governmental Organization (NGO), that will:

1. A) Offer the education of basic business management to representatives of global

MFIs, so that they can further on hold mandatory classes for the individuals

applying for microloans.

2. B) Supervise the MFIs after the education process,

4. Advises MFIs to supervise the clients who have taken microloans;

5. Recommends the idea of gradually decreasing the interest rates of microloans,

through governmental support;

6. Urges governments to support MFIs financially;

7. Encourages governments to offer incentives to commercial banks to have

micro financial services;

8. Calls Upon the United Nations to create an international set of rules for all MFIs, implemented by governments;

9. Further recommends holding a microfinance summit annually, to discuss past resolutions and future goals.

REFERENCES

READING MATERIAL

https://www.undp.org/content/dam/china/docs/Publications/U NDP-CH- Universal%20Basic%20Income%20A%20Working%20Paper.pdf

https://economics.mit.edu/files/16000

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source

=web&cd=15&cad=rja&uact=8&ved=2ahUKEwi6rb6gv4TkA hXUV30KHbVXCuIQFjAOegQICRAC&url=https%3A%2F%2F www.imf.org%2F~%2Fmedia%2FFiles%2FPublications%2F WP%2F2018%2Fwp18273.ashx&usg=AOvVaw2R- MmcJXERNUi1WTqJnNBL

HELPFUL AUDIO-VISUALS

NOTE:- These videos are just to give you an introduction to the agenda and get you familiar with the topic and these videos cannot be used as sources during the conferences

https://www.youtube.com/watch?v=c4W8p3b2p58&t=637s

https://www.youtube.com/watch?v=hS9wOdenEys

https://www.youtube.com/watch?v=X2KEYSz7WBY&t=268s

https://www.youtube.com/watch?v=VtBt2OSL2Mw

https://www.youtube.com/watch?v=-DHuRTvzMFw

https://www.youtube.com/watch?v=mQUhJTxK5mA

https://www.youtube.com/watch?v=m25YLByFVRw

https://www.youtube.com/watch?v=kl39KHS07Xc

https://www.youtube.com/watch?v=OQjrhIyaPyg

https://www.youtube.com/watch?v=v7gKGq_MYpU

https://www.youtube.com/watch?v=JZgc8y4rNBo

SOURCES FOR RESEARCH

UNDP (United Nations Development Programme)

World Bank Reports

IMF (International Monetary Fund)

ECOFIN Resolutions (United Nations Resolution and Reports)

Reuters

AP (Associated Press)

UN News

CIA factbook

RAND