[GA] Resolution on International Financial Practices

[NagandEmerald]

"Well, mutual agreements between the contractors that stipulate that there is a clause that holds something as a security deposit tend to be utilized by most, if not all nations, with a basic understanding of financial practices, whether that's money or some other form of collateral."

 

[Naio90]

"And why not include such thing in the presented draft? It would surely help to have more guideliens to work with, not all nations have the same insight on financial affairs or how the market effectively works.

A contribution like this by Germany would surely enhance the project."

 

[Retroliser]

"Because it's basic practice by commercial practices across the globe already," Hakim responded. "An agreement is two-sided. There is nothing compelling a borrower from agreeing to terms that they believe are unfair. In addition, it is already the case that a number of organisations, both private and owned by nations, engage in the business of providing loans. Your own country's central bank engages in the provision of loans to other nations, sir. If you are concerned about whether the people you provide loans for are truly willing to honour their agreements, it's your business to ensure that the terms of the contract protect you. Just as it is the right of another nation to say no to the terms you provide, and search for financial aid from another source, such as First Choice.

There is no issue to answer here via this body, nor is it within this body's competency. We are here to prevent war and gross injustice, not babysit banks."

 

[Naio90]

"Something being "basic practice" does not imply a legal binding, and as such could easily be left out resulting in an unfair deal for one of the sides, who could subscribe them without really knowing the scope due to lacking a clear reference.

I would rather avoid talking about specific cases, specially that of the nation I represent, but given that you mention it, Argentina gives out credit with standard contracts that are fair to both sides, therefor we are ocnfident about what we offer. However, this does not mean that we as a lendor are left vulnerable to the behaviour of the nations we work with, who could change governments or fall into anarchy. Having clear guideslines to know how to act is key to preserve stability and guarantee further growth of the international market.

We are submitting ourselves here to legality as a sign of our goodwill and itnerest in bringing prosperity. We expect therefore to have laws that protect all sides.

Finally, you say this body is about preventing war? Today there is nothing that prevents a nation to invade another in order to reclaim a debt, if they take it as a casu belli. Why not directly cut that possibility by their roots and prohibit it?"

 

[NagandEmerald]

"Simply slapping a sovereign nation on the wrist with sanctions and punishments for bad behavior is not going to prohibit a nation from using the act of invading another to reclaim their debt with "added interest" either way!" Harald exclaimed with mounting frustration, "This is why the Global Assembly exists in the first place: to deescalate those conflicts before they get out of control, and nations are left ruined! You don't get the fact that companies also act differently to sovereign nations, and it is the job of sovereign nations, and by extension the companies under them, to deal with these issues at the drawing board for their contract!" The representative then began to go on a tangent on how basic economics worked, for it was clear to him that the Argentinian representative had not thought his proposition through.

"For example, if my nation, Germany, was to take out a loan from a foreign power or even a private company, say First Choice International, I would expect that the company would want payment back with added interest, regardless of a timeframe for such a thing. Furthermore, I would expect that my government use its funds responsibly and pay back its lender, otherwise there is a means for calling for bankruptcy. Do you understand what I'm saying, sir?" With each major word that poured from his mouth from the rhetorical question, Harald slammed his hand at his podium.

"This is a 'futile' effort! It's futile because you 'expect' sovereign nations to behave 'poorly' and 'carelessly' with their loans or contracts! It is 'not' the Global Assembly's job to dictate what the stipulations of a contract are — just as the Ottoman delegation has stated previously — 'nor' is it its job to protect private companies' investments, as they are the ones taking the necessary risks in dealing with sovereign nations and all the financial stability that comes with it!"

 

[Retroliser]

"To add to the German delegate's statement," Hakim stated calmly. "If a lender does not request that the borrower provide them with collateral, that's their choice. The fact security and collateral exists is so that in the event that a borrower defaults on their debts, regardless of whether they are a nation, individual or corporation, the lender already has something in their possession they can use to recoup the loss. If they don't do such a thing, and end up out of pocket, that's their fault for not being careful. I do believe the phrase is 'sour grapes'? Regardless, if we look at your proposal, an entire section, Section 2, is a watered down definition OF a contract; A legally binding agreement between two parties. This is, as I mentioned before, basic contract law. Everyone in this room already recognises it in their respective legislatures.

We are not here to act as babysitters for those who, in all honesty, should not be writing loan contracts in the first place, if they are foolish enough to not demand collateral for the vast sums of money that are expected to be exchanged with other nations."

 

[사경사]

The South Korean delegation would arrive late and quietly enter the Assembly. Once seated and prepared, they would read through the transcripts so that they are up-to-date on the process and the current stance of the states in attendance. The representative would speak up:

"I would like to state South Korea does support such legislation. With the globalised world, companies and individuals alike are engaging in economic activity across states just as much as within them. Yet law only protects that economic interaction within the state, leaving much room for exploitation, fraud, breach of contract and criminal activity. Legislation on this level is exactly what the GA needs to make the global market a safe and trustworthy market, just as it is in our home countries."

 

[Naio90]

Calm, but annoyed at the disrespectful and rude way of behaving of the german representative, the argentine would respond to him and the turkish diplomat:

"So your Excellency, you are seeking a lawless, unregulated world where an entity can act as it pleases relying on its simple witt to overpower the less involved Parties that are beginning to adventure into this business, and let those less experienced out for the wolves? This is very a selfish position from your Government.

I welcome the idea of including the collateral as a helpful tool in such transactions, and so, rather than leaving half of the world to die, I would welcome very much to have a cosntractive and propositive discussion here on how to help fortify this economcially relevant market instead of plainly throwing everything over board.

Relation among states and international entities needs to be regulated at least in the form of a framework agreement as the one proposed by my nation.

The GA has to be constructive, positive. Work to build, not to destroy. Help all sides, not shut them down and leave them alone.

Finally, I thank the Korean representative for its contribution, and would like to hear the rest of the present's opinion on the matter."

 

[NagandEmerald]

"You still are not understanding the basic concept that a nation should not be held responsible to babysit any financial institutions except the ones that they actually own; ever! You do not understand the basic fundamental fact, that even you admitted yourself, that a nation fundamentally acts differently to your average citizen! I cannot, in good conscience, allow your framework to pass, and if it passes, and is to enforce all nations under the Global Assembly to correspond to what you and the average dunce may think is right, then I am guaranteeing that you will lose a large customer base as nations become afraid to step on the toes of anyone!"

 

[Retroliser]

"It is the duty of the prospective borrower to have, at the very least, a basic understanding of what they're doing before venturing into it," Hakim remarked. "His Excellency was not advocating a 'lawless environment', sir. He, and I, are highlighting that prevention of trickery first begins with the potential victim knowing the basics, so that they are not taken advantage of due to their inexperience. This framework is not doing that, it is taking the responsibility for national governments to understand what they are getting involved out of their hands.

You are, in effect, protecting incompetents and people who should not be in high office. You would be far more likely to gain support from the members of this international body by backing down from the position of making this international law, and instead opting for the implementation of a set of guidelines that nations, who have yet to explore the potential loans can bring to them, can consult. As a result, you do not encroach on the national sovereignty and freedom of nations, but you protect the inexperienced from exploitation."

 

[Naio90]

"So, propose an ammendment and lets discuss it, instead of just tearing down.

I understand your concerns, but it is imperative to have some type of regulations. And in the past there existed institutions like the Permanent Court of Arbitration, dedicated to serve as a mechanism to facilitate conflict resolution among states, organizations and private entities. Said instrument was composed by Member nations, sovereign nations. This is only an example of how public institutions can contribute to regulate public and private financial transactions.

How many state bailouts did we have to see in the past? How many private-originate issues affecting public finances?

It is duty of the GA to assist the, as you say, "inexperienced", and help them avoid making mistakes from the past."

 

[Odinson]

The Norwegian ambassador to the global assembly arrived, read the transcript, and began formulating what he should say, if anything. He was wearing a black suit with a dark blue tie and dark shoes. Silently, in the back of his mind, he was wondering what he would have being dinner for that night. He was also wondering how long it would take him to type seventy words if he just kept writing without thinking what he was writing. He found that it would take about ten or twenty-five seconds.

 

[NagandEmerald]

"That's the problem though; you are protecting men and women who should not be holding such positions if they do not understand what they are doing in the first place! You are, instead of advising someone on how to properly manage their economic and financial dealings with private companies and other sovereign nations as the Ottoman delegation stated, protecting the uninformed from actually learning their lesson with this document!" Harald placed his hand on his head in irritation as he continued.

"That's what we have been saying. We aren't advocating lawlessness, or leaving weakened or destitute individuals and sovereigns in the dust. We're advocating for something better than simply saying 'You can't do this and that.' It takes the power away from nations to self-govern, and for people to learn from their mistakes."

 

[사경사]

"With this opposition to the legislation, why don't we try to establish a middle-ground?

It is just I thought here, but maybe the establishment of a GA Financial Conduct Committee, to advise rather than inform, may be better. Or possibly a separate intergovernmental organisation be established that such legislation is the bases, in which states can voluntarily opt in, or out, and those who are members can benefit from the additional security and profit of this."

 

[Naio90]

"Argentina does not believe in dismissing ignorance and leaving aside those, so that they can learn "the hard way". On this level, the hard way is a financial crisis, recession and poverty. It is not fair for millions to pay the errors of a few, no. Argentina believes that instead of casting them to a side and see them fail, we better anticipate and help them learn their share of experience the good way. The presented code does not oblige anyone to enter this business, but instead helps them move around if they decide to do so, rather than letting them risk their future.

I welcome korea's suggestion to add a entity to monitor the overall health of world economy and give advise, althoug we must insist in having some kind of basic regulations to work with."

 

[NagandEmerald]

"Absolutely not. I will not compromise with a nation that's more focused on giving everyone a 'fair shot' at being a financial genius via slapping the wrists of more experienced corporate entities when, in reality, the best way to 'regulate' this is to actually advise sovereign nations on how to properly manage their state's financial and economic health. It's equally as unfair to corporations and banks that are trying to make a living for themselves to slap them on the wrists for being smarter than their competition or their investors," Now Harald was beginning to get inflammatory, and instead of restating what he'd stated to this imbecilic representative before, he instead began mocking the draft even more.

"But why not act like the US Left-Wing? Why not choose to punish people for simply being smarter than everyone? Or are simply just as bad as they are, because if you are, I certainly hope it'll work out for you in the end, but you know my position on this. I will not be compromising with you unless you remove any regulatory policies in your draft and, instead of focusing on spanking the proverbial shit out of businesses for doing what businesses are supposed to do in open market economies, focus your efforts on instead taking to what South Korea stated, and setting up an advisory committee, that way we all get what we want. Business owners can continue to make money and continue to do business with us, and we have a smarter market for them to negotiate with, given people take the opportunity to listen to what such a committee would have to say." The representative would then sit back and relax, pulling out his phone to simply browse online, doing some anniversary shopping for his family via Amazon, and no longer really listening to what the Argentinian delegation had to say to him until his demands were met.

 

[Naio90]

Not falling into the provocations of the german representative, the argentine diplomat would use his many years of experience and character to calmly respond:

"If your position is that of defending depredatory unregulated corporations, so be it. It's your nations position and we respect it. Ultimately, this is democracy, and while eventually adopting suggestions and ammendments to our proposal, a decision will be made regarding the draft. You are free to vote against it.

In the meantime, we will continue to work towards building an inclusive future for all nations."

 

[Moe]

The Brazilian representative would stand, "I have listened patiently to both sides. So, I would ask the German Representative, if it, and I quote, It is 'not' the Global Assembly's job to dictate what the stipulations of a contract are, Then why is it the GAs job to pass Resolutions for Laws of the Sea, Ban Chemical Weapons, Ballistic Missile use against civilians?

It seems as if it is the GAs job to govern those other aspects of world politics, then why can it not be the GAs job to regulate and have clear guide lines to know how to act is key to preserve stability and guarantee further growth of the international market?

We also like the South Korean proposal of possibly setting up an advisory board?

I think outright dismissal of the proposal is a bit short-sighted."

The Brazilian representative would then sit down.

 

[NagandEmerald]

"Because the Laws of the Sea, the banning of Chemical Weapons, and Ballistic Missile use against civilians are all resolutions that actively protect countries from going to war or, if they do, from creating unnecessary losses of life," Harald replied to the Brazilian representative.

"Comparing the babysitting of businesses to ensuring that war either does not occur or that massive loss of life is less likely is a silly excuse to say, 'well, it should be their responsibility to do what sovereign nations already do out of common sense'. It's a sovereign nation's own job to regulate their markets and businesses, however they choose; not the Global Assembly's." Harald began get a little more fired up again, his voice raising as he did.

"It doesn't guarantee world stability and growth on the international market; it only makes the Global Assembly seem more like world police, telling nations how to run what they are already regulating and running just fine without the Global Assembly. Dismissing this proposal is not short-sighted, as it is not required, given that nations the world over already regulate their markets and businesses."

 

[Moe]

The Brazilian representative would arise again and merely ask the German Representative, "Should it not be the responsibility of a nation to patrol their own shores? What makes this new resolution different from the Laws of the Sea?

Predatory fiscal endeavors should be monitored, much like a coastline.

Suppose Country A forces Country B to an unfair agreement? And country B cannot comply with the terms of the agreement later on with Country A. Country A invades Country B for breeching a contract that they never could afford anyway. What would happen then?

I will tell you what would happen.

We would all be back here in the GA asking the USA to invade Country A.

That is what would happen. The Argentinian proposal is common sense, especially with many new governments currently coming to power."