APPROVED [GA] Resolution on the Economic Situation in Russia

[Odinson]

Ambassador Adams took note of the issues that his Russian colleague had. "I'm frankly concerned with some of the constraints they are trying to put on Russia... as a sovereign nation. But yes, I see those that you pointed out as well. This is, of course, the first draft. So I'm sure there's ways to make this work," he noted in the quiet voice to the Russian.
HeadlessSeeker

Ambassador Luke Adams, who was presently sitting next to the Russian representative to the Global Assembly, noted when his British colleague entered into the chamber with fast food. He leaned over to quietly respond to his British friend and said, "Yes, very concerning... Our governments may have to do something about that soon," he said.
Jamie

 

[Hollie]

MOGLOBAL ASSEMBLY ANNOUNCEMENT MOBY THE SECRETARY GENERAL

__________________________________________________________

Today, we must focus our priorities on reducing massive sovereign debts. This is not just about what we do in our domestic economies but how the actions of the few, impact the many. It has become obvious the Russian Federation is devoting a large share of resources to maintaining military sectors, even when they are not immersed in war. We have learnt this is clearly unsustainable and action cannot be put off. No one can deny what a difficult position Europe is in at the moment. However, recovery has begun. We can overcome these problems but only together; no one is immune to this crisis. Speaking more on this topic is the South Korean Ambassador, Oh Joon.


.
Jay ​

 

[Jay]

Oh Joon: “Thank you Secretary General, respected members of the global assembly,

I want to begin my speech by wishing for all parties today, to recognize the significant impact of the Russian Economy today on the globe. While we may attempt to cocoon ourselves in the bubbles of our nations, believing we can overcome the storm alone, the storm that plagues the nation, plagues humanity together. Since the beginning of the interlinking of the global community following the end of the Second World War, we have become linked together like never before. But even before that, transatlantic and transcontinental paths from Asia to Europe, and from Europe to the Americas opened the pathway towards todays globalizing world. Unfortunately, instead of pushing for stronger international cooperation, institutions, and alliances, we’ve begun to hold back in fear of what global community could mean for the nation. Crisis after crisis has disrupted global peace, but, each crisis was limited in its scope. The consequences of aggression by rogue states was limited to the parties. However, together as countries we rose together to meet the challenge and end the tragic loss of life, suffering, and terror. When Spain suffered massive fires, the global community came together, When America and Norway were attacked, the global community came together. Yet, today, we must ask ourselves, how can we come together to deal with this new crisis, an economic crisis. Like the wars of aggression this chamber has risen to subdue and end, the economic crisis does not discriminate against its victim, like a plague it engulfs all it surrounds. Unlike the wars we’ve been tasked to deal with, this economic crisis is not constrained to one geopolitical area, it knows no boundaries, for the fear it sends can be felt even in the most distant of places.


Today, we are confronted with a crisis we were not equipped to handle, as economists from the UK and Korea raised alarms, they feel onto deaf ears. Rather than active preventively, unfortunately, we are responding reactively, and with it, the consequences are higher and more present. What was a healthy global economy continuing to grow last month is now at huge risk. Russia’s debt crisis threatens to plunge the globe into a recession. Yet, we can not alone, blame Russia, the economic crisis has been a pool of underlying factors of global negligence, lack of transparency in economic transactions, protectionism in trade, overspending without foresight, and a lack of willingness to act preventively. While some today will attempt to play the blame game, we ask all the Ambassadors to pause and reflect, for the time we waste on blaming one another, is only prolonging the deep economic crisis. This crisis is only exacerbated by Russia’s internal situation, of high crime and unemployment, and low healthcare services. The flight of Russian nationals abroad with their wealth will soon follow, and nations beginning to face the pressure of the bursting bubble will find themselves scrambling to keep the floodgates closed.

Beginning as late as October, Korea’s Ministry of Finance listed warnings, and Koreans heeded those warnings. We have shown that countries can avoid a crisis at home through preventive measures such as hardening their currencies, diversifying their assets, increasing their foreign reserves, putting money into infrastructure and capital investment projects, and most importantly, reviewing spending to remain appropriate with income levels. We hope that together as outlined in the resolution, may work together to solve this crisis

I have no doubt, that eventually, we will overcome this challenge. Our economists and theorists continue to provide a plethora of responses to the debt crisis. These are the times for which the Global Assembly was created, we are here to reaffirm investor confidence in the global community, so we can help shield the most vulnerable people and, take steps to revitalize the global economy. The actions and steps we take now will determine the speed and strength of our recovery. Together, we can truly advert the calamity of this crisis, but alone, we will never truly recover.
I invite, the Vice Minister of Economy and Finance, H.E. Ms. Park Jiwon to in the remainder of my allocated time, make closing statements to my address, and providing a much more technical perspective." The Vice Minister stood up to speak.

Park Jiwon "Thank you Mr. Ambassador, members of the forum.

There is no question that this year will be exceptionally difficult. If the debt crisis is resolved and its effects begin to fade away in the second half of the year, thus allowing a modem of social and economic stability, and returning to previous levels of growth. The Ministry’s baseline assumption for the recovery expectations are promising, conditional on the quick reaction of member states. But again, I stress there is tremendous amount of uncertainty, and the situation could get worse rapidly depending on many variable factors, including how investors in Europe and America feel, possibly setting off a spark that may rupture the fragile state. Crucially, everything depends on the actions we take now. Korea has underlined the following principles, for which the resolution seeks to address.

• First, continue with essential containment measures and support for debt repayment by the Russian government reassuring the global economic system. Some may say we are simply going to be bailing out Russia. I say it is a largely false assumption. Funding for Russia is not the primary modem of repayment, but a supplemental tool to ease the current inflation and panic, reassure investors, and ensure the Russian state does not implode. As investors grow more unconfident, the ruble depreciates, and people panic, Russia’s situation will be untenable forcing Russia to stop repaying its debts. This of course brings me to the Russian assets market, where many European firms invested into toxic assets which can no longer be repaid due to the lack of capital and money in Russia. This will shock investors in Europe and in turn, as we have already seen, cause a flight of investors. This is why providing supplemental funding for Russia will alleviate some of the investors fears, ensuring at least for a while, Russia may repay its existing loans. This money however, is primarily directed internationally, meaning, member states in Europe will as a byproduct, benefit from the emergency fund. This also requires, Russia to fill the gap between the emergency fund and its current debts, primarily, through selling of state assets, existing equipment, and gold and foreign reserves. By selling assets, Russia will raise capital to use for repayment, by using gold and foreign reserves, Russia is able to avoid hyperinflation by taking the amount of rubles in the market out through swaps. Additionally, Russia can take steps to implement currency swaps with member states to utilize their ruble in-take and repay their debts in rubles at a set price with loan-holders.
• There exist a range of vulnerabilities in the Russian financial sector. Banks do not have a built up capital reserve and asset liquidity has greatly diminished as a result of this crisis. This means, the way for Russia to rebuild its capital reserves is to begin selling off of state assets, laying off workers, and ceasing unnecessary spending. Effective tax mechanisms are required, however, given the current state of the Russian Government’s capacity and resources, we should prioritize in the areas where we are able, extract financial resources, and do so quickly. If Russia could disclose its tax revenues, we could add it to our calculations on the timeline for fully repay its debts. The global financial system is now facing significant pressures, and monetary stimulus and liquidity facilities will play an indispensable role. However, without swap lines and creating new ways to reduce financial market stress, the global financial system is held hostage by a domino effect of investor pullouts and inability by states to repay their debts. Enhancing current liquidity for a broad range of sectors would provide further relief. Importantly, it would also lift confidence. Without these steps, it will become difficult for us to fully enter the recovery phase at pre-crisis levels in the short-run. Again, I wish to emphasize must minimize the potential scarring effects of the crisis through action now. This requires careful consideration of all member states to ensure adequate funding for the relief fund, not causing a high capital outflow form member states putting them at greater risk, and reaffirming global confidence in the global communities ability to support one another.
• Given this is also a humanitarian crisis, only addressing the economic crisis will not be sufficient to address Russia’s growth problems. Russia requires external financing towards crime prevention, prison maintenance, healthcare, and healthcare availability. The health crisis and unemployment will continue to drive up crime, while overall reducing Russia’s quality of life. Ensuring the welfare of the people is necessary for economic recovery. The take away is, we should not unprioritize health spending including pay doctors and nurses and make sure hospitals and makeshift clinics can function effectively. This means carefully reallocating limited public resources by the Russian Government towards healthcare. It also means as an international community, we must work to increase the flow of resources to Russia such as vital healthcare equipment.
• Ensuring social welfare will act as a shield affected people and reduce the impact of the crisis. This crisis hits Russia during the winter, where temperatures will plummet and gas prices increase. For this reason, we are asking member states to increase natural gas and petroleum exports to Russia to depreciate gas prices. While, this will have a negative effect on Russia’s capital gains from exports due to lowering gas prices, it will result avoid the humanitarian effect of this crisis. Large, timely, and targeted fiscal measures such as financial stimulus is also required, and Russia must balance its priority with foreign investors and providing services to its citizens. For the lowest income brackets, we advise implementing tax deferrals, cash transfers to the most vulnerable. We caution from extending unemployment insurance and social assistance for the high costs of Russia’s current unemployment rate of 38.59% according to the economic intelligence unit of the Ministry. However, temporarily suspending rent payments and avoiding evictions will be required during the winter to avoid people being left on the streets during winter.

This leads me to the role of the GA.

The Global Assembly and its member states must pool our financial resources to contribute financially to the emergency disaster relief fund. The Republic of Korea can guarantee $700 million towards the fund, and dependent on the global assembly members efforts, provide up to $1 billion towards the fund to help Russia. Further steps may be taken to raise resources available to the fund. We call on the global community to begin taking steps towards helping end this crisis. I would remind the member states present, if the Russian Debt Crisis goes unaddressed, and as our economic data indicates to us, Europe’s economic market crash, foreign lenders in Europe to Asia, Africa, and the Americas will no longer extend rolling-loans. Today, if you asked a fair number of countries, they will be unable to fully repay their debts, others will only be able to partially repay their debts."

 

[Tim]

Francesco Paolo Fulci arrived at one of the side entrances of the Global Assembly Hall and heard that they had already started. He waited there for a moment and heard ambassador Oh Joon finish and invite someone else to the stage. He took this moment of changing speakers to quickly walk inside towards a spot close to the entrance where he opened his briefcase and took the proposed resolution and some writing gear out and took notes of the Vice Minister's speech.

 

[SM99]

The Yugoslav delegation would arrive. Ambassador Markovic would walk in confidently with his entourage and take their seats. Once at his seat he'd make it a point to carefully pin the emblem of the Yugoslav flag onto the right side of his suit. On the left side he'd pin a shiny gold hammer and sickle, along with the cufflinks. The Yugoslav delegation quietly took their seats and began reviewing the meetings notes. No attempts at conversation with other diplomats was made.

 

[Bruno]

The Spanish Ambassador Armando Salazar, would raise to speak,waiting for the room to quiet down.​

" Thank you Secretary General and respected members of the global assembly, while we agree with all that as been said by Mr. Oh Joon and Ms. Park Jiwon, and make their words mine, we cannot forget that while we are all here to aid Russia in their time of need, it is a insurmountable amount of debt to eliminate, the largest debt we have ever seen in the global community in recent years, at least from what I can remember. While this debt crisis.. spending crisis.. is extremely worrying for the global community, and greatly affects our own economies and the stock market, we cannot forget how this will affect our own common people, we must react in swift action, or risk a grander economic downfall equal to that of the Great Depression. I say to my colleagues from South Korea, you have our total support in this, but we cannot just throw money at the problem and hope it gets fixed. Russia must do and abide by their oath to start reforming their economic system, financial mechanisms and be more responsible with their spending. I also have spoken with Economic Specialists, which proposed that Russia sells part of its Debt at 3,45% interest, as it can also prove beneficial at reducing it and providing a line of funding to reform their financial system." He would pause.​

"Now this brings us to our next point, there is a social and political crisis happening in Russia right now, with extremely violent protests,and I fear a change in paradigm is about to happen in Russia, it is especially worrying seeing Soviet Union flags waving and past ancestors of a terrible leadership reappear, and using the Global Assembly as a scapegoat, blaming this chamber for the situation Russian finds itself. What guarantees does the Global Assembly have that by helping Russia with these funds it isn't creating a bigger problem by giving more reasons to this side, paraphrasing them, that Russia is being ravaged by the international community and that it needs a life line from foreign nations to sustain it self. I fear that, while the Global assembly wants to do what is morally right, which the Republic of Spain approves wholeheartedly, it can and may be used against us in the future, making more Russians fear cheated by their Government, and finding comfort from these characters.​

As such the Global Assembly must act in a way that can't be seen as intervention but as a helping hand, but it needs a guarantee from the Russia Government that they will use these funds in a responsible and correct way. Thank you."​

Jay Hollie Dutchy

 

[Jay]

Ambassador Oh Joon: "Thank you Ambassador Salaazar for your kind, firm, and critical words. I have great respect for my colleague and you never cease to amaze us with creative solutions to our problems. I wish to make the following points, bringing down your speech and responding. Firstly, I agree with the Ambassador completely. We must aid Russia without personal or geopolitical biases. We must address this crippling debt crisis that resulted from poor fiscal management policies, and that has exceeded in recent years any amount we've expected to deal with. As the Ambassador said, this crisis affects the global population completely and we must not act selfishly or alone.

It is also true, that in the past 24-48 hours, the situation has drastically changed in Russia, casting uncertainty to the current governments ability to govern, but more importantly, receive financial assistance and appropriate it accordingly. I wish to firstly say I agree with the Spanish Ambassador that throwing money to Russia and expecting them to address it themselves is not feasible. If we throw money at the situation without addressing the root causes of the agreement, it only serves to repeat the process over. The Republic of Korea applauds Russia's recent actions such as the selling of state assets to raise capital, however, we are significantly worried about the political stability in Moscow as the situation gets out of control. We urge Russia to take lead in these discussions to ensure a timely resolution is passed, but also, that Russia leads the charge in asking for assistance so that this chamber may detail a resolution Russia is comfortable with while balancing the concerns of the International Community.

With regards to Spain's economic proposal of selling debt with interest, the biggest issue with this as we have seen is Russia does not have any financial reserves at the moment to pay the primary on the interest. If a debt-swap was to occur, it would have to be one either based on 0% which would not be an incentivizing offer to member states or it would have to suspend debt-repayment for a period of 2-4 months until Russia could stabilize its finances. This is why, an amendment to the current resolution tying debt-swaps with the capital injections would be a suitable arrangement. However, at most, this would reduce Russia's debt between $4-14 billion depending on member states. Russia would still be required to sell off its current state assets, and begin reducing its government budget immediately.

I join the Ambassador in his statements on Russia's ability to maintain its political legitimacy, but also, that the GA's initiatives won't be fruitless if the government changes domestically through the democratic process. I hope that Russia can address these questions of the forum, but also, that we can take charge and modify the current resolution."

 

[JakeDorent]

Ambassador Fernando Paulo de Noronha would, after some...issues, with the traffic, would arrive at the Building and enter the chamber once Korean Ambassador Oh Joon finished their speech.

Fernando wore a charcoal classic double-breasted suit, a golden pin of the Coat of Arms of the Empire rested on the left side of his chest, next to a mysterious second pin.

He carried with him a black hard case briefcase with a navy blue inside texture, he discretely sat back on his assigned seat, looking around as he placed his suitcase on the left side of his desk, after putting in the code, a faint click being heard as the briefcase's lock mechanism unlocked to its owner, inside were files organized inside folders, a Gateway Solo 2200 Laptop, A small disassembled Brazilian Imperial flag with its small wooden mast and base. and the most unusual of the items, a Gameboy.

Fernando would take out the Flag, assembling it and placing it on the table, before pulling out his laptop and placing it on the table, opening it and turning it on, as he waited for it to load up, he put his briefcase under his table.

Once ready, he looked around, ready to take notes.

 

[Jay]

As the discussion process died down and the other Ambassador apparently continued to talk amongst themselves, the Korean Delegation still feeling a sense of urgency not yet sweeping the floor would take up a speaking slot and begin asking for a motion to move towards voting procedures.


Ambassador Oh Joon: "Honorable Secretary General, the Republic of Korea would like to move this draft resolution to the voting floor so that we can take much needed efforts to reinforce confidence in investors across Europe that we are not simply remaining idle. While the flames of Russia's failures disintegrate its societies, our inability to move forward with the relief mechanisms required has spread these flames across Russia's immediate neighbors in Norway and Ukraine, but inspired thousands others in India. The Republic of Korea recognizes the deficients in this resolution, yet, without meaningful contribution to understand global partners viewpoints and positions, I do not believe we can wait any longer. Therefor, I motion to move directly towards voting for the resolution in its entirety. I encourage delegates to move forward so that we can at the very least offer some form of assistance to Russia.

Attempts to strip the resolution of the insurances needed for financially contributing member states will not provide any of the reassurance governments require to divert financial resources abroad to a country on the brink of anarchy. Portions of the articles are less defined to allow mobility and discretion of the special task force and the Secretary General. The timeline our economic intelligence unit indicates, and I believe these are the numbers Russia also uses publicly, is, according to the international norm for taxes collected monthly, Russia requires 10 months to collect its taxes, this timeline is simply unacceptable, but more importantly infeasible. To be able to be able to cover its debts in 10 months is based on assumptions which re not feasible. Firstly, the assumption is Russia will not spend anything on its budget, secondly, the assumption Russia’s investors will continue to roll over on Russia’s debt, thirdly, investors will not leave Russia during the 10 month duration, and fourthly, Russia is able to collect taxes when nearly 40% of its labor force is unemployed, which is 61.35% of its population, or between 76,530,000 to 88,279,920, of which, 29,532,927 to 34,067,221 people are unemployed. If you take this into account, only 60% of Russia’s labor force have an income supply that is taxable. Unless Russia would impose a new wealth tax to include the entire populations wealth value, then, Russia’s outlook is not 10 months, but much longer. When we look at Russia today, in the capital city of Moscow where high ranking dignitaries are locked in a hotel due to a mob being able to penetrate the buildings security, and the government not sharing information on the wellbeing of our good colleagues, we can only see that this crisis continues to grow. Investors and analysts will also recognize this, and Russia’s inability to repay its debt will continue to devalue the ruble, see the dilapidation of the state infrastructure, resources, and services. The cycle will continue, Russia will have to print money to cover its basic running costs, depleting its foreign reserves, and eventually free falling the ruble due to lack of financial resources form the central bank. This will devalue the wealth and taxable income in Russia, reducing the effectiveness of its taxes. Russia will switch its rubles for dollars at weaker pricing and raising its costs to pay the principle and the debt itself. When the money becomes worthless, the valuation and bartering of tangible items will become Russia's new modem of currency. Causing further political instability that will not be good for any country. I hope this illustrated why Russia’s strategy to repay its debt on its own is unsustainable. At least, from our analysis, unfortunately, Russia has not been transparent on the reality of its debt. We are aware and able to track government debt from the international economic overviews released by respected organizations. However, we do not know how household debt has been during this crisis, we don’t know how government asset values are worth, and we don’t know if Russia’s disclosed debt accounts just its budget deficit spending or more. Its the economic mismanagement, its lack of full disclosure, and its selling of toxic government assets to adjust for its mismanagement is what precipitated this global crisis.

What is true is that this resolution was written before the economic crisis that hit Russia and Europe and was meant to be a preventive measure. Yet, in the time it took to gather and discuss, the forum did not take quick enough measures to streamline the process. The crisis continues to grow, and unfortunately, this resolution may become ineffective if we can not pass it quickly. It will become ineffective because it will be impossible to reassure financial investors to put money into Russia as it sinks into despair and internal conflict. The economic crisis will eventually pass Europe, as all recessions and depressions have in the past. However, the turmoil that is left in the wake of Russia's turmoil will not pass, and it will continue to linger. Reinforcing bigots and zealots in their quest for power, taking advantage of the plight and fears of the people. Where it leads us is unknown, however, we ask representatives to consider this all and vote for this resolution. It is not a moral or imperative question, but simply a matter of timely essence. If we are to remain truthful to our mission at the GA, we must take steps to overcome and diffuse this crisis as it has done in the past. I commend the Russian Governments efforts to adjust for its lapse in capital through selling of assets and other current measures, however, further measures are needed. I wish to commend the Republic of Ukraine in their announcement to purchase Russian debt, and Korea joins these independent efforts taken in the lapse of global cooperation. Thank you.

Hollie

 

[Alex]

Rattan Ambassador to the Global Assembly, Sook Manoots would arrive late but quickly read over the logs of the chamber.

 

[Drivindeath]

India will like to offer Russia a loan to alleviate their debt. India can only afford to loan Russia $5 Billion at the current moment. This would be a no interest rate loan that Russia can pay back gradually with no deadline until fulfilled. If they accept this, I will have the Indian Treasury draft up the terms and send the money immediately. I know that this is a small amount but every bit helps.

With the current situation developing in Russia, uprisings have sparked in India as well. We need to fix this debt now. India recently had a tragedy, as well as Ukraine and Norway. Now all these events have been due to Communism or some form of Terrorism. The free world can not allow this to happen. Violence is not an option. While we sit here discussing what needs to happen, the people of the world are taking matters into their own hands and doing what they feel is necessary.

I propose that the nations of the free world do a bail out of half the Russian debt as it stands today at -65,469,219,329.73. This would mean that each members nation here right now would pay $2,515,046,897.30 to Russia, for a total of $32,734,609,664.90 to the Russian Economy. This can buy us time until we can come up with a more definitive solution. I also suggest we place spending limits on the Russian government until their economy is back on track and is able to sustain itself.

 

[Jay]

Ambassador Oh Joon: "Honorable Secretary General, the Republic of Korea recognizes India's offer. However, we believe this statement is reflected by Article 3 on no-interest financing of Chapter III, and Article 2 and its content clauses of Chapter II. Which would allow Ukraine, India, and Korea to facilitate the assistance of debt relief as currently proposed would total $16 billion at $10 billion proposed by the Ukrainian Government in the...address, $5 billion by the Indian government, and $1 billion by the Korean Government. Additionally, the Indian Government's proposal about providing approximately $2.52 billion dollars to Russia is only a temporary solution that will not be useful unless coupled with internal reforms and labor liberalization process as outlined in this resolution.

The Indian Government's offer, Honorable Secretary General we believe, stands external to the resolution at the moment. As it does not specify any additive clauses to implement nor amends an existing clause. Therein, we ask the house to move forward in voting. Alongside India's proposal of 50% financing, and the $16 billion loan, Russia's current state asset sales, we can foresee the reduction of Russia's debt at a much more rapid pace, and alleviate the current economic situation hurting Europe. However, we urge, that the house vote now to pass this resolution so that we can at least begin the process."

Hollie

 

[HeadlessSeeker]

"Given all that has happened, we will support this bill entirely. While there are fears that this will be viewed negatively by those claiming we have sold out our nation, we have little choice if we wish for our nation to begin the healing process. We are preparing for a major scrapping process in order to bring out debt even lower. We predict that with this bill, and the liquidation of military assets we should be debt free in rapid succession."

 

[Nathan]

Klara Paulsen, the Danish Ambassador to the General Assembly would arrive to the meeting, flicking through the transcript to get herself up to date with recent events.

 

[Hollie]

MOGLOBAL ASSEMBLY ANNOUNCEMENT MOBY THE SECRETARY GENERAL

__________________________________________________________

The Resolution presented by the Korean Ambassador is now open to a vote. We are working on transcribing these sessions and once everything has been aggregated, you may download the material on our website.


.​

 

[ManBear]

Andrej Towpik was very late to the resolution. The recent political upheaval within Poland had him distracted with business at home. Once he arrived at the chamber, as quietly as possible, he would begin looking over the Polish transcripts.

 

[Kai]

The Estonians would arrive, look through the transcript, and vote.

 

[Hollie]

GLOBAL ASSEMBLY ANNOUNCEMENT BY THE SECRETARY GENERAL

__________________________________________________________

Voting on the Economic Situation in Russia has now ended. The result concludes at twelve (12) votes in favour, one (1) vote against and zero (0) abstain. The Resolution has been APPROVED. We will be making contact with member-states regarding voluntary financial contributions they wish to make in due course. Next on the agenda is the proposed amendments to the Vienna Convention, submit in good faith by the Swedish Ambassador. We hope to see you all make an appearance shortly.


.​