Economic crisis

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Economic crisis

Post  Nina on Thu Mar 12, 2009 9:13 pm

In 2008 the world faced a global economic crisis which was a consequence of several important indicators of economic downturn. One of those indicators was high oil prices which led to both high food prices and historical inflation all over the globe which resulted in stagflation and global recession. However the main factor that contributed to the occurrence of the crisis is the substantial credit crisis that began already years ago in the United States.

Such a global phenomenon called for immediate action. The international community agrees that United Nations as a global organization should also play a central role in the search for solutions and the implementations of decisions. Therefore the UN General Assembly set up the Interactive Panel on the Global Financial Crisis. The first meeting was held in New York in October 2008, led by Professor Joseph Stiglitz. It lobbies for an agreement involving all members of the UN. The UN can provide the technical and operational support for the implementation of reforms due to its close ties with governments. The Interactive Panel established the High Level Task Force of Experts to undertake a comprehensive review of the international financial system and give recommendations to the General Assembly.

The conference for Financing for Development (FfD) in Doha was the next action of the UN.
The main objectives at the Doha conference were:

* Implementation of the ministerial declaration of the World Trade Organization,
* that the reform of the international financial architecture should focus on providing greater transparency and strengthening the participation of developing countries and countries with economies in transition in international decision-making and norm-setting,
* national regulators should enhance financial information and transparency at the domestic level. There should be cooperation among national regulators from all countries to strengthen international financial standards,
* to exercise strong oversight over credit rating agencies, consistent with the agreed and strengthened international code of conduct, and take additional action to strengthen financial market transparency and enhance the convergence of global accounting standards.
* to bring the attention of all donors to the situation and needs of the poorest and most vulnerable.
* all donors must also maintain and deliver on their ODA (official development assistance) commitments and call on the international community, including the World Bank and IMF.

Besides the UN also the G-20 came to some important conclusions concerning the financial crisis. In the G-20 Leaders Summit on Financial Markets and the World Economy known in the media as The New Bretton Woods/Bretton Woods II took place in November 2008 in Washington. The general agreements were about the cooperation in key areas for the G-20 states to strengthen the economic growth and of course, deal with financial crisis. It also set the ground for reform to avoid similar crisis in future. The main actions to be taken are focused on broader policy response, based on close economic cooperation, to restore growth, avoid negative spillovers and support emerging market economies and developing countries.

Deriving from above mentioned efforts of the international community to struggle to diminish the effects of the financial crisis, delegates of SiMUN will be entrusted with an important and responsible task to further develop the ideas of the established international institutions and to use their creativity to upgrade and find successful solutions for the aforementioned crisis.

Nina

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