Topic History - OxIMUN

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Topic History - OxIMUN



    NDTH2 4 NOVEMBER 2012

    GROUP OF 20


    Topic A: Tackling Global Unemployment Topic A: Tackling Global Unemployment

    -Topic History.......................... pg 3 Topic B: Enhancing Food Security by Increasing -Discussion of the Problem ... pg 5

    Agricultural Productivity -The Future .............................. pg 7 -Points Resolutions Should 8 -Bloc Positions ......................... pg 8 A Message from your Directors: -Further Reading ..................... pg 9 -Bibliography ............................ pg 9

    Dear Delegates, Topic B: Enhancing Food Security By

    Increasing Agricultural Productivity

    To those unfamiliar with the committee, -Introduction ............................ pg 11

    the G-20 is one of the most important -Topic History ......................... pg 11 -Discussion of the Problem ... pg 15 forums for cooperation regarding -The Future .............................. pg 17 international financial system matters, -Bloc Positions ......................... pg 20 and the topics to be discussed in the G--Points Resolutions 20 at OxIMUN 2012 have been chosen Should 21 for their importance on the international -Further Reading ..................... pg 22

    stage. -Bibliography ............................ pg 22

     Being a delegate of the G-20 is a privilege

    and we strongly urge you to prepare Committee Director:

    yourself for the high-calibre debate and Ross Evans

    diplomatic intrigue that we will enjoy

     together in November. In the meantime, Assistant Directors: we look forward to answering any Anja Gullerfelt questions that may arise.

     Wishing you all the best in your Tee Zhi Yu preparation,

    Ross Evans

    Anja Gullerfelt

    Tee Zhi Yu

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    home owners, housing prices

    began to rise, resulting in a housing bubble

    which peaked in 2006. TOPIC A: TACKLING GLOBAL

     At the same time, steadily decreasing interest UNEMPLOYMENT

    rates and large inflows of foreign funds created According to the International Labour easy credit conditions, fuelling a housing Organisation, 200 million people worldwide are construction boom and encouraging debt-currently unemployed. Global unemployment financed consumption.

    does not only negatively affect national

    As part of the housing and credit booms, the economies, but also creates different social and

    number of financial agreements called development challenges. Despite our globalized

    mortgage-backed securities (MBS) and and inter-connected world, the response to

    collateralized debt obligations (CDO), which unemployment has remained very similar for the

    derived their value from mortgage payments and past century, generally depending on

    housing prices, greatly increased. negotiations on a purely national level. As the

    very nature of the labour market changes, along These financial products significantly with rapid technical progress, this is an issue underestimated the risk of default of subprime that is becoming ever more global. loans. When the US housing bubble burst in

    2007, it caused the values of subprime MBS to Delegates will need to identify the areas where

    plummet as default rates skyrocketed. Since the supranational cooperation is not only beneficial,

    integration of global financial markets meant but also preferable, for example in sustainable

    that subprime MBS were sold and resold around development issues, and peace and security

    the world, the bursting of the US housing concerns, two other factors that challenge the

    bubble damaged financial institutions globally. stability of the labour market.

    As a result of the subprime mortgage crisis, Delegates would need to create resolutions interbank lending dried up, credit tightened and which promote a shift in the tactics used to international trade declined globally causing battle unemployment, perhaps placing more many economies to go into recession. While the importance on the role of entrepreneurship, financial phase of the crisis led to emergency amongst other things. interventions in many national financial systems,

    it soon became clear that a global response was needed.

    TOPIC HISTORY 2008 G-20 Washington Summit on

    Financial Markets and the World 2008 Global Financial Crisis Economy

    In the USA, intense competition among An initiative by the French and European Union mortgage lenders for revenue and market share, President, Nicolas Sarkozy, and the British and the limited supply of creditworthy Prime Minister, Gordon Brown, resulted in a borrowers, caused mortgage lenders to relax special meeting of the G-20 to address the 2008 underwriting standards and originate riskier financial crisis. In the final quarter of 2008, the mortgages to less creditworthy borrowers. As G-20 group of major economies assumed a new banks began to give out more loans to potential

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    significance as a focus of and Balanced Growth”. In it, economic and financial crisis management. they set out their commitment to implement

    reforms to increase their growth potential and The 2008 G-20 Washington Summit achieved capacity to generate jobs and policies designed general agreement amongst the G-20 countries to avoid both the re-creation of asset bubbles on how to cooperate in key areas so as to and the re-emergence of unsustainable global strengthen economic growth, deal with the financial flows.

    financial crisis, and lay the foundation for

    reform to avoid similar crises in the future. The G-20 countries also committed to “Putting

    Quality Jobs at the Heart of the Recovery”. Although the G-20 countries pledged to take They pledged to implement recovery plans that strong and significant actions to stimulate their support decent work, help preserve employment, economies, economic momentum still slowed and prioritize job growth, as well as continuing down substantially globally, costing millions in to provide income, social protection, and job losses as countries went into recession. training support for the unemployed and those

    most at risk of unemployment. 2009 ILO Resolution on Recovering

    from the Crisis: A Global Jobs Pact 2011 Cannes Action Plan for Growth

     and JobsFaced with the prospect of a prolonged global

    increase in unemployment, in June 2009 the At the 2011 G-20 Cannes Summit, G-20 leaders International Labour Conference unanimously acknowledged that since the Seoul Summit in adopted a "Global Jobs Pact". November 2010, financial stress has increased

    sharply and the pace of economic growth has The Global Jobs Pact is a set of balanced and

    slowed, most notably in the advanced realistic policy measures that countries can

    economies. The G-20 leaders agreed that they adopt to ease the impact of the crisis and

    needed to strengthen international policy accelerate recovery in employment. It calls on its

    cooperation in the short-term in order to member States to put decent work opportunities

    achieve their ultimate objective of providing at the core of their crisis responses. It addresses

    more and better jobs for their citizens. Under the social impact of the global crisis on

    the Cannes Action Plan, they would implement employment and proposes job-centred policies

    a comprehensive set of policies that will help for countries to adapt according to their national

    reinvigorate global economic recovery. The needs. The fundamental objective of the Global

    policy measures would address short-term Jobs Pact is to provide an internationally agreed

    vulnerabilities, restore financial stability, and basis for policy-making designed to reduce the

    strengthen the medium-term foundations for time lag between economic recovery and a

    growth. recovery with decent work opportunities.

    Although it picked up support from the UN and 2011 G-20 Task Force on Employment the G-20, it failed to significantly reduce

    unemployment. The G-20 Task Force on Employment was set

    up at the 2011 G-20 Cannes Summit to focus 2009 G-20 Pittsburgh Summit on employment issues, especially for young

    people. Youth unemployment is epidemic in At the Pittsburgh Summit, the G-20 leaders laid

    both developed and emerging economies, and down a “Framework for Strong, Sustainable,

    poses one of the greatest threats to economic

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    recovery. This threat cannot be global demand, foster job tackled solely through microeconomic measures creation, contribute to global rebalancing and as the growing jobs deficit has reached epidemic increase growth potential.


    These include product market reforms to Labour force participation rates are falling when increase competition, measures to stabilize the they should be rising. Over 20 million people housing sector, labour market reforms to boost have become unemployed since the start of the competitiveness and employment, as well as downturn and 400 million jobs must be created fiscally responsibly steps to strengthen social in the next decade in order to keep up with an safety nets, advance tax reform to raise increasing global population. Globally, young productivity, increase investment in people are nearly three times as likely as adults infrastructure, and promote inclusive green to be unemployed. The consequences of this growth and sustainable development as can be devastating, potentially condemning a appropriate to country circumstances. whole generation to a lifetime of wasted

    potential and economic and social disadvantage.

    In 2012, ahead of the G-20 Los Cabos Summit,

    the International Labour Organisation (ILO) DISCUSSION OF THE

    and the Organisation for Economic

    PROBLEM Cooperation and Development (OECD)

    expressed concern that if employment continues

    The ILO states that the world will face a to grow at the current rate of 1.5 per cent, it will

    be impossible to close the approximately 21 600 million jobs challenge in the next million jobs gap that has accumulated across the decade. Today, 200 million people G-20 since the onset of the crisis in 2008. On a worldwide are unemployed, including 75 global scale at least 50 million new jobs need to million young people. And the youth be created each year to keep up with the growth

    unemployment figure may not necessarily of the working age population and steadily

    decrease any time soon as 40 million reduce unemployment to pre-crisis levels.

    people are estimated to enter the labour 2012 Los Cabos Action Plan for force every year into economies that Growth and Jobs cannot accommodate them.

    Furthermore, about 910 million workers At the 2012 G-20 Labour Ministerial Meeting in

    Mexico, ministers agreed on the Los Cabos earn wages less than US$2 per day and 75% Action Plan to focus on decent work, incomes, of the global population have no quality jobs, youth employment, investment and adequate social protection. important labour market measures. This plan, Unemployment is defined to occur when which incorporates and extends the Cannes

    a person who is actively searching for Action Plan, significantly intensifies the G-20‟s

    employment is unable to find work. efforts to achieve a stronger, more durable

    recovery. In it, the G-20 countries committed to

    During periods of recession, structural reforms to strengthen and sustain

    unemployment increases, so it is not

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    surprising that global who are frictionally unemployment is an issue after the 2008 unemployed are generally between jobs. Financial Crisis, the effects of which can

    The reason that governments are eager to still be felt in the world today.

    solve the problem of unemployment is Different economic theories are that it carries many costs to the

    constantly debated in regards to the individual, the society and the causes, consequences and solutions for government.

    unemployment. Classical and

    Unemployed individuals have a harder Neoclassical economists, along with the

    time meeting financial obligations, and Austrian School of economics argue that

    maintaining good standards of living. market mechanisms are the only way to

    Unemployment increases the risk of solve unemployment. As a result, they are malnutrition, mental stress and loss of against government intervention, such as

    self-esteem. Unemployment also results minimum wage laws and taxes. The in underemployment, where labourers cyclical nature of unemployment is

    work in jobs which they are over-supported by Keynesian economists, and qualified for. hence, in their view, interventions in the

    labour market reduce unemployment Economically, a society suffers from during recessions. unemployment because it is operating

    below its production possibility curve. If It is also important to categorise

    the labour force were to be used to its unemployment into their different types full potential, then output would increase. in order to be able to effectively analyse

    Additionally, if workers remain the causes, consequences and solutions unemployed for a prolonged period of to the problem. The main types of

    time, their skills may be lost, or become unemployment are structural, frictional irrelevant, and there is consequently a and cyclical. Structural unemployment is

    loss of human capital. There is also an the result of problems in the labour increased burden on the tax-payer, as market, where, for example, the supply

    they are responsible for providing and demand of workers with the required

    benefits to the unemployed. skill sets do not equate. The role of

    disruptive technologies and globalisation There are also social problems related to are often seen as the cause of structural high unemployment. High

    unemployment however, they are just unemployment may sometimes as much a part of the solution. Frictional encourage xenophobia and protectionism, unemployment is usually the result of as workers fear that foreigners are barriers to entry and wage rates, as those stealing their jobs. Additionally, high

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    unemployment can also unemployment rate with result in a higher crime rate. 23.6% and although jobs have been

    created in countries like Moldova, the From a political standpoint, national employment rate remains below unemployment often results in civil the world average. Moreover, the unrest. Additionally, rising economic and financial stability of these unemployment is often regarded as a nations continues to be threatened by the guarantee that the government which has political unrest that has come about as a overseen it will suffer from electoral consequence of the worsening economic defeat at the next general election. situation. Additionally, there is no stable

    foundation from which a needed recovery can begin, and this is perhaps

    what makes future prospects so dismal.

    THE FUTURE Experts at the ILO predict that the

    unemployment crisis is unlikely to end Since the 2008 financial crisis,

    within the next few years, and this holds unemployment has remained a significant

    true in particular for the more advanced issue for a multitude of countries.

    European economies. Unemployment rose in two thirds of

    European countries, according the ILO, It is not just Europe and North America whilst the American and Japanese that has felt the effects of unemployment. economies‟ slow recovery continue to The post-revolution nations of the have an impact on global unemployment Middle East have also had to adapt. levels. Political change and instability has a

    massive impact on a nation‟s rate of The ILO has also found that since 2008,

    unemployment, let alone its economy. there are 50 million fewer jobs available

    Citizens of who lived under oppressive in the global economy, and it is predicted

    rule now have a desire to embrace a that this scarcity of jobs is unlikely to

    better standard of living. In cases like improve in the near future due to

    Tunisia, economic hardship was an continued austerity, political change and

    important factor in encouraging a economic uncertainty.

    revolution. For Tunisia, however, the Country-wise, Greece is one of the worst economic situation has not improved, as hit. It is entering its fifth year of they experienced their first recession after recession, and is right at the centre of the years of sustained growth.

    Euro Crisis. However, it is not the only

     European nation that continues to suffer

    economically Spain has the highest


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    Nations focussed on A sustainable response to

    unemployment entails going further fiscal consolidation

    than implementing models that only Italy deal with public finance. The

    separation between the public and United States

    private sector has become less defined, Nations committed to promote and hence, the challenges that domestic demand unemployment poses cannot only be

    dealt with through the public financial Germany

    system. Entrepreneurship, public-Japan private partnerships and technological

    innovation will all need to play a role. Republic of Korea

    Additionally, despite the inter-Nations committed to promote connected-ness of our world today, investments in infrastructure the response to unemployment has

    generally remained unchanged for the Argentina

    past decades.


    ; Youth unemployment


    Efforts need to be made to tackle India youth unemployment. Steps to be

    taken include the development of Indonesia

    technical and vocational education Mexico and training (TVET). Empowering

    youth in order to find jobs will be of Saudi Arabia outmost importance in the coming

    decades. UNESCO has identified South Africa

    areas that need addressing, such as United Kingdom improving access to TVET and

    improving the relevance of TVET.

    Training that is relevant for “green

    jobs” is also necessary as the demands POINTS RESOLUTIONS

    of the labour market changes.


    ; Dealing with labour market

    changes ; New responses to unemployment

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    Mismatches between It is the opinion of many the demand and supply of labour are that austerity has not produced more a root cause of structural economic growth as countries were unemployment. Hence, training that is caught in an “austerity trap.” Budget relevant to lessen the gap. This holds cuts lead to even higher especially true for “green jobs” as the unemployment and lower growth, demands of the labour market which worsened the fiscal position of changes. countries, and this is especially true

    for Southern Europe. One ILO ; Supranational cooperation report suggests that "an increase in

    expenditure in public investment and Countries have begun to rely on

    social benefits -- of 1% each year -- cooperation to solve other public

    financed by an increase in revenues challenges, such as climate change,

    derived from indirect taxation, seems nuclear proliferation and sustainable

    to be the most effective policy mix in development. Perhaps it is time that a 1terms of employment creation," It similar method is employed when

    was estimated that such a measure dealing with the public challenge of

    would be able to create 2.1 million unemployment. In terms of tacking

    jobs in one year, whereas continued youth unemployment through TVET,

    austerity would only crease 0.8. international cooperation and

    dialogue in the TVET arena would aid

    in standardisation and recognition of

    TVET qualifications, resulting in FURTHER READING

    better labour mobility.

    ;; Creation of long term jobs cs-and-

    databases/WCMS_088394/lang--Many people are only able to secure

    en/index.htm short-term employment, as employers

    are unable to keep workers on for

    ; longer periods of time. This

    exacerbates the problem of

    underemployment, and fosters a

    continued sense of insecurity for the BIBLIOGRAPHY

    unemployed, as well as the employed.

    ; Austerity vs Other Measures 1


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