Committee: Economical and Financial Issue: The Impact of National Debt and Global Development Resolution submitted by:

Australia Date: 13.10.2011 ORGAN: The General Assembly of the United Nations,

Recalling resolutions 58/203 of 23 December 2003, 59/223 of 22 December 2004, 60/187 of 22 December 2005, 61/188 of 20 December 2006, 62/186 of 19 December 2007, 63/206 of 19 December 2008 and 64/191 of 21 December 2009, 65/144 of 4 February 2011, Recalling the Doha Declaration on Financing for Development outcome document, and the World Financial and Economic Crisis and Its Impact on Development and its outcome document, Approving the High Indebted Poor countries Initiative (HIPCI), Taking note that under the original HIRC Initiative, a country can be considered to achieve external debt sustainability if it is expected to meet its current and future external debt-service obligations in full, without recourse to debt relief, rescheduling of debts, or the accumulation of arrears, and without unduly compromising growth, Emphasizing that large external debt will hamper economic growth and become a constraint to poverty alleviation as it will lead to low consumer confidence in the economy changing peoples lifestyles and habits,

Encourages all nations to meet and follow the demands of resolution 65/144 of 4 February 2011 which states that: a. Timely and comprehensive data on the level and composition of debt are a condition necessary for, inter alia, building early warning systems aimed at limiting the impact of debt crises, b. International community should continue their efforts, to promote transparent and accountable debt management systems and provide negotiation and renegotiation capacities and through supporting legal advice in relation to tackling external debt, c. The consideration of additional initiatives aimed at ensuring long-term debt sustainability through increased forms of concessional financing,

the cancellation of 100 per cent of the eligible official multilateral and bilateral debt of heavily indebted poor countries; 2 Stresses that creditors and debtors must share responsibility for preventing unsustainable debt situations and resolving ones that have already occurred; 3 Encourages Member States to publicize and uphold the initiative of the United Nations Conference on Trade and Development which promotes responsible lending and borrowing; 4 Strongly encourages all donor governments to implement the following conditions when lending to highly indebted poor countries: a. Debt sustainability analyses must be done, to ensure that the borrower nation has or will have the ability to repay said donations, b. The International Monetary Fund and the World Bank, in their assessment of debt sustainability, should to take into account changes caused by uncontrollable events such as natural disasters, c. Public debt outstanding as a ratio of GDP must be considered, and a maximum percentage should be set, d. No single indicator should be used to make definitive judgments about debt sustainability; 5 Expresses its hope that debtor nations work towards having an international environment favorable to progress, while continuing to improve their domestic policies and economic management; 6 Emphasizes that those developing nations that are highly indebted, should be educated on the risks of an economy that is not conducive to debt sustainability by: a. Having a representative from the IMF inform them of risks of possessing unsound macroeconomic policies, and suggest that their: i. Federal expenditures should be limited to the previous years actual tax revenue, ii. Tax rates should be increased for those people that earn above a set amount, iii. Governments should attempt to eradicate superfluous spending,

b. Media outlets such as newspapers, the Internet and the television should also publicize the dangers of high national debt, and attempt to involve citizens in finding an effective way to eradicate said debt; 7 Firmly recommends that the need to take steps to ensure that resources provided for debt relief do not detract from official development assistance resources especially, inter alia, in health and education; 8 Encourages debtor nations to invest money into the financial sector as it has recently suffered a downturn in economic activity; 9 Stresses that debt relief should be directed towards activities consistent with poverty eradication, sustained economic growth, economic development and the internationally agreed development goals: a. If nations do not use their debt relief in the areas aforementioned donor nations should promptly stop any further lending, b. Also if conditions are not met the United Nations should consider sending in an NGO to investigate; 10 Suggests the need to find a solution for the debt problems of heavily indebted developing countries that are not eligible for debt relief under the HIPCI; 11 Acknowledges the ongoing work towards a more inclusive approach to sovereign debt restructuring, and praises the efforts of the international community to support the promotion of national debt management as an essential part of national development strategies;