ECOFIN: Second Committee, Economic and Financial
Welcome to the Second Committee of the General Assembly at SCMUN 2019!
The Second Committee of the General Assembly, the Economic and Financial committee (ECOFIN) deals with issues of economic growth and development such as international trade, the international financial system and focuses on the humanitarian side of the economy through discussing sustainable development, human settlements, and poverty eradication.
The committee analyzes the means of globalization and interdependence, operational activities for development, and information and communication technologies that can help better communities and the livelihood of all individuals. Topics of debate within ECOFIN are discussed in tandem with applying economic theories that can stabilize communities, enabling further growth and development.
Topic 1: Debt Sustainability in Sub-Saharan Africa
Of the “Heavily Indebted Poor Countries” classified by the World Bank-IMF joint initiative to relieve and forgive their loans, 30 of these classified countries are in Africa. While these measures that began in 2005 seemed effective for awhile, sub-Saharan Africa’s median debt-to-GDP ratio is showing a significant increase again, at 50%. Since the detrimental effects of the 2008 global financial crisis, borrowing and lending became a widely popular practice all across the globe, but most significantly in Africa. Doing so, has led to a repetitive cycle of debt, increased borrowing, more debt, and bailouts. For many countries in the region, development and urbanization is on the rise - making funding through loans necessary. With such growing debt, sub-Saharan Africa is also vulnerable to the influences of private sources and political gains from its lenders. This cycle-of-debt-burden forces developing countries to take on financial and political burdens in order to develop - a cycle which inherently prevents them from truly positive growth. While measures employed are temporarily effective, debt sustainability and management is still an incredibly pressing issue that must be addressed in order to avert future debt disasters in African countries.
Topic 2: Human Capital Development
Human capital is the collection of knowledge, talents, skills, abilities of humans populations that can be directed and utilized to accomplish economic goals. The availability and quality of skills are important determinants of productivity and the types of activities that can be undertaken. LDCs (Lesser developed countries) lack the human capital for economic development and the means to attract valuable human resources. Higher education and workforce training are the fundamentals to developing a rich human capital in less developed countries, since they provide effective mechanisms to maximize diverse sets of skills and knowledge, ensure sustainable economic development and reduce poverty rates. Investments into education sectors and policy-making that increases public access to education are some potential means that LDC governments can undertake to tackle this issue. Constituting ⅔ of a nation's economic capital, strong human capital charges economic growth. A high human capital is often associated with a higher GDP per capita and a low unemployment rate.