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FORUM: 4th SIMUN Conference

COMMITTEE: ECOSOC Sub-Committee 2
SUBMITTER: Japan, Italy
CO-SPONSORS: Congo, Zimbabwe, Colombia, Mexico

THE QUESTION OF THE IMPACT AND SUSTAINABILITY OF INTERNATIONAL

FINANCIAL AID

The General Assembly,

Recognising that International Financial Aid constitutes the greatest source of external
development financing and that it can support a country’s education, health, public
infrastructure, agricultural and rural development,

Bearing in mind the United Nations (UN) Resolution in 1970 for More Economically
Developed Countries (MEDCs) to progressively increase Official Development Aid spending
(ODA) to a target of 0.7% of Gross National Product (GNP) in international financial assistance,

Observing that most developing countries which have received aid has seen their per
capita income fall or stagnate – this shows that aid given is not channelled to sustainable
economic projects,

Deploring that a large percentage of aid given is not given on the basis of Third World
impact but on benefits to donor nations themselves,

Noting with deep concern that there is a lack of accountability to where financial aid is
being channelled,

Confident that a sound treaty addressing both the impact and sustainability of financial
aid will motivate more countries to advance on the issue of international aid,

1. Strongly encourage that MEDCS meet their targets of donating 0,7% of their GNI;

2. Calls for the creation of a central International Aid Agency established under the
auspices of the United Nations where all International Financial Assistance is
directed;
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3. Proposes a model for the distribution of international financial aid based on the model
of the Millennium Challenge Account announced at the Inter-American Development
Bank on March 14, 2002 by President George W. Bush;

4. Affirms the following clauses of the Millennium Challenge Account model;

a) Financial Aid will be made out to recipient nations based on the viability of
the economic projects which they propose thus respecting their sovereignty
and reducing the incidence of tied aid;

b) The establishment of an agency comprising of independent economic advisors

to allocate the distribution of aid based on a criteria for selection – the
membership of this panel will change every three years;

c) The objective selection of recipient countries for grants on a competitive

basis;

i) The competitiveness of a potential recipient country will be measured

against an objective yardstick comprising of a set of indicators;

ii) These indicators will include “Corruption Levels of the Recipient

Government” and “Human Development Index”, et cetera, which give
a good indication of the impact and sustainability of financial aid
allocated to them;

iii) These indicators will be measured by the various specialised agencies

of the United Nations such as the International Monetary Fund and by
third party, non-governmental organizations such as Global Integrity
Index;

d) The suspension of financial aid grants should a country is shown to backslide

through its various indices;

5. Recommends that all members of the United Nations (UN) ratify this treaty and that
in all decisions, be it made in this treaty or as a result of this treaty, and be binding;

6. Hopes that this treaty be put in place by 2009.