Ecofin topic guide yale mun korea 2014

Yale Model United Nations Korea

Economic and Financial Committee

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hair: BEN DELLA ROCCA ice Chairs: SHUBHAVI ARYA SAMUEL SEO

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LETTER FROM THE CHAIR Ben Della Rocca My name is Ben Della Rocca, and I couldn’t be more excited to welcome you the Economic and Financial Committee (ECOFIN) at YMUN Korea 2014—what promises to be the best YMUN Korea yet. After Chairing a committee at this conference last year, I’m very hopeful for a high level of debate as delegates in this committee tackle some of the most pressing economic issues of the world today.

Currently, I am a sophomore at Yale University in Davenport College, and I am majoring in Yale’s Ethics, Politics & Economics program. My other academic interests, however, are more varied, and include philosophy, linguistics, East Asian language and studies, and international relations.

On campus, I compete with Yale’s Debate and Model UN teams, and this year I have been serving as the Vice President of the Yale International Relations Association—the umbrella organization that oversees this conference. My passion for economics, and developing global solutions to solve pressing economic problems, leads me to chair this committee, and I am very much looking forward to what this conference has in store.

Jung Woong Seo Hello, I am Jung Woong Seo from Seoul, Korea, and I’m very excited to meet you all in May. Due to my father’s job, I have had to move from place to place throughout my life. I have lived in Tokyo, Vancouver, and Auckland as well as Seoul. These experiences have encouraged me to become more friendly and approachable to get used unknown societies.

My MUN career started when my coach at speech and debate at New Zealand recommended that I start MUN. I really enjoy sports, particularly snowboarding, ice hockey, cross country, and soccer. I can be reached at jwseo15@student.kis.or.kr.

Shubhavi Arya My name is Shubhavi Arya and I am a high school student in Singapore.

I am originally from New Delhi, India where I began to participate in Model UN at the beginning of my first year of middle school-one of the best decisions I’ve ever made. I instantly became very keen about the activity, and it wasn’t long before MUN occupied my social and extracurricular life.

My experience travelling around the world has instilled in me a passion for foreign cultures, influencing me about the significance of diversity and global perspectives. I’ve completely loved exploring international dynamics and especially enjoy chairing conferences with students at high school level. Outside the classroom, I enjoy spending time outdoors and playing sports. In my free time, I love to dance, travel, and watch movies.

Between now and the beginning of the conference, please feel free to contact me with any questions about conference preparation or research.

I can’t wait to meet you all in May! I can be reached at aryashubhavi@ gmail.com.

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Table of Contents History of the Committee 1 Ensuring the Equitable Distribution of Transnational Natural Resources Topic History 2 Current Situation 7 Questions to Consider 13 Bloc Positions 14 Encouraging the Diversification of Rentier States Topic History 16 Current Situation 19 Questions to Consider 23 Bloc Positions 24 Role of the Committee 25 Structure of the Committee 25 Suggestions for Further Reading 26

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History of the Committee The Economic and Financial Committee of the United Nations General Assembly—known as the Second Committee or, more commonly, ECOFIN—discusses and deals with matters relating to economic growth, development, financial regulation, financial transparency, and poverty eradication around the world. ECOFIN’s distinction as the second oldest General Assembly committee in the UN earns it its title as the Second Committee. ECOFIN derives its mandate from Article 13 of the United Nations Charter of 1945, originally conceived to promote economic cooperation among the world’s nations.

In 2013, ECOFIN entered its 68 th session, having convened its first session in 1946. The current Chairman of ECOFIN is Abdou Salam Diallo, the representative of Senegal to the United Nations; Diallo has held his post since October 2013.1 All 192 members of the General Assembly sit in the Economic and Financial Committee, as is the case with all committees in the General Assembly. Traditionally, ECOFIN works cooperatively with other international bodies that discuss economic matters, such as the IMF, the UNDP, and the WTO. ECOFIN, however, often renders decisions with more legitimacy than the former bodies, as ECOFIN’s representation is fully international and derives not just from subset of the world’s nations.

1

“Second Committee,” last modified October 9, 2013, http://www.un.org/en/ga/second/68/bureau.shtml.

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Topic History: Ensuring the Equitable Distribution tional Natural Resources

of

Transna-

Resource disputes refer to any conflict or disagreement – military or diplomatic – regarding the national ownership of natural resources and national actors’ rights to consume those resources. This section outlines some major areas of resource disputes currently ongoing around the world; these are a broad set of examples of problems that ECOFIN should address in committee. As is evident from the following, resource disputes arise surrounding a wide variety of natural resources, and different cases involve varying degrees of international actors engaged in conflicts of varying intensity. Cases of transnational resource disputes differ significantly from disputes about resources that are confined to national borders. Individual countries have their own policies for internal dispute enforced by a single sovereign government. International law, however, must deal with competing transnational resource claims in such a way that respects the sovereignties of multiple actors. Moreover, international disputes generally involve one bloc’s making claims or taking actions that directly harm the citizens of other countries entirely.

WATER CONFLICTS Nile River Conflicts Conflicts over different types of bodies of water have different nuances; in the case of river conflicts, oftentimes the food and water security of nations involved in the dispute depends upon the outcome.

The case of the Nile River is an example of such a conflict.

For decades, the Nile River has characterized the geopolitical dynamics of Northeast Africa. The Nile remains the longest river in the world, running 6,650 kilometers, and possesses a flow of 84 billion cubic meters of water annually.2 As many do today, residents in the Nile River basin have depended on the Nile for their livelihood, the Nile being an essential provider of food and water resources.

Since the colonial era, Egypt and Sudan have enjoyed inordinate levels of control of Nile resources, at the exclusion of other nations in the region; such imbalances contribute to current instabilities. The earliest treaty establishing regional control over the Nile was the Anglo-Ethiopian Treaty of 1891, signed between Britain, Italy, Ethiopia, Sudan, and Eritrea.3 In addition to redefining the borders between the latter three nations, this treaty, in Article III, attempted to “safeguard the unimpeded flow of waters from the Blue Nile” for Britain.4 As a result of this treaty, which prohibited construction projects that prevented the Nile’s flow into Britain- and Egypt-controlled Sudan, Sudan and Egypt monopolized control over the northern segments of the Nile. Treaties signed in 1902 and 1906, between Britain and the Independent State of Congo, produced a similar effect in securing control for Egypt and Sudan.5

Ultimately, as the colonial era progressed, two major treaties subsequently yielded the most influence “Conflict on the Nile: The future of transboundary water disputes on the world’s largest river,” last modified November 25, 2013, http://www.futuredirections.org.au/publications/food-and-water-crises/1452-conflict-on-the-nile-thefuture-of-transboundary-water-disputes-over-the-world-s-longest-river.html.

3 Edward Ullendorf, The Anglo-Ethiopian Treaty of 1902, (London: Cambridge University Press, 1967), http:// www.jstor.org/stable/612393, 641.

4 Ibid.

5 “Conflict on the Nile: The future of transboundary water dispute on the world’s largest river.”

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in shaping the North African geopolitical dynamic. First, in 1929, Egypt and Britain signed the Nile Water Agreement: a treaty that gave Egypt formal power to directly oversee and inspect any upstream project on the Nile that might impede the Nile’s flow.6 Such a one-sided agreement was justified by citing Egypt’s uniquely high reliance on the Nile compared to other nations with higher rates of rainfall.7 However, Egypt held special strategic importance for Britain that merited favorable treatment, as Egypt controlled the Suez Canal, by which Britain could access India.8

Second, in 1959, Egypt and Sudan signed the Nile Water Agreement to allow Egypt to construct the Aswan Dam. This agreement afforded Sudan control of one fourth of the Nile’s entire annual flow, leaving Egypt with three fourths. As they did to the former, other Nile basin nations strongly objected to monopolistic outcomes of this treaty; Nile basin countries besides Egypt and Sudan lacked autonomous status and thus remained unable to participate as equal players in Nile resource negotiations.9

Non-Egyptian and –Sudanese countries have gained more control over the Nile in recent years, however. Two key agreements, which arose in the 1990s and only more recently are coming to gain full legal force, contribute to this shift in the balance of power: the Nile Basin Initiative (NBI) and the Nile River Co-operative Framework (NRCF). The NBI promotes dialogue between riparian nations (nations located in the Nile basin) in order to work towards sustainable solutions for resource management.10 The NBI also enjoys the support of the international community, with the World Bank explicitly committed to supporting NBI-endorsed measures.11 Arising from the NBI is the NRCF, an agreement that redistributes control of the Nile River and break up Sudan’s and Egypt’s near duopolistic share.12 Six nations in the NBI have, as of 2011, ratified the NRCF—despite a over a decade of Egypt’s and Sudan’s delaying the process.

Convention on the Law of the Non-Navigational Uses of International Watercourses

Disputes regarding water sources certainly extend to more examples than the Nile, and the international community has made some attempts to regulate the settlement of those disputes in the past.

The Convention on the Law of the Non-Navigational Uses of International Watercourses is a document that regulates sea resources adopted by the United Nations, but not in full force, since 1997. The document has been ratified by 31 states, but needs 35 to assume the full force of international law; however, this document still represents an important step in the process of developing international law to govern water resources.13 In general, this document—should it be ratified—would oblige member nations to be more mindful of other nations’ needs for transnational water resources when nations are consider their own consumpIbid.

Ibid.

Ibid.

Ibid.

“About the NBI,” Nile Basin Initiative, accessed December 20, 2013, http://nilebasin.org/newsite/index. php?option=com_content&view=section&layout=blog&id=5&Itemid=68&lang=en.

11 “Implementation and Results Progress Report,” International Development Association, last modified November, 2012, http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/11/14/000386194_201211 14004435/Rendered/PDF/NonAsciiFileName0.pdf.

12 “East Africa seeks more Nile water from Egypt,” BBC News, last modified May 14, 2010, http://news.bbc. co.uk/2/hi/africa/8682387.stm.

13 Krishna Raj and Salman Salman, “International Groundwater Law and the World Bank Policy for Projects on Transboundary Groundater,” Groundwater: Legal and Policy Perspectives: Proceedings of a World Bank Seminar, 1999, 173.

6 7 8 9 10

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tion levels, ultimately such that member nations share transnational water resources equitably. Specifically, the treaty would require nations to make transparent the conditions of the water resources they consume and their planned uses for watercourse. It would also requires member states to develop mutually agreed upon solutions to conflicts, with disputes able to be arbitrated by international courts.

Some controversy exists surrounding this document, however, contributing to its current inability to be ratified. Article 7 of the text, for example, which obliges nations in their own consumption to avoid harming other nations as much as possible, remains vague regarding the extent to which nations must curtail consumption, simply entreating nations to take “all appropriate measures” to prevent third party harm.14 Water-Related Disputes Across the Globe Conflicts over oceanic resources often involve many more nations directly, as compared to river conflicts. The case in Europe illustrates this phenomenon. As the European Parliamentary Research Service so eloquently acknowledges, “Fish do not recognise national boundaries, so sustainable exploitation of shared living sea resources requires joint management between fishing states.”15 Indeed, disagreements over fishing resources have long been sources of dispute in almost all parts of the world. Fishery disputes historically receive much attention from institutions like the United Nations Convention on the Law of the Sea (UNCLOS). However, ECOFIN does have a role to play in facilitating adherence to international guidelines, promoting incentives for establishing Marine Protected Areas, and making economic-based recommendations to the international community.

The overuse of fishery resources represents a typical example of a failed market. In the classic fishery dispute scenario, many different nations have access to fisheries, each nation has an incentive to consume fishery resources at high levels, but unless actors restrict their levels of consumption, they will deplete the fishery’s resources entirely and prevent all consumption in the future. The classic solution to this problem is the establishment of Marine Protected Areas (MPAs). MPAs are national or international agreements that limit the extent to which national or business actors can use marine resources, in a given area.

Just over 1% of the Earth’s marine surfaces are covered by MPAs. Studies conducted in 2010 indicate that, by nearly all metrics and in nearly all circumstances, MPAs have strikingly positive effects at improving the characteristics of the fish stock populations that they protect.16 MPAs, when instituted, promote in fish stock both population growth and population density, as well as improving other metrics such as biomass and body size of fish stocks.17

In the recent past, many major MPA agreements have been utilized with success. The North American MPA Network, signed between the United States, Canada, and Mexico in 2007, effectively promotes information sharing and the development of MPAs between the three North American Nations.18 In “Convention on the Law of Non-Navigational Uses of International Watercourses,” United Nations, accessed December 19, 2013 http://legal.un.org/ilc/texts/instruments/english/conventions/8_3_1997.pdf.

15 “North-East Atlantic fish stock disputes,” European Parliamentary Research Service, last updated September 12, 2013, http://www.europarl.europa.eu/RegData/bibliotheque/briefing/2013/130686/LDM_BRI%282013%29130686_ REV1_EN.pdf.

16 “The Science of Marines Reserves,” Partnership for Interdisciplinary Studies of Coastal Oceans, accessed December 22, 2013, http://www.piscoweb.org/outreach/pubs/reserves.

17 Ibid.

18 “International Marine Protected Areas Efforts,” U.S. Department of Commerce, accessed December 22, 2013, 14

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Asia and Oceania, many MPAs exist with similar efficacy in the Philippines, which possesses extremely high biodiversity, and Australia. UNESCO’s Programme on Man and the Biosphere promotes research that contributes to the development of MPAs. Oftentimes, MPAs represent a crossroads between the competing interests of environmental preservation and economic development.19 Oil in Kirkuk Oil, like water, is an extremely valuable resource for many nations, causing oil also to be the subject of significant international disputes--as is the case in Kirkuk.

Kirkuk is a province in northern Iraq, with an estimated population of 1.4 million people in just under 10,000 square kilometers. The primary inhabitants of Kirkuk, as has been the case historically, are Kurds, Turkmens and Arabs.20 After the fall of the Ottoman Empire in 1923, the Kurdish majority failed to secure for themselves an independent state of Kurdistan, and the region fell to colonial rule.21 In 1932, the League of Nations gave Iraq control over the region, on the condition that they allow the Kurds self-governance rights; however, Iraq did not honor this agreement.22 Up through Saddam Hussein’s regime, the Iraqis moreover pursued ethnic cleansing initiatives that forced hundreds of thousands of Kurds to flee from the region.23 Although ethnic tensions remained high, after the Gulf War in 1991, Iraq conceded to the Kurds the right to form the semi-independent state of Kurdistan, technically within Iraq’s borders.24 Kurdistan acted de facto as an autonomous state, without being recognized as one de iure. Throughout the 2000s, many Kurds have been attracted back to Kurdistan, and this has led to the group’s continuing to exert their autonomous status.25 Disputes regarding Kirkuk’s oil surround and indeed arise as a result of these political issues in the region. Kirkuk is of special importance in Iraq because of its large oil reserves, which comprise 13% of Iraq’s total reserves.26 Securing Kirkuk, the ancestral home of the Kurds, is essential for the Kurds to achieve the independent status that they covet; however, desire for control of Kirkuk’s oil reserves have provided large impetus for Iraq to resist the Kurds.27 Since 2003, as tensions escalated, both the Kurds and the Iraqi central government have maintained military personnel in the region.28 Tensions have remained high as the Kurds have pushed for a referendum in Kirkuk in order to determine Kirkuk’s national status: the Kurds believe that a majority in Kirkuk would vote to integrate into Kurd-controlled Kurdistan, rather than remain in Iraq.29 The United Nations has not supported Kurdish President Mahmoud Barzani’s calls for referendum, labeling such a move dangerously provocative.30 Mining Rights in Eastern Africa http://marineprotectedareas.noaa.gov/helpful_resources/international.html.

19 Ibid.

20 Saed Kakei, “Negotiating a satisfactory outcome for the crisis in Kirkuk,” Ekurd.net, last updated April 24, 2013, http://www.ekurd.net/mismas/articles/misc2013/4/kirkuk781.htm.

21 Ibid.

22 Ibid.

23 Ibid.

24 Ibid.

25 Ibid.

26 Tim Cocks, “U.N. wants Iraq Kurds to drop Kirkuk vote-diplomat,” Reuters, last updated July 2009, 1. http:// www.reuters.com/article/2009/07/21/idUSLL491827.

27 Jen Alic, “Kirkuk Poised for Conflict, BP Enters Fray,” Oilprice.com, last updated January 23, 2013, 1. http:// oilprice.com/Energy/Energy-General/Kirkuk-Poised-for-Conflict-BP-Enters-Fray.html.

28 Ibid.

29 “U.N. wants Iraq Kurds to drop Kirkuk vote-diplomat.”

30 Ibid.

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Conflicts regarding minerals and mining resources represent a further type of international resource conflict; the disputes over mines in the Democratic Republic of the Congo most exemplify mineral conflicts. Throughout northeastern Africa, many societies actively engaged in mining, harvesting minerals ranging from salt, to gold, to iron.31 In the colonial era, however, Africa’s mining industries developed rapidly under colonial rule. Britain, Portugal, and Belgium played a foremost role in developing mining infrastructure in Africa and investing in the mining industries.32 The Congo region in the colonial period came to provide extremely large portions of the world’s market for minerals like cobalt, copper, and, significantly, diamonds.33 The Democratic Republic of the Congo is a country extremely well-endowed in natural resources compared with even other eastern African nations. After achieving independence in the 1960s, the DRC government, like the governments of neighboring countries, attempted to exert significant state control over the mining industry.34 The DRC intended to counteract the drop in investment in the industry pursuant to the fall of colonial rule.35 International exploitation of the DRC’s mines began, however, in the 1990s. With war in Rwanda breaking out in the early 1990s, hundreds of thousands of refugees sought refuge from Rwanda in the eastern part of the DRC. Such population shifts majorly affected mineral resource security: factions of the Rwandan population plundered mines in the eastern region and disrupted the delicate power structures in place.

The situation escalated a few years later in 1996, when the Second Congo War arose—a civil war between the Zairian nationalist forces and the Alliance of Democratic Forces of the Liberation of CongoZaire (AFDL). The ensuing chaos upset normal supply channels and power structures further, as the government lost control of many resource stocks.36 When Uganda, Rwanda, and Burundi began assisting the rebel AFDL forces in 1998, military factions from these countries gained control over some DRC land, allowing military forces to exploit mining resources through more formal mechanisms, such as price fixtures and military confiscation.37 The AFDL leadership often tacitly encouraged such looting actions that drew resources away from the government.38 In years following this period, which the UN describes as a period of “Mass-scale looting,” systematic extraction of minerals from the DRC began to occur.39 Rwanda- and Uganda-owned foreign companies began to transport minerals out of the DRC on a large scale, oftentimes purchasing materials through counterfeit money or other illicit means, at the behest of both government and non-government groups.40 Plenty of instances have also arisen in which mineral resources have forcibly been confiscated from villages and civilians.41 This situation has also caused major loss of life: as a direct result of the migration of hundreds of thousands of members for the Hutu ethnic group from Rwanda, over “Minerals and Africa’s Development: The International Study Group Report on Africa’s Military Regimes,” Economic Commission for Africa, accessed December 17, 2013, 11.

32 Ibid, 12.

33 Ibid.

34 Ibid, 14.

35 Ibid, 14.

36 “Report of the Panel of Experts on the Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of the Congo,” Expert Panel on the Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of the Congo, accessed December 21, 2013.

37 Ibid.

38 Ibid.

39 Ibid.

40 Ibid.

41 Ibid.

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5 million individuals are estimated to have died.42 The United Nations has not been inactive with the onset of these problems in the DRC. Throughout the 2000s, the UN has kept a presence of Peacekeeping Forces in the region to quell rebel and separatist violence.43 Since 2010, the United Nations Organization Stabilization Mission in the Democratic Republic of the Congo (MONUSCO) has taken over these initiatives and provided aid to DRC government forces.44 As described in the current situation section, MONUSCO has had some efficacy in mitigating rebel violence and exploitation.

Current Situation Nile River Conflict The historic inequity in the distribution of the Nile’s resources has lead to a highly volatile situation in the status quo—one that certainly has potential to erupt into interstate conflict. Today, the Nile River basin is comprised of eleven North African countries: Burundi, the Democratic Republic of the Congo, Egypt, Eritrea, Ethiopia, Kenya, Rwanda, Sudan, South Sudan, Tanzania, and Uganda.45 Combined, these nations have a population of over 450 million people.46 Of these, an estimated 200 million depend on depend on the Nile for food and water security.

As described in the Topic History section, the NBI and the ensuing NRCF are the two international agreements (or potential agreement in the latter’s case) of foremost importance in the status quo. On balance, the NBI has been a very positive force for facilitating cooperation. To facilitate transparency, NBI nations embarked upon the Shared Vision Program, which works now to share innovations regarding technological innovations and institutions that promote efficiency, sustainability, and socioeconomic improvement.47 The NBI has also given rise to a number of Subsidiary Action Programs that have promoted regional cooperation. The Eastern Nile Subsidiary Action Program, in addition to promoting transparency, is an entity that funnels investment in the short and long term to projects relating to water sustainability and security.48 Projects undertaken range from the facilitation of cross-border energy trade to streamlined irrigation. Many of these projects receive funding from the World Bank.49 A less extensive program called the Nile Equatorial Lakes Subsidiary Action Program consists of smallerscale, environment-oriented projects that involve the southernmost members of the NBI (significantly, not Egypt and Sudan).

The NRCF remains the most controversial initiative associated with the NBI. As of 2011, Burundi signed the NRCF after years of delay, making itself the sixth signatory to the treaty, and giving the treaty legal force, with the majority of the nations in the region in support. Burundi signed the NRCF by signing the Entebbe Agreement in March of that year; with Burundi, South Sudan and the Democratic RepubMarina Litvinsky, “DR-CONGO: Firms Fuelling ‘Conflict Minerals’ Violence, Report Says,” last updated July 21, 2009, 1. http://www.ips.org/africa/2009/07/dr-congo-firms-fuelling-conflict-minerals-violence-report-says/.

43 “MONUSCO Mandate,” United Nations, accessed December 22, 2013, http://www.un.org/en/peacekeeping/missions/monusco/mandate.shtml.

44 Ibid.

45 “Conflict on the Nile: The future of transboundary water dispute on the world’s largest river.”

46 Ibid.

47 “About the NBI.” 48 Ibid.

49 “Implementation and Results Progress Report.”

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lic of the Congo have also expressed intent to sign the agreement and join Burundi, Rwanda, Uganda, Ethiopia, Tanzania, and Kenya.50 The main force behind the NRCF treaty is that it grants nations autonomy to commence with projects on the Nile, without explicit permission of Egypt and Sudan, so long as they do not significantly alter current allotments. Egypt and Sudan refuse to ratify this treaty so far, making quite clear that they object to the “significantly” standard and they feel even marginal changes in the status quo are unacceptable.51

Egypt’s primary objection to Nile redistribution is that the degree to which its depends on the Nile far outstrips that of any other nation in the region. Some of the factors that Egypt uses to substantiate this claim are certainly true. The Nile provides 97% of Egypt’s water needs annually, and even with the Nile River, Egypt faces serious water scarcity.52 According to United Nations’ studies, Egypt may face the prospect of running out of water by 2025.53 The Nile also provides Egypt essential food and electrical resources. Almost 80% of water consumed in Egypt is devoted towards agriculture; nevertheless, Egypt still faces food scarcity and remains the world’s highest importer of grain.54 The vast majority of the country’s electrical power also depends on the Nile, with almost 10% of the nations power coming from the Aswan Dam.55 Rapid population growth in Egypt exacerbates these factors: by 2050, Egypt’s population is on pace nearly to double. Sudan cites similar concerns regarding its own country’s dependence on the Nile, especially its own heavy lack of rainfall.56 Significantly, Egypt and Sudan advocate, instead of signing the NRCF, “refining” the workings of the NBI and further promoting mutually agreed upon methods of cooperation.57

Upstream Nations, South of Sudan and Egypt in the Nile basin, similarly face upward pressures on water demand, however. Nations such as Uganda and Ethiopia maintain very high population growths of around 3% per year; rapid economic development of nations in this region increases these nations’ dependence on the Nile for hydroelectric power, as well.58 The need for Egypt and Sudan to permit these nations to increase Nile usage has historically hindered development.59 Complicating matters further, South Sudan’s recent independence has created a shift in power within the Sudanese region itself. Right now, South Sudan controls an estimated 18% of the Nile’s flow since it achieved independence; South Sudan’s control will likely need to be renegotiated, however.60

How these tensions will resolve remains unclear, though the potential for interstate conflict certainly exists. Egypt in particular takes the preservation of its current share of the Nile extremely seriously. A 2004 initiative in Tanzania constructing a pipeline to the Northwestern region of the country was met with bomb threats from Egypt, who argued that such construction diverted water from the Aswan Dam and violated the treaty from 1929.61 Egypt’s former foreign minister conjectured in 1988 that Egypt’s next war would center around distribution of the Nile’s resources.62 50 51 52 53 54 55 56 57 58 59 60 61 62

“Conflict on the Nile: The future of transboundary water dispute on the world’s largest river.”

“East Africa seeks more Nile water from Egypt.”

“Conflict on the Nile: The future of transboundary water dispute on the world’s largest river.”

Ibid.

Ibid.

Ibid.

“East Africa seeks more Nile water from Egypt.”

“Conflict on the Nile: The future of transboundary water dispute on the world’s largest river.”

Ibid.

“East Africa seeks more Nile water from Egypt.”

“Conflict on the Nile: The future of transboundary water dispute on the world’s largest river.”

Ibid.

Ibid.

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Besides the case of the Nile, other disputes regarding river resources exist as well. Other cases also have major implications for regional food and water security. The Jordan River, for instance, remains the subject of some dispute. With Israel, Jordan, and Palestine all historically having claimed water rights for water sources in the Gaza Strip, the Oslo Agreement of 1994 affirmed rights for all parties to access these water sources in varying degrees. Multiple parties claim, though, that many of the specific distribution regulations set forth in this agreement are no longer observed, and water rights remain in dispute.

Fishery Conflicts Across the Globe Demonstrating the differences between oceanic and river water disputes, the situation in the European Union is particularly illustrative of fishery resource conflict, though issues of transnational fishery resource distribution arise in other parts of the world as well. Currently in the European Union, a number of international institutions have been established to regulate cooperation on national fishery policies.

For instance, the North East Atlantic Fisheries Commission (NEAFC) regulates fish stock populations in the regions of the northeast Atlantic Ocean, where some of the most populous fish stocks exist.63 Typically, the NEAFC regulates fish stocks by setting an overall quota for fishing that agreeing members cumulatively shall not exceed, by using a licensing system to regulate fish stock harvests, and by delineating mutually agreed upon areas of the ocean as Regulatory Areas where the NEAFC regulations have binding force.64 Parties involved in NEAFC agreements tend to be the EU as well as other northern European nations and the Russian Federation.65 Some other similar organizations include the International Commission for the Conservation of Atlantic Tunas and the North Atlantic Salmon Conservation Organization; nations also on an ad hoc basis will often craft agreements similar to those set forth by such international organizations.66 Agreements pertaining to the northeast Atlantic Ocean exemplify the current situation of these types of resources agreements well because large quantities of fish exist in this region—such as tuna, mackerel, and salmon—and hence a large degree of international cooperation characterizes the handling of these fish stocks. These international organizations are known commonly as Regional Fisheries Bodies or Regional Fisheries Management Organizations.67 In the northeastern Atlantic (NEA), an example of a disputed fish stock is the Atlantic mackerel. Recently, difficulties have arisen regarding this stock because the population now covers a much wider terrain that it previously has. Throughout the past year or even longer, the Atlantic mackerel has come to inhabit northwestern European waters, especially areas of the sea around Iceland.68 Traditionally, this population stayed predominantly in waters around the EU and Norway, not extending itself significantly further North.69 Prior agreements that limited the fishing of this population did not include Iceland; now, however, Iceland wishes to claim for itself a significant share of the fish stocks in its waters.70 Because the rapid change in current situation, Iceland has incentives not to join current international agreements. Since 2010, Iceland has expressly declined to take part in current agreements and has set its “About the Work of the NEAFC,” North East Atlantic Fisheries Commission, accessed December 21, 2013, http://www.neafc.org.

64 Ibid.

65 Ibid.

66 “North-East Atlantic fish stock disputes.”

67 Ibid.

68 Ibid.

69 Ibid.

70 Ibid.

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own consumption limits at 130,000 tonnes of mackerel per year—significantly higher than the binding agreements on other EU members.71 Year of such lack of cooperation have triggered international concerns about sustainability of the population: the International Council for the Exploration of the Sea (ICES) has characterized the Atlantic mackerel population as subject to overexploitation.72 ICES has set the recommended limit for harvesting the Atlantic mackerel fish stock at just under 600,000 tonnes per year.73 Largely precipitated by Iceland’s deviation from international policy, current fishing levels exceed over 900,000 tonnes per year.74 Indeed, such patterns are fairly regular; the cases with Blue Whiting and Atlantic-Scando herring populations display similar trends of overexploitation.75 The case with Iceland demonstrates how, due to the ad hoc nature of international fishery agreements and the dynamic nature of fish populations, disputes can arise that may prove harmful to existing fish stocks. The status quo often lacks incentives to compel international cooperation on these issues; ensuing collective problems have the potential to cause long-term reductions in overall international consumption, if the international community overuses fishery resources. A further common trend in cases of fishery disputes is nations’ lack of ability to regulate successfully the fishing industries within their borders and to hold firms accountable to internationally accepted quotas.

Oil in Kirkuk The situation of Kirkuk’s oil incorporates formal treaties to a far lesser degree than most of the waterrelated disputes examined thus far. In the status quo, high tensions in Kirkuk have manifested themselves in a variety of ways. Bloodshed in the form of terrorism is common in the region, driven by strong sectarian and political opposition.76 In the political sphere, Baghdad routinely denies budgetary maneuvers supported by Barzani and the Kurdish leadership.

Oil remains especially contentious, however, as the Kurds and Baghdad leadership both see control over Kirkuk’s oil as essential to maintaining power over the Kirkuk region. Each side has taken measures to assert authority over the reserves. Earlier in 2013, the Kurd leadership announced that it was engaging in negotiations with Turkey to construct an oil pipeline, by which it could export oil to Turkey at greatly accelerated rates. Currently, Kirkuk exports between 30 and 50 thousand barrels of oil per day to Turkey, transporting the oil primarily by truck.77 By constructing the pipeline, the Kurds endeavor to increase exports to 300,000 barrels of oil per day.78 Kurdish President Barzani initially made bold statements regarding the pipeline, with the Kurdish Regional Government signaling that the pipeline to Ankara might be operation as early as December, 2013.79 Ultimately, though, this proved not to be the case. Ankara (Turkey’s capital) and Erbil (the center of the KRG) seemed to have reached a secret agreement, but on December 4 th, Barzani announced that the pipeline’s construction would be delayed, since Erbil and Baghdad had yet to reach an agreeIbid.

Ibid.

Ibid.

Ibid.

“ICES Advice 2013, Book 9,” ICES, last updated October, 2013, http://www.ices.dk/sites/pub/Publication%20 Reports/Advice/2013/2013/whb-comb.pdf.

76 “Iraqi Kurdistan: Seizing an Opportunity?” The Economist, last updated August 15, 2013, http://www.economist.com/blogs/pomegranate/2013/08/iraqi-kurdistan.

77 “Showdown on Iraqi Kurd’s oil, gas is looming,” UPI, last updated December 11, 2013, http://www.upi.com/ Business_News/Energy-Resources/2013/12/11/Showdown-on-Iraqi-Kurds-oil-gas-is-looming/UPI-39481386785187/.

78 Ibid.

79 Ibid.

71 72 73 74 75

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ment on the matter.80 This announcement is very significant, insofar as it refocuses the dispute as one centrally between the KRG and Baghdad: as one Turkish official notes, “Ankara now says the future of the agreement is up to Baghdad and Erbil.”81 How the conflict will resolve if left solely between Erbil and Baghdad, however, remains unclear. Baghdad claims that the oil exports that Kirkuk currently engages in are already illegal and represent a form of theft.82 Additionally, the KRG’s achievement of oil independence would cement its own autonomy from Iraq; Kurdistan acts as an autonomous state in many ways, and significant economic independence would render the KRG autonomous from Iraq to an even greater capacity. Equally contributing to Iraq’s refusal to change its stance regarding this issue are economic concerns. With the existence of a Kurd oil industry, Iraq’s exports and export revenue would fall significantly. This could prove especially pernicious for the country, given that Iraq is still implementing recoveries from the past few war-torn decades.83 Further signaling Baghdad’s refusal to reconsider its Kirkuk is its announced negotiations with British Petroleum, regarding oil operations in the Kirkuk region. Much to the frustration of the KRG, Baghdad acknowledged in November, 2013, that it had plans to give BP drilling rights in Kirkuk on a massive scale.6 The proposed plans will attempt to more than double Kirkuk’s oil output for Iraq over the next three years to 500,000 barrels of oil per day.6 This unilateral decision by Iraq, with long-term implications, has done much to increase tensions with the KRG. Earlier in the summer of 2013, Barzani traveled to Baghdad for the first time since 2010, and he signaled that the KRG might be working with Baghdad to progress constructively towards political solutions.84 However, the above developments later this year indicate that the situation is not quite so optimistic.

Thus, the political stalemate arising from each side’s determination shows no signs of yielding, threatening if anything to escalate into more serious conflict. Regarding international actors, a significant player in Iraq since 2003, the United States, has made clear its desires regarding the Kirkuk dispute.

Strongly in favor of a cohesive Iraq, the United States opposes a separate Kurd oil industry, citing such initiatives as the single most threatening factor to Iraqi unity.85 Notable also is Turkey’s stake in this dispute. A country with almost no energy resources of its own, Turkey spends over USD 50 billion per year on oil imports; access to Kirkuk’s oil via this pipeline would yield tremendous positive impact on the nation’s economy.86 Mining Rights in Eastern Africa Much more violent than the above types of resources conflicts are the conflicts over minerals in Africa.

As a continuation from previous years, rebel violence remains high in many of the mining regions of the DRC, leading to resource exploitation. Rebel groups, most of whom remain military active motivated by a desire for political separation and reform, conduct attacks both on mining sites and areas of political importance. Illustrating this phenomenon are attacks in the Katanga province earlier in 2013--the most active among the Katanga militia groups are the Gedeon and Kyungu Mutanga groups.87 Katanga 80 81 82 83 84 85 86 87

Ibid.

Ibid.

“U.N. wants Iraq Kurds to drop Kirkuk vote-diplomat,” “Showdown on Iraqi Kurd’s oil, gas is looming.”

“Iraqi Kurdistan: Seizing an Opportunity?”

“Showdown on Iraqi Kurd’s oil, gas is looming.”

Ibid.

“Congo: Bloody Katanga,” Strategy Page, last updated April 23, 2013, http://www.strategypage.com/qnd/congo/

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is a large province in the southeastern region of the DRC that possesses a lot of the DRC’s mining wealth; Katanga is particularly rich in copper and cobalt.88 Raids often focus on plundering mining resources from mining sites and from villagers’ homes.89 Earlier this year, the Mayi-Mayi Kata separatist group also launched a 300-man assault on the region of Lubumbashi, the provincial capital, creating panic and unrest that have hampered mining productivity and supply chain security.90

In response to the above attack on government personnel, MONUSCO forces assisted local security personnel in locating the regional Mayi-Mayi Kata rebel group. With MONUSCO’s assistance, the DRC secured the surrender of hundreds of affiliated rebels by effectively serving as an outside arbitrator.91 While international groups such as MONUSCO can be effective, ultimately the situation in the DRC remains extremely dynamic, especially given the fact that even the DRC-native separatist militia forces may have ties to international organizations, from Rwanda and Uganda, who do not object to the plundering of mining resources.

The current situation in East Africa also sees a sharp increase in the level of foreign business involvement in DRC mining, as compared to previous years. The involvement of major international corporations has unfortunately exacerbated the conflicts that have been present for over a decade. European and Asian companies in particular have in recent years been purchasing minerals from rebel groups and militias in the DRC, and the funds from these purchases have been found to facilitate military action in the country.92 Some of the large corporations engaging in such practices include THAISARCO, a Thailand-based company; Trademet, based in Belgium; and Affirmex, based in Britain.93 Moreover, sources have also confirmed that in many of these cases, militia groups in the DRC collude with factions of the DRC military, sharing massive profits as a result of mining labor exploitation.94 As more reporting has recently come to light on this subject, the extent of the corruption and lack of transparency regarding DRC mining seems to be enormous.

Noteworthy as well is the decision from the United States to restrict imports on products coming from this region. With the passage of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010, the United States legally requires companies to track the purchase of conflict minerals and disallowing purchases of minerals obtained through illicit practices in the DRC. Given the recent nature of this legislation, the exact parameters remain unclear; however this still represents a major international response.

articles/20130423.aspx.

88 “Rebels surrender to UN following attack on DRC mining hub,” Mineweb, last updated March 25, 2013, http:// www.mineweb.com/mineweb/content/en/mineweb-fast-news?oid=183343&sn=Detail.

89 “Congo: Bloody Katanga.”

90 “Rebels surrender to UN following attack on DRC mining hub.”

91 Ibid.

92 “DR-CONGO: Firms Fuelling ‘Conflict Minerals’ Violence, Report Says.”

93 Ibid.

94 Ibid.

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Questions to Consider How can this body institute measures that arrive at equitable solutions in river-related conflicts, while keeping in mind the goal of diminishing the likelihood of interstate military conflict?

Ultimately, what are the criteria for fair water distribution arrangements, given that oftentimes many actors have competing claims in these disputes?

When river disputes occur, how can this body take measures to ensure food and water security for all parties in the region in question?

Are conflicts over scarce natural resources the source of international conflict, or do they escalate disputes that have resulted from other sources (for example: cultural conflicts)? Does this matter for their solution?

How can ECOFIN work towards the institutionalization of standard procedures that address global water resource disputes, given that agreements in the current situation often arise on an ad hoc basis?

How are the competing goals of resources sustainability and economic productivity best balanced in cases the regulation of fish stocks and other water resources?

What organizations, policies, regulations and laws best control water resources? On what grounds are these regulations based upon (contemporary law, colonial law, historical beliefs)? To what extent do they oppose each other?

Is there an unfair and inequitable power distribution or relationship between the existing competing blocs regarding water disputes? Do additional non-water tensions exist among them?

As questions regarding the political legitimacy of movements for referendum and other measures in Kurd territories may not fall under ECOFIN’s jurisdiction, what outcomes in Kirkuk should this body encourage and what types of regulations are most conducive to those ends?

Can this body take measures to alleviate the potential burdens on nations that rely more heavily upon oil from unstable regions?

What reforms that ECOFIN might pursue would prove most beneficial to Iraq as a whole?

Are the policies pursued by the United States conducive towards alleviating the situation in this region, and if so, should the international community as a whole adopt similar options?

What types of regulations should companies operating in this region be subject to?

With what measures, if any, might the transparency of economic operations in the DRC be improved?

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Bloc Positions The bloc positions below are basic descriptions of some trends found within particular regions of the world. These descriptions may prove helpful in guiding delegates towards solutions in committee, but delegates should ultimately formulate their positions based on the views of their nations individually.

European nations and western liberal democracies Developed nations in Europe and other western liberal democracies unify around their calls for peaceful solutions to disputes and the use of international institutions, rather than militaries. However, an emphasis on this type of problem solving does not necessarily mean that these nations always agree on the same solution for each dispute. As disputes surrounding fish stocks illustrate, individual interests of these nations still prevent consensus on problems from being reached, despite heavy reliance on institutional solutions to problems. A historic lack of regulation of businesses in the Congo may illustrate similar trends for nations besides the United States, though nevertheless many western liberal democracies push strongly for international solutions to the resource disputes in Africa.

South American nations Like European nations, South American countries have primarily experienced marine resource disputes firsthand. When resolving disputes, nations in this region have sometimes resorted to force—such as the case of Ecuador and Peru, who fought a small war over territorial conflicts in the mid-1990s.

Overall, though, interstate conflict is minimal, and South American nations display a proclivity to craft international agreements to forestall problems. Since the turn of the century, for instance, Mexico and many other nations have extensive agreements with the United States regarding fishing and marine resources regulations.

Northern African nations (Egypt, Sudan, Eritrea, etc.)

Especially in the context of resource disputes, discussing African nations as a unified bloc hardly gives an accurate description of different nations’ views. However, nations such as Egypt and Sudan that benefit from the Nile distribution arrangements of the status quo strongly oppose changing the current Nile agreements. Although these nations do not directly international cooperation and collaboration – having acceded to the formation of institutions in the past – these nations do object to rapid calls for change in the status quo. In general, the viewpoint of these nations is one that affirms national sovereignty and that looks unfavorably upon internationally coordinated efforts to redistribute resources.

Other African nations Military conflicts that embroil countries like the DRC demonstrate that African nations often lack a unified vision for solving resource problems. In general, though, nations such as South Africa and the DRC have long recognized the pernicious effects of mining practices in their country, but nevertheless, pressing needs for economic development and external make the prospect of disrupting these practices difficult. Other nations, such as those in the Nile basin, pursue diplomatic action based on their need for resources such as water.

Middle Eastern nations Disputes over natural resources in the Middle East frequently arise from ideological factors as much as economic. Disputes ranging from Kirkuk to allegations over Israel’s rain-inducing technologies dem-

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onstrate this phenomenon. Nevertheless, resource claims in the region primarily derive from incentives to develop at the expense of others. Demand from other nations, such as Turkey in the case of Kirkuk’s oil, for instance, further drive Middle Eastern nations to prioritize oil production over other concerns.

Many nations in the region do not support an independent Kurdistan.

East Asian nations Generalizing about East Asian nations also often fails to describe the region’s dynamics fully. Nations like Japan and South Korea are more inclined than others to turn to international institutions to solve problems. Many nations in the region have displayed a tendency to prioritize economic growth over other concerns in dispute resolution—perhaps evinced by Thailand’s allowing major national corporations to profit heavily off of the situation in the DRC. Regarding territorial and resource disputes in general, China, for instance, provides an example of a nation that strongly asserts its own international interests above other concerns in negotiations. China claims vast amounts of territories extending far into the Pacific Ocean that nations such as Vietnam, the Philippines, and Japan have long claimed for their own—the conflicts surrounding Diaowu Island represent only the tensest example of these disputes.

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Topic History: Encouraging the Diversification of Rentier States The formal definition of a rentier state is a state that derives nearly all or most of its national revenue from one type of national export. While the concept is less formal in international relations, and no specific, agreed-upon threshold exists at which point nations are categorically considered “rentier states,” the theory behind the concept remains clear: nations that depend excessively upon one export industry for national revenue face great danger should that resource be compromised, and those nations’ government may often be obliged to serve outside interests rather than their own citizens. The classic examples of rentier states are heavily oil-dependent nations in the Middle East. However, a variety of different types of rentier states exist, and this section outlines the current situation of some such rentier states, divided by region.

The Middle East and OPEC The historical factors that cause Middle Eastern oil states to become rentier states on some level harbor no fundamental differences from the factors that cause any state to be overly dependent on one export: Middle Eastern nation are uniquely endowed with oil and natural gas resources, and the cultivation of these resources have proven the most expedient means for developing these nations’ economies. However, in the case of the Middle East, other geopolitical factors have influenced the dynamics of rentier nations’ current economies. With the development of the Organization of Petroleum Exporting Countries, or OPEC, Middle Eastern dependence on oil furthered significantly. Understanding the history of OPEC and oil markets in a very general sense will provide context for the current situations that many Middle Eastern rentier states face.

Founded in Baghdad in September, 1960, OPEC originally consisted of the nations of Iraq, Venezuela, Iran, Kuwait, and Saudi Arabia. Joined by more oil exporter nations in subsequent years, including Qatar, Libya, the UAE, Nigeria, Angola, and Gabon, OPEC’s main function is to coordinate petroleum policies amongst member nations. Through such coordination, OPEC endeavors to create price stability in oil markets as well as high returns to investors in the industry.95

With the arrival of the 1970s, OPEC began to attain major international significance. OPEC nations controlled between 40% and 50% of the entirety of the world’s oil markets throughout the 1970s, counting 13 nations among its members by 1975.96 In 1973, OPEC first exercised its economic influence with the Arab Oil Embargo of 1973; in 1979, the Iranian revolution, which disrupted much of OPEC’s supply chains of oil, also had major impacts on the world oil markets and oil prices.97 Ultimately, the supplyside reductions in the oil market precipitated by OPEC yielded major impacts worldwide—these events were a primary contributor to the United States’ stagflation crisis in the 1980s.

The 1980s ushered in lower profits for many OPEC rentier states overall, with slow decreases in international demand for oil.98 Early on in this decade, demand for other types of energy substituted hydrocarbon demand, in part because of the negative global impacts of OPEC’s supply restrictions in the “OPEC: Brief History,” Organization of Petroleum Exporting Countries, last updated January, 2014, http://www. opec.org/opec_web/en/about_us/24.htm.

96 Gregor Macdonald, “OPEC Has Lost the Power to Lower the Price of Oil,” last updated May 22, 2012, http:// www.peakprosperity.com/blog/opec-has-lost-power-lower-price-oil/75729.

97 “OPEC: Brief History.”

98 Ibid.

95

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previous decade.99 OPEC countries in this decade lost an average of one third of their previous revenue levels.100 While oil prices made slight gains towards the end of the decade, throughout the 1990s oil prices remained low, depressed by the Southeast Asian economic crises of the decade.101 Throughout the 2000s, oil prices and thus OPEC national revenues fluctuated more severely, remaining low at the start of the decade and peaking in 2008 to record high levels, only to crash once more following the subsequent global recession.102

OPEC’s activities reveal the great extent to which heavy involvement in international oil markets can yield high national revenues, because of other nations’ dependence on oil imports; however, an understanding of OPEC’s history also reveals the volatility of these markets and the economic difficulties arising from too much reliance on oil. As discussed in further sections, OPEC nations as a result have structured their economies around a high dependence on oil exports. These practices have led to a vicious cycle, by which economic policies, precipitated by a desire to maximize oil profits, further necessitate oil export dependence.

Saudi Arabia Saudi Arabia, a state currently with over 24 million people, is a typical example of an oil-dependent rentier state. In the early 1980s, following worldwide price increases in the oil markets, Saudi Arabia’s dependence on oil manifested clearly, with sharp upticks in unemployment. Still in the late 1980s, Saudi Arabia had per capita income of $17,000; however, by 2003 Saudi Arabia’s per capita income has decreased to $8,200, triggered in part by rapid population growth necessary for the functioning of the economy.103

Only in the 1970s did Saudi Arabia begin to enjoy rapid economic growth. Oil was only discovered in the region in the 1930s, and even then, development of oil resources came slowly. However, with the formation of OPEC, and the subsequent embargo that raised oil prices in 1973, Saudi Arabia quickly began to reap significant oil profits. On a trajectory similar to many OPEC nations, Saudi Arabia’s development after the initial profitability in the 1970s saw decrease in GDP throughout the 1980s (on average at -0.8%), increases of over 2% in the 1990s, and increases of roughly 4.4% in the 2000s.104

Something to keep in mind is that, in order to Saudi society to function, the government has actively solicited immigrants from a variety of nations to relocate to the country, to fulfill essential ministerial positions in the private sector. The rapid influx of millions of immigrants to the country has created unique labor force dynamics that only today begin to fully manifest.

Iraq Decades ago, Iraq had seemingly very bright economic prospects because of its heavy reliance on oil.

In 1970s, Iraqi oil production had reached 3.5 million barrels of oil per day, a rate significantly higher Ibid.

Ibid.

Ibid.

Ibid.

Robert Looney, “Development Strategies for Saudi Arabia: Escaping the Rentier State Syndrome,” Strategic Insights, last updated March, 2004, http://www.hsdl.org/?view&did=444733.

104 “World Economic Outlook Database,” International Monetary Fund, last updated April, 2013, http://www.imf. org/external/pubs/ft/weo/2013/01/weodata/index.aspx.

99 100 101 102 103

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than its current level of production.105 By 1980, annual revenues from oil exports peaked USD 27 billion; from its high levels of exports, Iraq had acquired almost USD 35 billion in reserves of foreign exchange.106

However, 1980 also saw the start of war between Iran and Iraq. Economically, this conflict had highly pernicious impacts on Iraq, especially when coupled with decreasing oil revenues for OPEC nations worldwide. As a result of the conflict, Iraqi oil production fell, and Iraq assumed a burden of over USD 40 billion in foreign debt, undoing much of the economic growth accomplished in the prior decade.107 Much of the decrease in revenue came from supply-side factors: the military conflict wrought the destruction of oil production sites and oil pipelines in Iraq.

As noted above, moderate price increases towards the end of the 1980s brought profit to the OPEC nations; Iraq was no exception. By the end of this decade, Iraq had acquired the funds to begin rebuilding some of its infrastructure, with an extra focus on oil infrastructure to promote its dominant national export.108 However, in 1990, Iraq invaded Kuwait, in a move with many significant international implications. Most relevant to discussion of this topic, the human rights violations committed by Iraq merited severe sanctions imposed upon the country by the United Nations. The ensuing infrastructure neglect from these sanctions, along with nepotistic government subsidy policies, had major negative impacts on Iraqi standard of living in the 1990s.109

The United Nations did implement some aid-relief measures in the 90s—including the Oil for Food program of 1995—to alleviate some of the hardships, but economic troubles continued, despite the Iraqi government’s central planning.110 Problems only worsened in 2003, with the United States’ invasion of the country. Since that time, however, increases in foreign aid have had notable effects at stimulating economic growth. As discussed later, these factors have led to moderately improved economic conditions in the present day.

United Arab Emirates The United Arab Emirates, which became independent in 1971, bore all the characteristics of a typical rentier state upon its conception. The UAE sits upon almost 10% of the world’s total oil reserves; for the latter part of the 20 th century, oil exports made up the bulk of the nation’s economy.111 In the late 1960s, oil prospecting in Abu Dhabi facilitated much of the nation’s growth, as Abu Dhabi holds approximately 90% of the nation’s oil reserves.112 Upon oil’s discovery in this region, infrastructure grew extremely quickly, and as institutions such as schools, housing, roads, and municipal centers arose, population began to increase as well.

Much of the UAE government’s policies center around economic development concerns. Some stimulatory measures pursued by the UAE to take full advantage of its resources include trade agreements. In “Iraq: Economy,” Michigan State University, last updated January, 2014, http://globaledge.msu.edu/countries/ iraq/economy.

106 Ibid.

107 Ibid.

108 Ibid.

109 Ibid.

110 Ibid.

111 “The Story of the U.A.E.,” Zayed University, accessed December 22, 2013, http://www.zu.ac.ae/main/en/_careers/living/story.aspx.

112 Ibid.

105

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2004, the UAE signed the Investment Framework Agreement with the United States and additionally commenced negotiations toward a Free Trade Agreement with the United States.113 Tax incentives have enhanced United States’ investments in the region.

Asia Turkmenistan is an example of a central Asian nation classified as a rentier state. Turkmenistan declared independence from the Soviet Union in 1991, and since that time, the country has remained one of the world’s highest exporters of natural gas. Estimates from 1999 show that the natural gas industry represents approximately 70% of GDP.114 Other major shares of GDP are the 12% share of cotton and the 18% share of oil.115 Turkmenistan is believed to be in the top four natural gas producing nations, with approximately eight trillion cubic tons of natural gas reserves within its boundaries.116 Unlike other rentier nations, such as those in the Middle East, Turkmenistan truly has very few plans for economic reform and diversification, and the nation has historically treated reform with extreme caution and reticence.117

A natural gas crisis in 2009 reveals precisely how dependent Turkmenistan is upon the natural gas industry. In 2009, Russia’s demand for natural gas dropped, and it greatly reduced its imports from Turkmenistan—this was particularly problematic because Russia has historically been Turkmenistan’s primary trading partner.118 Unemployment rose during this period and Turkmenistan’s national debt increased to USD 5 billion.119 With few plans for diversification, the trends seen in Turkmenistan’s twodecade history show few signs of changing anytime soon.

Current situation Saudi Arabia The aforementioned steady decreases in per capita income have been accompanied in recent years by a rapid increase in unemployment.120 Overall unemployment in Saudi Arabia well exceeds 15%; more significantly, 80% of the unemployed are under the age of 30.121 Increasing competitiveness in world-wide oil markets have contributed to the inability of many youth to find jobs. To combat these problems, Saudi Arabia is seeking to develop private business sectors in the country, to allow workers more easily to find job that do not depend entirely upon oil markets. This program is referred to as a “Saudization” “Middle East: United Arab Emirates,” CIA World Factbook, last updated January 2014, https://www.cia.gov/ library/publications/the-world-factbook/geos/ae.html.

114 Ahmet Kuru, “The Rentier State Model and Central Asian Studies: The Turkmen Case,” Alternatives Turkish Journal of International Relations, last updated 2002, http://gemba.sdsu.edu/~akuru/docs/Kuru_ATJIR.pdf.

115 Ibid.

116 “Turkmenistan: Economy,” Michigan State University, last updated 2014, http://globaledge.msu.edu/countries/ turkmenistan/economy.

117 Ibid.

118 Ibid.

119 Ibid.

120 Fahad Nazer, “Dependence on oil revenue leaves Saudi Arabia at risk,” The Nation, last updated July 9, 2013, http://www.nationmultimedia.com/opinion/Dependence-on-oil-revenue-leaves-Saudi-Arabia-at-r-30209943.html.

121 Ibid.

113

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program.122 Traditionally, private sector jobs in Saudi Arabia are filled by non-Saudi people’s.123 That the government is now actively looking into ways to involve more Saudis in the private sector may create problems for the non-Saudi populations, which total almost 9 million.124 This influx of foreigners was once necessary for Saudi Arabia to function and to provide essential municipal services; however, as the government provides incentives to companies to hire higher percentages of Saudi workers, foreign laborers rapidly face displacement.125 Saudi Arabia has so far failed to combat its economic problems with a cohesive, widely implemented plan. With the exception of some initiatives to provide capital to small- and medium-sized private enterprises in the mid-2000s, Saudi Arabia has yet to adopt truly significant measures to restructure its economy.126 Research and development, investment in infrastructure, and liquidity-enhancing measures remain under utilized Saudi Arabia, as compared to other countries in the region (Pakistan, for example).127 As many acknowledge, one of the greatest difficulties for Saudi Arabia is, resultantly, the ability of entrepreneurs to access startup capital.128

Iraq Other nations in the Middle East face situations similar to Saudi Arabia’s. Iraq’s economy is still dominated by oil, with 90% of government revenue and over 80% of foreign exchange earnings dependent on oil markets.129 Moreover, Iraqi dependence on oil shows signs only of increasing: in 2012, Iraq exported 2.6 million barrels per day, up from 2.2 million per day in 2011.15 In contrast to Saudi Arabia, Iraq has pursued fewer active measures to reduce its dependence on oil, focusing its economic efforts primarily upon growth and infrastructure development.

The current situation in Iraq, which while problematic does represent an improvement over pre-2003 conditions, has been characterized since 2003 by a massive influx of international aid. With over USD 33 billion in foreign non-security aid pledged to Iraq in the coming years by international actors, Iraq each year has received hundreds of millions of United States dollars—over USD 4 billion in 2010—to be used for reconstruction of the country.130 Funds have generally been administered and coordinated by the IMF. The country has also received many soft-loans, or investments made in economic undertakings occurring in developing regions; Japan, for instance, has granted over USD 3 billion in soft-loans to spur development.131

Still, while Iraq’s economy may be faring better than expected given a toppled regime, multiple bloody conflicts, and devastating international sanctions, its rentier status remains a major problem. Without diversification, Iraq will face the same vulnerability at the hands of international oil markets, regional conflict, and OPEC’s decision-making that it faced in the 1980s. As exemplified by the upcoming deal that Baghdad has announced with BP, which if successful will more than double Iraq’s oil production over the next three years, Iraqi leadership remains determined to build their economy from a base of oil 122 123 124 125 126 127 128 129 130 131

Ibid.

“Development Strategies for Saudi Arabia: Escaping the Rentier State Syndrome.”

“Dependence on oil revenue leaves Saudi Arabia at risk.”

Ibid.

“Development Strategies for Saudi Arabia: Escaping the Rentier State Syndrome.”

Ibid.

“Development Strategies for Saudi Arabia: Escaping the Rentier State Syndrome.”

“Iraq: Economy.”

Ibid.

Ibid.

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wealth, signifying an extreme disregard for the dangers of rentierism.

One course of action that Iraq is considering, to its credit, is a more equitable framework for resource distribution. Iraq’s legal code remains quite outdated, and as a result of its failings, the legal code actively stifles investment in non-oil businesses.132 By more equally dividing oil revenues amongst economic interests, as well as by reducing regulations that hamper investment, the Iraqi government hopes to allow a diverse array of industries to grow.133 Such processes require time-consuming overhauls of the existing legal code, however.

UAE Today, the UAE fares somewhat better than other rentier nations in the Middle East, largely due to prescient policies that have greatly diversified its economy. The UAE has a per capita income of approximately USD 25,000, which remains among the highest in the world.134 Admittedly, the UAE’s smaller population than other Middle Eastern oil nations makes high per capita income levels more attainable.

Still, while oil drove much the UAE’s wealth and growth in the past, the oil industry now accounts only for 30% of the country’s GDP.135 Largely, this shift is the result of investment in other lucrative industries, such as tourism, promoted heavily by the government. Construction in Dubai and Dubai real estate also contribute highly to GDP, though admittedly this became the case only after the oil industry triggered extreme increases in UAE wealth.136 The rise of tourism and real estate as industries often depend upon a region’s possessing independent wealth to begin with.

While the UAE may have invested in non-oil industries more successfully than other Middle Eastern nations, this body should not discount the crucial role that oil still plays for the UAE. Thirty per cent of GDP is not an insignificant figure; should the UAE lose access to its oil, or should the oil markets be upset, the UAE would still experience significant economic losses. The rate at which the UAE depletes its oil is also surprisingly fast. In the next 10 years, all reserves in Dubai are estimated to dry up completely.137 While the reserves at Abu Dhabi are expected to last another 100 years, these facts underscore the reality that oil does not last forever, and nations best serve themselves by preparing as much as possible for the day when they no longer can rely so heavily upon oil, whenever that day may arrive.138 Asia Turkmenistan unfortunately explicitly intends for its dependence on natural gases to counteract its economic inefficiencies that arise from its rentier state status.139 Perplexingly, Turkmenistan has at multiple times signaled its intention to achieve agricultural self-sufficiency—a measure that certainly would not prove efficient for an economy with evidently non-agricultural endowments.140 Inefficient policies facilitate these goals in the status quo, and such policies are only possible because of the thriving natural gas industry, which allows costly agricultural subsidies and other policies to function with solvency.141 “Iraq Economy Profile 2013,” Index Mundi, last updated February 21, 2013, http://www.indexmundi.com/iraq/ economy_profile.html.

133 Ibid.

134 “The Story of the U.A.E.” 135 Ibid.

136 Ibid.

137 Ibid.

138 Ibid.

139 “Turkmenistan: Economy.”

140 Ibid.

141 Ibid.

132

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Perhaps partly as a result of these factors, the United Nations Development Program estimates that as much as 70% of the Turkmenistan labor force is underemployed.142 Such national priorities seem further counterproductive given Turkmenistan could surely benefit from investment in infrastructure, as most cities reportedly lack many elements of even basic industrial infrastructure—the trend in Turkmenistan has not been towards investment in future productivity.143

Much data regarding the Turkmenistan economy remains classified by the government, so in many areas little is known about the nation’s economic operations. The state exercises a monopoly over natural gas and oil properties, most.144 Turkmenistan’s current level of technological development regarding natural gas is not fully known; however, with some further development, experts believe that Turkmenistan can certainly outpace other competitors on the natural gas market.145 More transparent data could lead to more useful recommendations from international institutions regarding possible economic reforms.

Turkmenistan’s primary trading partners are Russia, Iran and China—an unsurprising arrangement given Turkmenistan’s ex-Soviet status. To accommodate the natural gas trade, Turkmenistan has invested in long multi-option pipes, which have the capacity to transport natural gas over great distances.146 (These policies represent some of the country’s only long-term investments in infrastructure.)

Turkmenistan eventually plans to engage in consistent trade, through these pipelines, with eastern European nations, Middle Eastern nations, other central Asian nations, and even Japan.147 Pursuant to these goals, Turkmenistan has already constructed one 2000 kilometer pipeline that reaches Turkey; Turkmenistan also currently has plans to finish two pipelines exceeding 1400 kilometers Iran and Afghanistan.148 Still, estimates from 2010 place Turkmenistan’s trade with China at a volume of 100 billion cubic meters of natural gas, a large portion of its current trading volume.149 In the near future, Turkmenistan’s natural gas prospects do show signs of modest growth; however, Turkmenistan depends upon this industry to an extreme degree, showing almost no signs of precautions to diversify its economy at all. Turkmenistan’s insistence on operating with major economic inefficiencies, such as in the agricultural sector, further underscores its extreme dependence on its primary resource.

142 143 144 145 146 147 148 149

Ibid “The Rentier State Model and Central Asian Studies: The Turkmen Case.”

Ibid.

Ibid.

Ibid.

Ibid.

Ibid.

Ibid.

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Questions to consider What lessons should ECOFIN draw from the examples of these states that can be applied to other nations in other regions?

Given that some nations in the Middle East have diversified their rentier economies more successfully than others, how can lessons from the more successful nations be applied generally?

Given that Iraq has recently experienced a war with particularly devastating economic consequences, is Iraq making a mistake by distinctly disregarding diversification in the short term?

How can nations like the UAE and Saudi Arabia best integrate more of their citizens into non-oil industries, especially with such high populations of expatriates filling those economic roles?

How are Turkmenistan’s and other Asian states’ economic resources best utilized, and what recommendations can the international community provide?

Is increased diversification in trading blocs a goal that this body ought promote, and if so, how might ECOFIN best realize this goal?

To what extent/limits can the rentier countries effectively participate in localized/zonal unification within themselves and among non-rentier states?

Are there social division politics in Gulf rentier states?

How does the ‘rentier’ status impact the level and quality of a country’s dictatorism?

What attributes of the Gulf Cooperation Council are representatives of rentiers in general and which ones are documented specifically to the Arabian Peninsula?

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Bloc Positions European nations and western liberal democracies Rentierism is not a challenge that European nations face directly to any significant degree. Many western liberal democracies actively encourage the importance of diversification in national economies. Still, developed countries often have economic interests closely tied to the rentier status of other nations.

Indeed, in cases such as the Africa, the Middle East, and the Caribbean, western influence has precipitated rentier status by causing nations to rely very heavily on one specific major export. Notably, high amounts of tourism from developed nations in countries may be linked to economic diversification, as has been the case with the UAE. South American nations Some consider a number South and Central American states to have rentier characteristics. Nations such as Venezuela, which relies heavily on oil, and nations in the Caribbean like Cuba, which relies on sugar, display a wider variety of types of rentierism in South America. While profit incentives have encouraged some nations’ heavy reliance on specific industries, the region has experienced first hand some consequences of rentierism. Indeed, Venezuela felt crippling economic effects from contractions in the oil market at the end of the 20 th century.

African nations African nations that have exhibited rentier tendencies, such as heavy reliance on diamond production, have often done so because of western colonial and post-colonial influence. More so than Middle Eastern countries, African nations recognize the problems associated with overreliance on any one industry— especially given that industries such as the diamond industry are often surrounded by heavy violence and inhumane practices. Still, obstacles—including in some cases a lack of developed infrastructure for the rapid growth of industries—remain for African nations that wish to diversify.

Middle Eastern nations A relatively large number of nations in the Middle East meet the criteria for rentier status; however, national opinions regarding the importance of diversification remain split. The United Arab Emirates, for instance, has achieved moderately more diversification than its neighbors as the result of years of concerted long-term planning. Other Middle Eastern countries eschew these concerns. Regardless, those nations that have diversified have done so of their own accord. Nations in this region generally have not sought a large amount of involvement on the part of the international community on this issue, for better or for worse.

Asian nations Less adversely affected by rentierism than their Middle Eastern neighbors on balance, Asian nations have tended to prioritize medium-term economic growth over long-term diversification. A focus on economic growth inclines nations in this region to prioritize the problems of nations’ rentierism less in international agendas. This remains especially true when these nations benefit from heavy production of oil or other products in rentier states.

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Role of the Committee The primary role that ECOFIN has is that of developing solutions to problems related to economics and finance, consistent with its mandate. ECOFIN often works with financial institutions such as the IMF, or more regional institutions, to finance solutions that promote development or otherwise fulfill the committee’s chartered goals. In addition to taking steps on its own to directly finance initiatives, ECOFIN acts as a guide for the rest of the world by collecting information on regions that it uses to prescribe appropriate courses of action to address global problems. In the committee’s deliberations, ECOFIN addresses a wide range of global dilemmas in the order of which problems the committee deems most in need of attention. Given ECOFIN’s inherent inclusivity, ECOFIN has a unique ability to originate and develop the frameworks of solutions to international disputes that receive the respect of the international community. Regulations set by ECOFIN, ranging on topics from global finance to corruptive behavior, establish the norm for international economic protocol. In terms of addressing the above topic specifically, ECOFIN has ability to make regulations regarding international economic problems, finance developmental initiatives, seek the involvement of external institutions, and make recommendations to the international community; outside the bounds of economics and finance, however, ECOFIN lacks authority. For instance, in the above situations that involve military conflict, ECOFIN has no ability to dictate the actions of military forces. In general, unless a nation acts in violation of already accepted international regulations, ECOFIN has little power to directly coerce nations to behave counter to their own intentions.

Structure of the Committee The structure of this committee is the standard General Assembly format for YMUN Korea.

To become eligible for an award, each delegate must submit one position paper for each topic of the committee. Delegates should follow the standardized YMUN Korea procedure for writing their papers.

Position papers should consist of three paragraphs. The first paragraph answers the question of what the general problem is that the committee must address – delegates can conceptualize this paragraph as broadly summarizing the committee topic in their own words. The second paragraph discusses how that problem affects the delegate’s own country. The third paragraph discusses how the delegate proposes that the problem be solved on a global level. Position papers should be no more than two pages of double-spaced, 12pt. font. If delegates submit position papers before April 1 st, they can receive feedback on their work from the Chair. Delegates need only submit position papers by May 1 st to remain eligible for awards.

In terms of the procedure of the committee itself, delegates will begin in the first session by discussing the topic determined by the Chair. During Session 1 of the conference, delegates are expected to write and submit resolution clauses to the Chair during unmoderated caucuses interspersed with structured debate, so that more time can be allotted in the conference to debating specific written content. Debating on these clauses will continue until halfway through Session 3, when the committee will vote on the clauses put forth. This same process will then be repeated for the topic not already addressed, culminating in a vote on clauses addressing this topic at the end of the conference.

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Suggestions for Further Research Kakei, Saed. “Negotiating a satisfactory outcome for the crisis in Kirkuk.” http://www.ekurd.net/mismas/articles/misc2013/4/kirkuk781.htm “Minerals and Africa’s Development.” http://www.africaminingvision.org/amv_resources/AMV/ ISG%20Report_eng.pdf “North-East Atlantic fish stock disputes.” http://www.europarl.europa.eu/RegData/bibliotheque/ briefing/2013/130686/LDM_BRI%282013%29130686_REV1_EN.pdf Ofori-Amoah, Abigail. “Water Wars and International Conflict.” http://academic.evergreen.edu/g/ grossmaz/OFORIAA/ “Nile River Dispute.” ICE Case Studies. http://www1.american.edu/ted/nile.htm Looney, Robert. “Development Strategies for Saudi Arabia: Escaping the Rentier State Syndrome.”

Kuru, Ahmet. “The Rentier State Model and Central Asian Studies: The Turkmen Case.” gemba.sdsu. edu/~akuru/docs/Kuru_ATJIR.pdf.

Richani, Nazih. “The Rural Strike and General Crisis of a Rentier Economy.” http://nacla.org/ blog/2013/8/19/rural-general-strike-and-crisis-rentier-economy Richani, Nazih. “The Agrarian Rentier Political Economy.” http://lasa.international.pitt.edu/LARR/ prot/fulltext/vol47no2/47-2_51-78_Richani.pdf Yates, Douglas A. “The Rentier State in Africa: Oil Rent Dependency & Neocolonialism in the Republic of Gabon.”

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