Al Jazeera English

ContentsPage 2 - Opinion

Page 3 - General AssemblyPage 4 - Economic and Social

CouncilPage 5 - Security Council

Page 6 - The team behind theScenes

Page 7 - Photographs

Head of International Press

Twesh Mishra

Creative Editor

Paritosh Anand

USG International Press

Shivani Bazaz

Reporters

Amlan Das

Priyanshi Chauhan

Palak Nayyar

Photographers

Aman Agrawal

Ankit Kumar Srivastava

2Opinion

Eurozone Crisis Unveiled

Priyanshi Chauhan discourses over the prevailing eco-

nomic distraught that has plagued the European Union

The global economy has experienced slow growth since

the US financial crisis of 2008-09, which has exposed

the unsustainable fiscal policies of countries in Europe

and around the globe. Of the big economies, Italy along

with Germany were the first ones to break the 3% an-

nual borrowing limit, followed by France which caused

the euro zone crisis. Greece, which has spent lavishly

for years and failed to take fiscal reforms, was the first

to feel the pain of weak growth. In fact, it never stuck

to its 3% target but manipulated its borrowing statistics

to look good. The result was that the new Prime Minis-

ter George Papandreou, in late 2009, was forced to an-

nounce that previous governments had failed to reveal

the size of the country’s deficits. In reality, Greece’s

debt exceeded the size of the nation’s entire economy

which they could no longer hide.

LSE’s Waltrud Schelkle said that we now need more

trouble in the euro zone crisis before we see bold po-

litical steps towards solving the problem. Generally, the

consensus among participants of the crisis was that

they are dealing with a multidimensional problem that

can be divided into a competitiveness of goods, fiscal

banking and political crisis. But there has been certain

rebalancing between the euro zone periphery and the

core since this crisis began. The reduction in unit labor

costs and current account deficits in Greece, Spain and

Portugal have been because of high unemployment and

hence lower wages and massive cuts in imports, rather

than improvement in productivity. And if the current

pattern of negative growth and relatively high interest

rates persists then several of these countries might join

Greece.

It is believed that Germany, since early stages of the

crisis, realized that the impact would be asymmetric

and hence decided that the periphery will blink first in

the battle. The problem here is that the euro zone

countries are not willing to hand in the sovereignty to

the centre. A currency can only survive if it has a cen-

tralized political theory to underpin it.

This makes us conclude that the solution to the prob-

lem lies in the United States of Europe? This would be

a huge mistake because European societies are too di-

verse and divergent to be managed by a centralized

power and the German population would be against

this move. And this is the reason why Angela Markel

has never dared to propose her vision of Europe to Ger-

man electorate.

Nevertheless, one should not underestimate the

progress that has been achieved. The Euro zone now

has a permanent rescue mechanism, the ESM (a de

facto of European Monetary Fund), which has the ca-

pacity to intervene in the primary and secondary sov-

ereign debt markets and can also inject funds into the

national banking systems. The member states have also

signed the six-pack, the two-pack and the fiscal com-

pact, which will be protected by the constitutional law

or something similar. They have also agreed to hold

regular euro group meetings at heads of state and gov-

ernment level. These are just some of the reforms

unimaginable only three years ago.

This is a lot of institutional change in a short time pe-

riod and this should be commended. But there is still a

long way to go. Many questions about legacy debt, cre-

ation of banking union and reigniting growth are still

unanswered. Undoubtedly, huge political obstacles are

preventing the reforms from happening. May be there

is a need to make this crisis even crisis so that the so-

lutions which now seem impossible became the plan of

action then!

Al Jazeera

3General Assembly

Financially Unstable South Sudan Assures

Judicious Channelization of Funds

Debate continues as the two economies struggle to sta-

bilise, refugee and citizenship crisis also addressed in

council. Palak Nayyar reports.

Both the Sudanese states do not hesitate to admit that

they are in need of external financial assistance, which

is a loud and clear message to the developed countries

that the Sudanese states are open to aids. Also the

committee was successful in garnering realistic solu-

tions to address these financial problems. In a very im-

portant statement by Republic of China, the issue that

came to light was the issue of oil production. China

suggests that instead of looking for an alternative

pipeline, which is not economically feasible for either

of the two States, with the discovery of oil in Kenya in

Rift Valley and across the border of Ethiopia, there is a

possibility of creation of a viable and strategic oil bloc

comprising of Sudan, South Sudan, Kenya and Uganda

which could help the countries flourish with coopera-

tion.

Besides catering to all of their financial needs, it would

also help strengthen their fraying relations. Sudan

made an uncompromising statement directing to South

Sudan to start focusing on reducing the military expen-

diture. The statement stands valid owing to the fact

that South Sudan cannot even practically meet its pub-

lic expenditure. The two countries recognise that they

are facing grave economic, social and political issues.

The very fact that their dispute was given formal recog-

nition is a ray of hope as realising a problem is the first

step of resolving it.

Countries in Council collectively support that the

United Nations urge the developed Nations to invest in

infrastructure and social overheads, like education,

health and power of Sudan Sudan so as to generate

employment opportunities and subsequent betterment

of standard of living of the citizens. The Sudanese

economy was always subject to dependence on the oil

production that constitutes the major part of its GDP.

The chief agenda of the discussion was to look for vi-

able solutions that help in reducing south Sudan’s de-

pendency on oil production and set feet in other

sectors, including agriculture and economic overheads.

Issue of the citizenship crisis, however, managed to

harvest only little. South Sudan urged Sudan to accept

and support dual citizenship, which is not seen as a

practical solution because it fails the purpose of seces-

sion. A more viable solution should be of separate cit-

izenship criteria for both the States, as hundreds of

Internally Displaced People still wait to be told which

State they actually belong to. There are thousands of

Southerners living in North and thousands of Northern-

ers living in South. The Governments’ have been urged

to look into these matters at the earliest as any further

delay shall prove to be detrimental to the little

progress the Sudanese countries have made.

Sudan and South Sudan, along with other countries in

council look forward to enact upon resolutions sug-

gested by the Chinese envoy. The committee, essen-

tially based on securitisation, attempted to overstep its

authority when the member states swayed into dis-

cussing the economy of these Sudanese states. By tak-

ing recourse to discussions related to economic affairs,

the committee focused on devising a solution to the

pertinent problem instead of dwelling in the web of

procedures.

Al Jazeera

4Economic and Socia l Counc i l

Fiscal Deficit in Pieces!Priyanshi Chauhan reports as ECOSOC discusses the im-

plications of fiscal deficit and solutions offered!

Unemployment, inflation and hyperinflation were the

main focus of the Economic and Social Council of the

United Nations. South Korea mentioned the impact of

high fiscal deficit with special focus on unemployment.

Fiscal deficit causes unemployment but if the money

spent by the government is used for productive and

profitable activities then this problem of unemploy-

ment can be solved to some extent. Also, if government

focuses on its infrastructural development then em-

ployment will be created in the process as well as after

the development.

To the problem of unemployment, Germany suggested

that working age of the employed should be increased

so that pension is given at a later age. South Korea also

wants to reduce the strength of trade unions and make

sure that people never say no to the work they are of-

fered. This however, is not a democratic solution. In-

creasing age limit of the workforce will not be a good

idea keeping in mind the health issues of senior citi-

zens. Also if trade unions are weakened by the govern-

ment then manufacturers and business class can

exploit them more. And if people are forced to work

whatever is available for them then they will have no

incentive to go for higher education. Moreover, highly

skilled workforce will be at a disadvantage.

Ireland, Germany and Republic of Korea said that fiscal

deficit can affect the economy in the worst possible

way by causing inflation and hyperinflation. But this

might not always be the case. High fiscal deficit will

lead to inflation only if demand for same goods in-

creases. But government expenditure is also increasing

in the entire process which increases output as well.

With the increase in output, demand for other com-

modities also increases. Thus, money does not always

‘chase the same goods’ and so the problem of inflation

should not exist.

South Korea talked about debt trap with respect to

India rightly stating that one-third of the total revenues

of India are spent in repaying the borrowed money

with an interest to the international institutions. And

then India again borrows money for growth and devel-

opment of the nation thus falling into a debt trap. To

this, South Korea suggested that India should focus on

growth oriented and productivity oriented expendi-

ture. But this at first place is not possible because to

focus on growth oriented expenditure India needs

money which is its problem at first place. Instead India

should focus more on reducing the current account

deficit by increasing exports which will bring down its

fiscal deficit and the desire to borrow money will van-

ish. It is notable to mention that last year, house hold

debt of South Korea stood at 152.3% of disposable in-

come, one of the highest in the world.

Also, Germany and South Korea favored disinvestment

which will reduce the government expenditure and fis-

cal deficit. Disinvestment, however, is not a good idea.

PSUs that the government has been investing in are the

profit making ones. If it starts disinvesting it might save

a lump-sum amount in one year but also lose profits

that PSUs could have made. Therefore, disinvestment

will not be of much help. Ireland, proposed another so-

lution stating that increase in taxes will boost the econ-

omy through tax multiplier which increases output and

income, thus, reducing, the deficit.

Al Jazeera

5Securi ty Counci l

Collective rescue of the dipoles saves

the day for Israel

Despite the success, what made the Palestinian repre-

sentative walk out? Why did US and China, two dipoles

join together to save Israel? Amlan J. Das reports from

the UNSC

In one of those rarest of rare occasions, here at an in-

ternational convention, we find an untold mutual un-

derstanding between two ever contradicting nations,

USA and China. The topic being discussed and analyzed

was about the annexation of land by troops in Israel;

and considering how things transpired earlier in the

committee; Palestinians expected even this to go their

way, which meant UNSC classifying such movements as

illegal.

Right from the very null point, both USA and China

seemed overcautious. In spite of the fact that the in-

ternational community did respond to the issue in a

way which Palestine might have anticipated. Both

countries tried hard to maintain their guards. This

might probably be considering the fact that both USA

and China have their hands colored in various issues re-

lated to annexation of land. Bring up the issue of an-

nexation would also freshen up Chinese occupation of

disputed Indian Territory. As far as US is concerned, ac-

cording to the Centre for Research on Globalisation and

other media reports, their annexation movement in the

Canadian territory might lead to some fingers being

pointed, which they never appreciate.

Thus the cloud hovering over Israel partially faded

away in this due deliberation by the United States of

America and China regarding the issue. Palestine uti-

lized every opportunity to convince the international

community to vote the annexation activities illegal; this

if done, would definitely mean another victory for

them in the global arena, after the UN General Assem-

bly episode. But least to their expectations, the com-

munity did not respond as anticipated.

Situation turned further grim when the frustrated

Palestinian representative expressed his disappoint-

ment by walking off the table. After all the support

flooded by its fellow countries, this walking out surely

suggests the un-fulfillment of the real intention of the

Palestinian delegation. Most probably they walked in

with a prime agenda of categorizing all Israeli activities

illegal in terms of International code of conduct. They

did succeed in a few, but things did not end the way

which they actually expected.

Taking this as opportunity, Israel tried diverting the in-

ternational attention towards the geo-political analysis

of the land of Palestine and on the issue of the missile

attacks by HAMAS. But again their speak up landed

them under the same gloomy cloud under which they

were for sufficient amount of time before USA and

China came to its rescue.

Israel seemed very disappointed of the acquisitions

made over them. As the country speaks now, their clear

demand for sympathy can be made out. Most probably,

they are trying to reach out to their alias. They might

seem to indicate that they can’t tolerate a Palestinian

victory at such a significant platform. It lost all its

hopes when everything turned against them, but an in-

tervention like what USA and China did might lead

them to a final victory. A victory, that would make all

the hard earned achievements of Palestine over the

past two days go vain.

The battle continues, decade long of Israel and Pales-

tine trouble actually could not be accommodated in a

two day meet. Of course things might have got lot

clearer, but very significant amount of work is yet to be

completed.

Al Jazeera

6Photographs

Al Jazeera

7The Team Behind the Scenes

Al Jazeera

The Organising Committee

The International Press Team