Topic: Sustainable Economic Policy
Country: Kazakhstan
Delegate Name: Katlyn Ratzlaff
School: Mattawan High School
Topic page: background guide and all position papers All Kazakhstan position papers GLIMUN 2015 committees
The way that nations determine a fair interest rate and fair leniency on loans provides the primary issue with international debt. The loans that mid to poverty stricken countries often times occurs during a time of desperation. Generally, the creditors represent well-off countries who do not heavily rely on the loaned money. The problem comes when the interest rate is extremely high on the loans, thus rendering it impossible for the country to pay back their debt. The steps taken towards making a fair system for both the well-off countries and the poverty ridden countries needs to be discussed in this session.
Kazakhstan takes the stance of more leniency in the terms of international loans and debt. Today, the system for International trade is unfair between the well-off countries and countries who are still developing. Some developing countries have no ability to provide to the high demands that some loans entail. Creditors have a more strategic understanding of loans and know how to take acquire the amount of loans they desire to receive. On the other hand, lower class countries do not fully understand how international debt works long-term, nor do they care because the government works diligently and desperately to keep their citizens from becoming malnourished due to the small supply of resource availability. When one of these countries borrows money internationally, the money cannot always be repaid, because they may not receive the same revenue as others. The loans alone are difficult to pay back for countries experiencing a decrease in their economy, and then adding high interest rates makes it implausible for the country to pay their debts.
For instance, leading up to 2007, Kazakhstan relied heavily on borrowing money from foreign countries such as Netherlands, Great Britain, and the USA. This was how our country rapidly boosted the economy through high interest rates on deposits. Eventually, the debt reached around 50 million dollars. In order to combat this debt, the Republic of Kazakhstan’s government announced that Kazakh banks had to pay out $12 billion of foreign credits by the first of September in 2008. For these reasons, we were forced to cut back on educational development for the uneducated in our country. This caused drastic, recovery measures that ceased our country’s productivity. If there was more leniency in the terms of repaying our debts, then we would have been able to keep funding education in our country while paying our debts.
Yet, Kazakhstan is not suggesting that the solution is voiding the debt all together. Speaking on behalf of Kazakhstan, we do not want other countries handouts; we simply want a reasonable loan agreement. Kazakhstan believes that in-debt countries will willingly return the the money borrowed for a reasonable price.
The solution lies in a court-like system that hears to the issues of each country has about reimbursing their debts. In other words, we need a mediator that hears to the disputes of international debt. In this way, countries who took out loans because of desperation, or countries who want to pay for the debt when their economy can support it, should be heard by a nonbiased group. In this way lower class counties will have the ability to have a voice in the equality of international debts, while the creditors still will receive their rightful return on their money.
