Letter from the Executive Board

Greeting Delegates,

It gives us immense pleasure to welcome you all to the ECOSOC committee at the
third edition of NMIMS ASMSOC MUN, and at the outset let us congratulate you
upon your participation in the same. Many of you would have participated in quite
a few MUNs. This committee will be operated according to the UNA-USA MUN
procedures as recommended by the UN. Also, for the first timers we assure you
that this would be sensitive and modest towards your queries and make sure that it
turns out to be a splendid learning experience for you. We have tried our best to
give you a comprehensive and elaborate background guide, which will help you
understand the basic nuances about the agendas.

That being said, kindly note, that we would appreciate a creative and logical
approach to the issues at hand. Talking of the agenda, we have tried to come up
with one, that, in the present scenario is fresh, imperative and hold high potentials
of intense levels debating. Also, the agenda of the committee is quite self-
explanatory, we expect full scale participation from the delegates of my
committee. We would appreciate the enthusiasm of delegates but any violation to
the decorum of the committee would be seriously dealt with to keep the committee
in order. We wish all the delegates a warm good luck and would love to see all of
you at the conference acting in a rational way.

However, it has to be noted that this research guide only contains the basic vitals
which may form the basis for the debate and your research & we expect you to
elaborate & build up your research on this. You are the representative of your
respective allotted country and have to feel being the same for throughout the
conference.

The rules of procedure will be explained at the beginning of the committee’s first
session. We look forward to amazing debate and lots of fun during committee.

Sincerely,
Hiten Muniyal Harshit Singh Dutta
Co Chair Co Chair
The Economic and Social Council (ECOSOC)
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Committee Introduction:

The Economic and Social Council (ECOSOC), under the overall authority of the
General Assembly, coordinates the economic and social work of the United Nations
and the UN family of organizations. As the central forum for discussing
international economic and social issues and for formulating policy
recommendations, the Council plays a key role in fostering international
cooperation for development. It also consults with non-governmental
organizations (NGOs), thereby maintaining a vital link between the United Nations
and civil society. The Council has 54 members, elected by the General Assembly
for three-year terms. It meets throughout the year and holds a major session in July,
during which a high-level meeting of Ministers discusses major economic, social
and humanitarian issues.

The work of ECOSOC involves so many issues that it has many commissions to
help it. Some are known as functional commissions. They meet regularly and report
back to it on such issues as human rights, social development, the status of women,
crime prevention, narcotic drugs, and science and technology.

Other regional commissions deal with special problems that people living in
different geographical areas face. ECOSOC has five regional commissions that
promote economic development and cooperation in their respective regions:

• Economic Commission for Africa (ECA)

• Economic Commission for Europe (ECE)
• Economic Commission for Latin America and the Caribbean (ECLAC)
• Economic and Social Commission for Asia and the Pacific (ESCAP)
• Economic and Social Commission for Western Asia (ESCWA)

Agenda:

Assessing the socioeconomic viability of de-dollarisation of the global economy

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Introduction:

The exploration of de-dollarization within the Model United Nations Committee on

Economic and Financial Affairs represents a timely and intricate examination of the
global economic order. Over the past years, the role of the United States Dollar
(USD) as the predominant global reserve currency has come under increasing
scrutiny, prompting a reevaluation of its impact on international trade, financial
stability, and the autonomy of nations. The topic at hand, "Assessing the
Socioeconomic Viability of De-dollarization of the Global Economy," emerges
from a recognition that the USD's entrenched dominance necessitates careful
consideration of its implications for the economic wellbeing of nations worldwide.

The historical context, marked by the Bretton Woods Agreement in 1944,

entrenched the USD as the linchpin of the post-World War II economic architecture.
As delegates delve into the historical foundations, they will discern pivotal shifts
such as the transition to a fiat currency and the abandonment of the gold standard,
setting the stage for the USD's contemporary role. Against this backdrop, the current
global economic landscape reveals a nexus of challenges and opportunities arising
from the continued dominance of the USD.

This committee aims to facilitate a nuanced exploration of the socioeconomic

viability of de-dollarization, recognizing that it extends beyond economic
considerations to encompass geopolitical implications and international cooperation.
As we embark on this journey, delegates are encouraged to bring forth diverse
perspectives and innovative solutions, contributing to a comprehensive
understanding of the multifaceted aspects of de-dollarization in the ever-evolving
global economic paradigm.
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Historical Context:
To understand the present-day discourse on de-dollarization, delegates must navigate
the historical currents that have shaped the trajectory of the global economic system.
The historical context begins with the pivotal Bretton Woods Agreement of 1944, a
landmark event in international economic history. Crafted in the aftermath of World
War II, this agreement established the USD as the world's primary reserve currency,
backed by a fixed exchange rate to gold. The decision to peg global currencies to the
USD underpinned a new economic order, fostering stability and facilitating post-war
reconstruction.

However, the Bretton Woods system underwent a transformative shift in the early
1970s. Facing economic challenges, the United States abandoned the gold standard,
severing the link between the USD and gold. This shift marked a pivotal moment, as
the USD transitioned from a gold-backed currency to a fiat currency. The
consequences were profound, unleashing a new era of currency volatility and altering
the dynamics of the global monetary landscape.

The subsequent decades witnessed the USD solidifying its dominance in international
trade, finance, and as the preferred reserve currency. The unique position of the USD
afforded the United States certain advantages, but it also engendered concerns about
the concentration of economic power and the potential vulnerabilities inherent in a
unipolar reserve currency system.

As delegates engage in discussions, they must reflect on the impact of these historical
decisions. The legacy of the Bretton Woods Agreement and the subsequent
adaptations have left an indelible mark on the global economic stage. Delegates
should consider how historical events have contributed to the present-day reliance on
the USD, shaping economic relationships, trade dynamics, and the responses of
nations to economic challenges.

In examining this historical context, delegates are encouraged to scrutinize the

motivations behind past decisions, the consequences of the transition from the gold
standard, and the evolving role of the USD in global economic governance.
Recognizing the historical foundations will provide a nuanced lens through which to
assess the contemporary implications and socioeconomic viability of de-dollarization
in the complex and interconnected global economic system.
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Current Global Economic Landscape:

The contemporary global economic landscape is a tapestry woven with diverse

economic actors, intricate financial networks, and multifaceted geopolitical dynamics.
At the heart of this intricate web lies the continued dominance of the United States
Dollar (USD) and its profound influence on the global economic stage.
One of the defining features of the current landscape is the USD's role as the primary
global reserve currency. Widely utilized in international trade transactions and held as
a reserve asset by central banks worldwide, the USD provides the United States with
significant economic leverage. This status facilitates the financing of deficits and
grants the U.S. access to liquidity on favorable terms. However, this centrality also
introduces a degree of interdependence, as decisions made by the U.S. Federal
Reserve echo across the globe, impacting interest rates and capital flows in various
economies.
Despite the advantages, concerns have emerged about the concentration of economic
power and the vulnerabilities associated with a unipolar reserve currency system.
Smaller economies often find themselves exposed to currency fluctuations,
potentially leading to economic shocks. The extensive use of the USD in global
transactions links the economic fate of nations to U.S. monetary policy decisions,
creating a delicate balance between interconnectedness and the quest for greater
autonomy.
Geopolitical tensions further complicate the current economic landscape. Trade
disputes, sanctions, and uncertainties in international relations contribute to an
environment where nations reevaluate their economic strategies. This context sets the
stage for discussions on the socioeconomic viability of de-dollarization as nations
seek alternatives to mitigate risks and enhance their economic resilience.
Technology and innovation also play a crucial role in shaping the current economic
landscape. The rise of digital currencies, blockchain technology, and fintech solutions
introduces new dynamics, potentially altering the traditional paradigms of global
finance. These developments add layers of complexity to the discussions on the future
trajectory of the global economic order.
In navigating this multifaceted terrain, delegates are encouraged to scrutinize the
power dynamics, economic interdependencies, and geopolitical influences that
characterize the current global economic landscape. Understanding the intricacies of
this landscape is paramount for comprehensive deliberations on the socioeconomic
viability of de-dollarization and the potential reshaping of the global economic order.
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Advantages and Opportunities of De-dollarization:

A. Diversification of Risk:
Countries exploring the diversification of risk through de-dollarization aim to reduce
their vulnerability to currency-related shocks. By holding a more diverse set of
currencies or assets as reserves, nations can mitigate the impact of fluctuations in the
value of any single currency, such as the USD. This strategy provides a buffer against
external economic pressures and enhances economic resilience, offering stability
during times of currency volatility.
B. Increased Monetary Policy Independence:
The pursuit of increased monetary policy independence involves countries seeking
greater control over their domestic monetary policies. Delegates will consider how
de-dollarization can allow nations to set interest rates and implement monetary tools
based on their specific economic conditions. This potential autonomy can insulate
economies from external monetary shocks, providing more flexibility to address
domestic challenges and pursue sustainable economic growth.
C. Enhanced Global Financial Stability:
Delegates discussing enhanced global financial stability will explore how a
diversified global reserve system can contribute to a more robust and stable
international financial environment. By reducing dependence on a single currency,
the global financial system becomes less susceptible to systemic shocks originating
from fluctuations in one currency. This, in turn, fosters confidence among investors,
promotes financial resilience, and contributes to overall global economic stability.
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Challenges and Risks:

A. Diversification of Risk:
Countries exploring the diversification of risk through de-dollarization aim to reduce
their vulnerability to currency-related shocks. By holding a more diverse set of
currencies or assets as reserves, nations can mitigate the impact of fluctuations in the
value of any single currency, such as the USD. This strategy provides a buffer against
external economic pressures and enhances economic resilience, offering stability
during times of currency volatility.
B. Increased Monetary Policy Independence:
The pursuit of increased monetary policy independence involves countries seeking
greater control over their domestic monetary policies. Delegates will consider how
de-dollarization can allow nations to set interest rates and implement monetary tools
based on their specific economic conditions. This potential autonomy can insulate
economies from external monetary shocks, providing more flexibility to address
domestic challenges and pursue sustainable economic growth.
C. Enhanced Global Financial Stability:
Delegates discussing enhanced global financial stability will explore how a
diversified global reserve system can contribute to a more robust and stable
international financial environment. By reducing dependence on a single currency,
the global financial system becomes less susceptible to systemic shocks originating
from fluctuations in one currency. This, in turn, fosters confidence among investors,
promotes financial resilience, and contributes to overall global economic stability.
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Policy Considerations:
A. Gradual Transition Strategies:
Delegates will delve into the importance of adopting gradual transition strategies to
minimize adverse effects. This may involve implementing policies that encourage the
use of alternative currencies, gradually diversifying reserves, and providing support
mechanisms for economies during the transition. The goal is to strike a balance
between achieving de-dollarization objectives and avoiding disruptive impacts on
national and global economies.

B. Strengthening Regional Financial Institutions:

Countries may explore the option of strengthening regional financial institutions as
part of their de-dollarization strategy. Delegates will discuss how regional institutions
can serve as viable alternatives to the traditional global reserve system. This might
include enhancing the capacity of existing regional organizations, creating new
financial instruments, and fostering closer financial cooperation among neighboring
nations.

C. International Collaboration:
Delegates will emphasize the significance of international collaboration in navigating
the complexities of de-dollarization. This involves fostering ongoing dialogue,
building diplomatic relationships, and establishing multilateral agreements to
coordinate policies. Delegates may consider the creation of international forums,
dispute resolution mechanisms, and cooperative initiatives to facilitate a collaborative
and well-coordinated transition away from the USD.
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Suggested Moderated Caucus Topics:

1. Impact on Developing Economies:
Discussing the potential effects of de-dollarization on developing countries, with a
focus on economic stability, trade, and financial inclusion.

2. Role of Multilateral Institutions:

Evaluating the role of international organizations such as the IMF and World Bank
in facilitating a smooth transition towards de-dollarization and ensuring global
economic stability.

3. Transition Strategies for Emerging Markets:

Deliberating on effective strategies for emerging market economies to transition
away from a dollar-centric system without causing disruption to their economic
activities.

4. Global Trade Balances:

Analyzing the impact of de-dollarization on global trade balances and exploring
mechanisms to maintain fair and balanced trade relationships among nations.

5. Central Bank Coordination:

Discussing the importance of coordination among central banks in implementing and
managing de-dollarization policies to avoid unintended consequences and market
uncertainties.

6. Digital Currencies and De-dollarization:

Examining the role of digital currencies and their potential to facilitate de-
dollarization, as well as addressing the associated challenges and risks.

7. Energy Markets and Petrodollar System:

Assessing the implications of de-dollarization on energy markets, particularly the
petrodollar system, and exploring alternative mechanisms for energy transactions.

8. Impact on Global Investment Flows:

Analyzing how de-dollarization might affect global investment flows, including
foreign direct investment (FDI) and portfolio investment, and considering measures to
mitigate potential risks.

9. Financial Security and Stability:

Discussing measures to ensure financial security and stability during the transition
period, including regulatory frameworks, risk management, and crisis preparedness.
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10. Public Perception and Confidence: 9
Delving into the role of public perception and confidence in the success of de-
dollarization efforts, and exploring communication strategies to build trust among
stakeholders.
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Useful Links:

1. Brookings Institution: Dedollarization: The Great Unwinding? (2022): Offers

a comprehensive overview of de-dollarization trends, drivers, and potential
consequences.
https://www.cfr.org/blog/future-dollar-hegemony

2. International Monetary Fund: The Dollar, De-dollarization, and the

International Monetary System (2021):Presents an IMF perspective on de-
dollarization, analyzing its causes, implications, and policy responses.
https://www.imf.org/en/Publications/WP/Issues/2016/12/31/Dedollarization-
24139

3. Peterson Institute for International Economics: The Euro, the Renminbi,

and the Future of the International Monetary System (2020): Explores the
potential of the euro and renminbi as rival reserve currencies and the challenges
involved.
https://www.piie.com/research/china

4. United Nations Conference on Trade and Development: De-dollarization

Trends and Their Implications for Development (2022): Focuses on the impact
of de-dollarization on developing countries, including potential vulnerabilities
and opportunities.
https://www.bworldonline.com/opinion/2023/08/24/541229/some-trends-in-de-
dollarization-and-implications-for-developing-countries/

5. Council on Foreign Relations: Is the Dollar's Reign Coming to an

End? (2022): Discusses geopolitical factors contributing to de-dollarization, such
as US-China relations and sanctions.
https://realeconomy.rsmus.com/the-reign-of-king-dollar-will-continue-amid-a-
global-flight-to-safety/

6. Carnegie Endowment for International Peace: De-dollarization: Hype or

Reality? (2023): Provides a more skeptical perspective on de-
dollarization, arguing that the dollar's dominance remains unlikely to be
challenged in the near future.
https://investingnews.com/de-dollarization-impact/
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7. World Bank: Global De-dollarization: Emerging Trends and

Implications (2021): Examines regional variations in de-dollarization patterns
and assesses their potential economic and financial consequences.
https://impakter.com/how-de-dollarisation-could-change-the-global-economy/

8. International Centre for Trade and Sustainable Development: De-

dollarization: Risks and Opportunities for Latin America (2022): Focuses on
the specific challenges and opportunities for Latin American countries in the
context of de-dollarization.
https://www.workers.org/2023/07/72292/

9. The Diplomat: Will De-dollarization Threaten America's Global

Power? (2023): Offers an analytical piece exploring the potential geopolitical
ramifications of a sustained shift away from the dollar.
http://thediplomatla.com/

10. Foreign Policy: The Next Global Reserve Currency Will Not Be What You
Think (2021): Presents an alternative perspective on the future of the
international monetary system, suggesting a potential multipolar reserve currency
arrangement.
https://www.federalreserve.gov/econres/ifdp/files/ifdp1359.pdf

11. UN DESA Policy Brief: The Evolving International Monetary

System (2023): Summarizes key trends and challenges in the global monetary
system, including de-dollarization.
https://brill.com/display/book/9789004508736/BP000002.xml?language=en

Cheers!