The Bretton Woods Committee

Deliberating on the World War 2 Economic consequences to

form a system of economic order and international cooperation

Blue- Kavyaa Turakhia

Green- Dimple Malani
Red- Lakshya Singh
Table of Contents

1. Letter from the Bureau

2. Introduction to the Committee
3. Introduction to the Agenda
3.1 The World War II
4. Key Terms
5. Rigidity of Past Systems
5.1 Previous International Gold Standards
5.2 Competitive Devaluations and Rate Instability
5.3 Restrictive Trade Policies
6. The Great Depression
6.1 Economic Collapse
6.1.1 Wall Street Exchange Collapse
6.1.2 Bank Reserve Crisis
6.1.3 Effect on countries worldwide due to US loan dependency
6.2 Unemployment and Homelessness
6.2.1 Market and Business Failures
6.3. Collapse of International Trade
7. Impacts of the ongoing WW2
7.1 Shift of Production
7.2 Rehabilitation
7.3 Reconstruction
7.4 Debt Situation due to government involvement
8. The Articles of Agreement
9. Case Studies
8.1 Mercantilism in Europe vs in Soviet Union
8.2 Great Depression and its impact on Germany
8.3 Blitz Bombing around Britain
10. Conclusion
11. Expectations from the Delegates
10.1 Freeze Date
12. Questions a Resolution must answer
13. Bibliography
 LETTER FROM THE BUREAU

Dear Delegates,

With immense pleasure, we welcome you to the ninth iteration of the Shishukunj Model
United Nations where you will witness some of the best debates, discussions and solutions.

This year, the agenda for the ‘Bretton Woods Committee’ is “Deliberating on the World War
II economic consequences to form a system of economic order and international
cooperation”. This has been taken up for the delegates to experience a glimpse of the past,
as they step into the shoes of the important personalities and representatives of the nations
present in the conference, think not of the present but of the year 1944 and face various
crises such as the then ongoing WWII; and provide innovative approaches with new and
pragmatic solutions.

We look forward to interacting with all of you and having fruitful and healthy discussions
over the span of three days. We will always be there to help you and guide you on each and
every level of the conference starting from preparation to the final day itself. We hope to
make this conference a great learning opportunity for each one of you. Delegates must
participate enthusiastically throughout the three days to enhance their communication,
public speaking and diplomatic skills by lobbying with other delegates and forming blocs
based on their country’s foreign policies.

Delegates must avoid the use of ChatGPT and other such AI Platforms in speeches and are
expected to have their original research and form creative solutions, plagiarism will not be
tolerated in the committee

This detailed study guide aims to provide all the delegates with the knowledge and various
aspects about the agenda and platform needed to have an informative and deliberative
debate and discussion. This study guide is also divided into subtopics for your better
understanding. We encourage delegates to also check the validity of their research, and be
on their best conduct. The delegates are requested to refer to this guide for their better
understanding about the agenda but should not limit their research only to the study guide
and are expected to be well-researched according to their allotted portfolios. The case
studies mentioned in the study guide are only for the better understanding of delegates and
not to be discussed in the committee sessions.

Looking forward to a wonderful conference this year!

Best of Luck!!
Kavyaa Turakhia: Chairperson
Dimple Malani: Vice Chairperson
Lakshya Singh: Rapporteur
 INTRODUCTION TO THE COMMITTEE

FREEZE DATE- JULY 1ST, 1944

The Bretton Woods Conference

The Bretton Woods Conference was held on July 1, 1944, when delegates of 44 nations
came and met for the United Nations Monetary and Financial Conference at Mount
Washington Hotel in Bretton Woods, New Hampshire. They came together to agree on an
economic order system and international cooperation to recover countries and their
economies due to the then ongoing World War 2 and create an economic framework for
post-war conflict resolution and reconstruction. The conference's main focus was on the
establishment of the IMF and IBRD, with a secondary focus on the World Bank Group.
Preceding the conference, a preliminary draft was created, particularly influenced
significantly by the United Kingdom and the United States of America with suggestions,
consultations, and proposals from other countries with their ideas for an international bank.

This conference was formally called the United Nations Monetary and Financial Conference
which was attended by 730 delegates whose president was Mr. Henry Morgenthau Jr. (US
Treasury Assistant Secretary) and Lord John Maynard Keynes (UK Treasury Advisor
Delegation) led the Commission II dealing with the proposal for a bank for reconstruction
and development. It studied the preliminary draft presented to the conference with
additional suggestions. Some active members of the same were Mexico, Chile, Brazil,
Russia, Belgium, China, Netherlands, Poland, China, India, and Czechoslovakia.

By July 22nd, 1944, the Final Act of the United Nations Monetary and Financial Conference
was formulated which included charters outlining goals and mechanisms for both the IMF
and the IBRD. The Article of Agreement for the International Bank of Reconstruction and
Development and the International Monetary Fund was ratified on December 27th, 1945
with representatives of 21 countries which became the first members of the bank.

For the ‘Bretton Woods Conference’ Committee, the freeze date is July 1st, 1944.

A freeze date basically means that the committee is a historic committee. It will go back in
time and will function according to the events which happened during that particular time
period.
 INTRODUCTION TO THE AGENDA

The World War II

Sept 1st, 1939 – Sept 2nd 1945
The humiliation faced by Germany under the Treaty of Versailles, paved the way for the
spread of Nationalism in Germany. Hitler promised to overturn the Versailles Treaty for the
betterment of his people and the wealth of his country.1

Nazi ruler Adolf Hitler's invasion of Poland in September 1939 drove Great Britain and
France to declare a state of war on Germany, marking the beginning of World War II. Over
the time period of 6 years, the conflict took more lives and destroyed more land and
property around the globe than any previous war and there was a serious holocaust in
Germany against the undesirable termed by Hitler.2

World War II had significant economic consequences worldwide. The War led to destruction
of infrastructure, global trade, and caused a serious destruction of capital investments and
human resources. 3Many nations were facing serious debts, inflation, and high
unemployment rates. Due to the war economies of almost all countries were damaged and
there was also a need for redevelopment of infrastructure due to the long wars, bombing and
planned destruction methods. The debts, loans and the need for reconstruction due to the
first world war also not completed during world war 2. Businesses had collapsed, factories
were ruined, men on the battlefield had had a devastating effect on the global economy.

Attacks and bombing by both the Axis and the Allies powers increased significantly during
the period of the war. Over 200,000 houses were destroyed by heavy enemy bombing.
several women and children with their families had to re-locate several times, often into
established emergency homes. Millions of civilians were made homeless, and many major
cities were destroyed, all the programs involved strategic destruction of railways, harbours,
cities, workers quarters, factories, and civilian housing, and industrial districts in enemy
territory. The money cost governments involved has been estimated at more than
$1,000,000,000,000 for the redevelopment of the destruction and damages done in WW2. 4

The war consisted of two fronts with mainly the following countries:-
Axis Powers- Germany, Italy, Japan
Allied Powers- Great Britain, Soviet Union, United States of America, France

Due to WWII, post-effects of the Great Depression and several other factors, there was a
need for a system of economic order and international cooperation. There was also a
necessity.for a global institution to address this issue which led to the Bretton Woods
Conference.

1
https://www.history.com/topics/world-war-i/treaty-of-versailles-1
2
https://www.history.com/this-day-in-history/germany-invades-poland
3
https://www.investopedia.com/articles/markets/022516/economic-conditions-helped-cause-world-war-ii.asp
4
https://www.britannica.com/summary/World-War-II
 KEY TERMS

1. Depression- A steep and sustained drop in economic activity featuring high

unemployment, rate instabilities and negative GDP growth.

2. Fictitious Reserves- Fictitious reserves are those reserves which aren’t physically
present but are included in expenditure and records. When the checks are considered
‘floating’ i.e. they are counted in the reserves of two banks or are counted twice- one
where the check was deposited, one where it is withdrawn from but the cash is
physically present in only one bank.

3. Cyclical Unemployment- Joblessness that occurs due to fluctuations in the business

cycle, specifically during economic downturns or recessions. Its main factors are
decrease in demand and reduction in production.

4. Real GDP- It is the inflation adjusted calculation of the GDP (Gross Domestic
Product) which is the total yearly economic output of a country. It reveals actual
growth or decline in the economy with respect to inflation.

5. Inflation- Inflation means the rise of the price of goods and services but fall of
purchase power simultaneously. When inflation is high, every unit of currency buys
lesser goods and services.

6. Tariff Barriers- Restrictions on trade in the form of taxes and duties imposed. They
generate revenue for the government.

7. Non Tariff Barriers- Restrictions on trade in the form of regulations, conditions,

requirements etc. They do not generate revenue for the government.

8. Bilateral Agreements- refers to an agreement between nation states that aims to

keep trade deficits to a minimum. It varies depending on the type of agreement,
scope of the countries, and the countries that are involved in the agreement. In a
bilateral trade agreement, the countries involved provide each other access to their
markets, which leads to trade and economic growth of the nations.

9. Devaluation- refers to an official downwall of the value of a country's currency

within a fixed exchange-rate system, in which a monetary authority formally sets a
lower exchange rate of the national currency in relation to a foreign reference
currency.

10. Rationing- the limiting of goods and services that are high on demand and short of
supply. It is also the maximum quantity fixed by a government.
11. Capital transaction- the expense that is incurred while procuring assets or while
maintaining the existing assets which will increase the production capacity resulting
in an increase in earning capacity.

12. Economic reforms-Economic reforms are defined as the changes introduced by the
government to bring an improvement in the economy of a country through various
reforms and policies.

13. Budgetary deficits-A budgetary deficit is referred to as the situation in which the
spending is more than the income.

14. Austerity measures-Austerity measures are strict, frugal economic policies used by
governments to manage public debt.

15. Fiscal management -Fiscal management refers to the management of financial

resources, including revenue collection, budgeting, and expenditure

16. Debt restructuring -A process used by companies, individuals, and even countries
to avoid the risk of defaulting on their existing debts, such as by negotiating lower
interest rates.

17. Trade liberalisation-Trade liberalisation is the removal or reduction of restrictions

or barriers on the free exchange of goods between nation

18. Total war-A war that is unrestricted in terms of the weapons used, the territory or
combatants involved, or the objectives pursued,especially one in which the accepted
rules of war are disregarded.

19. Authorized Capital Stock- The maximum amount of shares/ capital which can be
issued to the stakeholders by a company

20. Global Liquidity- Total amount of money and credit which circulates globally and
is available for borrowing and investment in the world financial system. These can
be transferred between borders very easily, frequently and rapidly.
 RIGIDITY OF THE PREVIOUS SYSTEMS

Previous International Gold Standards

The gold standard was the foundation for the
international monetary system.It was in action
from the 1870s to the early 1920s and was also
readapted from the late 1920s to 1932. A
country’s money supply had a value that was
linked to gold under the Gold Standards after
world war 1. Due to which many countries would
have a huge outflow of gold and will have a
reduction in money supply. International payments
remaining were settled in gold instead of paper
money. The Gold Standard would make borrowing more expensive, reducing investment
spending and domestic demand, which in turn would put pressure on domestic prices,
enhancing competitiveness between the nations and running exports. The gold standards
ultimately led to the worsening of the income disparity
amongst people and also delayed economic growth in
many nations by limiting money supply and domestic
investment opportunities. Borrowings were expensive
under the gold standards as there were fixed exchange
rates meaning countries couldn't adjust their currency's
value according to economic conditions. There was limited
money supply because the money supply of a country was
tied to their gold reserves therefore countries had to increase their gold reserves to print
more money and the limited money supply led to higher interest rates.5

The dependence on gold led to financial instability, for example, the Great Depression and
the wall street exchange crash in the US. The currencies were made easily convertible into
gold at a fixed value. Gold coins were used as the local currency alongside coins made of
other types of metals and paper notes, seeing the composition variations amongst the
countries. Every domestic currency value was made fixed in terms of gold. Due to the
classic gold standard there was a requirement for a more flexible and dynamic monetary
framework to address the difficulties of the global financial systems and solve the issues of
the classic gold standards.6

Under the classic gold standards , the central banks held

large gold reserves to maintain currency stability, ensure
convertibility, and act as a support to international and
global trade between countries. The gold reserves in the
central banks were more.
5
https://www.gold.org/history-gold/the-classical-gold-standard
6
https://www.investopedia.com/ask/answers/09/gold-standard.asp
Competitive Devaluations and Rate Instability
During World War 2, the countries had to engage in
competitive devaluations of their currencies to gain an
advantage in trade, production and international
cooperation. Steps like reducing the value of their
currency in comparison to others, making exports cheap
and importing was made expensive for financial gain
and also their systems made by the central government
for financial stability. These steps were done for
improvement in domestic industries & production and
battling foreign competition. This all gave rise to a sense
of fighting between the nations in terms of financial trade and earning.7

Rate instability refers to the general price level

in an economy that fluctuates a lot over time and
results in its instability. During World War II, the
Governments were pressured by the Treasury of
the nations to keep longer-term interest rates low
to allow the government debt accrued during the
war to become financially cheaper but keeping
interest rates low even as the economy was
growing risked economic depression and
inflation. In August of 1929, the United States
joined the recession that became the Great Depression. A Sharp decline in US prominent
wall street exchange in 1929 caused it to crash resulting in a big economic instability and
also played a part in the Great Depression of the 1930s.

During the time period of World War 2, globally financial and stock markets were
experiencing extraordinary and high rate instabilities, there was high rates of fluctuation in
the exchange rates, there was a rise in chances of inflation, and unstable domestic prices in
the nations. The war disturbed the international trade flows and slowed the process of
import and export from various countries. There was a need for stable currencies at the time
and later, the currency's value rose sharply as nations were engaging in currency
management to help finance their war efforts and prevent high-rate instability. Governments
slowly started to take responsibility to manage present resources, food shortages and
worsening economic conditions. The currencies were not stabilised during the time period
of world war 2 and there was a need for a system to work on making these currencies
stable.8

7
https://www.investopedia.com/terms/c/competitive-devaluation.asp#:~:text=Competitive%20devaluation%20is%20a%20theoretical,
devalues%20its%20currency%20in%20response.
https://cleartax.in/glossary/competitive-devaluation
8
federalreservehistory.org/essays/feds-role-during-wwii#:~:text=In%20sum%2C%20the%20Federal%20Reserve,postwar%20return
%20to%20peacetime%20activities.
https://www.federalreserve.gov/pubs/ifdp/1993/442/ifdp442.p
Restrictive Trade Policies
Mercantilism mainly dominated trade policies of major European powers. The primary goal
was to achieve a "favourable" balance of trade, where exports exceed imports. Governments
used tariffs, charges and quotas on imports to protect local or domestic industries. Tools,
machinery, capital equipment, child labourers and skilled labourers were prohibited from
export to prevent foreign competition with domestic manufacturing industries. Basic
products for daily use like sugar, tires, gasoline, meat, coffee, butter, canned goods, milk,
bread and shoes came under serious rationing and food regulations. Every country had
different trade to occur internationally.

E.g.- The Blockade of Nazi Germany -The blockade of Nazi Germany during WWII
restricted essential goods and supplies, including food, water, fuel, rubber, ammunition,
medicines and metals. This shortage of resources severely delayed Germany's military
operations and industrial production, also playing a crucial role in the ultimate defeat of the
Nazis in WW2.

The British Navigation Act -The British Navigation Act, ratified in the 17th century,
controlled colonial trade to benefit England, authorising those goods to be transported on
English ships and often from and through English ports, thus helping in growth of naval
dominance and economic control over its colonies.

From 1934 until the beginning of World War 2, the US trade policies worked on methods to
reduce trade barriers and expand global trade through a complex series of trade treaties and
bilateral agreements with its prominent and main trading partners and nations to reduce its
trade tariffs.

The soviet union during the period of 1930’s to mid 1940’s had strong trade policies and a
proper system of trade business with implemented trade barriers and tariffs. They focused
on doing global trade with a vast number of countries to increase trade and domestic
production for economic and financial growth. The trade union of the soviets worked on the
enhancement of domestic trade duties and checked the status of trade supplements.The
central government worked on improving foreign trade agreements and making bilateral
trade partners for high profits and financial and economic enhancement of the union state.

The requirement for making bilateral and multilateral trade agreements was an issue over
the time period of the ongoing world war 2 as the nations turned focus on themselves,
prioritising self-sufficiency, self-benefits and planned welfare and development of the
nation. The result for the same was the collapsing and worsening of the global trading
system and markets, slowing down the transport of goods through imports and exports and
making worse economic disturbances faced by the nations. For example, high rate
instabilities, high interest rates on imports and exports etc.restrictions according to their
national economic policies which made it difficult for exports.9
9
https://www.trade.gov/trade-agreements
https://www.britannica.com/money/mercantilism
 THE GREAT DEPRESSION
The Great Depression started in 1929 which led to a situation of extreme economic turmoil
that occurred worldwide due to the stock market collapse, banking panics, unacceptability of
the International Gold Standard, tariff barriers etc. It led to the fall of the economy of the
United States of America and thus of the whole world. It ended around the start of the
World War II.

Economic Collapse

1. Wall Street Exchange Collapse and its impact on the USD

The Wall Street Exchange Collapse was the collapse of the
stock market of the United States of America. On October
28, 1929 , the stock market index (Dow Jones Industrial
Average) fell by nearly 13%. Following this, the next day
market further dropped by 12%.10 Before the crash, there had
been a phase of economic prosperity due to which there had
been an increase in the production. With the crash, the
demand had lowered down to a great extent thus the
manufacturers faced losses leading to a sharp decrease in the
shares leading to market failures. People lost huge amounts
of money and thus slowly lost trust in the USD. Investors and
consumers were afraid of putting their money in the same.

2. Bank Reserve Crisis

During the collapse, around 8000 banks belonged to the
federal government while 16,000 didn’t hence it was
impossible to mobilise these bank reserves in the time of
crisis due to no jurisdiction over the non-federal banks. Due
to the great depression, more than 8000 banks in the US
alone collapsed leading to a contraction in investments,
expenditure and Gross Domestic Product.11 Life savings of
people due to bank collapses were lost. There was an increase
in fictitious reserves which led to a drastic decrease in the
real reserves required during emergencies. Because of the
crisis, people started withdrawing cash which caused a
shortage of reserves in the banks. This led to bankers
accumulating reserves and the citizens to hoard cash which
led to a problem of deflation due to decrease in the capacity of the
bank to provide loans and eventually decreased the bank’s monetary
base causing a decrease in the stocks as well as the prices of the goods.

10
https://www.federalreservehistory.org/essays/stock-market-crash-of-1929
11
Banking Panics of 1930-31 | Federal Reserve History.
 3. Effect on other countries’ economy due to fall of the US economy
Before the great depression, the US and its lending services had decreased due to
excessive interest rates. With the recession of the US economy, there was a lack of
trust on the dollar and with the falling reserves US slightly increased the interest rate
during 1937 but then drastically dropped and remained low after. After the first
world war, the US was one of the largest loan sources for countries to recover
infrastructure, but with the great depression there was a withdrawal in the provision
of loans which led to hindrance in infrastructural development and the collapse of
currencies especially in Europe. The US also increased its interest rates in deficit
nations to retain their financial condition. Most of the countries fell into huge debts
as the debt ratio peaked at 80% of GDP in 1932.12 Instead of finding common
solutions which would be beneficial for several countries, nations implemented
unilateral solutions. Several governments started devaluations of their currencies and
increased tariffs to make imports expensive and exports cheaper. This had adverse
effects on the economy of all the countries. WWII had also worsened the just gotten
better debt situation.

12
https://www.imf.org/external/pubs/ft/fandd/2011/03/picture.htm#:~:text=The%20'Great%20Peak',an%
20end%20to%20the%20deleveraging
Unemployment and Homelessness
With the collapse of banks worldwide, people lost their life savings due to wiping off of
deposits within the banks. In the US alone, $7 billion depositor’s assets were lost.13 There
was as such no deposit insurance reform existing when the crisis occurred due to which
there was no way these people would have gotten their money back. With extremely little
money to sustain, there was an extreme drop in living standards. In the United States,
around 2 million people faced homelessness during the 1930s Due to deflation and decrease
in production, cyclical unemployment soared.

1. Market and Business Failures

Markets and Businesses were hit the worst with the great depression. Failures of
markets and businesses were the main cause of the increased homelessness and
unemployment. Real GDP reduced by 29% during just the start of the great
depression. The problem of overproduction and underconsumption caused severe
deflation in the prices. Many farmers and landlords went bankrupt and lost their
lands due to selling prices being very low than the cost prices. They went into debt
traps because of the lack of income. Consumer Prices and Wholesale Prices had
fallen by estimated 25% and 32% respectively.14
Due to the unstable economy, banks denied loans to businesses which affected their
growth in turn severely affecting the business in debts. The businesses had extremely
low profit margins as well. Around 86,000 businesses had failed during the 1930s.
Production levels, especially in the US and Germany dropped drastically.

With failures in the industrial and agricultural sector, self-employed people like farmers and
micro job workers had completely lost their sources of
income meanwhile big industries had started to limit
their employee count. Around one-fourth of the labour
force in industrialised countries failed to find work.
Work unemployment increased to nearly 30% and
remained in double digits throughout the decade of the
great depression.15 With less income and debt
problems, several renters were evicted. Homelessness
increased as people failed to afford basic necessities.
Lack of emergency food, shelter, clean water etc. led to
psychological and physiological problems like
malnutrition causing several deaths. People of certain
races (e.g.-afro-american in the USA) faced worse
situations than others due to discrimination making it much more difficult for them to thrive.
Any available jobs were provided to the superior caste and colour (whites) especially in the
USA causing further problems for people of other races.

13
https://www.ssa.gov/history/bank.html
14
https://www.stlouisfed.org/the-great-depression/curriculum/economic-episodes-in-american-history-part-3#:~:text=
Real%20GDP%20fell%2029%25%20from,failed%20between%201930%20and%201933.
15
https://www.imf.org/external/np/exr/center/mm/eng/mm_cc_03.htm#:~:text=World%
Collapse of International Trade
The Great Depression not only affected the USA but it also affected trade relations with
other countries around the world. With a huge decrease in industrial production along with
strict tariff barriers, there was a significant decline in international trade. Multilateral trade
agreements were scrapped and replaced by regional trading blocs and bilateral agreements.
There was an increase in the tariff and non-tariff barriers.The overproduction, oversupply,
underconsumption and higher prices had extreme consequences for international trade. This
was also followed by decrease in production due to market failures and less workforce.
From 1929 to 1934, global trade declined by 66% and import export volume in
industrialised nations decreased by about 30%. 16

Under the ‘Smoot Hawley Tariff Act of 1930’, the US doubled import duties to around 40%
to protect local farmers and businesses by increasing barriers on trade. This led to countries
like Germany, Italy, France to increase tariffs on
agricultural goods. Around 61 nations responded
in the same way to USA's new monetary policies
and goods. Due to the government’s individual
measures of currency devaluation, imports being
expensive and exports cheaper etc. there were
adverse effects because exports of one country
are imports for another which declined
international trade even more. 17

‘The Reciprocal Trade Agreements Act of 1934’

by the US government under Roosevelt to
retaliate against the Smoot Hawley Tariff Act and aimed to uplift the US economy Under
this Act, the US government aimed to add exceptions in the tariff system country wise. With
this act, the US formed 19 trade agreements with other countries between 1934 and 1939.
In total, world trade shrank down to 35% of its value in 1929. 18

The main reason for the collapse of international trade was the competition on currency
devaluations and tariff barriers. Rather than focusing on their domestic products, the
government increased tariffs to challenge the international market and the barriers set up by
other countries, known as the Beggar-Thy-Neighbour Devaluation policy. This was
unfruitful for other countries and also further worsened their condition and all over not only
imports but exports as well.

The collapse of international trade emphasised on the need for international cooperation and
a standard framework of mechanisms and rules.

16
https://history.state.gov/milestones/1921-1936/protectionism
17
https://www.senate.gov/artandhistory/history/minute/Senate_Passes_Smoot_Hawley_Tariff.htm
https://www.britannica.com › topic › Smoot-Hawley-Tari…
18
https://ustr.gov/about-us/policy-offices/press-office/blog/2014/June/Eighty-years-of-the-Reciprocal-Trade-Agreements-Act#
:~:text=The%20Reciprocal%20Trade%20Agreements%20Act%20was%20signed%20into%20law%20on,economic%20crisis%20to%20gl
obal%20leadership.
 IMPACT OF THE ONGOING WORLD WAR II
A significant part of Africa, Asia, and Europe was in ruins by the time the Second World
War ended. Cities and towns had been demolished, railroads and bridges had been
destroyed, and the countryside had been scorched by fighting and bombardment. The
number of lives lost in the war, both military and civilian, was equally astounding.
Following the declaration of peace, shortages of food, fuel, and a wide range of consumer
goods continued and, in many cases, got worse. There were not enough commodities
produced in war-torn Europe and Japan to meet domestic demand, let alone export.The
aftermath of World War II left behind a legacy of loss and devastation as well as hope,
perseverance, and innovation.

SHIFT IN PRODUCTION
During World War II, there was a massive shift in production across many industries.
Civilian manufacturing was largely redirected to support the war effort, with factories
producing weapons, ammunition, vehicles, aircraft, and other military supplies. This shift
impacted almost every aspect of daily life, as rationing became widespread to conserve
resources for the war. Women entered the workforce in large numbers to fill roles left vacant
by men who had enlisted in the military. Additionally, research and development
accelerated, leading to significant advancements in technology and medicine, spurred on by
the urgent needs of wartime.

During World War II, the United States saw a remarkable change in its economy. The War
Production Board, which directed industrial production towards military needs, had been
implemented by the government. American industry, such as auto manufacturers like Ford
and General Motors, moved production lines to the manufacture of tanks, planes, trucks
with other military equipment.

Under the Nazi era, Germany's economy was primarily focused on producing military
equipment. The production of weapons, vehicles, and other war related goods has been
mobilised by companies such as Krupp, Siemens, and Volkswagen. In order to support the
war effort, the German concept of "total war" meant that civilian industry was also adapted.
Tanks, planes, submarines and other weapons of war were manufactured by the factories.
Germany's production facilities became increasingly vulnerable to damage as the war
progressed, leading to interruptions in production and shortages of essential supplies, as the
Allied bombing campaign intensified.

The Ministry of Supply and other government-run organisations were used to establish
centralised economic planning and control in the United Kingdom. Industries were
instructed to produce supplies, weapons, and military equipment. Military vehicles and
aircraft components were produced by converting civilian companies, such as automakers
like Morris Motors and Vauxhall. Food, clothes, and other necessities were rationed for the
British people in order to dedicate resources to the war effort. To save resources, the
government also encouraged recycling of materials
REHABILITATION
The Second World War resulted in an estimated 60 million displaced which included
roughly 12 million Germans19. Millions of people were forced from their homes due to the
enormous refugee crisis brought on by World War II. Resettlement of refugees, provision of
humanitarian assistance and addressing the long term needs of the displaced population
were part of the rehabilitation efforts. Massive displacement and refugee crises brought
forth by World War II put a strain on host towns' housing and infrastructure. Overcrowding
and burden on public services and infrastructure resulted from the refugee crisis that moved
into both rural and urban regions. For example, millions of people had to escape their homes
as a result of the bombing of cities in the Soviet Union and Poland, which put a strain on the
housing and transportation systems in the surrounding areas. In order to alleviate the acute
housing shortage brought on by population relocation and military devastation, large-scale
construction projects were started. Due to the war, there were disruptions to utilities like the
electrical and water supplies, which had an effect on public services and the standard of
living. For instance, the bombing of hydroelectric dams in France and Italy caused
disruptions to the delivery of power to cities.Many bombs were dropped on cities in Europe
and Asia. High explosives and fire damaged apartments and houses, leaving families on the
streets and their homes completely destroyed.

Numerous families experienced economic hardship and job losses as a result of the war's
disruption of the economy. Economic changes aiming at fostering stability, growth, and
prosperity were frequently a part of post-war economic policy. These reforms included
actions like trade liberalisation, currency stabilisation, and the creation of welfare
institutions to assist the weaker members of society. The shift in production caused
hindrance in the basic needs of civilians which caused severe health problems like
malnutrition making it more difficult for them to survive.

Both injured soldiers and civilians frequently received inadequate treatment for their
injuries and had restricted access to medical care. Base hospitals provided more thorough
medical care than field hospitals since they were farther away from the front lines. Their
facilities were more extensive and included specialised medical professionals, diagnostic
services, and surgical theatre.Patients requiring additional treatment or rehabilitation were
treated at the base hospitals for a longer period of time.Malnutrition, infections, injuries, and
psychological trauma are just a few of the health problems brought on by war which were
common amongst civilians.

The United Nations Relief and Rehabilitation Administration was a new organisation
established by the United States and the United Kingdom in late 1943. UNRRA was a
remarkable international initiative that aimed to arrange the world's food supply, clothes,
and medical supplies, along with limited shipping and transportation, for the benefit of the
19
http://graphics.wsj.com/migrant-crisis-a-history-of-displacement/
impoverished people in China and Europe who had been devastated by war. The
organisation raised funds, established connections with allied powers and military forces,
employed and trained more than 10,000 personnel, and sent $4 billion20 worth of food and
supplies abroad.

RECONSTRUCTION
Much of Europe and portions of Asia suffered greatly as a result of World War II. Along
with reconstructing the physical infrastructure, the reconstruction efforts also sought to
address social issues, revive economies, and bring political stability back. After World War
II, cities were brutally attacked throughout Europe, Asia, and other regions. Factories,
shipyards, and manufacturing facilities suffered damage as a result of the bombing on the
industrial centres. Important industrial infrastructures were destroyed as a result of bombing
on the industrial centres like Hiroshima in Japan and Dresden in Germany.

Millions of people were left homeless or displaced, industries were destroyed, and cities
throughout Europe were reduced to ruins. The United States gave sixteen European
countries significant financial assistance (about $12 billion)21. The money supported
agricultural expansion, modernised industry, and rebuilt infrastructure.

For instance, Poland's capital city of Warsaw encountered several difficulties. Thirty percent
of the subterranean infrastructure was damaged, all the bridges collapsed, and almost eighty
percent of the structures were destroyed. Twenty million cubic metres of debris, including
mines and unexploded bombs, covered the city.

Cities in France that saw significant destruction during the conflict included Caen and Le
Havre. During the "Battle of Normandy," Caen in particular sustained significant damage.
For these cities to recover after the war, reconstruction initiatives were crucial.

DEBT SITUATION DUE TO THE GOVERNMENT

INVOLVEMENT
Due to the high expenditures of the war effort, several nations had large debt burdens
following World War II. The cost of financing war activities had to be greatly increased by
governments to support the war. This involves producing war material, supplying personnel,
and financing military activities. The massive magnitude of spending frequently resulted in
significant budget deficits. Infrastructure was damaged, economies were decimated, and
people needed help and rehabilitation after the conflict. A number of tactics were used to
deal with these issues, including debt restructuring and economic reforms meant to boost
economic development and gradually lower debt. In order to finance their military
20
https://www.nationalww2museum.org/war/articles/united-nations-relief-and-rehabilitation
21
https://history.state.gov/milestones/1945-1952/marshall-plan
spending, governments issued large amounts in the form of war bonds and loans. These
loans were necessary to meet the immediate financial needs of the war, leading to significant
national debt at the end of the war. Several countries were heavily burdened by debts due to
World War II. In order to finance military operations, acquire weapons and equipment as
well as support its soldiers during World War II, the U.S. government significantly increased
spending. The expenditure contributed to significant budgetary deficits. The United States
government borrowed extensively from domestic and international sources in order to
finance the war effort. In order to finance the war, citizens were encouraged to purchase war
bonds.

The United Kingdom came into World War II deeply indebted and this debt further grew
during the war. High levels of debt persisted as a result of post-war reconstruction efforts,
increased social expenditure, and the loss of colonial revenue.

In order to fund the war effort, the British government had taken out large loans from both
domestic and foreign sources, including the United States through the Lend-Lease program
which was signed on March 11,1941 and continued throughout 1944 under which a system
was formed that would allow the United States to lend or lease war supplies , food or raw
materials to any nation deemed "vital to the defence of the United States." This made it
possible for the US to lend or lease arms and ammunition to nations that were battling the
Axis powers, which included China, the Soviet Union, and the United Kingdom. The
program, which supplied planes, tanks, trucks, food, and other supplies worth billions of
dollars, was essential in enhancing the Allies' capabilities.This act provided the president the
power to accept reimbursement "in kind or property, or any other direct or indirect benefit
which the President deems satisfactory" and to assist any country whose defence he deemed
essential to the United States. Lend-lease was first approved to help Britain, but it was also
extended to China in April and the Soviet Union in September. The British Commonwealth
nations (about 63%) and the Soviet Union (approximately 22%) were the most prominent
receivers of aid, yet by the conclusion of the war, lend-lease assistance had reached more
than 40 nations.Approximately $ 49 billion22 worth of supplies and services were provided
under the Lend-Lease program during World War II, most of which was given to to Britain
that is around $31 billion23 and almost $ 11 billion 24 to Soviet Union in aid. It eventually
helped the Allies win the war and was crucial in keeping up
the war effort. . The UK suffered with economic austerity
measures after the war, but with careful fiscal management
and economic development it was finally able to lower its
debt load.

22
https://www.britannica.com/topic/lend-lease
23
https://encyclopedia.ushmm.org/content/en/article/lend-lease
24
https://ru.usembassy.gov/world-war-ii-allies-u-s-lend-lease-to-the-soviet-union-1941-1945/
 THE ARTICLES OF AGREEMENT
For the International Bank of Reconstruction and Development and the International Monetary Fund

The Article of Agreement was formed in the Bretton Woods Conference or the United
Nations Monetary and Financial Conference. Its preliminary draft was formulated on July
1st, 1944 which was completed by July 22nd, 1944 and ratified by 29 countries on
December 27th, 1945. It has been amended three times on December 17, 1965, February 16,
1989 and June 27, 2012.

It consists of 11 articles focusing on:-

1. Purposes- This article enlisted the purposes of the bank which were reconstruction
and development of territories of members, promotion of private foreign
investments, expand international trade and investments and induce long-term
balance growth and payments, creation of specific channels to ensure international
loans deal with the urgent matters first, increasing labour and standard of living and
ensuring a smooth switch from war conditions to a peaceful economy.

2. Membership in and Capital of the Bank- This article has 10 sections wherein the
criteria of membership is specified, the authorised capital stock and the US Dollar,
subscription of shares (values of all shares during new stock issuance), issue prices
of shares, methods and times of payment for the share subscription, division of
subscribed shares, liabilities and their limitations on shares, maintaining bank
currency holdings and restrictions on disposing shares and powers residing with the
bank with respect to shares.

3. General Provisions Relating to Loans and Guarantee- This article has 6 sections
which specify the use of resources by the bank, dealings between the bank and its
members, limitations on guarantees and borrowings of the bank, conditions for loan
provision by the bank, use of these loans guaranteed/participated in/made by the
bank and loans to the International Financial Cooperation(formed in 1956; part of
the World Bank).

4. Operations-This article has 10 sections which include Methods of Making or

Facilitating Loans, Availability and Transferability of Currencies,Provision of
Currencies for Direct Loans,Payment Provisions for Direct
Loans,Guarantees,Special Reserve, Methods of Meeting Liabilities of the Bank in
Case of Defaults, Miscellaneous Operations,Warning to be Placed on Securities,
Political Activity Prohibited.

5. Organisations and Management -This article comprises of 14 sections which specify

Structure of the Bank,Board of Governors,Voting ,Executive Directors, President
and Staff, Advisory council, Loan Committees, Relationship to Other International
Organisations, Location of Offices, Regional Offices and Councils, Depositories,
 Form of Holdings of Currency, Publication of Reports and Provision of Information,
Allocation of Net income.

6. Withdrawal and Suspension of Membership:Suspension of Operations-This article

has 5 sections which incorporate Right of Members to Withdraw,Suspension of
Membership,Cessation of Membership in International Monetary Fund, Settlement
of Accounts with Governments Ceasing to be Members,Suspension of Operations
and Settlement of Obligations.

7. Statue , Immunities and Privileges-This article has 10 sections which throw light on
Purposes of the Article,Status of the Bank,Position of the Bank with Regard to
judicial Process,Immunity of Assets from Seizure, Immunity of Archives,Freedom
of Assets from Restrictions,Privilege for Communications,Immunities and Privileges
of Officers and Employees,Immunities from Taxation,Application of Article.

8. Amendments- Article 8 of the IBRD Articles of Agreement specifies the process for
making changes to the articles of agreement. Proposed amendments can be put
forward by any of the member countries or nations. The amendments must then be
approved by the Board of Governors and approved by the member nations. This
progression ensures that the agreement remains flexible and can be adjusted to
address emerging problems and emphasise the growing needs of the member
nations.

9. Interpretation- Article 9 of the IBRD Articles of Agreement explains how the

agreement should be interpreted. It states that if there is a disagreement about a
certain part of the agreement, the Board of Governors will discuss and make the final
decision. They also have the right to ask the International Court of Justice for help if
needed. This article helps to ensure that everyone understands the agreement and
resolves disputes in a proper manner.

10. Approval Deemed Given- Article 10 of the IBRD Articles of Agreement says that
once a member country agrees to join the IBRD association, it is automatically
considered agreed. This means they do not need any further approval. This makes it
easier for countries to become members and start their self-benefiting from the
IBRD’s support without any delay.

11. Final Provisions- Article 11, the Final Provisions of the IBRD Articles of
Agreement, states that any country joining the IBRD approves to follow its rules,
and if there's a conflict between these rules and a country's law and justice, the IBRD
rules are overcome. It also says that amendments to the agreement can be done by a
vote of the central Board of Governors, but all members must approve. Additionally,
it states that the agreement is always open for nations or countries to join, and once
 they do, they're guaranteed by its terms. Overall, it's all about ensuring that all
members recognize and agree to abide by the IBRD's rules and procedures.25

Loopholes in the Agreement:-

The Agreement focused on a lot of key points and also increased stability during and post
the world war II but some loopholes led to its collapse:-

1. Less implementation due to unwillingness of the key sovereign members to fulfil the
requirements and follow the rules.
2. Influence and Dependence on the US Dollar- e.g. the international gold system was
the gold dollar system, US being the central reserve system thus not facing the
problem of payment deficits, global liquidity problem, US Dollar Liabilities
increased
3. Rigidity in wage prices- increased unemployment and also prevented normal price
adjustments of gold standard price mechanisms to function
4. Undervaluing the price of gold- adverse effect on global trade

The influence of the US Dollar on the Bretton Woods System was a very huge reason for its
failure because problems like inflation of the dollar affected all countries globally, the gold
standard and several other economic aspects were affected by problems in the US economy.

25
https://www.worldbank.org/en/about/articles-of-agreement/ibrd-articles-of-agreement- Original Agreement (after the amendments)
 CASE STUDIES

1. Mercantilism in Europe vs in the Soviet Union

Mercantilism is basically an economic theory
that emphasises self-sufficiency of a nation or a
country through maintaining a favourable
balance of trade with other nations. Mercantilist
policies during the time period of the great
depression and world war 2 mainly emphasised
on the gathering or collection of wealth and
resources through trading amongst the nations
and improving the chain of exports and
imports. Mercantilism in Europe was a platform
where exports would exceed imports. For examples:-

1. Italy under fascism: Benito Mussolini's fascist regime in Italy turned focus on
policies and methods to achieve economic self-sufficiency and to reduce their
dependence on trades with other nations and improve the condition of the nations in
the ongoing world war.The government worked on implementing efficient measures
such as high tariffs and shares to protect domestic industries from competition with
other nations and the government also implemented trade barriers and tariffs.The
Italian economy during Mussolini's rule turned more focus on military production to
tackle the issues faced in the ongoing world war 2. Mussolini was supported by
hitler in trades and arms supply.

2. Soviet Union: The Soviet Union did not associate with mercantilism ideology due
to the nation’s socialist ideologies and communist rule. Under the rule of Stalin, the
nation displayed significant work on economic self-sufficiency. Stalin's policy of
collectivization worked on increasing agricultural productions to meet the local
needs and reduce the nation's reliance on imported food and materials. The Soviet
Union also started to focus on its domestic industrialization through the making of
Five-Year Plans, prioritising the development and establishment of heavy industries
to strengthen military strength to tackle war situations and also become a
self-dependent nation. The union had a strong trade policy.

3. Neutral Countries: Neutral countries in Europe also worked on adopting

mercantilist policies during the ongoing World War 2 to safeguard their economies
from the chaos, threat and damages of the ongoing war. These countries started
imposing trade restrictions, enhancing trade barriers and worked on implementing
measures to protect their domestic industries and factories from the destruction of
war. Many neutral nations also started to implement policies for economic self-
sufficiency.
2. Great Depression and its impact on Germany
After the first world war ended in 1918 and the Treaty of Versailles was signed in
1919, Germany was held completely accountable for the war. Apart from the
snatching away of territories and overseas colonies, Germany had to give a sum of
$33 billion as reparations for the war. Under ‘The Dawes Plan’, The German Nation
was mostly dependent on the US and other foreign loans to complete the reparation
sum as well as recovering their economy. With the stock market crash, economies
worldwide especially of the US were affected. Countries started to withdraw their
investments due to which Germany fell into another economic crisis. There was
hyperinflation in the country. The decline in production in Germany was roughly
equivalent to that of the United States. Industrial production had halved, prices
dropped, expenditure decreased
There was a huge increase in unemployment as it rose to around 6 million from 1.3
million between 1929 and 1933. By 1933, when Hitler became the chancellor, 1 in
every 3 Germans was reported to be unemployed. Homelessness increased and
people weren’t able to afford basic necessities.

Germany was extremely dependent on the trade of manufactured goods and foreign
short term deposits to pay for its fuel and food and industrial production but with
decrease in international trade and decline of foreign deposits due to lack of trust on
the currency, the country was hit worse than others. In 1927, foreign bonds issued by
the state and local governments were stopped by the cancellation of tax exemption of
German Bonds which were floated abroad. This did not affect the short term
borrowing, investments and inflow of short-term foreign capital which had severe
consequences on the already weakened capitalised banking system.

Many German Banks failed in 1931, one of the most prominent one was Danatbank
which was Germany’s second largest bank collapse due to the defaulting of a textile
firm which was its largest borrower. With the central bank reserves being less in
number, and the conflict between Germany and France due to the WWI reparation,
the Danatbank crisis worsened causing a system-wide banking crisis. Depositors
started favouring foreign currency denominated assets due to lack of confidence in
banks worsening the currency crisis. With this crisis going on, Germany continued to
pay its reparations from the WWI in gold marks whose value was stable but the
German Currency was declining making it more expensive to pay.

These economic situations also led to political extremism. With the rising
unemployment, homelessness, banking crisis and public discontentment, Hitler rose
to power by promising employment, improving the
economic condition and taking
revenge for the humiliation of the Treaty of Versailles.
It gave rise to dictatorial rule in the country thus being
a major factor for world war II.
3. Bombing around Britain

The name 'Blitz' refers to the German term Blitzkrieg, which means ‘lightning war.' It
describes the campaign of aerial bombing strikes by the Luftwaffe (German Air Force) on
British towns and cities, which took place between September 1940 and May 1941.

Beginning on September 7, often known as "Black Saturday," German bombers struck

London, resulting in 1,600 injuries and 430 fatalities. Then, for 57 nights in a row, London
was bombarded, frequently even during the day. Attacks on London were frequent, and on
May 10–11, 1941, the city was the target of its largest onslaught. 2,393 incendiaries and 711
tons of high explosive were dropped by German aircraft. 1,436 people lost their lives. But
this turned out to be the final significant attack until January 1943.

The Blitz was an attack on the whole nation, even though London received more bombs and
more frequent attacks than any other location in Britain. There were very few places that air
strikes did not target. A serious air strike might have disastrous effects on relatively small,
compact communities.The targets were key provincial cities and industrial centres starting
in mid-November 1940. A second round of strikes, mostly targeting ports, started in early
1941. June finally brought some respite, with the Luftwaffe focusing much of its efforts on
targets in the Mediterranean and Russia.

There were more than 43,500 civilian deaths throughout these nine months. The Blitz had a
major impact on British towns and cities.

Coventry :On November 14–15,

1940, Coventry, a significant hub for
engineering and munitions
production, was the target of an
attack. 30,000 incendiary bombs and
503 tons of high explosive were
dropped on the city by German
planes. There were 568 fatalities and
850 critical injuries. The mediaeval
cathedral was demolished. 35 percent of the city's stores were destroyed, and nearly
one-third of its homes were rendered uninhabitable.

Birmingham :After London and Liverpool, Birmingham was the third most bombed city in
the United Kingdom. August 1940 saw the first significant raid. September and October
brought more. On November 19–20, 1940, around 400 tons of high explosive bombs were
dropped in a raid. 53 people were killed when a bomb went off at the Birmingham Small
Arms (BSA) plant, one of the most significant industries in the city. In a novel strategy of
attacking towns and cities on back-to-back evenings, Birmingham was once more
thoroughly blitzed on November 21–22 and 22–23.
 Bristol:Bristol had witnessed multiple air strikes by November 1940. German bombers had
attacked its aircraft manufacturing outside the city and its ports at Avonmouth. However, an
air strike with far more fury than the previous ones struck the city on November 24. 1,250
incendiaries and 1,540 tons of heavy explosives were dropped by German planes. 207
people died and 187 were gravely injured in the attack. 175 UXBs (unexploded bombs)
were left behind, and many of the city's ancient structures were destroyed or set on fire.

There were hundreds of civilian deaths and numerous injuries as a result of the
bombings.During the Blitz, many Londoners, especially children were evacuated to the
countryside for safety.Critical infrastructure, including industries, hospitals, and
transportation networks, suffered significant damage, and entire districts were completely
obliterated.

The Blitz Bombing was intended to break British morale and force the Government into
seeking a negotiated peace with Germany, which would bring an end to Britain's resistance ,
it also intended to destroy the economy of Britain .In addition, it was a reprisal for British
bombing operations against German cities earlier in the war, especially the bombing of
Berlin by the RAF(Royal Air Force).
 CONCLUSION

In the midst of the intense Second World War , representatives from 44 countries convened
at the exclusive Mount Washington Hotel in Bretton Woods, New Hampshire, on July 1,
1944, to take part in the historic Bretton Woods Conference. Their goal was to come to an
agreement on an international cooperation framework and economic order that would aid in
the recovery of war-torn nations and promote sustained global growth. Hitler's ascent to
power and nationalism were fueled by the humiliation Germany suffered as a result of the
Treaty of Versailles, which he promised to overturn. Britain and France declared war on
Hitler's invasion of Poland in 1939, sparking the outbreak of World War II. The six-year
conflict had far-reaching effects on the world economy, the Holocaust, and the environment.
Devastating effects on capital, international trade, and infrastructure resulted in high debt
levels, inflation, and unemployment. Major cities were demolished, millions of people were
displaced, and over 200,000 houses were destroyed. The war's damage tab exceeded $1
trillion. After World War II, the need for economic order and international cooperation led to
the Bretton Woods Conference.Fixed exchange rates to gold were set under the International
Gold Standard, which offered stability but restricted nations' freedom to modify their
monetary policies. Mercantilism has been the driving force behind trade policy, with a focus
on favourable trade balances through tariffs and quotas. International trade was further
hindered by export restrictions as demonstrated by the British Navigation Act and the
Blockade of Nazi Germany.The Great Depression, spanning from the 1920s to World War
II, was marked by global economic turmoil triggered by the collapse of the Wall Street
Exchange. The economic collapse led to the closure of thousands of banks, plummeting
investments, and a contraction in GDP. Unemployment soared, reaching around 30% in
industrialised nations, leading to a decline in living standards and a rise in homelessness,
particularly affecting certain racial groups such as African Americans in the US.
International trade suffered greatly, with a significant decrease in production and the
imposition of strict tariff barriers, leading to a sharp decline in global trade. Regional blocs
replaced multilateral trade agreements, and currency depreciation proliferated. All things
considered, the Great Depression had dire repercussions, such as increased unemployment,
unstable economies, and a decline in global commerce.Following World War II, millions of
people were displaced, infrastructure was devastated, and large parts of Africa, Asia, and
Europe lay in ruins. A major shift in production toward military items during the war had an
influence on civilian life as there was a shortage of basic domestic goods. Countries like the
US, UK, Germany, and Japan concentrated their production on military goods during the
war, which resulted in enormous debt loads after the war. In an effort to meet humanitarian
needs and reconstruct damaged infrastructure and economy, international programs like the
Marshall Plan and the founding of UNRRA were among the rehabilitation efforts. This
together called for an international monetary system to regulate financial matters
 EXPECTATIONS FROM THE DELEGATES

Throughout the course of the conference, the committee will comply with the freeze date.
The delegates will redesign the Article of Agreement for the International Bank of
Reconstruction and Development and International Monetary Fund formulated in 1944 with
their own solutions reforming the World Bank and the International Monetary Fund.

The study guide also includes how world war II started with reference to the Treaty of
Versailles. In the committee sessions, the bureau expects the delegates to discuss only on the
impacts of WWII which include rehabilitation, reconstruction, government involvement and
a shift of production and the effects of these on the economy. The discussions must be
primarily focused on the economical situation and not the political issue of the war.

What is a freeze date?

A freeze date basically means that the committee is a historic committee. It will go back in
time and will function according to the events which happened during that particular time
period.

For the ‘Bretton Woods Conference’ Committee, the freeze date is July 1st, 1944. This is
when the conference was actually held. Delegates are going to sit in the past. For them,
World War II is ongoing, the great depression has just occurred and there is a whole war
based situation amidst which they have to form the Article of Agreement for the
International Bank of Reconstruction and Development and the International Monetary
Fund with reference to the crises going on in 1944. For them 2024 doesn’t exist, neither
does the World Bank nor does the International Monetary Fund. They have to start from
scratch and with their own solutions create another article with different mechanisms to
rebirth these important global institutions.
 QUESTIONS A RESOLUTION MUST ANSWER

1. How will the Axis, Allied and Neutral powers come to common ground in regard to
World War II which is going on?

2. Which currency should be set at the international standard instead of the US Dollar?

3. How to address the problem of reparations of both WWI and the ongoing WWII?

4. How to ensure the stability of exchange rates, currency rates, imposition of taxes and
maintaining economic development for a better future?

5. How will the nations plan balancing and maintaining domestic economic policies
with international economic cooperation to prevent future economic and war
situations?

6. How can the nations ensure that trade policies and implementations of trade barriers
and tariffs are fair, beneficial and advantageous to both developed and developing
nations for future development, industrialization and economic expansion?

7. What measures can be taken to ensure economic stability during times of conflict
and prevent recurrence of the high amounts of debt seen during the World War II era
from occurring again?

8. How did the economic consequences of Second World War have an impact on
marginalised communities,and what steps/policies can be taken to ensure equitable
recovery and rehabilitation for them ?

9. What measures could be taken to address the challenges and disruptions in lives of
civilians which were caused by the shift in production during world war 2 ?
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