International Monetary Fund

 
 

Topic: Decreasing External Debt and Avoiding Global Default

As interest rates have risen around the world, it has become increasingly difficult for developing nations to pay off sovereign debt which they have previously taken. Countries around the world such as Sri Lanka, Russia, and Ethiopia have defaulted since international interest rates were hiked to decrease inflation, and some 12 other countries are projected to have an over 50 percent chance of default in the coming years. While a growingly generous IMF has tried to alleviate this problem, with many lending nations obstinate and many debtor nations incapable of paying off loans at current international interest rates, even with fiscal restructuring, more decisive action is demanded to deal with sovereign debt. Delegates will have to mediate between the interests of creditor and debtor nations, deciding what sorts of policies are feasible for the IMF, with its limited money and emphasis on lending connected to fiscal restructuring to undertake. What this will mean is an attempt to re-write exactly what policies are required for nations to receive IMF debt as well as to clarify when the IMF should step in to help debtor nations.

The rise of international interest rates has created an international housing crisis. This housing crisis has affected developing nations, where fixed-rate loans are more uncommon, and thus shifts in the interest rate create significantly greater problems for debtors. With growing housing prices led by an increase in the difficulty to pay off mortgages has also come a growing international housing humanitarian crisis, one which demands international intervention. Current policy is largely informalized and varies depending upon the nation; amidst the growing international crisis, delegates should consider the IMF’s ability to formalize policy and use the monetary levers to which it has access to alleviate this issue. Yet, it is important for delegates to also remember the complexity which monetary policymakers face when trying to avoid unsustainably high interest rates. On the one hand, it is vital that delegates should attempt to avoid international housing poverty and the humanitarian crisis that comes along with it. At the same time, delegates should avoiding making mortgage loans uncompetitive and therefore driving away creditors. Delegates should focus on a policy that can be acceptable to both debtors and creditors to avoid bringing further damage to the international housing market.

 

Dear Delegates,

It is my pleasure to welcome you to the International Monetary Fund for the 2024 session of Harvard Model United Nations! I am honored to have the opportunity to see all of you and serve as your Director. I am excited for our hopefully lively and cooperative discussions on these deep and important issues.

My name is Jason Morganbesser. I am a rising sophomore living in Quincy House planning to concentrate in Philosophy. I have been involved in Model UN since my Sophomore year in High School, first competing while in high school and then judging in college. I was previously Assistant Director of the UNHRC at HMUN 2024 and of ASEAN at HNMUN 2024. This year, I am excited to direct the WIPO committee at HNMUN as well as this committee. I hope my experience as both a former competitor and a director will allow me to facilitate an intellectually rewarding, substantive, and successful committee.

Model UN has been an incredibly rewarding and valuable part of my life since I started down this path four years ago, and I hope that I can continue to support that experience for you as well. As a chair, I value the quality of the ideas put forth by delegates, their ability to both address the complexities of the issue at hand with bold ideas as well as to be practically effective and feasible. I also value a close connection between the stated position of the delegate and the actual position of the country.

As the world economy shifts into a high interest environment, dealing with rising sovereign debt has rarely been a more pressing issue. Significant developing nations such as Ethiopia and Sri Lanka have defaulted on their debt in the past several years, and another 12 nations are at risk of default. To maintain global economic development, we are forced to consider policies that would allow debtor nations to maintain their solvency while sustaining creditor nations’ willingness to lend. The high interest economic environment presents a humanitarian issue as well as a purely economic one. As interest rates rise, the ability for people, particularly those in the developing world, where fixed-rate mortgages tend to be rare, to acquire mortgages and continue interest payments on those mortgages is significantly hampered. As the developing world faces a growing housing crisis, it is imperative to find a way to alleviate the monetary pressures on higher international mortgage rates.

I am excited to be able to work with you at our annual conference and would be happy to support you on any stage of the process, from researching to the end of the conference. Please reach out with any questions or concerns, and I’m excited to work with you all!

Sincerely,

Jason Morganbesser

Director, International Monetary Fund

imf@harvardmun.org

Harvard Model United Nations 2025