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International Affairs

Republic of Yemen General Assembly Second Committee (Economic and Financial) TopicA: Excessive international financial market speculations and extreme price volatility of food and related commodity markets The Republic of Yemen, as a country whose economy is heavily reliant on the commodity market (most notably oil), recognizes the issues that have arisen relatively recently in the commodity market. The uncertainty surrounding commodities such as oil has led Yemen to make a concerted effort to diversify its economy. This effort received support from the International Monetary 1 Fund in 2006 in the form of $370 million in order to spur economic diversification. Although this was a step in the right direction, Yemen acknowledges that there is still a serious need in the international community for long-term solutions to price volatility in the commodity derivatives market. These solutions will require international cooperation if they are to be effective for years to come. Yemen, as an oil exporting and food importing nation, has the highest levels of poverty in the Middle East and North Africa. These poverty levels rose sharply after the food crisis of 2008 from 34.8% to 42.8%.Any growth on the back of the oil- 2 industry has not proven to be substantial enough to reduce the poverty levels . The effects of food price volatility due to volatility in the commodities market are especially felt in rural areas, where nearly half of Yemen’s citizenry still lives. Volatility in the commodities market also makes it impossible for the government to sustain oil-subsidies; this makes even the slightest growth on the back of a lagging oil industry nearly impossible. It is Yemen’s hope that a push for economic diversification will lessen the effects of price volatility on Yemen’s economy and stabilize food prices for the average citizen. Yemen thus encourages other nations facing similar economic issues to consider how economic diversification could insulate them from the effects of financialization of the commodities market. Yemen would also encourage its fellow member states to consider the idea of a transactions tax system in order to slow down financial market activities and thus lessen the risk of price volatility. Topic B: Promoting the efficiency, transparency, and accountability of public administration by strengthening supreme audit institutions
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