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Scale of quota assessments of the Member States 2012-2014 Secretariat for Administration and Finance.

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Presentation on theme: "Scale of quota assessments of the Member States 2012-2014 Secretariat for Administration and Finance."— Presentation transcript:

1 Scale of quota assessments of the Member States Secretariat for Administration and Finance

2 Summary The scale methodology First three-year review of scale, following UN methodology, as adopted by GA in AG/RES. 1 (XXXIV – E/07) Calculation of ability to pay is now automatic based on World Bank/IMF published data (GNI, external debt) Assessments determined by income, relative size of the economies, discounted for low-income countries and variations capped at 25% on level of previous scale 2/11/20142

3 Scale of assessments

4 Content I.Background II.Ability to pay III.Methodology IV.Economic growth and scale of assessments /11/20144

5 5 I Background

6 BASIS FOR DETERMINING QUOTA ASSESSMENTS Article 55 The General Assembly shall establish the bases for fixing the quota that each Government is to contribute to the maintenance of the Organization, taking into account the ability to pay of the respective countries and their determination to contribute in an equitable manner (emphasis added).

7 1948 The OAS is established. Charter mandates that contributions be based on the Member states capacity to pay. Is first applied in BACKGROUND The OAS scale was calculated on the basis of the quotas assessed to OAS Member states at the UN The quota scale was frozen with the proposal to lower the maximum quota (United States).

8 BACKGROUND 1990s New scales approved upon arrival of new members: Canada (1990), Belize and Guyana (1992) CAAP considers several options for a new quota scale, based on the UN scale of assessments1996 Member countries began to call for the need to review the scale in order to comply with the Charter (capacity to pay).

9 BACKGROUND 2006 A group of experts convened by the Permanent Council discusses alternatives presented. A transitory scale for is adopted pending deliberation of a final proposal First period under which a quota scale calculated under the approved methodology becomes effective2007 General Assembly reaches a consensus on a methodology for calculating the scale and approves it in a special session in resolution AG/RES. 1 (XXXIV-E/07)

10 2/11/ II Ability to Pay

11 Ability to pay 2/11/ The basis for measuring Size of the economy (Gross National Income) adjusted for: Total external debt Per capita income Application of floor and ceiling rates Quota growth/decline capped at 25% of previous period

12 2/11/ III Methodology

13 The Data 2/11/ GNI data for base periods of 6 and 3 years for the periods and Obtained through the United Nations website and Annual Statistical Reports published by the ECLAC. External debt data: The World Banks Global Development Finance 2011 and ECLAC reports

14 2/11/ Methodology

15 2/11/ Methodology Step 1: GNI figures in US dollars are used to calculate shares of GNI for each Member State. The figures are averaged for each period of 6 and 3 years.

16 2/11/ Methodology Step 2: The debt adjustment for each year is deducted to derive the debt- adjusted GNI for each statistical base. Debt adjustment is equal to one-eight of total outstanding debt stock.

17 2/11/ Methodology Step 3: Application of the low Per Capita income adjustment. This involves the calculation of the median debt-adjusted Per Capita GNI during each base period. These figures are the thresholds for the low Per Capita income adjustments.

18 2/11/ Methodology Step 4: The GNI of each country whose debt-adjusted Per Capita GNI was below the 30 th percentile is reduced by 80% (gradient) of the percentage by which its debt-adjusted Per Capita GNI is below the threshold.

19 2/11/ Methodology Step 5: The total amount of the low Per Capita income adjustment is reallocated pro rata to Member States whose debt-adjusted Per Capita GNI was above the 30 th percentile, except the ceiling country.

20 2/11/ Methodology Step 6: The minimum assessment rate, or floor (0.022%), is applied to those Member States whose rate is lower. Pro rata reductions are applied to all other Member States, except the ceiling country.

21 2/11/ Methodology Step 7: Application of the maximum assessment rate (59.470%). Increases corresponding to the resulting reduction for the ceiling country are applied pro rata to other Member States, except those affected by the floor rate.

22 2/11/ Methodology Step 8: An arithmetic average of the statistical base periods of 6 and 3 years is calculated for each Member State.

23 2/11/ Methodology Step 9: Application of the maximum limits for increases/decreases in the Member States assessment, established at 25%. Corresponding increases/decreases are distributed pro rata among the Member States, except those affected by the floor and ceiling rates.

24 2/11/ IV Economic growth and scale of assessments

25 Economic Growth



28 2/11/ Economic growth may explain, in most cases, increases or decreases to a member states quota Even though a member state may have experienced growth, its overall quota may be reduced if the relative size of the economy is less than the previous quota (e.g. Argentina) Large increases to major contributors tend to crowd out or diminish the relative size of others and contribute to their reduction (e.g. Brazil and Mexico grow while Canada sees a reduction) Caps on growth or reductions will affect the contributions of other member states due to the redistribution of excess percentages Explaining changes to the scale of assessments

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