Source: http://www.un.org/News/Press/docs//2006/gaab3753.doc.htm http://www.un.org/News/Press/docs//2006/gaab3753.doc.htm
Date: October 9, 2006

9 October 2006
http://www.un.org/News/Press/docs/unlogo_blue_sml_en.jpg \* MERGEFORMATINET
General Assembly
GA/AB/3753 





Department of Public Information • News and Media Division • New York
Sixty-first General Assembly 
Fifth Committee 
2nd Meeting (AM)

GENERAL ASSEMBLY’S BUdGET COMMITTEE BEGINS REVIEW OF HOW MUCH

MEMBER STATES SHOULD PAY TO UNITED NATIONs IN 2007 - 2009
 

Factors Governing Scale of Assessments Are Discussed;
Contributions Committee Report Outlines Principles to Be Applied

As the Fifth Committee (Administrative and Budgetary) took up the scale for determining Member States’ dues to the Organization’s budget in 2007-2009, the delegates focused today on the main elements of calculating the assessments, including the minimum and maximum rates -- so-called “floor” and “ceiling” -- as well as other elements of the methodology to measure countries’ share of the budget.

As pointed out by Bernardo Greiver, Chairman of the Committee on Contributions, which considered the elements of scale methodology during its latest session this year, the current scale is only valid through 2006 and the new one has to be adopted during the main part of the Assembly’s session.  That observation was echoed by the United Nations Controller, Warren Sach, who said that smooth operation of the Organization was dependant on the smooth flow of contributions, which could be ensured only if payments were received on time.  That would only be possible with a scale of assessments in place.

While agreeing that the principle of “capacity to pay” should remain the basis of assessing dues, speakers, including the representative of Mexico, offered alternatives to the current elements of the scale, including the statistical base period for considering the national income of Member States and application of such mitigation measures as low per capita income and debt burden adjustments.  Serious concern was also expressed over the 22 per cent ceiling that was adopted in 2000.  The ceiling was then applied to the Organization’s main contributor -– the United States -- and the points arising as a result of the change were distributed pro rata among other States, except for those affected by the floor (0.001 per cent) and the least developed countries’ ceiling of 0.01 per cent.

In that connection, the representative of South Africa, speaking for the “Group of 77” developing countries and China, said the rationale for reducing the ceiling to 22 per cent had been to facilitate the payment of arrears to the United Nations.  Despite the Group’s opposition to unilateral attempts to modify the ceiling, it had joined consensus on the matter for the sake of the financial wellbeing of the Organization.  Six years later, there were indications that the rationale for requesting the reduction had not been met.  Now, it would be incumbent upon the Assembly to undertake review of the ceiling.

Malaysia’s representative said that the calculation of the upcoming scale should, as much as possible, reflect Member States’ real capacity to pay, in which the largest contributor should, in effect, be paying more than the ceiling of 22 per cent.  However, the United Nations remained a platform that served the collective interest of all Member States.  Thus, the interest of the Organization did not solely rely on the contribution of one Member State.

The representative of Finland, speaking for the European Union and associated States, called for a scale that was stable, simple and transparent.  He endorsed basing the scale on the gross national income, but said the current scale did not reflect “capacity to pay”.  For instance, the Union’s collective assessment was 37 per cent, while its collective gross national income share was 26 per cent.  Although emerging economies accounted for 40 per cent of world exports and held 70 per cent of foreign exchange reserves, their contributions to the United Nations budget were modest.  There should be a single statistical base period, to minimize distortions from repeated rounding.  The ceiling for the largest contributor should account for capacity to pay and the circumstances in which it was agreed to in 2000.

China’s representative opposed any proposals deviating from the principle of “capacity to pay”, including concepts of “responsibility to pay”, or minimum assessment rates for permanent members of the Security Council.  Such proposals would erode the status of developing countries in the Organization and affect friendly cooperation among States.  National income measurements with low per capita income adjustments were the best way to measure capacity to pay.  He favoured adopting the methodology used in the 2004-2006 scale for the 2007-2009 period, which would ensure the solid financial base the United Nations needed as it underwent various reforms.

Most speakers agreed with the recommendations of the Committee on Contributions that the scale should be based on the most current, comprehensive and comparable data available for gross national income and supported employing market exchange rates, except in cases where its use would cause excessive fluctuations and distortions, in which case price-adjusted rates or other appropriate conversion rates should be used.  They also emphasized that all Member States should honour their obligation under the Charter to pay all contributions on time, in full and without conditions.

Speakers also supported the recommendation that the Central African Republic, Comoros, Georgia, Guinea-Bissau, Liberia, Niger, Somalia and Tajikistan be permitted to vote in the Assembly until the end of its sixty-first session since their non-payment of dues was a consequence of factors beyond their control.  [According to Article 19 of the Charter, should a Member State fall behind in the payment of its dues by an amount equal to its assessments for the two most recent years, it will lose its right to vote in the General Assembly, unless the Assembly decides that non-payment is a consequence of factors beyond its control.]  They also looked favourably on a similar plea from Sao Tome and Principe, whose representative said his country had been unable to present its request directly to the Committee on Contributions, because there had been three elections and a change in Government this year.

Also taking the floor today were representatives of Australia (speaking also for Canada and New Zealand), India, Saudi Arabia, Bangladesh, Cambodia, Egypt, Nigeria (both in the national capacity and on behalf of the African Group), Pakistan, Jordan, Jamaica and Nepal.

The Committee will continue its consideration of the scale of assessments and take up the reports of the Joint Inspection Unit at 10 a.m. tomorrow, 10 October.

Background

As it began its substantive session this morning, the Fifth Committee (Administrative and Budgetary) took up the scale of assessments, by which Member States’ dues for the budget of the United Nations are calculated.

The Committee had before it this year’s report of the Committee on Contributions (document A/61/11), which presents its review of the elements of the methodology for preparing the scale for 2007-2009.

When it adopted a revised scale in 2000 -– which was fixed until 2006 -- the Assembly based individual countries’ assessments on their gross national income (GNI), which is converted to United States dollars after adjustments for external debt and low per capita income.  There are also minimum and maximum rates -- so-called “floor” and “ceiling” –- of assessment.  One of the main features of the revised scale was a reduction of the ceiling from 25 to 22 per cent.  That ceiling was then applied to the Organization’s main contributor -– the United States -- and the points arising as a result of the change were distributed pro rata among other States, except for those affected by the floor (0.001 per cent) and the least developed countries’ ceiling of 0.01 per cent.

During its fifty-eighth session, the Assembly requested the Committee to continue to review the methodology of future scales, based on the principle that the Organization’s expenses should be apportioned broadly according to capacity to pay.  The Assembly also noted that the application of the new methodology had led to substantial increases in the rates of some Member States, including developing countries.

Following its review of the scale methodology, the Committee on Contributions recommended that the 2007-2009 scale should be based on the most current and comprehensive Gross National Income data and that market exchange rates should be used in preparing the scale, except where that caused excessive fluctuations and distortions in income.  The Committee decided to consider the base period, the debt-burden adjustment, the low per capita income adjustment and the question of automatic annual recalculation of the scale at future sessions, in the light of any guidance from the Assembly.

During its latest session, the contributions Committee also had before it alternative proposals by some of its members, as well as Japan and Mexico.  According to the report, Mexico suggested using the base periods of two and six years, rather than three and six years.  It also proposed that points transferred from Member States whose per capita gross national income was below the threshold of the low per capita income adjustment would be absorbed only by the top 20 per cent of Member States based on that national income per capita.  The proposed change would address the problem faced by Mexico with the current scale, when the increase in its rate of assessment greatly exceeded the real growth in its economy.  The elements proposed by Japan include, among other things, a base period of three years, with annual recalculation; a debt burden adjustment on the basis of the total debt stock; a minimum assessment rate of 3 or 5 per cent for the permanent members of the Security Council; and a maximum assessment rate of 22 per cent.

Included in the report are the results of applying new gross national income data, under the current methodology.  Based on that information, the Committee on Contributions identified 21 countries whose rates of assessment for 2007-2009 would increase or decrease by more than 50 per cent, compared with 2004-2006.  In a number of cases, underlying data were subject to significant revision, either by the Member States concerned or when official data replaced earlier estimates by the Statistics Division.  For countries at or near the floor, assessment increases are high in percentage terms.  In some cases, high real growth is combined with currency appreciation, but not to an extent requiring adjustment of the market exchange rates.  Having reviewed these cases, the Committee did not consider that any of them necessitated any further adjustments.

The Committee on Contributions decided to use market exchange rates for most of the 192 Member States.  It also decided to use United Nations operational rates for Myanmar and Syria, and official rates for the Democratic People’s Republic of Korea.  United Nations operational rates were also applied to Cuba.  A decision was also made to adjust market exchange rates for Afghanistan, Angola, Turkmenistan and Zimbabwe.

The Committee concluded that the system of multi-year payment plans, endorsed by the Assembly in 2002, had made a positive contribution in encouraging States to reduce their debt to the United Nations and in providing a way for them to demonstrate their commitment to meeting their obligations.  The contributions Committee welcomed the submission of such a plan by Liberia and expressed appreciation that Iraq had completed payments under its plan and no longer fell under the provisions of Article 19 of the Charter.  [According to Article 19, a Member State falling behind in the payment of its dues by an amount equal to its assessments for the two most recent years, loses its right to vote in the Assembly, unless it were determined that non-payment is a consequence of factors beyond its control.]  The contributions Committee also noted with appreciation full payments by Georgia and the Niger in 2005 under their multi-year plans, and by Georgia in 2006.  On the basis of positive experience to date, the Committee recommended that the Assembly encourage other Member States in arrears to consider submitting multi-year plans.

With regard to the application of Article 19, the Committee also recommended that the Central African Republic, Comoros, Georgia, Guinea-Bissau, Liberia, Niger, Somalia and Tajikistan be permitted to vote in the Assembly until the end of its sixty-first session.  Under other matters, the Committee recommended a rate of assessment of 0.001 per cent for Montenegro, as a new Member State, in 2006.  The same (notional) rate of assessment was recommended for the Holy See, as a non-Member State, for the period 2007-2009.

The Fifth Committee also had before it a separate report on multi-year payment plans (document A/61/68), which provides information on payment plans/schedules submitted earlier by Georgia, Iraq, the Niger, the Republic of Moldova, Sao Tome and Principe and Tajikistan, and on the status of those plans as at 31 December 2005.

Introduction of Documents

BERNARDO GREIVER, Chairman of the Committee on Contributions, introduced that body’s report, adding that a new scale must be adopted by the Assembly during the main part of the session, in order to permit the Secretary-General to issue assessments to Member States for periods after 31 December.

WARREN SACH, United Nations Controller, introduced the report on multi-year payment plans contained in document A/61/68.  He also emphasized Mr. Greiver’s observations on the importance of the Fifth Committee taking action on the scale during the current session.  Smooth operation of the Organization was dependant on the smooth flow of contributions, which could only be ensured if payments were received on time.  That would only be possible with a scale of assessments in place.

The Committee’s attention was then drawn to a letter dated 5 October from the President of the General Assembly (document A/C.5/61/3), transmitting a letter dated 4 October from the Government of Sao Tome and Principe regarding a request for exemption under Article 19.  According to the document, non-payment of the country’s dues to the United Nations had been because of conditions beyond the Government’s control.  Despite the grave economic difficulties facing the country, the Government had demonstrated its commitment to meeting its financial obligations through the multi-year plan it had submitted in 2002.  The first instalment had already been made.

Statements

TOM GRÖNBERG (Finland) speaking for the European Union and associated States, said that States with genuine difficulties in paying their dues should be treated with respect and sympathy, and that multi-year payment plans had helped to reduce arrears.  He noted the payment of Iraq’s arrears in full, the submission of a plan by Liberia, and commended Georgia and the Niger for making full payments under their plans.

He encouraged all Member States requesting Article 19 exemptions to present multi-year payment plans, and endorsed the recommendations of the Committee on Contributions that the Central African Republic, Comoros, Georgia, Guinea-Bissau, Liberia, Niger, Somalia and Tajikistan retain their votes in the General Assembly through the end of the sixty-first session.

He said that the European Union did not look favourably upon the request of Sao Tome and Principe for a waiver under A/C.5/61/3, explaining that direct requests to the Fifth Committee sent out a signal that Member States may bypass the Committee on Contributions.  However, the Union reluctantly agreed to Sao Tome and Principe’s waiver request because of its willingness to honour its payment schedule, but it expected the country to abide by proper procedures in the future.

Discussing assessments for 2007-09, he called for a scale that was stable, simple, and transparent.  He endorsed basing the scale on gross national income, but said the current scale did not reflect “capacity to pay” because the European Union’s collective assessment was 37 per cent, while its collective gross national income share was 26 per cent.  Although emerging economies accounted for 40 per cent of world exports and held 70 per cent of foreign exchange reserves, their contributions to the United Nations budget were modest.  He said the low per capita income adjustment should be modified because it was set up to accrue benefits to a handful of countries, and was of scarce improvement in the assessment on the least developed countries.  There should be a single statistical base period, to minimize distortions from repeated rounding.

He said the European Union would examine the exclusion of debt-burden adjustments, since they were accounted for in gross national income data.  The ceiling for the largest contributor should account for capacity to pay and the circumstances in which it was agreed to in 2000.  He stressed the importance of resolving the unpaid assessments of the former Yugoslavia by the end of the main session.  Ultimately, he added, he looked forward to working towards a scale of assessments that better reflected the principle of capacity to pay.

DUMISANI S. KUMALO (South Africa), speaking for the “Group of 77” developing countries and China, reaffirmed the Group’s long-standing position that the financial resources provided to the United Nations must be commensurate with its mandates, and that Member States had a legal obligation to bear those expenses as apportioned by the Assembly.  It was crucial that Member States paid their assessed contributions in full, on time and without any conditions.  He also reaffirmed the principle of the capacity to pay as the fundamental criterion in determining the scale.  Developing countries should not be assessed at a rate higher than their capacity to pay as a result of any adjustments in the scale.

He said the main elements that had affected the application of the principle of capacity to pay was the ceiling.  The rationale for reducing it to 22 per cent had been to facilitate the payment of arrears and thereby improve the financial situation of the United Nations.  Despite the Group’s opposition to unilateral attempts to modify the ceiling, it had joined consensus on the matter in 2000 for the sake of the financial well-being of the Organization.  Indications six years later were that the rationale for requesting the reduction had not been met.  Now, it would be incumbent upon the Assembly to undertake the review as stated in paragraph 2 of its resolution 55/5 C.

He said the Group supported the recommendation of the Committee on Contributions that the scale should be based on the most current, comprehensive and comparable data available for GNI.  He also supported employing the market exchange rate for the scale, except in cases where its use would cause excessive fluctuations and distortions, in which case price-adjusted rates (PARE) or other appropriate conversion rates should be used.

He referred to purchasing power parity in the report of the Committee on Contributions, and said such parity did not provide a useful measure of capacity to pay.  It did not meet the criterion that the data used in the scale should be reliable, verifiable and comparable.  The Group of 77 did not support any proposal to use such parity in preparing the scale.  He also emphasized that the low per capita income adjustment was an integral part of the scale methodology, which the Group supported maintaining as its element.  The debt burden adjustment also needed to be maintained, he added, as well as the floor of 0.001 per cent and the maximum assessment rate for least developed countries at the current rate of 0.01 per cent.

He said the Group of 77 noted that, once again, a number of Member States faced substantial increases in their rates.  Such increases should be phased in during the scale period to avoid imposing an excessive burden of those States, particularly developing countries.  Turning to the reference in the report to introducing a minimum assessment rate for permanent members of the Security Council, he noted that, according to the report, such a proposal was contrary to the principle of capacity to pay.  The Group also wished to restate its previous position that the proposal for the annual recalculation of the scale was not in conformity with the principles contained in the original terms of reference of the Committee on Contributions.  Moreover, there was a number of procedural and practical questions that rendered the proposal impractical.

Turning to requests for exemption under Article 19, he concurred with the conclusion of the contributions Committee that the failure of the Central African Republic, Comoros, Georgia, Guinea-Bissau, Liberia, Niger, Somalia and Tajikistan to make the minimum payment necessary to avoid the application of sanctions was due to conditions beyond their control.  He also recognized the need to extend sympathetic understanding to the request by Sao Tome and Principe.  Supporting the requests for exemptions of those nine Member States, the Group trusted that every effort would be made to ensure that such requests were submitted in accordance with the provisions of resolution 54/237 C.

On multi-year plans, he said the Group of 77 appreciated the efforts of those countries that had submitted them and had honoured their commitments under the plans.  The plans should remain a voluntary mechanism and should not be used to pressure Member States that were already in difficult situations.  The submission of plans was definitely not a requirement for granting waivers under Article 19.  However, the Group encouraged Member States with significant arrears to consider submitting multi-year plans if they were in a position to do so.

ROBERT HILL (Australia), speaking also for Canada and New Zealand, supported keeping the following elements in the next scale of assessments:  a measure of income to assess each Member State’s capacity to pay; a progressive low per capita income adjustment; ceilings to avoid excessive dependence on any one State; and a floor forming a de minimus level of contribution for sovereign Member States.  He noted that some improvements could be considered, such as the use of more than one gradient in the low per capita income adjustment, to provide the highest rates of adjustment to the poorest countries.

He said the debt adjustment level had little demonstrable link to Member States’ ability to pay, and he favoured a shorter statistical base period with the possibility of annual adjustment in line with changing data.  He was open to considering the practical application of proposals for new elements, within the framework of the principle of capacity to pay.  But the Committee must not compromise its fundamental responsibility this session to agree to reach agreement on a new scale.  He called on the Committee to use the illustrative table presented on pages 12 to 25 of the report of the Committee on Contributions (document A/61/11) as the most appropriate starting point for negotiation.

LIU ZHENMIN ( China) said that the principle of capacity to pay reflected the general consensus of the broad membership, and he was against any proposal deviating from it, including concepts of “responsibility to pay”, or minimum assessment rates for permanent members of the Security Council.  He warned such proposals would erode the status of developing countries in the Organization and affect friendly cooperation among Member States.  National income measurements with low per capita income adjustments were the best way to measure capacities to pay.  He favoured adopting the same methodology used in the 2004-2006 scale for the 2007-2009 period, which would ensure the solid financial base the United Nations needed as it underwent various reforms.

He said that China was ready to make greater contributions to the United Nations, based on capacity to pay, as the domestic economy continued to grow.  He observed that China’s assessment rate grew from 0.995 per cent in 2000 to 2.053 per cent in 2004-2006, a 107 per cent increase in the span of four years.  The Chinese Government had honoured its financial obligations in word and deed, and it assumed additional obligations for peacekeeping.  China’s assessment would now grow to 2.716 per cent using the current methodology, the largest increase among all Member States.  Nevertheless, China would continue to give favourable consideration to the existing methodology as it was in keeping with the principle of capacity to pay.  With the largest population in the world, its gross domestic product (GDP) per capita was still a far cry from the average per capita gross national income, and economic development, poverty eradication, and the realization of modernization remained daunting challenges.

K.P.K. KUMARAN ( India) endorsed the recommendation of the Committee on Contributions that certain Member States retain their vote in the General Assembly until the end of the sixty-first General Assembly session.  He praised States making efforts to meet their obligations under voluntary multi-year payment plans, particularly Iraq and Liberia.  He said it was the Committee’s solemn duty to stand by Member States during their time of need, and he supported Tajikistan’s request for writing off its arrears for peacekeeping that accumulated before 2000 in view of the country’s difficulties.  He said there was no justification for developed countries to be in arrears.

He called for Member States to be assessed according to their means, and was convinced that the primary source of distortion in the capacity to pay principle resided in the 22 per cent ceiling, and called for a re-assessment of the ceiling.  Assessed contributions needed to be paid in full, on time and without conditions.

While the most current, comprehensive, and comparable data available for gross national income should be the basis for the scale of assessments, vigilance was required in the areas of comprehensiveness and comparability.  He said market exchange rates should be the basis for conversion rates, except where it could cause excessive fluctuations and distortions, and he preferred the six-year base periods.  He said he was wary of proposals for annual recalculation for being less stable, unpredictable, and adding administrative cost, and favoured retaining the debt-stock adjustment although the appropriateness of its application to higher income countries should be examined.  He sought a continuation of distribution of the low per capita income adjustment to Member States above the threshold, and not the entire membership.  He opposed any large scale increases in rates of assessments of developing countries, and was open to examining whether the current floor level of assessment still imposed excessive burdens on least developed countries and small island developing States.

Finally, he urged the Secretariat to cooperate with Member States that had difficulties in collating and submitting national income statistics on time.  He said that Angola’s assessment had risen by an astronomical percentage, and measures to mitigate unjust assessments must be evaluated.

ABDULLAH S. AL-ANAZI ( Saudi Arabia) said he supported the position of the Group of 77 and China, and that the principle of the capacity to pay was the most appropriate one for the calculation of Member States’ assessments.  While not perfect, it was a realistic and logical principle, which should form the basis for the next scale’s methodology as well.

He said he appreciated the application of multi-year payment plans, which had encouraged Member States to reduce their debt to the United Nations and supported the recommendation of the Committee on Contributions to grant exemptions under Article 19 of the Charter to the Central African Republic, Comoros, Georgia, Guinea-Bissau, Liberia, Niger, Somalia and Tajikistan, and to permit them to enjoy the right to vote in the Assembly, since their debt had been due to conditions beyond their control.

He urged all Member States to make their payments to the United Nations in full, on time and without any conditions, to assist the Organization in overcoming its chronic financial crisis.

DOMINGOS AUGUSTO FERREIRA ( Sao Tome and Principe) said that his country had been unable to present its request directly to the Committee on Contributions because there had been three elections and a change in Government this year.  The economy of his country was based on production of some commodities like cocoa and coffee, as well as on fishing and foreign aid.  The situation remained fragile, based on a long period of decline in the world price of cocoa, combined with increased prices in crude oil.  Sao Tome and Principe had a high per capita debt and the population was living in deep poverty.  Unemployment had been rising, and inflation and exchange rates were on the rise.  Taking into consideration the economic and social situation in the country, he said, the Government was not in a position to pay its contribution.  However, it intended to honour its obligation as soon as the economic situation changed.  He called on the Fifth Committee to take a favourable decision on his country’s request.

MUHAMMAD MUHITH (Bangladesh) said he supported the position of the Group of 77 and China, and noted that, while the Committee on Contributions had been able to recall, and in some cases reaffirm, its recommendations for income measurement, conversion rates, and floor and ceilings, it had decided to consider further the questions of the base period, debt burden adjustments and low per capita income adjustment -- very important elements of the scale –- at its future sessions.  This would be in the light of the guidance from the Assembly.  The new scale should be based on the principle of the capacity to pay, as well as updated gross national income data.  The conversion rates should be based on market exchange rates, with some exceptions where those would cause excessive fluctuations and distortions in the income of some Member States.  He strongly supported maintaining the floor at 0.001 per cent and the maximum assessment of least developed countries at 0.01 per cent.

As for the purchasing power parity, or the Law of One Price -- or “Big Mac Index”, as some people termed it –- he said his delegation maintained that it fell short of reliability and appropriateness, in terms of comparable data to be used in preparation of a fair scale, and that the exchange rate reflected only traded goods, in contrast to non-traded ones. Crucial ingredients could not be traded across the border, however.  He said price ratios between rich and poor countries varied widely across commodities.  For goods that were easily traded across borders, prices compared at market exchange could be sometimes similar in rich and poor countries, but for goods and services that were not easily traded across borders, prices compared at market exchange rates could easily be as much as 50 times higher in rich countries than in poor ones.

He said his delegation strongly supported the conclusions of the Committee on Contributions with regard to the requests for exemption under Article 19.  He was encouraged to learn that the system of multi-year plans had yielded positive results in assisting member States to reduce their unpaid dues and in providing a way to demonstrate their commitment to meeting their financial obligations of the United Nations.  He commended Liberia for having submitted such a plan and for making the initial payment.  He also appreciated that Iraq, Georgia and the Niger had made necessary payments under such plans.

On statistical information, he added that it was very important to gather reliable, verifiable and comparable data from authentic sources of the Member States.  For those countries, from which replies to the national accounts questionnaire had not been received, information was sometimes collected from the websites of central banks or ministries of finance or planning.  The information on websites was not always updated and, therefore, its use could result in an incoherent assessment on contributions.  In that regard, the contributions Committee might consider having the Permanent Missions in New York involved in the process of collecting statistical information.

WIDHYA CHEM (Cambodia) associated himself with the position of the Group of 77 and China and insisted that the methodology for the new scale of assessments for 2007-2009 should continue to be based on the use of gross national income; average base periods of six and three years; and the use of market exchange rates, except where that would cause excessive fluctuations or distortions in the income of Member States.  He also supported the use of the floor of 0.001 per cent and the ceiling for least developed countries of 0.01 per cent.

Continuing, he said he supported the conclusions of the Committee on Contribution with reference to the exemption from the application of the provisions of Article 19 of the Charter of several Member States to arrears because of conditions beyond their control.  Those countries should be allowed to vote until the end of the current session of the Assembly.  He said his delegation would like to extend its sympathetic understanding to those Member States that were in difficulty, and were temporarily unable to meet their financial obligations.  Any measures to encourage payment of arrears should take into consideration the situation of the countries involved.  Multi-year plans should remain a voluntary mechanism to help Member States to pay their arrears and should not be linked with conditions.

HESHAM AFIFI ( Egypt) said the United Nations could play a greater role in international affairs only if it had a sound financial basis, and Member States, therefore, needed to pay their assessed contributions on time, in full and without conditions.  Severe circumstances had prevented some from fulfilling their obligations, but they must be treated with respect and sympathy.

He said he was encouraged by the submission of multi-year payment plans, but believed they should not play a factor in the considerations of the Committee on Contributions under Article 19 for waivers.  Distortions in the current methodology of the principle of capacity to pay needed to be analysed, and he called the lower per capita income adjustment, and the debt burden adjustment, the best expressions of the capacity to pay in assessing contributions.

SIMEON ADEKANYE ( Nigeria) aligned himself with the position of the Group of 77 and China and said his country valued the Organization’s role in the world.  It was the responsibility of the whole membership to provide the Organization with resources to allow it to fully execute its mandate.  To that end, Nigeria would continue to pay its assessments in full and without conditions.  The Committee on Contributions had the arduous responsibility of providing the Assembly with vital information to help it to collectively adopt a methodology for establishing the future scale of assessments.  That was anchored on the important “capacity to pay” principle.  Other important principles that should be preserved in any methodology had been earlier enunciated in the statement by the Group of 77.  Low per capita income and debt burden adjustments impacted directly on a country’s capacity to pay and, therefore, should remain integral elements of scale methodology.

Nigeria supported the requests for exemptions under Article 19 and agreed with the Committee on Contributions that the failure of the Central African Republic, Comoros, Georgia, Guinea-Bissau, Liberia, Niger, Somalia and Tajikistan to make the requisite minimum payments had been due to conditions beyond their control.  It was also necessary to consider the request of Sao Tome and Principe with understanding.  He also congratulated those Member States that had not only submitted payment plans, but also honoured their commitments under those plans.  That was a welcome development worth encouraging, but it should continue to remain voluntary, as envisaged by the Assembly.

ROSLAN BIN AWANG CIK ( Malaysia) said it was vital to take into account the various socio-economic factors that affected the well-being of Member States when dealing with the scale of assessments, and said the principle of capacity to pay must continue to determine the share of contributions to the Organization.  He supported retention of market exchange rates in reviewing the 2007-2009 scale, and agreed to the use of a price adjusted rate of exchange or other appropriate conversation rates in cases where market exchange rates would cause excessive distortions.  But purchasing power parity was not available for many countries, and was not a feasible and practical measure of the capacity to pay.

He said that Malaysia was flexible in considering a base period between three and six years, as well as proposals relating to the 22 per cent ceiling, since the Organization did not rely solely on the contribution of one Member State.  He recognized the essential nature of the debt burden adjustment in the calculation of the scale.  He recognized that a discontinuity between scale periods had occurred for some countries, related to the low per capita income adjustment, which could be discussed in detail.  He noted that Malaysia did not support the proposal of having an annual recalculation for the scale as it would be a tedious exercise that made the scale less predictable and could incur additional resources.  Finally, he called on all Member States to settle their arrears without any conditions attached.

AHMED FAROOQ ( Pakistan) said preserving the capacity to pay was vital for equitable sharing of United Nations expenses.  He called the low per capita income adjustment an adjunct to that principle, and sought a restoration of the gradient to its former level of 85 per cent, as well as retention of the debt stock adjustment.  He said the proposal for using purchasing power parity to calculate national income had no sound technical and moral basis because of the lack of up-to-date comparable data for most of the Member States.  The premise of the capacity to pay should give maximum relief to the developing and least developed countries.  Large scale-to-scale increases needed to be avoided, he said, and any move to disturb the current methodology could open the wider issue of re-negotiating the ceiling on contributions.  He said that using greater financial contributions to create political leverage and attempts to introduce concepts such as “responsibility within the Organization” as a basis for the scale were divisive actions.  He, therefore, called the current methodology, with appropriate adjustments, the most reasonable basis for a consensus.  Timely and full payment of contributions by Member States was critically important, he said.

RICARDO DE LA PENA ( Mexico) said the basis for the funding of the United Nations must be the principle of the capacity to pay.  For that reason, his country had endeavoured to find a solution, which could help the United Nations to mitigate the negative effect of the distortions in the current methodology.  Some problems had been festering for years, and they could exacerbate the problems of countries experiencing economic difficulties, including developing countries and those with economies in transition.  One of the problems related to the discontinuity of the low per capita income adjustment.

Other most meaningful elements of the scale included the gross national income, and the base period should bring about a better calculation in that regard.  It was important to eliminate a two-year lag in the historic series of national macroeconomic data.  The scale methodology must adhere more closely to the economic reality on the ground.  Towards that end, Mexico had proposed to modify the methodology as presented in a document presented to the Assembly and reflected in paragraph 21 of the Committee on Contributions report.

He said his delegation had carefully examined the report before the Fifth Committee and noted with satisfaction greater transparency in its presentation, he said.  However, he wanted to pose some questions to the Chairman of the Committee on Contributions, which, he hoped, would be answered in informal consultations later.  Among other things, he wanted to know how many countries in the past had crossed the threshold of low per capita income adjustment from one scale to the next, and how many would be crossing it now.  How many countries would be affected with discontinuity? As to the two-year lag in the gross national income data, he asked how many countries had presented their official statistical information in a formal format.  How was the data collected if they did not present such information?  Would the two-year statistical period information, averaged with a six-year base period, help to improve the situation?

MOHAMMAD TAL ( Jordan) said the principle of capacity to pay was the main criterion by which the expenses of the United Nations should be apportioned, and Member States had a legal obligation to pay all assessments in full, on time, and without conditions.  It was important to build on discussions that occurred in the last session, and he called on Members to avoid any undue extended presentations and reiterations of their positions.  This was not a time for statistical creativity, and he said that many proposals offered earlier served no purpose other than to consume time, which could be better allocated to other important items on the agenda.

He said the reliability of data was the most important issue in calculating the scale of assessments.  Market exchange rates should be used, except when they would cause excessive fluctuations and distortions.  The debt burden adjustment must be maintained, and should be based on debt stock, despite concerns about the repayment period assumptions.  He noted that Jordan and other developing countries had sizeable increases in their rate of assessment, although their economic performance did not improve enough to justify that increase.  Jordan, therefore, did not accept any proposals aimed at increasing the burden on developing countries.  He said he supported the recommendations of the Committee on Contributions on preserving the General Assembly votes of the Central African Republic, Comoros, Georgia, Guinea-Bissau, Liberia, Niger, Somalia and Tajikistan.  He added that the multi-year payment plans should be encouraged, but remained voluntary.

NORMA ELAINE TAYLOR ROBERTS ( Jamaica) supported the position of the Group of 77 and China, as well as the recommendations of the Committee on Contributions on the requests for exemption from sanctions under Article 19.  She also advocated responding favourably to the request by Sao Tome and Principe.  Member States would not deliberately fail to honour their obligations to the United Nations without a reason.

She also noted “large and excessive” scale-to-scale increases for some countries, in particular that faced by Angola.  Previously, when Jamaica had faced that problem, it had benefited from favourable understanding of Member States.  She did not think that countries experiencing difficulties should “go hat in hand” to ask for a reprieve.  As pointed out by the representative of South Africa on behalf of the Group of 77, such increases should be phased in during the base period to avoid imposing an excessive burden of Member States, particularly developing countries.  She reaffirmed the principle of capacity to pay, recognizing that the system could not be perfect, but the single most distorting element in the current scale was the ceiling of 22 per cent.  In 2000, the Assembly had decided that it would review the elements of the scale, including adjustments to the ceiling.  It was time to honour that mandate.

ANIL KUMAR JHA ( Nepal) said many situations adversely impacted the capacity of certain Member States to pay, and they needed to be considered favourably in determining the scale of assessments.  Special attention should be given to the financial difficulties of countries emerging from conflict.  He said the idea of purchasing power parity required careful consideration to ensure that it was reliable, verifiable and comparable data.  He also said that substantial increases in the rates of assessment to least developed and small countries had far-reaching consequences for capacity to pay, and he supported maintaining the floor rate of 0.001 per cent and maximum assessment rate of 0.01 per cent for least developed countries.  Finally, he supported the exemptions under Article 19 for the Central African Republic, Comoros, Georgia, Guinea-Bissau, Liberia, Niger, Somalia and Tajikistan.

Speaking on behalf of the African Group, NONYE UDO (Nigeria) said the Group attached great importance to the requests for exemption under Article 19 that were submitted by Member States -– both those made to the Committee on Contributions and to the Fifth Committee this morning, so that they could participate effectively and fully in the work of the Assembly.  She said the African Group supported those applications, and urged others to consider the requests favourably, including that made by Sao Tome and Principe.  While recommending that relevant procedures should be abided by, she understood that, due to circumstances out of countries’ control, exceptions should be made in some cases.  The Committee needed to be magnanimous, as it had always been, granting waivers from sanctions to those who had made their requests.

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For information media • not an official record