Scale of assessments

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The scales of assessments determine how much each Member State contributes to the UN regular programme buget. The basis for the scale of assessments is Article 17.2 of the United Nations Charter. A separate scale governs contributions to UN peacekeeping operations.

Regular budget scale of assessments The expenses of the United Nations are apportioned on the principle of capacity to pay, which has been reflected through comparative estimates of national income modified by per capita income. This principle was established bythe Preparatory Commission of the United Nations (1945-46), which was responsible for determining the administrative arrangements required to establish the United Nations. The first General Assembly, however, also instituted a maximum assessment rate (or “ceiling”) on the assessment of the largest financial contributor, the United States, as a way to guard against financial over-reliance on a single Member State.

The methodology is the formula used to generate the scale of assessments from economic data provided by Member States to the UN Statistics Division. Since 1946, the methodology has undergone many changes, but two elements of the methodology have existed in one form or another since the very beginning: the low per capita income adjustment, which provides discounts to low-income countries, and the ceiling.

Process

Consideration of the scale of assessments by the General Assembly, through the Fifth Committee is based on the report of the Committee on Contributions (COC), an elected body of 18 members. The terms of reference of the COC are governed by rules 158 through 160 of the Rules of Procedure of the General Assembly. The COC meets annually in June and issues a report for consideration by the General Assembly in the fall, though the actual rates are only considered every three years.

Every year, the General Assembly considers two resolutions on the scale of assessments. The first has to do with providing waivers to Member States falling afoul of Article 19 of the Charter, i.e. those who are more than two years in arrears and who have therefore lost their right to vote in the General Assembly. The second is on the scale methodology itself. During the triennial negotiations on the scale rates, the outcome of the negotiations is a resolution establishing the rates of assessments for the following three-year scale period. During non-scale years, the resolution is supposed to provide guidance to the COC on what elements of methodology it should examine during its next annual session.

Methodology

The current methodology determines each country’s share of the regular budget through the following steps:

  1. Comparative measures of national income: each Member State’s relative share of the world economy (in GNI, expressed in United States dollars) is determined using economic data submitted by Member States to the UN Statistics Division under the System of National Accounts. For countries for which use of market exchange rates would "cause excessive fluctuations and distortions", the COC can recommend the use of price-adjusted rates of exchange (PARE) to convert national currencies into U.S. dollars. Averages for six- and three-year base periods are calculated with a time lag of two years (i.e. "t-2 data"). All subsequent steps are run for the three and six year averages, which are then averaged together to obtain the final result, a compromise dating from 1995.
  2. Debt burden adjustment (DBA): Member States covered in the World Bank external debt database receive a discount (applied to the results of the previous step) equivalent to 12.5% of their total debt stock for each year of the base period. Member States not subject to debt burden adjustment are assessed an additional amount to offset the discounts provided. This step was introduced during the 1980s as exceptional relief to countries affected by the Latin American debt crisis. The 12.5% discount is based on the assumption—which is no longer valid—that countries generally repay debt over eight years. The alternative “debt flow” method provides discounts based on the actual amount of debt principal repaid.
  3. World per capita GNI calculation: The world average per capita GNI is calculated for the two base periods.
  4. National per capita GNI calculation: Average per capita GNI is calculated for each country for the two base periods.
  5. Low per capita income adjustment (LPCIA): Member States below the LPCIA threshold are provided a discount, equivalent to 80% (the gradient) of the percentage by which the individual Member States are below the threshold. As such, countries with lower per capita GNI have a larger LPCIA discount than those whose per capita GNI are close to the threshold. Member States above the threshold are assessed an additional amount to offset the discounts provided. The LPCIA is the largest source of point redistribution in the scale methodology.
  6. Minimum assessment rate: A floor rate of 0.001 per cent is applied.
  7. Maximum assessment rate for least-developed countries: An LDC ceiling rate of 0.01 per cent is applied for the least-developed countries. Determination of which Member States are considered Least-Developed Countries (LDCs) is made by the Committee for Development Policy, a subsidiary body of ECOSOC, on the basis of three LDC criteria.
  8. Maximum assessment rate: The ceiling of 22 per cent is applied. The United States is the only country that benefits from the ceiling. A ceiling rate has existing since the inception of the organization, though it has decreased over time.

Because of the impact of the redistribution of points under the LPCIA and ceiling steps of the calculation, the LPCIA is actually calculated in two different ways—one excluding the United States for the purpose of determining the actual rate of assessment (the "track 1" calculation) and one including the United States for the purpose of illustrating the impact of each methodological step in the calculation (the "track 2" calculation).

Other proposals

Rule 160 of the Rules of Procedure currently state that the scale of assessments should apply for three years. One proposal that is regularly debated in the Fifth Committee is the question of annual calculation, i.e. automatic adjustment of the scales each year on the basis of new economic data received.

Assessment of non-Member States

Non-member States, of which there are currently two (the Holy See and the State of Palestine) are assessed an amount equivalent to half of what their share would be if they were a Member State. This amount is recorded by the UN as miscellaneous income.

Recent reports and resolutions