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04COLOMBO1597 2004-09-27 05:49:00 CONFIDENTIAL Embassy Colombo
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					  C O N F I D E N T I A L SECTION 01 OF 02 COLOMBO 001597 



E.O. 12958: DECL: 09/27/2014

REF: A. STATE 184616 (NOTAL)

B. STATE 180466 (NOTAL)


Classified By: Ambassador Jeffrey J. Lunstead. 1.4(b,d)

1. (U) This is an Action Request -- please see Para 8.

Working group, created to discuss a proposed constitutional
amendment on financial arrears, met on September 24. In
addition to the Secretary General and the Maldivian High
Commissioner, acting as President of the Council,
representatives from Korea, Pakistan, Nepal, Burma, Iran,
Thailand, and Japan also attended. During a briefing on the
history of the amendment, the Secretary General made the
point that the annual dues (14,500 USD) covered only the
Secretariat's administrative costs. The costs for the major

programmatic components of the Colombo Plan were borne by the
various member countries.

3. (U) Responding to a request by the Council President to
brief on the U.S. amendment, poloff shared with the attendees
that the United States was committed to ensuring member
states' duty to pay the annual dues, but not at the expense
of the loss of significant training and development
opportunities for the citizens of those countries. Building
on the spirit of consensus of the organization, the United
States' proposed amendment removed the right of countries in
arrears to participate in such consensus decision-making.

4. (C) SUPPORT FOR THE U.S. AMENDMENT: Nepal, Iran, and
Pakistan expressed their support for the U.S. amendment, with
the Pakistani representative noting that the U.S. amendment
distinguished between restricting a country's administrative
rights -- which the dues support -- and restricting a
country's access to Colombo Plan programs -- funded
separately from annual dues. He also noted the U.S. proposal
was in line with United Nations' principles on the issue of
dealing with arrears. Via letter to the Secretary General,
the Government of Bhutan also indicated its support for the
U.S. amendment. Notwithstanding their view of the amendment,
several countries requested that the term "calendar year" in
the U.S. suggested wording be changed to "fiscal year."
Poloff responded that the U.S. would not have an issue with
this change. The Japanese representative said he did not
have specific instructions from Tokyo, but that Japan
generally respected the consensus opinion. He pointed out
that, given the old amendment's focus on the right to
participate in program activities versus the U.S. proposal
focused on the right of decision making, he thought the
former type of sanction could be more effective in making
member states pay their arrears.

representative from Thailand suggested changes to the U.S.
amendment, notably that U.S. proposed wording "lose its right
to participate in decision taking" be altered to "not be able
to participate in program activities, except at its own
expense." Full text of Thailand's proposed changes follow in
para 6 below. (Poloff noted that the U.S.' position was
intended not to block participants from training
opportunities and did not know how Washington would respond
to this suggestion.) The Pakistani representative noted that
the suggested change by Thailand was troubling in that it
restricted program opportunities again. The Secretary
General said the proposed change in wording could represent a
compromise that would allow member countries to retain the
right of membership by not barring their right of decision
making and still allow access to training opportunities (if
the member countries paid their own way). In a response to a
question from poloff regarding the point at which a member
country's financial support for access to training would
outweigh the amount of annual dues, the Secretary General
said that for the annual 14,500 USD contribution, on average,
member states receive 50-60 scholarships valued at
2,000-2,500 USD each (100,000-150,000 USD).

6. (SBU) Begin text of changes proposed by Thailand:
"A Member Government that is in arrears in the payment of its
assessed financial contributions to the organization shall
not be able to participate in program activities, except at
its own expense if the amount of its arrears equals or
exceeds the amount of the contributions due from it for the
two preceding financial years. The Council may,
nevertheless, permit such a Member Government to participate
in program activities if it is satisfied that the Member
Government's failure to pay is due to conditions beyond the
control of the Member Government and upon agreement to an
approved amortization plan to repay all outstanding
contributions. A Member Government's participation in
program activities shall be restored, as long as payments
pursuant to such a plan continue to be paid. Such an
amortization plan should not exceed seven years in length."

End text of proposed changes.

7. (U) The member countries took note of the proposed change
by Thailand, the comments by the Secretary General and said
they would have to discuss it with their capitals. At the
end of the meeting, the Secretary General said that he would
not set a date for the next working group meeting at that
time, but would wait to hear informally that the
representatives present had heard back from their capitals on
these developments.

8. (C) ACTION REQUEST: Mission requests Department guidance
on a response to the suggested wording change by Thailand.
The Secretary General is keen for a compromise to resolve
this multiple-year discussion on the issue of the amendment
and the Thai suggested changes may represent that compromise.
Mission notes, however, it is unclear that member countries
in arrears would actually pay for their nationals to
participate in programs in the absence of financial support
from the organization. Unless the defaulting governments pay
for such participation, the de facto result of Thailand's
proposed amendment would be that those citizens who would
most benefit from the programs are denied the opportunity
because their government is in arrears. If Department feels
that the Thai proposed amendment is not acceptable,
Department may wish to consider a demarche in Bangkok, which
would probably have more effect than a representation here to
the Thai Embassy. END ACTION REQUEST.