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IdentifierCreatedClassificationOrigin
06USUNNEWYORK2268 2006-12-19 21:25:00 CONFIDENTIAL USUN New York
Cable title:  

SCALE OF ASSESSMENTS: PREPARING FOR STATUS QUO

Tags:   AORC UNGA KUNR 
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VZCZCXRO9244
PP RUEHRN
DE RUCNDT #2268/01 3532125
ZNY CCCCC ZZH
P 192125Z DEC 06
FM USMISSION USUN NEW YORK
TO RUEHC/SECSTATE WASHDC PRIORITY 0987
INFO RUEHNR/AMEMBASSY NAIROBI PRIORITY 0559
RUEHGV/USMISSION GENEVA PRIORITY 2446
RUEHRN/USMISSION UN ROME PRIORITY
RUEHUNV/USMISSION UNVIE VIENNA PRIORITY 0628
					  C O N F I D E N T I A L SECTION 01 OF 02 USUN NEW YORK 002268 

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/15/2016
TAGS: AORC UNGA KUNR
SUBJECT: SCALE OF ASSESSMENTS: PREPARING FOR STATUS QUO
SOLUTION

REF: A. USUN 02184


B. USUN 02208

C. USUN 02217

D. USUN 02227

E. USUN 02262

Classified By: Classified By: Amb. Mark Wallace
Reasons 1.4 (b) and (d).




1. SUMMARY AND COMMENT: On December 14, the Fifth Committee
(Administrative and Budgetary) resumed its consideration of
the draft resolution of the scale of assessments during
informal informal consultations. Progress in the Fifth
Committee towards finding consensus on the scale has come to
a standstill, with the Group of 77 and China, European Union,
and Japan continuing to press, without bending, on their
respective proposals (reftels). The Russian Federation,
allying itself with the G-77, keeps pushing for a status quo
solution to the scale. Mexico, also vocal during the last
informal informal consultation (ref e), offered a new
consensus proposal that incorporated a bit of all other
proposals in an effort to move forward. It called for
maintaining the six and three-year base period, slight
changes to the low per capita income adjustment (LPCIA)
gradients, and a debt burden adjustment based on the debt
stock approach currently used.



2. (C) SUMMARY AND COMMENT CONTINUED: Contrary to several
Committee member wishes, the Coordinator (Iran) said the
final scale session would be scheduled for the entire day of
December 20. The Coordinator made clear that he intends to
complete scales by the Secretariat-imposed UNGA deadline of
December 21. Perhaps, a firm deadline might finally force
Committee members to find consensus on the issue. As an
aside, Ambassador Wallace met with Ambassador Kumalo (South
Africa) on December 14 to discuss the issue. Indications
were -- off the record -- that the G-77 would be happy if the
current methodology was retained, with inclusion of the G-77
proposal for large scale-to-scale increases. END SUMMARY AND
COMMENT.


Informal Informal: More of the Same


--------------------------





3. During informal informal consultations on the night of
December 14, the Coordinator (Iran) reviewed all outstanding
issues for the Committee. He noted there was ad hoc
agreement on the debt burden adjustment to continue using the
"debt stock" approach. Issues without agreement, however,
were the base period, the low per capita income adjustment
(LPCIA), ceiling, and annual recalculation. Once again,
there was spirited debate between Finnish Ambassador Gronberg
(on behalf of the European Union) and South Africa (on behalf
of the Group of 77 and China). Japan and the Russian
Federation chimed in as well. Mexico continued to seek
and/or create a new consensus proposal, but other Committee
members did not appear amenable to the idea. This time
around the U.S. did not speak, and neither did the usual
suspects, India, China, and Brazil.



4. The Committee quickly reviewed new tables presented by
the Secretariat in answer to inquiries by the G-77 and EU.
Debate began over the G-77 proposal of large scale-to-scale
increases, with the EU countering by opting to keep the
current but unofficial rule to use mitigation on a
case-by-case basis rather than create a new mechanism (ref
e). South Africa responded that the G-77 preferred to have a
mechanism in place so that the most vulnerable countries most
affected by large scale increases would not be subject to
"pressures" by larger states, which had a habit of offering
assistance in exchange for voting favors or support on other
issues. Australia (on behalf of CANZ) noted inaccuracies
with the G-77 proposal, saying it strayed from the principle
of capacity to pay. He called their proposal a "benefit on
top of an existing benefit." The Russian Federation delegate
said his country supported the G-77. He said regardless of
contribution to the Organization, all Member States were
equal within the UN system.



5. Mexico interjected, offering a new solution to the scale
that they claimed was fairer (ref e). He called for
maintaining the current base period of six and three years.
Mexico was also offering new LPCIA gradients of 85 percent
for least developed countries, 75 percent for those states
exceeding the current one percent of gross national income
(GNI) threshold, and 80 percent for all other below the
threshold. Mexico had been hit hard by scale increases in

USUN NEW Y 00002268 002 OF 002


2003 and 2004, but was doing much better today, he said.
Although issues of economy were rather unpredictable, and
that this methodology could perhaps hurt Mexico down the
road, the Mexican delegate believed his country's proposal
would please everyone. South Africa replied that the G-77
was not interested in any new methodology. No one else
commented on the Mexican proposal.



6. South Africa tried numerous times to draw the U.S. into
the discussion by commenting on the ceiling. She claimed
that debate on proposals such as LPCIA or large
scale-to-scale increases would not be necessary if the
largest contributor paid its fair share. Her words garnered
no reaction from the EU or CANZ. She once again told Japan
they paid too much because of the U.S. ceiling. Ambassador
Shinyo (Japan) replied that the ceiling was always part of
the methodology, since it was better not to have too much
reliance on one Member State. In other words, there was
really no reason to discuss the issue, he said.


Meeting with the G-77 Chair


--------------------------





7. (C) Separately on December 14, Ambassador Wallace held a
brief discussion with Ambassador Kumalo (South Africa),
current G-77 Chair, concerning the current state of play in
ongoing scale negotiations. Kumalo apologized to Wallace for
giving the impression that he had been avoiding him, noting
multiple demands on his time limited his availability.
Kumalo noted it was still too early in the process to predict
the final outcome, but that, off-the-record, Kumalo would not
at all be surprised nor unhappy if the current methodology,
with technical adjustments to address large scale-to-scale
increases, was to remain in place for the period 2007-2009.
Kumalo added that it was regrettable the U.S. and G-77 were
beating each other up when the real obstacle to reaching
consensus remained the EU. (NOTE: While Kumalo's private
comments inspire confidence that the G-77 is not bent on
pressing for an increase in the ceiling to 25 percent, such
an outcome at this stage is by no means a certainty. END
NOTE).


WOLFF