UK HOSTS LUNCH FOR UN COMMITTEE ON CONTRIBUTION

UNCLAS E F T O USUN NEW YORK 000584

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: PREL AMGT AORC UN
SUBJECT: UK HOSTS LUNCH FOR UN COMMITTEE ON CONTRIBUTION
DELEGATES TO DISCUSS SCALES OF ASSESSMENT

REF: A. USUN 518

B. USUN 562

Classified By: Ambassador Rosemary DiCarlo For Reasons 1.4 b


1. (SBU) SUMMARY: On June 4, 2009 the UK Mission hosted a
lunch for members of the Committee on Contribution (COC) to
discuss the scale of assessment models and general views of
the committee on the scales debate. In addition to CoC
delegates from Germany, Australia, the UK, Romania,
Portugal, Japan, Republic of Korea (ROK),and the US. Fifth
Committee delegates from Canada, the UK, Czech Republic,
Japan, Germany, Sweden, Mexico and the US were also invited.
(Comment: Notably, the participants included the experts and
Fifth Committee delegates from the three countries which the
EU and CANZ participants on the G7 discussions want to invite
into the G7 initiative discussion. Reftel USUN 562 )The Brits
indicated the lunch was an opportunity to share views on the
CoC's work and the impact from the CoC's report on the scale
debate outcome. The discussion was primarily focused on
LPCIA, but there were discussions on the margins about the
potential outcome of the scales negotiations. The Portugese
CoC member made the observation that, based on his review of
the financial data provided by the UN Secretariat, the status
quo may not be such a bad outcome in the scales negotiation
as many western countries assessment decreases whereas the
assessment for Brazil, Russia and China increases. Many CoC
delegates indicated interest in continuing to consider
changes to the methodology e.g. debt burden, and LPCIA. The
Japanese CoC member advocated for an overall reconstruction
of the scales methodology for the 2012 debate and continues
to see value in incorporating some elements of the Purchasing
Power Parity (PPP) into that new methodology. The Swedes, the
Brits and the Canadian refuted the notion to maintain the
status quo and indicated now is the time to push for a
change. END SUMMARY


2. (SBU) At this lunch, the UK host informed the group that
the EU had intended to present to the CoC the elements of the
EU models that had been outlined in a recent letter to the
CoC chairman (Reftel USUN 518),however events in the May
resumed session of the Fifth Committee appear to be making it
difficult for the EU to prepare a briefing on their request.
Therefore, it is unclear whether or when the EU will make a
presentation on their request. The UK focused the
conversation initially on LPCIA and the elements, such as the
threshold and gradient, that could result in a fair scale
methodology. The Portugese CoC member questioned whether it
might be an acceptable outcome to maintain the status quo,
given the data for the current scales methodology provided by
the UN Secretariat indicates most of the Western members
assessments would decrease while assessments for Brazil,
China and Russia would increase. In addition, the Japanese
CoC member stated the group should focus efforts on proposing
an overall change to the methodology in the 2012 scales
debate.


3. (SBU) The Japanese CoC member indicated that the Market
Exchange Rate (MER) is an element of the methodology that
creates significant disparities and that if the group wants
to achieve change to the methodology it would be better to
propose a radical change in the methodology rather than
continuing to try to make small changes to the existing
methodology. The Swedes and the Brits responded that the
opportunity to make a change to the scale methodology must be
seized this Fall. Several of the CoC delegates spoke in favor
of continuing to consider change, in the debt burden and
LPCIA elements, focusing on adjustments to the threshold.
Several CoC delegates also expressed support and interest in
the proposal to include a point limit in the methodology,
limiting the benefit that could accrue to any one member from
the LPCIA. The US raised and other delegates recognized the
difficulty this would create for the US given the potential
implications for our position on the ceiling.


4. (SBU) The Canadian raised the possibility of exploring a
potential rift within the G77 over Gulf States discontent
over paying more than China in the peacekeeping scale of
assessment. The Canadian had also heard that the Pacific
Island States had expressed dissatisfaction at having to pay
more than other member states who they deem being able to pay
far more than the pacific island states. The Brits and
Canadians indicated they would ask Naru and Palau to consider
providing the CoC with a briefing on the financial impact of
scales on the pacific islands as a means to inform other
member states of the disparity that exists because of the
current methodology.
RICE