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RUEHNE/AMEMBASSY NEW DELHI PRIORITY 2976
RUEHME/AMEMBASSY MEXICO PRIORITY 0844

C O N F I D E N T I A L USUN NEW YORK 000005 
 
SIPDIS 
 
E.O. 12958: DECL: 01/03/2020 
TAGS: AORC PREL UN UNGA UNGA KUNR
SUBJECT: UNGA FIFTH COMMITTEE: US ACHIEVES OBJECTIVES IN 
SCALES OF ASSESSMENTS 
 
REF: A. 09USUNNEWYORK518 
     ¶B. 09USUNNEWYORK562 
     ¶C. 09USUNNEWYORK655 
     ¶D. 09USUNNEWYORK663 
     ¶E. 09USUNNEWYORK746 
     ¶F. 09USUNNEWYORK843 
     ¶G. 09USUNNEWYORK917 
     ¶H. 09USUNNEWYORK1071 
     ¶I. 09USUNNEWYORK1122 
 
¶1. (U) Summary: Shortly before midnight on 23 December 2009, 
Permanent Representatives from approximately two dozen UN 
Member States concluded nine hours of negotiations to resolve 
the impasse over the scales of assessments in the Fifth 
(Administrative and Budgetary) Committee. The meeting, which 
was chaired by the President of the General Assembly (PGA), 
was convened because of deadlock in the Fifth Committee 
stemming from differences between developed countries and the 
G-77. Although the Committee ultimately agreed to maintain 
the current methodologies for the two scales, concessions 
were made on both scales. On the regular budget scale, the 
Committee agreed to a review of the scale methodology by the 
end of the sixty-sixth session in 2012. On the peacekeeping 
scale, there was an understanding that the Bahamas and 
Bahrain would remain in level B but would be treated as if 
they were in level C until 2012. In the end, the U.S. 
achieved its primary objectives of maintaining the 22-percent 
ceiling in the regular budget scale and preventing expansion 
of level C in the PKO scale without breaking with the EU and 
other Western allies. End Summary. 
 
SETTING THE SCENE 
----------------- 
 
¶2. (C) U.S. JOINS G7 AND EU TO SEEK FAIRER SCALES OF 
ASSESSMENTS: Beginning in April, Fifth Committee experts of 
the G7 (Canada, France, Germany, Italy, Japan, the UK, and 
the U.S.), joined later by the EU, held a number of meetings 
to forge a common negotiating position on the scales of 
assessments. On the regular budget scale, this "like-minded" 
group agreed to pursue a change to the low per capita income 
adjustment (LPCIA) element of the methodology to increase the 
share of the BRIC countries (Brazil, Russia, India, and 
China) while respecting each others' redlines, e.g. the U.S. 
redline of maintaining the 22 percent ceiling. On the PKO 
scale, the group agreed to work towards elimination of the 
discount applied to the five countries in level C, i.e. 
Brunei, Kuwait, Qatar, Singapore, and the UAE, while 
recognizing that taking such a position might have negative 
repercussions on the regular budget scale negotiations (see 
refs. A-F). 
 
¶3. (U) FIFTH COMMITTEE BEGINS DEBATE ON SCALES: The Fifth 
Committee began its deliberations with formal statements 5 
and 6 October during which G-77 representatives declared that 
they were prepared to immediately adopt the existing 
methodology for the regular budget scale (see ref. G). The 
Fifth Committee held informal consultations until 19 October, 
when it turned its attention to other items on the agenda. On 
20 November, the Committee resumed its discussion on scales 
with the presentation of proposals on the two scales 
resolutions during informal consultations. 
 
¶4. (U) G-77 PROPOSES TO LIFT CEILING WHILE LIKE-MINDED GROUP 
ATTACKS THE BRIC: On the regular budget scale, the G-77 
proposed to restore the ceiling to 25 percent because (1) the 
ceiling represented "a fundamental source of distortion" in 
the scale methodology and (2) the continued failure of the 
U.S. to fulfill its promise, made in 2000 when the ceiling 
was lowered to 22 percent, to satisfy its financial 
obligations to the UN. The EU, represented by Sweden, France, 
and Romania, proposed a reduction of the LPCIA discount for 
the BRIC and redistribution of the savings resulting from 
this reduction between developed and developing countries. 
Russia proposed relaxing the criteria for applying 
price-adjusted rates of exchange in lieu of market exchange 
rates. Mexico and Tajikistan also presented proposals, but 
these generated very little discussion in the Committee (see 
ref. H). 
 
 
¶5. (U) PKO SCALE PROPOSALS FOCUS ON LEVEL C: On the PKO 
scale, the G-77 proposed inclusion of the Bahamas and 
Bahrain, which had graduated into level B in 2004 from levels 
D and E respectively, into level C and establishment of level 
C as the highest assessment level for developing countries. 
The U.S. put forth two options (1) to eliminate level C 
outright or (2) to maintain the status quo regarding level C, 
while initially indicating a strong preference for the former 
(see ref. H). 
 
¶6. (U) IMPASSE IN THE FIFTH COMMITTEE: By the beginning of 
December, it was clear that both sets of negotiations were 
deadlocked. While the like-minded group, led by the EU, 
vigorously pursued LPCIA redistribution on the regular 
budget, the G-77 not only steadfastly opposed the proposal, 
saying that it was both arbitrary and discriminatory, but 
also accused the EU of trying to bribe G-77 members into 
breaking solidarity. The G-77 also continued to attack the 
ceiling, claiming that the ceiling -- and not the LPCIA -- 
was the largest source of distortion in the scale 
methodology. While the U.S. and others argued that the 
Organization has always had a ceiling to prevent its 
overreliance upon any one Member State, the G-77 responded 
that a ceiling of 25 percent would still serve that purpose 
(see ref. I). On the PKO scale, the G-77 proposal was opposed 
by the like-minded group, which engaged the G-77 in many 
heated discussions primarily over the definition of 
"developing country". In an effort to reach out to the G-77, 
the U.S. proposed to maintain the status quo while the 
General Assembly conducted a review of the structure of 
levels. While the G-77 was generally receptive to the U.S. 
proposal, it continued to insist on the inclusion of the 
Bahamas and Bahrain in level C. 
 
¶7. (C) TENSIONS RISE WITHIN THE LIKE-MINDED GROUP: As the 
Fifth Committee deliberations progressed, the like-minded 
group -- which expanded to include the Republic of Korea and 
Mexico -- continued holding expert-level consultations. 
Within the group, it was apparent that, despite a concerted 
demarche campaign, the LPCIA redistribution proposal failed 
to gain any traction amongst G-77 members. The U.S. and other 
members of the group expressed concern that the group risked 
losing control over the issue if it continued to pursue the 
EU proposal on LPCIA and therefore urged the EU to be 
flexible and consider more realistic proposals for the 
endgame. The U.S. also warned that such flexibility was 
necessary to ensure that its key interest -- the ceiling -- 
was adequately protected. The unity of the group was 
maintained when the EU agreed to consider a "status quo plus" 
option for the endgame. On 17 December, the group drafted a 
proposal to maintain the current methodology of the regular 
budget scale while calling for a review of the methodology 
with a view towards a decision on a new scale of assessments 
in two years. This proposal was submitted privately to the 
Chairman of the Fifth Committee, Ambassador Peter Maurer of 
Switzerland, the next morning. 
 
¶8. (C) CHAIRMAN ATTEMPTS TO BROKER COMPROMISE: In an attempt 
to broker a compromise on the two scales, the coordinators of 
the regular budget and PKO scales discussions circulated 
draft proposals on 20 December that would maintain the 
current methodologies of the scales for the period 2010-2012 
while calling for comprehensive reviews of the scale 
methodologies in the interim. These proposals were based on 
the language privately submitted to the Chairman by the 
like-minded group but included amendments made by the 
Chairman to better take into account the positions of other 
delegations. However, the G-77, Russia, and Tajikistan 
rejected the proposal as not going far enough to address 
their concerns. The EU also raised concerns and said that 
they would have to discuss the proposal internally. In 
private, EU negotiators told USUN that they were unhappy with 
the Chairman's amendments. 
 
HIGH-LEVEL MEETINGS CONVENED TO RESOLVE DEADLOCK 
--------------------------------------------- --- 
 
¶9. (U) G-77 SNUBS PGA AT HIGH-LEVEL MEETING: On 22 December, 
over two weeks after the Committee was originally scheduled 
to complete its work, the PGA, Ali Treki of Libya, intervened 
 
 
at the request of the Chairman to resolve the impasse. That 
afternoon, the PGA called for a meeting at the Permanent 
Representative (PR) level of the delegations that had 
submitted proposals on the scales in the Fifth Committee in 
order to try to break the deadlock. However, PRs from the 
G-77 refused to attend the meeting, reiterating their 
longstanding position concerning decision-making in 
"small-group configurations". By this time, however, it was 
widely recognized that the scales could no longer be 
negotiated at the Fifth Committee expert level. The PGA met 
separately that evening with G-77 PRs to express his 
displeasure at their boycott and subsequently called for a 
second PR-level meeting for 23 December, involving a broader 
range of Member States, in order to reach a compromise. 
 
¶10. (U) PERM REPS CONVENE TO DELIBERATE ON SCALES: At 3:00 in 
the afternoon on 23 December, two dozen PRs and DPRs took 
their places around the ring-shaped table in Conference Room 
8 in the basement of the General Assembly building. The rest 
of the chamber was packed with Fifth Committee experts, with 
even more waiting outside. At one point during the 
negotiations on the regular budget scale, the PGA, expressing 
frustration that PRs could not engage in fruitful discussion 
in the presence of Fifth Committee experts, threw everyone 
who did not hold ambassadorial rank out of the room. The two 
scales were then discussed ad seriatum, starting with 
negotiations on the regular budget scale. 
 
¶11. (U) REGULAR BUDGET SCALE: PERM REPS AGREE ON "STATUS QUO 
PLUS": Discussion at the PR meeting focused on a draft 
proposal presented by the Chairman on 22 December that 
further refined the compromise proposals circulated on 20 
December to take into account the concerns raised. All 
delegations agreed to a "status quo plus" option, though the 
G-77 called for deletion of the "plus" paragraphs which the 
EU considered to be essential (paragraphs 7-9 of draft 
resolution L.24). In the end all of these paragraphs were 
retained, albeit in a modified form to satisfy G-77 concerns. 
To address the fundamental EU concerns, the final text called 
for the General Assembly to review all elements of the 
methodology with a view to a decision on the methodology 
before the end of the sixty-sixth session. If agreed, the 
decision on the methodology would go into effect for the 
2013-2015 scale of assessments. This compromise, however, was 
unacceptable to Russia and a number of other former Soviet 
republics because it did not include the Russian proposal on 
exchange rates. These delegations signaled that they would 
call for a vote on the Russian proposal when the regular 
budget scale resolution came before the Fifth Committee (see 
para. 13 below). 
 
¶12. (SBU) PKO SCALE: MUCH ADO ABOUT THE BAHAMAS AND BAHRAIN: 
On the PKO scale, the G-77 remained adamant about the 
inclusion of the Bahamas and Bahrain into level C. In 
private, both the Bahamas and Bahrain admitted to USUN that 
they did not need the 7.5 percent discount associated with 
level C but that they could not accept having the current 
five members of level C getting a better deal than they were 
getting. The U.S. suggested the possibility of providing some 
kind of relief to the two countries for three years while the 
structure of levels was being reviewed, a proposal that was 
reluctantly agreed to by France and the UK. Although some 
G-77 experts were initially lukewarm about the proposal, 
their tune changed after the U.S. suggested that the G-77 
needed to get its act together or it risked having the offer 
being withdrawn, as had been threatened by the UK PR. After 
intense negotiations on how to provide this relief without 
setting a precedent, a compromise was reached by which both 
the Bahamas and Bahrain would technically remain in level B 
but would be treated as if they were members of level C and 
provided with the associated 7.5 percent discount for the 
2010-2012 scale period. However, it was agreed that this 
arrangement would not be implemented as part of the PKO scale 
resolution but rather as a decision of the GA to be reflected 
by official statements on the record by both the Chairman and 
the PGA as well as in a letter to be circulated by the PGA. 
(Note: this letter was sent to Member States on 6 January 
¶2010. End note) 
 
ADOPTING THE COMPROMISE 
 
 
----------------------- 
 
¶13. (U) RUSSIA AND OTHERS BREAK CONSENSUS ON REGULAR BUDGET 
SCALE: It was not until shortly before midnight that the 
figurative "white smoke" appeared and the PR conclave finally 
reached agreement on the two scales of assessments. The Fifth 
Committee convened formally at 1:00 AM to approve all pending 
draft resolutions, including the two draft resolutions on the 
scales of assessments. On the regular budget scale, the 
Russian delegation submitted its original proposal on 
exchange rates as an amendment. Russia had little to show for 
a vigorous demarche campaign it conducted in G-77 capitals 
during the preceding week, as the amendment was soundly 
defeated by a vote of 22 in favor, including China; 85 
opposed; and 27 abstentions, including Brazil and India. 
Although the regular budget scale resolution was subsequently 
adopted in the Committee without a vote, Russia, Ukraine, and 
Belarus made statements disassociating themselves from the 
consensus and expressing grave concern that the Fifth 
Committee had adopted a resolution as fundamental as the 
scales of assessment without having first reached a 
consensus. 
 
¶14. (U) CHAIRMAN AND PGA ISSUE STATEMENTS ABOUT THE BAHAMAS 
AND BAHRAIN: On the PKO scale, the Chairman of the Fifth 
Committee issued a statement, as agreed during the PR 
meeting, indicating that the Bahamas and Bahrain would be 
treated as level C countries for the scale of assessments for 
the period 2010-2012 even though they would technically 
remain members of level B. When the General Assembly convened 
at 3 AM to adopt, inter alia, the resolutions of the Fifth 
Committee, the PGA made a similar statement. Both scales were 
adopted by the General Assembly shortly after 4 in the 
morning on Christmas Eve. 
 
CONCLUSION 
---------- 
 
¶15. (SBU) USUN achieved all of its principal goals in the 
scales of assessments negotiations. On the regular budget, we 
maintained the 22 percent ceiling for at least three more 
years without having to break ranks with the EU and other 
western colleagues. On the PKO scale we successfully thwarted 
the G-77 attempt to open level C up to all G-77 members. 
 
¶16. (SBU) Comment. The EU was very frustrated and unhappy 
with its failure once again to change the methodology for the 
regular budget scale to reduce its high collective assessment 
(some 10 percent higher than its share of world GNI) by 
forcing the BRIC to shoulder a greater share of the budget 
commensurate with their growing economic strength and 
political influence. Since the high EU assessment is the 
result of both the LPCIA and ceiling, and because of previous 
challenges by both the EU and the G-77 to the ceiling, the 
review of the regular budget scale methodology is likely to 
examine the ceiling in some form. Regarding the PKO scale, 
the G-77 remains committed to establishing level C as the 
highest level for developing countries but are prepared to 
consider alternatives based on the review of the structure of 
assessment levels. The question remains how the U.S. will 
address both of these reviews and what decisions will 
confront the GA on the two scales. End comment. 
RICE