FC 100/9 |
Hundredth Session |
Rome, 9 – 13 September 2002 |
Incentive Scheme to Encourage Prompt Payment of Contributions - |
1. The purpose of this paper is to request the Finance Committee's concurrence with the discount rate to be used in applying credits to 2003 contributions.
2. The Conference, at its Twenty-sixth Session in November 19911/, noted, in fact, that in determining the rate of discount to be used in the test discount scheme, the Director-General should consult the Finance Committee. The purpose of this paper is therefore to identify an appropriate rate of interest for 2002 discounts and to quantify the amount of discount earned on qualifying contributions in 2002 using the suggested interest rate.
3. The Committee’s discussions at its Seventy-second session in September 1991 and considerations by the Conference/ resulted in rules for a proposed discount scheme, as follows:
4. The Committee at its Eighty-eighth Session in September 1997 considered the proposal made by the Director-General to modify the methodology used for the calculation of the incentive in the interests of an equitable application of the rules and the need to reduce the potentially high cost of the Scheme. Under this revised methodology, contributions received on the first day of the discount period would qualify to receive 100 percent of the discount whereas contributions received on the last day of the period would receive only 1/90th of the discount. The Conference at its twenty-ninth session in November 1997 approved this refinement and agreed that it should be applied with effect from 1 January 1998.
5. The assessed contributions of Member Nations that have met the criteria as described in (a) and (d) above are shown in the table below. Those Member Nations qualifying for a discount for prompt payment in 2002 are detailed in the Appendix.
Year | Number of Member Nations | Assessed Contributions US$ | Discount US$ |
1993 | 29 | 78,846,542 | 654,426 |
1994 | 30 | 97,963,700 | 862,081 |
1995 | 31 | 97,529,140 | 1,453,184 |
1996 | 35 | 102,623,400 | 1,364,891 |
1997 | 41 | 150,420,600 | 2,030,678 |
1998 | 35 | 93,415,205 | 617,527 |
1999 | 40 | 91,899,243 | 357,791 |
2000 | 39 | 85,168,949 | 437,831 |
2001 | 20 | 22,482,776 | 107,121 |
2002 | 38 | 42,332,259 | 96,327 |
6. As in the past, the Director-General suggests that the Finance Committee consider an average of the eurodollar interest rates for the first three months of 2002 as the most appropriate rate to use in determining the amount of discount to credit to the Member Nations who so qualify. The Director-General further suggests, as approved by the Committee at its Seventy-sixth session, that the discount rate be determined by allocating one fourth of this average annual rate to the first ninety days of the year.
7. The interest rates on Eurodollar deposits during the first quarter of 2002 are shown below:
2 January | 1.80% p.a. |
1 February | 1.80% p.a. |
1 March | 1.77% p.a. |
29 March | 1.82% p.a. |
8. A numerical average of the interest rates is 1.7975% per annum. By employing the methodology suggested by the Director-General in paragraph 5, a discount rate of 0.45% is determined.
9. The application of this 0.45% rate to the qualifying assessments of US$42,332,259 shown in paragraph 5 results in a total discount of US$96,327.25. In accordance with the rules stated in paragraph 3, this discount would be credited to the 2003 assessments of the Member Nations who paid the full amount of their assessment by 31 March 2002. The rules also provide that the amount of such credit would not exceed the interest earned on Regular Programme funds during the year. Accordingly, a final decision on this matter cannot be taken until the end of 2002 when the amount of interest earned on Regular Programme funds is known.
10. The Director-General requests the Finance Committee's concurrence on the discount rate to be used in applying credits to 2003 assessed contributions.
APPENDIX - MEMBER NATIONS ELIGIBLE FOR DISCOUNT
AT 31 MARCH 2002
2002 | Date of | No. of days | Potential | |
Member Nation | Assessment | Receipt | discount | Discount |
US$ | US$ | |||
|
||||
Albania | $9,675.95 | 27-Feb-02 | 33 | $15.97 |
Angola | $6,450.63 | 01-Jan-02 | 90 | $29.03 |
Bahamas | $38,703.78 | 07-Feb-02 | 53 | $102.57 |
Bahrain | $58,055.67 | 20-Mar-02 | 12 | $34.83 |
Belgium | $3,692,985.68 | 26-Feb-02 | 34 | $6,278.08 |
Bhutan | $3,225.31 | 01-Feb-02 | 59 | $9.51 |
Bolivia | $25,802.52 | 13-Mar-02 | 19 | $24.51 |
Bulgaria | $41,929.10 | 01-Jan-02 | 90 | $188.68 |
Burkina Faso | $6,450.63 | 01-Jan-02 | 90 | $29.03 |
Canada | $8,366,467.11 | 10-Jan-02 | 81 | $33,884.19 |
Croatia | $125,787.29 | 01-Jan-02 | 90 | $566.04 |
Cyprus | $122,561.97 | 06-Mar-02 | 26 | $159.33 |
Czech Republic | $557,979.50 | 12-Feb-02 | 48 | $1,339.15 |
Denmark | $2,448,014.08 | 19-Feb-02 | 41 | $5,018.43 |
Egypt | $264,475.83 | 04-Feb-02 | 56 | $740.53 |
Estonia | $32,253.15 | 11-Feb-02 | 49 | $79.02 |
Ethiopia | $12,901.26 | 25-Feb-02 | 35 | $22.58 |
Finland | $1,706,191.63 | 29-Jan-02 | 62 | $5,289.19 |
Iceland | $106,435.40 | 28-Jan-02 | 63 | $335.27 |
Ireland | $964,369.19 | 08-Feb-02 | 52 | $2,507.36 |
Korea, Republic of | $6,053,916.26 | 28-Feb-02 | 32 | $9,686.27 |
Laos | $3,225.31 | 19-Mar-02 | 13 | $2.10 |
Lesotho | $3,225.31 | 01-Jan-02 | 90 | $14.51 |
Luxembourg | $261,250.52 | 12-Mar-02 | 20 | $261.25 |
Madagascar | $9,675.95 | 01-Jan-02 | 90 | $43.54 |
Maldives | $3,225.31 | 21-Mar-02 | 11 | $1.77 |
Malta | $48,379.73 | 22-Jan-02 | 69 | $166.91 |
Netherlands | $5,679,779.71 | 20-Feb-02 | 40 | $11,359.56 |
New Zealand | $786,976.86 | 22-Feb-02 | 38 | $1,495.26 |
Norway | $2,115,806.64 | 05-Mar-02 | 27 | $2,856.34 |
St Kitts & Nevis | $3,225.31 | 11-Feb-02 | 49 | $7.90 |
Slovakia | $138,688.55 | 24-Jan-02 | 67 | $464.61 |
Sweden | $3,357,552.92 | 27-Mar-02 | 5 | $839.39 |
Switzerland | $4,131,628.52 | 08-Feb-02 | 52 | $10,742.23 |
Syria | $264,475.83 | 26-Mar-02 | 6 | $79.34 |
Thailand | $825,680.64 | 21-Feb-02 | 39 | $1,610.08 |
Tonga | $3,225.31 | 01-Jan-02 | 90 | $14.51 |
Trinidad and Tobago | $51,605.04 | 21-Mar-02 | 11 | $28.38 |
$42,332,259.40
|
$96,327.25
|
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