QUOTAS OF THE MEMBER STATES

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QUOTAS OF THE MEMBER STATES

• TRADITIONAL METHODOLOGY
• COMPUTATION, DRAWBACKS AND ALTERNATIVES

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QUOTAS -TRADITIONAL METHOD

• The Traditional Method is the simplest approach
  to compute a scale of quota assessments
• However, it results in a scale that, under
  present circumstances, does not strictly adhere
  to the ability to pay principle

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QUOTAS -TRADITIONAL METHOD

• The methodology consists of three steps
• Establish a maximum quota of 59.47 (United
  States)
• Establish a minimum quota of 0.020 for those
  member states who pay the minimum quota at the UN
  (0.001 which applies to 8 OAS member states)
• Multiply the UN quota of the remaining 26 member
  states, whose aggregate UN quota is 8.149, by a
  factor of 4.954
• The minimum and maximum quotas are set by
  agreement among the member states
• See Annex I for calculation of this factor

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QUOTAS -TRADITIONAL METHOD

• The scale adds up to 100
• United States 59.470
• 8 member states paying minimum at UN (8 x
  0.020) 0.160
• Remaining 26 member states (8.149 x
  4.954) 40.370
• Total 100.000

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TRADITIONAL METHODSHORTCOMINGS

• The problem with this approach is that it would
  result in calculated quotas that are below the
  agreed-upon minimum of 0.020. (See Annex II)
• St. Lucia, for example, has a UN quota of 0.002.
  Multiplying it by the correction factor of 4.954
  would yield a quota of 0.010
• Similar results are obtained when the factor is
  applied to Antigua and Barbuda and Haiti, whose
  UN quota is 0.003, yielding an OAS quota of
  0.015

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TRADITIONAL METHODSHORTCOMINGS

• This situation could be remedied by applying the
  minimum quota of 0.020 to St. Lucia, Antigua and
  Barbuda, and Haiti.
• The difference in percentage points would be
  redistributed among the remaining 23 member
  states (see Annex III for results)

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TRADITIONAL METHODSHORTCOMINGS

• However, the methodology would yield undesirable
  results
• St. Lucia, which pays twice as much as 8 other
  member states at the UN, would pay the same quota
  at the OAS.
• The same situation would apply to Antigua and
  Barbuda and Haiti, which pay three times as much
  as 8 other member states and 50 more than St.
  Lucia
• This would, in essence, violate the ability to
  pay principle set forth in Article 55 of the OAS
  charter

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TRADITIONAL METHODALTERNATIVES

• The traditional methodology is essentially a
  linear, or constant-proportionality,
  calculation. As we have established, it is not
  appropriate for the calculation of OAS scales,
  given current UN quotas.
• The next alternative is an exponential
  relationship of the form
• Y aXb c
• Where
• Y OAS quota
• X UN quota, and
• a, b, and c are parameters to be determined using
  optimization methods (see Annex IV for an example
  of the resulting scale)
• This solution yields a scale that reflects the UN
  rankings and meets the constraints of minimum and
  maximum quotas

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ALTERNATIVE METHODY aXb c

• This methodology was first proposed in 1998,
  along with another variation thereof.
• The member states were unsuccessful in reaching
  an agreement on a quota scale based on any of the
  alternative methodologies presented.
• In 2000, a more sophisticated approach was first
  proposed, using logistic regression as the basis
  for a new mathematical formula. This is the
  latest methodology presented to the CAAP for
  consideration

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ANNEX ITRADITIONAL METHOD

• The following charts describe the step-by-step
  calculation of the scale using the traditional
  method

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OAS MEMBER STATES PAY 30.157 OF THE TOTAL UN
QUOTA
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CALCULATING A NEW QUOTA SCALE
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CALCULATING A NEW QUOTA SCALE
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CALCULATING A NEW QUOTA SCALE
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CALCULATING A NEW QUOTA SCALE
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CALCULATING A NEW QUOTA SCALE
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CALCULATING A NEW QUOTA SCALE
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CALCULATING A NEW QUOTA SCALE
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CALCULATING A NEW QUOTA SCALE
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ANNEX IIResulting ScaleTraditional Method

• The scale that results from applying the
  traditional methodology yields quotas for three
  member states that are below the minimum, 0.020
• The reason for this is that the minimum OAS quota
  is 10 times greater than that of St. Lucia, and
  6.67 times greater than those of Antigua and
  Barbuda and Haiti, but the proportional rate
  applied is only 4.954.
• Note that the mathematical relation applied
  preserves the UN rankings of the member states
  that is, the quota for Antigua and Barbuda is the
  same as Haitis, and these are still greater than
  that of St. Lucia

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ANNEX IIIResulting ScaleTraditional Method
w/Correction

• The scale should be corrected by enforcing the
  minimum quota on those countries whose calculated
  quota falls below 0.020.
• However, these member states are paying the same
  quota at the OAS as those who pay the minimum at
  the UN, resulting in a deviation from the
  ability to pay principle.
• For example, Haiti pays 3 times as much as
  Suriname at the UN, but both countries would pay
  the same quota at the OAS
• This distortion renders the traditional
  methodology unusable for our purposes, given
  current UN scales.

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ANNEX IVAlternative Method

• The next alternative methodology would be to use
  an exponential relationship of the form
• Y aXb c
• Where
• X UN quota
• Y OAS quota
• a 5.0891
• b 0.795326
• c -0.00092487
• This solution yields a scale that reflects the
  UN rankings and meets the constraints of minimum
  and maximum quotas