Caps and discounts on the contribution of LDCs to the United Nations system budgets

LDCs benefit from certain caps, discounts or other favourable conditions regarding their contributions to the budgets of United Nations System entities. There are two main methods for determining each Member States’ contributions to these budgets, and the LDC-specific benefits are determined accordingly:

1) Most of the United Nations system budgets are based on the scale of assessments (i.e. the percentages of the budget that each country is responsible for) used for the United Nations regular budget. The scale is determined based on capacity to pay, translated into indicators of gross national income, debt-burden, and per capita income, among others. Each Member State is assigned a percentage (the assessment rate), corresponding to the share of the regular budget its contribution will amount to. The minimum assessment rate is 0.001% and the maximum is 22%. For LDCs, the maximum rate is 0.01%. In practice, the assessment rate for many LDCs is below 0.01% due to their income and other criteria affecting the calculation of the assessment rates.

2) Certain agencies use a system based on classes of contributions, whereby countries belong to a class corresponding to a certain share or multiple shares of a pre-determined unit of contribution. LDCs are entitled to contribute at the lowest rates.

The table below summarizes the system for determining contributions and the LDC-specific concessions, as well as the effects of graduation from the LDC category.

General rules (and links to sources – see also “Resources” below) LDC-specific support What happens after graduation?
Regular budget: A scale of assessments is determined every three years in a resolution of the General Assembly, based on capacity to pay, translated into indicators of gross national income, debt-burden, and per capita income, among others. Each Member State is assigned a percentage (the assessment rate), corresponding to the share of the regular budget its contribution will amount to. The minimum assessment rate is 0.001% and the maximum is 22%. The maximum rate for LDCs is 0.01%. In practice, the assessment rate for many LDCs is below 0.01% due to their income and other criteria affecting the calculation of the assessment rates. The 0.01% cap no longer applies. This would raise the contributions of graduated countries that exceed the assessment rate of 0.01% according to the formula applied to determine capacity to pay. It has no impact for those that do not.
Peacekeeping operations: Based on the scale of assessments for the regular budget adjusted by a premium in the case of permanent members of the Security Council and discounts in the case of all countries with per capita gross national product below the Member State average. Member States are grouped into levels based on per capita GNI, with larger discounts applying for the levels of countries with lower incomes. LDCs are entitled to the greatest discount, of 90%. The applicable discount rate for most graduated countries (in 2016-2018, any with per capita GNI under USD 9,861, as per Resolution 70/246) would be 80%.

 

United Nations Mechanism for International Criminal Tribunals: Half of the budget is paid for by Member States based on the scale of assessments applicable to the regular budget of the United Nations, and half in accordance with the rates of assessment applicable to peacekeeping operations. LDCs benefit from the cap on the rate of assessment of the regular budget and the discount on the rate of assessment for peacekeeping operations. The amount due by the graduated country will increase proportionally to any increases in the rate of assessment for the regular budget or peacekeeping operations budget.
FAO, ILO, UNESCO, UNIDO, WMO, WHO, CTBTO, IAEA, ICC, IOM, ISA, ITLOS, OPCW*: Based on the scale of assessments used for the United Nations regular budget, in some cases adjusted for more restricted membership by the application of a coefficient. Same as for the regular budget.

UNIDO, one of the entities that adjusts the scale by a coefficient due to more restricted membership, does not apply this coefficient to LDCs whose rate may exceed 0.01%.

As for the regular budget, the 0.01% cap no longer applies.

For UNIDO, the waiver on the application of the coefficient no longer applies after graduation.

International Telecommunications Union (ITU): Voluntary selection of a class of contribution based on shares or multiples of an annual unit of contribution of CHF 318,000. Only LDCs can contribute 1/8 or 1/16 of a unit of contribution. The minimum contribution would in principle be ¼ of a unit of contribution. The ITU Council can authorize a graduated country to continue to contribute at the lowest classes, and all LDCs that have graduated since 2007 continue to do so (as of March, 2018).
World Intellectual Property Organization (WIPO): Voluntary selection of classes of contribution, each corresponding to a share of a unit of contribution determined for every biennium, with only certain categories of developing countries eligible to contribute in the lowest class of contribution (class S). Only LDCs can contribute at the lowest level – Ster – of the lowest class, with 1/32 of a unit of contribution. Non-LDC developing countries with an assessment rate for the regular budget of less than 0.01% contribute 1/16; non-LDC developing countries with an assessment rate for the regular budget between 0.02% and 0.10% contribute 1/8. Others contribute ¼ and up.
Universal Postal Union (UPU): Voluntary selection of class of contribution, each corresponding to a share (from one to 50 units) of a pre-determined unit of contribution (CHF 41,021 for 2018/19) Only LDCs can contribute at ½ of a unit of contribution. Graduated countries contribute at least 1 full unit of contribution.

*FAO: Food and Agriculture Organization; ILO: International Labour Organization; UNESCO: United Nations Educational, Scientific and Cultural Organization; UNIDO United Nations Industrial Development Organization; WMO: World Metereological Organization; WHO: World Health Organization; CTBTO Preparatory Commission: Preparatory Commission for the Comprehensive Nuclear-Test-Ban Treaty Organization; IAEA: International Atomic Energy Agency; ICC: International Criminal Court; IOM: International Organization for Migration; ISA: International Seabed Authority; ITLOS: International Tribunal for the Law of the Sea; OPCW: Organization for the Prohibition of Chemical Weapons.

** Contributions to funds and programmes, such as UNICEF and UNDP, are voluntary. Contributions to the World Trade Organization are determined based on members’ share of international trade with no concessions specifically for LDCs.

 

Resources

Regular budget: Committee on Contributions, General Assembly of the United Nations (http://www.un.org/en/ga/contributions/index.shtml). For the period from 2019 to 2021, the scale of assessments is defined in General Assembly Resolution 73/271. See also Report of the Committee on Contributions, Seventy-Seventh Session (5-23 June, 2017). Document (A/72/11. http://www.un.org/ga/search/view_doc.asp?symbol=A/72/11)

Peacekeeping operations: General Assembly Resolution 55/235. For the period 2019-2021, see United Nations (2018), Report of the Secretary General: Implementation of General Assembly resolutions 55/235 and 55/236 (A/73/350 and A/73/350/Add.1) and General Assembly resolution 73/272 (3 January 2019).

United Nations Mechanism for International Criminal Tribunals: “Assessment of Member States for the financing of the International Residual Mechanism for Criminal Tribunals from 1 January to 31 December 2018”. ST/ADM/SER.B/976

FAO: “Scale of Contributions 2018-2019”, Finance Committee, 166th Session (March 2017), FC 166/4 (http://www.fao.org/3/a-ms516e.pdf) and “Regular Programme Contributions” (http://www.fao.org/fileadmin/user_upload/about-fao/docs/31_May_2017_RP_Contributions_.pdf)

ILO: established practice. Draft scale for 2019 at ILO (2018), Report II Information concerning the programme and budget and other questions”, 107th session (http://www.ilo.org/wcmsp5/groups/public/—ed_norm/—relconf/documents/meetingdocument/wcms_624919.pdf).

CTBTO: “Budget” (https://www.ctbto.org/the-organization/the-provisional-technical-secretariat-pts/budget/)

ISA: “Assembly” (https://www.isa.org.jm/authority/assembly)

ITLOS: “General information” (https://www.itlos.org/general-information/)

OPCW: Chemical Weapons Convention, Article 8. (https://www.opcw.org/chemical-weapons-convention/articles/article-viii-the-organization/)

UNESCO: Status of Contributions to the Regular Budget as at October 12, 2017 (http://www.unesco.org/new/fileadmin/MULTIMEDIA/HQ/BFM/MemberStates-Status-of-Contributions.pdf)

UNIDO: Scale of assessments for the fiscal period 2018-2019 (https://www.unido.org/fileadmin/user_media/PMO/PBC/PBC33/PBC.33_6_E_Scale_of_assessments_for_the_fiscal_period_2018-2019_V1701074.pdf).

WHO: “Scale of assessments for 2018-2019 – Report by the Director-General” A70/42, March 2017 (http://apps.who.int/gb/ebwha/pdf_files/WHA70/A70_42-en.pdf)

International Telecommunications Union: Response to the Survey of UNDS Organizations concerning the reasons and consequences of the non-application of the LDC category, 2016, and ITU (2014) “How is ITU Funded?” (https://www.itu.int/en/plenipotentiary/2014/newsroom/Documents/backgrounders/pp14-backgrounder-how-is-itu-funded.pdf)

World Intellectual Property Organization (WIPO): WIPO (1999), “Constitutional Reform – Memorandum of the Secretariat” A/34/9. Assemblies of the Member States of WIPO, Thirty-Fourth Series of Meetings. P. 16.(www.wipo.int/edocs/mdocs/govbody/en/a_34/a_34_9-main1.doc)

“Contribution classes of States Members of WIPO and/or the Paris and/or Berne Unions” (http://www.wipo.int/treaties/en/contribution_classes.html).

WIPO (2017) Proposed programme and budget for the 2018/2019 biennium. (http://www.wipo.int/edocs/mdocs/govbody/en/wo_pbc_27/wo_pbc_27_8.pdf)

Universal Postal Union (UPU): “Finances” (http://www.upu.int/en/the-upu/finances.html)

See also Financial Arrangements under the Common Fund for Commodities.