WORLD HEALTH ORGANIZATION FIFTY-SECOND WORLD HEALTH ASSEMBLY Agenda item 15 A52/27 18 May 1999
Status of collection of assessed contributions, including Members in arrears to an extent which would justify invoking Article 7 of the Constitution Second report of the Administration, Budget and Finance Committee of the Executive Board to the Fifty-second World Health Assembly
INTRODUCTION 1. The Administration, Budget and Finance Committee (ABFC) met on 14 May 1999 under the chairmanship of Mr H. Voigtländer to consider, inter alia, the subject of the status of collection of assessed contributions including Members in arrears to an extent which would justify invoking Article 7 of the Constitution (see Annex 3). 2. The Committee noted that the rate of collection of annual assessed contributions at the end of 1998 was 77.9% of the assessed amounts, which is much in line with the previous two years. As at 31 December 1998, 88 Members (one more than 1997) had not paid their current year’s assessment in full, including 63 Members (two more) which had made no payment for the year. 3. The Committee further noted that at 30 April 1999 collections from contributions due in respect of the regular budget amounted to 24.6% of assessed contributions for 1999, in addition to unpaid arrears for prior years amounting to US$ 156 million. Thirty Members were in arrears to an extent which would justify invoking Article 7 of the Constitution. 4. The Committee noted that the voting privileges of 25 Members (Afghanistan, Antigua and Barbuda, Armenia, Azerbaijan, Bosnia and Herzegovina, Central African Republic, Chad, Comoros, Dominican Republic, Djibouti, Equatorial Guinea, Georgia, Guinea-Bissau, Iraq, Kazakhstan, Kyrgyzstan, Latvia, Liberia, Niger, Republic of Moldova, Somalia, Tajikistan, Turkmenistan, Ukraine and Yugoslavia) had been suspended, and that suspension will continue at the Fifty-second World Health Assembly and subsequent health assemblies until the arrears have been reduced to a level below the amount which would justify invoking Article 7 of the Constitution. 5. By resolution WHA51.2 the Health Assembly had decided to suspend the voting privileges of Ecuador and Gambia as from the opening of the Fifty-second World Health Assembly if those Members were still in arrears in the payment of their contributions to an extent which would justify invoking Article 7 of the Constitution.
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6. The Committee was informed that as a result of a payment made by Ecuador, the decision taken by resolution WHA51.2 in respect of Ecuador had lapsed and would not take effect. 7. The Committee noted that as at 30 April 1999, Guinea, Libyan Arab Jamahiriya and Yemen were in arrears in amounts that equalled or exceeded the amounts due from them for the preceding two full years. As a result of payments made in May 1999 by Libyan Arab Jamahiriya and Yemen, Article 7 of the Constitution would not be invoked for those two countries at the current Assembly, and they should be deleted from the list in Annex 3 of document EBABFC11/2. Pursuant to resolution WHA41.7, unless there are exceptional circumstances justifying a different measure, the Fifty-second World Health Assembly would adopt a decision under which the voting rights of Guinea would be suspended as from the opening of the Fifty-third World Health Assembly. 8. Concern was expressed at the total amount of US$ 75 million owed by these Members in respect of prior years and at the fact that Article 7 of the Constitution would apply to 30 Member States as at 30 April 1999. The Committee noted the large amount collectively owed by the countries with economies in transition. The Committee agreed that, in view of this situation and the difficulties associated with making distinctions between the circumstances prevailing in the countries on the list, the suspension provisions should be systematically applied to all Members concerned. 9. The Committee examined the requests of Latvia and Liberia, which had requested that their arrears should be rescheduled and their voting rights restored. 10. The Committee also reviewed a request from Nicaragua that its arrears payable to WHO should be written off in view of the economic hardship caused by Hurricane Mitch. The Committee did not feel, however, that there was sufficient justification for this course of action.
RECOMMENDATIONS 11. In view of the above, the Committee recommended the following resolution for consideration by the Fifty-second World Health Assembly: The Fifty-second World Health Assembly, Having considered the second report of the Administration, Budget and Finance Committee of the Executive Board to the Fifty-second World Health Assembly on Members in arrears in the payment of their contributions to an extent which would justify invoking Article 7 of the Constitution; Noting that, at the time of opening of the Fifty-second World Health Assembly, the voting rights of Afghanistan, Antigua and Barbuda, Armenia, Azerbaijan, Bosnia and Herzegovina, Central African Republic, Chad, Comoros, Djibouti, Dominican Republic, Equatorial Guinea, Georgia, Guinea-Bissau, Iraq, Kazakhstan, Kyrgyzstan, Latvia, Liberia, Niger, Republic of Moldova, Somalia, Tajikistan, Turkmenistan, Ukraine and Yugoslavia remained suspended, such suspension to continue until the arrears of the Member State concerned have been reduced, at the present or future Health Assemblies, to a level below the amount which would justify invoking Article 7 of the Constitution;
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Noting that, in accordance with resolution WHA51.2, the voting privileges of Gambia have been suspended as from 17 May 1999 at the opening of the Health Assembly, such suspension to continue until the arrears of Gambia have been reduced to a level below the amount which would justify invoking Article 7 of the Constitution; Noting that Guinea was in arrears at the time of the opening of the Fifty-second World Health Assembly to such an extent that it is necessary for the Health Assembly to consider, in accordance with Article 7 of the Constitution, whether or not the voting privileges of Guinea should be suspended at the opening of the Fifty-third World Health Assembly, 1. EXPRESSES great concern at the large number of Members that have been in arrears in the payment of their contributions in recent years to an extent which would justify invoking Article 7 of the Constitution and the unprecedented level of contributions owed by them; 2. URGES the Members concerned to regularize their position at the earliest possible date;
3. FURTHER URGES Members that have not communicated their intention to settle their arrears to do so as a matter of urgency; 4. REQUESTS the Director-General and Regional Directors to approach the Members in arrears to an extent which would justify invoking Article 7 of the Constitution, with a view to pursuing the question with the governments concerned; 5. REQUESTS the Executive Board, in the light of the Director-General’s report to the Board at its 105th session in 2000, and after the Members concerned have had an opportunity to explain their situation to the Board, to report to the Fifty-third World Health Assembly on the status of payment of contributions; 6. DECIDES: (1) that in accordance with the statement of principles in resolution WHA41.7 if, by the time of the opening of the Fifty-third World Health Assembly, Guinea is still in arrears in the payment of its contributions to an extent which would justify invoking Article 7 of the Constitution, its voting privileges shall be suspended as from the said opening; (2) that any suspension which takes effect as aforesaid shall continue at the Fifty-third and subsequent Health Assemblies, until the arrears of Guinea have been reduced to a level below the amount which would justify invoking Article 7 of the Constitution; (3) that this decision shall be without prejudice to the right of any Member to request restoration of its voting privileges in accordance with Article 7 of the Constitution. 12. The Committee further recommended that in respect of the proposals of Latvia and Liberia the draft resolutions contained in Annex 1 and Annex 2 to this document respectively, should be adopted. With respect to the request from Nicaragua for the write-off of its arrears, the Committee recommended that the request should not be accepted.
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ANNEX 1 DRAFT RESOLUTION ON THE REQUEST FROM LATVIA FOR RESCHEDULING OF ARREARS
The Fifty-second World Health Assembly, Having considered the second report of the Administration, Budget and Finance Committee of the Executive Board on Members in arrears in the payment of their contributions to an extent which would justify invoking Article 7 of the Constitution, with respect to Latvia’s request for the settlement of its outstanding contributions, and the terms of that proposal as set forth in the report of the Director-General to the Administration, Budget and Finance Committee,1 1. DECIDES to restore the voting privileges of Latvia at the Fifty-second World Health Assembly;
2. ACCEPTS as an interim measure, that Latvia should settle its outstanding contributions for 1999 of US$ 100 450 before the end of 1999 and liquidate the contributions that remain outstanding in respect of the period 1993-1998 inclusive, totalling US$ 2 148 600, in five equal annual instalments as follows: US$ 1999 2000 2001 2002 2003 429 720 429 720 429 720 429 720 429 720
payable in each of the years 1999 to 2003, subject to the provisions of Financial Regulation 5.6, in addition to the annual contributions due during the period; 3. DECIDES that, in accordance with Article 7 of the Constitution, voting privileges will be automatically suspended again if Latvia does not meet the requirements laid down in paragraph 2, and, notwithstanding the provisions of Financial Regulation 5.8, payment of the 1999 instalment of Latvia’s contribution for the financial period 1998-1999 and contributions for subsequent periods shall be credited to the financial period concerned; 4. REQUESTS the Director-General to report to the Fifty-third World Health Assembly on the prevailing situation; 5. REQUESTS the Director-General to communicate this resolution to he Government of Latvia.
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Annex 5 of document EBABFC11/2 (attached as Annex 3).
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ANNEX 2 DRAFT RESOLUTION ON THE REQUEST FROM LIBERIA FOR RESCHEDULING OF ARREARS
The Fifty-second World Health Assembly, Having considered the second report of the Administration, Budget and Finance Committee of the Executive Board on Members in arrears in the payment of their contributions to an extent which would justify invoking Article 7 of the Constitution, with respect to Liberia’s request for the settlement of its outstanding contributions, and the terms of that proposal as set forth in the report of the Director-General to the Administration, Budget and Finance Committee,1 1. DECIDES to restore the voting privileges of Liberia at the Fifty-second World Health Assembly;
2. ACCEPTS as an interim measure, that Liberia should settle its outstanding contributions for 1999 of US$ 8370 before the end of 1999 and liquidate the contributions that remain outstanding in respect of the period 1989-1998 inclusive, totalling US$ 356 682, over a five-year period as follows: US$ 1999-2002 2003 71 336 per year 71 338
payable in each of the years 1999 to 2003, subject to the provisions of Financial Regulation 5.6, in addition to the annual contributions due during the period; 3. DECIDES that, in accordance with Article 7 of the Constitution, voting privileges will be automatically suspended again if Liberia does not meet the requirements laid down in paragraph 2, and, notwithstanding the provisions of Financial Regulation 5.8, payment of the 1999 instalment of Liberia’s contribution for the financial period 1998-1999 and contributions for subsequent periods shall be credited to the financial period concerned; 4. REQUESTS the Director-General to report to the Fifty-third World Health Assembly on the prevailing situation; 5. REQUESTS the Director-General to communicate this resolution to the Government of Liberia.
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Annex 6 of document EBABFC11/2 (attached as Annex 3).
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A52/27 ANNEX 3
WORLD HEALTH ORGANIZATION ADMINISTRATION, BUDGET AND FINANCE COMMITTEE OF THE EXECUTIVE BOARD Eleventh meeting Provisional agenda item 3 EBABFC11/2 13 May 1999
Status of collection of assessed contributions, including Members in arrears to an extent which would justify invoking Article 7 of the Constitution Report by the Director-General
1. In order that WHO may deliver its approved programme in full, the contributions from Member States have to be received in total and on time. Low annual collection rates have been of serious concern to successive Executive Boards and Health Assemblies. 2. The rate of collection in 1998 was only 77.9% of the amount due. Contributions in full had been received from 105 of the 193 Member States. Annex 1, Figures 1 and 2, show graphically a declining trend in, or level of, collections and rising arrears for the past 10 years. As a result of this decline, the Organization cannot fulfil its programme activities without significant internal borrowing. 3. All Member States are required under Financial Regulation 5.6 to pay their contributions as of 1 January of the year in which they are due. Annex 2 shows the status of collection as at 30 April 1999 for all Members and Associate Members. As at 30 April 1999, collections of contributions due in 1999 in respect of the effective regular budget amounted to 24.6% (US$ 102 million) of the assessments on the Members concerned as compared with 21.7% in 1998 and 33.4% in 1997 (see Annex 1, Figure 1). Unpaid prior years’ arrears total US$ 156 million as at 30 April 1999 (Annex 1, Figure 2). 4. Late payment imposes a significant administrative burden on the Organization and ties up resources which could in other circumstances be more productively used to the benefit of technical activities. The current incentive scheme, designed to reward Members which pay on time, appears to be less than effective, and is currently under review in order to improve it. 5. Article 7 of the Constitution states that “If a Member fails to meet its financial obligations to the Organization ... the Health Assembly may ... suspend the voting privileges to which a Member is entitled”. The situation at 30 April 1999 is summarized in the following paragraphs. 6. Prior years’ debt owed by 30 Members in arrears is US$ 75 million, an increase of US$ 7 million (10%) from 1998 (see Annex 1, Figure 3).
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7. The total number of Members in arrears has decreased from 32 at 30 April 1998 to 30 at 30 April 1999 (see Annex 1, Figure 4). 8. In accordance with previous Health Assembly resolutions, the voting privileges of 25 Members (Afghanistan, Antigua and Barbuda, Armenia, Azerbaijan, Bosnia and Herzegovina, Central African Republic, Chad, Comoros, Djibouti, Dominican Republic, Equatorial Guinea, Georgia, Guinea-Bissau, Iraq, Kazakhstan, Kyrgyzstan, Latvia, Liberia, Niger, Republic of Moldova, Somalia, Tajikistan, Turkmenistan, Ukraine and Yugoslavia) will remain suspended at the Fifty-second and subsequent Health Assemblies until the arrears have been reduced to a level below the amount which would justify invoking Article 7 of the Constitution (see Annex 3). 9. The voting privileges of Ecuador and Gambia will be suspended as from the opening of the Fiftysecond World Health Assembly on 17 May 1999 if at that time these Members are still in arrears in the payment of their contributions to an extent which would justify invoking Article 7 of the Constitution, in accordance with resolution WHA51.2 adopted by the Fifty-first World Health Assembly. 10. Unless there are exceptional circumstances justifying a different measure, the Fifty-second World Health Assembly will adopt a resolution under which the voting rights of Guinea, Libyan Arab Jamahiriya and Yemen will be suspended as from the opening day of the Fifty-third World Health Assembly in May 2000, if at that time they are still in arrears in amounts which equal or exceed the amounts due from them for the preceding two full years. 11. Annex 4 lists the above 30 Members ranked in order of indebtedness and provides a detailed analysis, together with a summary, of the Members concerned, indicating rankings by size of prior years’ debt, frequency with which they have appeared on the list of Members subject to Article 7, and grouping by United Nations country classification and WHO region. 12. Letters from Latvia (Annex 5) and Liberia (Annex 6) have been received requesting rescheduling of their arrears and restoration of their voting privileges. A letter has been received from the Minister for Foreign Affairs of Nicaragua (Annex 7) requesting that the full debt of Nicaragua should be written off because of economic hardships sustained as a result of Hurricane Mitch. A letter has also been received from Antigua and Barbuda indicating that it would like to come to an arrangement to pay its arrears over time. It has been requested to submit a proposal, which, if received in time, will be presented to the Committee.
ACTION BY THE ADMINISTRATION, BUDGET AND FINANCE COMMITTEE 13. No action is required by the Committee in respect of those Members whose voting privileges have already been suspended under previous Health Assembly resolutions, or of those Members which may lose their voting privileges as from 17 May 1999 under resolution WHA51.2 (if by that time these Members are still in arrears in the payment of their contributions to an extent which justifies invoking Article 7 of the Constitution). 14. The Committee may wish to draft a resolution in accordance with the principles stated in resolution WHA51.2, for consideration by the Fifty-second World Health Assembly in respect of Guinea, Libyan Arab Jamahiriya and Yemen.
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15. The Committee may wish to consider the proposals for rescheduling made by Latvia and Liberia, and the request for the writing-off of debt from Nicaragua, and to comment thereon to the Health Assembly.
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ANNEX 1
Figure 1. Percentage rate of collection of contributions at end April 1990 to 1999 Percentage 60 50 40 30 20 10 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Year 34 50 46 42 32 42 31 33 22 25 WHO99203
US$ millions 250 200 150 100
Figure 2. Unpaid prior years’ arrears to the regular budget at end April 1990 to 1999 WHO99204
191 158 108 154 156
95 51 47 63
94
50 0 1990
1991
1992
1993
1994 1995 Year
1996
1997
1998
1999
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Annex 1
Figure 3. Prior years’ debt of members subject to article 7 of the Constitution at end April 1994 to 1999 US$ millions 90 80 70 60 50 40 30 22 20 10 0 1994 WHO99205
75 67 61 45 68
1995
1996 Year
1997
1998
1999
Figure 4. Number of members subject to article 7 of the Constitution at end April 1994 to 1999 Members 50 40 30 20 10 0 1994 1995 1996 Year 1997 1998 1999 25 45 WHO99206
41
38 32 30
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