Fourteenth General Review of Quotas—Realigning Quota Shares: Further Considerations—Simulation Requests
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Borrowing Agreement with the Bank of Slovenia

Abstract

Borrowing Agreement with the Bank of Slovenia

Fourteenth General Review of Quotas—Simulation Requests from Executive Directors1

This paper presents quota simulations that were requested by Executive Directors either at the July 7 meeting of the Committee of the Whole for the 14th General Review of Quotas or communicated shortly thereafter. To further clarify these requests, staff followed up with Executive Directors and their offices. With a view to keep the number of simulations at a manageable level, the simulations presented here typically focus on a representative subset of the requests. The main assumptions, per the requests of Executive Directors, are discussed below. The requests were often made with respect to staff’s illustrative simulations for the July 7 Committee meeting; for ease of reference, the assumptions underlying these illustrative simulations are also attached.2

(i) A smaller overall quota increase—Mr. Alazzaz (Tables 1 and A1)

Table 1.

Illustrative Scenarios: Request by Mr. Alazzaz 1/

(In percent)

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Source: Finance Department.

The simulations assume a 30 percent increase of post second round quotas. The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of 0/60/40, respectively. Overrepresented countries are protected at their calculated quota share.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, compressed using a factor of 0.95.

Corresponds to Set 1 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 3A).

Corresponds to Set 2 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 4A).

Corresponds to Set 3 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 5A).

Including Korea and Singapore.

Includes all under-represented EMDCs plus other dynamic EMDCs defined as those whose PPP GDP share divided by post second round quota share is greater than 1 and who are not over-represented by more than 25 percent.

Uniform proportional reduction in the gap between calculated and post-selective quota share or GDP blend (see footnote 3) and post-selective quota share, whichever is applicable.

Table A1.

Illustrative Scenarios: Request by Mr. Alazzaz -- by Member 1/

(In percent)

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Source: Finance Department.

The simulations assume a 30 percent increase of post second round quotas. The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of 0/60/40, respectively. Overrepresented countries are protected at their calculated quota share.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, compressed using a factor of 0.95.

Corresponds to Set 1 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 3A).

Corresponds to Set 2 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 4A).

Corresponds to Set 3 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 5A).

Includes China, P.R., Hong Kong SAR, and Macao SAR.

An overall quota increase of 30 percent is assumed, using Sets 1, 2 and 3 from the June Paper (Fourteenth General Review of Quotas—Realigning Quota Shares: Further Considerations), with 0/60/40 allocation (equiproportional/selective/ad hoc), and full protection for over-represented countries against becoming under-represented.

(ii) Formula-based approach with a large selective increase—Mr. Callesen (Tables 2 and A2)

Table 2.

Illustrative Scenarios: Request by Mr. Callesen 1/

(In percent)

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Source: Finance Department.

The simulations assume a 50, 100, and 150 percent increase of post second round quotas. An initial ad hoc increase is applied to all under-represented countries to ensure that two-thirds of their respective out-of-lineness (difference between calculated and post second round quota share) is reduced. A selective approach is then applied for any additional quota increases. An additional ad hoc increase ensures that over-represented countries are protected at their calculated quota share and PRGT-eligible countries receive at least their post second round actual quota share.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

Including Korea and Singapore.

Includes all under-represented EMDCs plus other dynamic EMDCs defined as those whose PPP GDP share divided by post second round quota share is greater than 1 and who are not over-represented by more than 25 percent.

Table A2.

Illustrative Scenarios: Request by Mr. Callesen -- by Member 1/

(In percent)

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Source: Finance Department.

The simulations assume a 50, 100, and 150 percent increase of post second round quotas. An initial ad hoc increase is applied to all under-represented countries to ensure that two-thirds of their respective out-of-lineness (difference between calculated and post second round quota share) is reduced. A selective approach is then applied for any additional quota increases. An additional ad hoc increase ensures that over-represented countries are protected at their calculated quota share and PRGT-eligible countries receive at least their post second round actual quota share.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

Includes China, P.R., Hong Kong SAR, and Macao SAR.

Assuming overall increases of 50%, 100%, and 150%, an initial ad hoc increase is applied to all under-represented countries to ensure that two-thirds of their out-of-lineness (difference between calculated and post second round quota share) is eliminated. The remaining increase is then distributed selectively and as an additional ad hoc to ensure that over-represented countries are protected at their calculated quota share and PRGT-eligible countries receive at least their post second round actual quota share.

(iii) Sets 2 in the June paper with full protection at calculated quota share or the GDP blend share, whichever is greater—Mr. Fayolle and Mr. Gibbs (Tables 3 and A3)

Table 3.

Illustrative Scenarios: Request by Mr. Fayolle and Mr. Gibbs 1/

(In percent)

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Source: Finance Department.

The simulations assume a 100 percent increase of post second round quotas. The assumptions correspond to Set 2 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 4A) except that countries that are over-represented with respect to the quota formula or with respect to the GDP blend are protected at the calculated quota share or their GDP blend share, whichever is greater.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, compressed using a factor of 0.95.

The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of x/y/z, respectively.

Including Korea and Singapore.

Includes all under-represented EMDCs plus other dynamic EMDCs defined as those whose PPP GDP share divided by post second round quota share is greater than 1 and who are not over-represented by more than 25 percent.

Uniform proportional reduction in the gap between calculated and post-selective quota share or GDP blend (see footnote 3) and post-selective quota share, whichever is applicable.

Table A3.

Illustrative Scenarios: Request by Mr. Fayolle and Mr. Gibbs -- by Member 1/

(In percent)

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Source: Finance Department.

The simulations assume a 100 percent increase of post second round quotas. The assumptions correspond to Set 2 of Fourteenth General Review of Quotas-Realigning Quotas Shares-Further Considerations (Table 4A) except that countries that are over-represented with respect to the quota formula or with respect to the GDP blend are protected at their calculated quota share or their GDP blend share, whichever is greater.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, compressed using a factor of 0.95.

The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of x/y/z, respectively.

Includes China, P.R., Hong Kong SAR, and Macao SAR.

Assuming an overall increase of 100 percent, Set 2 in the June paper is modified so that countries that are over-represented with respect to the quota formula or with respect to the GDP blend are protected at the calculated quota share or the GDP blend share, whichever is greater.

(iv) Update the simulations in the March paper (Fourteenth General Review of Quotas—Realigning Quota Shares—Initial Considerations), using the data set through 2008—Mr. Guzmán and Mr. Stein (Tables 4 and A4)

Table 4.

Illustrative Scenarios: Request by Mr. Guzmán and Mr. Stein 1/

(In percent)

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Source: Finance Department.

The simulations assume a 100 percent increase of post second round quotas.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

See footnote 9 for definition of other dynamic EMDCs.

Corresponds to Table 7 in Fourteenth General Review of Quotas-Realigning Quota Shares-Initial Considerations.

Corresponds to Table 9 in Fourteenth General Review of Quotas-Realigning Quota Shares-Initial Considerations.

Corresponds to Table 11 in Fourteenth General Review of Quotas-Realigning Quota Shares-Initial Considerations.

The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of x/y/z, respectively.

Including Korea and Singapore.

Includes all under-represented EMDCs plus other dynamic EMDCs defined as those whose PPP GDP share divided by post second round quota share is greater than 1 and who are not over-represented by more than 25 percent.

Uniform proportional reduction in the gap between calculated and post-selective quota share.

Table A4.

Illustrative Scenarios: Request by Mr. Guzmán and Mr. Stein -- by Member 1/

(In percent)

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article image
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Source: Finance Department.

The simulations assume a 100 percent increase of post second round quotas.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

Other dynamic EMDCs are defined as those whose PPP GDP share divided by post second round quota share is greater than 1 and who are not over-represented by more than 25 percent.

Corresponds to Table 7 in Fourteenth General Review of Quotas-Realigning Quota Shares-Initial Considerations.

Corresponds to Table 9 in Fourteenth General Review of Quotas-Realigning Quota Shares-Initial Considerations.

Corresponds to Table 11 in Fourteenth General Review of Quotas-Realigning Quota Shares-Initial Considerations.

The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of x/y/z, respectively.

Includes China, P.R., Hong Kong SAR, and Macao SAR.

Using the updated quota data set through 2008, this simulation set updates the simulations in Tables 7, 9 and 11 of the March paper (Fourteenth General Review of Quotas—Realigning Quota Shares—Initial Considerations) which allocate the ad hoc quota increase to all under-represented countries and other dynamic EMDCs based on an overall increase of 100 percent. See Attachment II for further information on assumptions in the March paper.

Table 7.

Illustrative Scenarios: Request by Mr. Kotegawa 1/

(In percent)

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Source: Finance Department.

The simulations are based on Set 2 in Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 4A) with an overall increase of 100% and distributed in the proportion of 0/60/40 and 0/75/25. An additional amount is allocated to countries based on their contributions provided: (1) the country contributes to all of the following activities: PRGT, externally financed Fund technical assistance and the NAB; and (2) its average share in contributions relative to its post second round quota share (the Average Misalignment Factor (AMF), as defined in Mr. Weber’s scenario) is greater than 2. The eligible member may be either over-represented or under-represented under the formula. In cases where the eligible country was “capped” in Set 2, the cap is removed. For the eligible countries, their new quota share would be equal to the average of their post second round quota share (PSRQS) and the quota share that results from the selective and ad hoc increases as in Set 2 (SET2QS) increased by the AMF in percentage points (e.g. an AMF of 2 would imply a 2 percent increase in SET2QS): (PSRQS + SET2QS * (1+ AMF/100))/2.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, compressed using a factor of 0.95.

The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of x/y/z, respectively.

Including Korea and Singapore.

Includes all under-represented EMDCs plus other dynamic EMDCs defined as those whose PPP GDP share divided by post second round quota share is greater than 1 and who are not over-represented by more than 25 percent.

Uniform proportional reduction in the gap between calculated and post-selective quota share or GDP blend (see footnote 3) and post-selective quota share, whichever is applicable.

Table 9.

Illustrative Scenarios: Request by Mr. Mozhin and Virmani 1/

(In percent)

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Source: Finance Department.

The simulations assume a 100 percent increase of post second round quotas. 15 percent increase is allocated on the basis of members’ calculated quota shares. The remaining 85 percent increase is allocated on the basis of members' PPP GDP share, compressed by a factor of 0.95, and protection of PRGT-eligible countries at the individual level.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, compressed using a factor of 0.95.

Including Korea and Singapore.

Includes all under-represented EMDCs plus other dynamic EMDCs defined as those whose PPP GDP share divided by post second round quota share is greater than 1 and who are not over-represented by more than 25 percent.

Table 11.

Illustrative Scenarios: Request by Mr. Weber 1/

(In percent)

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Source: Finance Department.

The simulations assume a 100 percent increase of post second round quotas. Simulations are based on Set 2 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 4A) except that additional protection is provided to members that meet the following criteria: (i) contribute to all of the following activities:PRGT, externally financed Fund technical assistance and the NAB; (ii) the country's average share in contributions is greater than its post second round quota share; and (iii) the country is over-represented and will lose quota share relative to its post second round quota share. The maximum loss in quota share (difference between post second round and calculated quota share) for all eligible over-represented countries is reduced in proportion to the country's average out-of-lineness with respect to the 4 categories of financial contributions (PRGT loans, PRGT subsidies, technical assistance and the NAB). The out-of-lineness is definded as the country's share in the financial contributions divided by its post second round quota share.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, compressed using a factor of 0.95.

The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of x/y/z, respectively.

Including Korea and Singapore.

Includes all under-represented EMDCs plus other dynamic EMDCs defined as those whose PPP GDP share divided by post second round quota share is greater than 1 and who are not over-represented by more than 25 percent.

Uniform proportional reduction in the gap between calculated and post-selective quota share or GDP blend (see footnote 3) and post-selective quota share, whichever is applicable.

(v) Sets 2 and 3 in Fourteenth General Review of Quotas—Realigning Quota Shares: Further Considerations, assuming all countries, including advanced, participate fully in the ad hoc increase—Mr. Hockin (Tables 5 and A5)

Table 5.

Illustrative Scenarios: Request by Mr. Hockin 1/

(In percent)

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Source: Finance Department.

The simulations assume a 100 percent increase of post second round quotas.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, compressed using a factor of 0.95.

EMDCs and advanced countries that are under-represented under the formula or the GDP blend receive a uniform reduction in out-of-lineness with respect to the quota formula or the GDP blend, whichever is greater. Other assumptions correspond to Set 2 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 4A).

EMDCs and advanced countries receive a uniform reduction in out-of-lineness with respect to the GDP blend variable; Other assumptions correspond to Set 3 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 5A).

The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of x/y/z, respectively.

Including Korea and Singapore.

Includes all under-represented EMDCs plus other dynamic EMDCs defined as those whose PPP GDP share divided by post second round quota share is greater than 1 and who are not over-represented by more than 25 percent.

Uniform proportional reduction in the gap between calculated and post-selective quota share or GDP blend (see footnote 3) and post-selective quota share, whichever is applicable.

Table A5.

Illustrative Scenarios: Request by Mr. Hockin -- by Member 1/

(In percent)

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Source: Finance Department.

The simulations assume a 100 percent increase of post second round quotas.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, compressed using a factor of 0.95.

EMDCs and advanced countries that are under-represented under the formula or the GDP blend receive a uniform reduction in out-of-lineness with respect to the quota formula or the GDP blend, whichever is greater. Other assumptions correspond to Set 2 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 4A).

EMDCs and advanced countries receive a uniform reduction in out-of-lineness with respect to the GDP blend variable; Other assumptions correspond to Set 3 of Fourteenth General of Quotas-Realigning Quota Shares-Further Considerations (Table 5A).

The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of x/y/z, respectively.

Includes China, P.R., Hong Kong SAR, and Macao SAR.

Assuming an overall quota increase of 100 percent, Sets 2 and 3 in the June paper are modified so that all eligible countries participate fully in the ad hoc quota increases. The simulations assume full protection for over-represented countries at their calculated quota share. In particular:

  • ➢ For Set 2, Emerging Market and Developing Countries (EMDCs) and advanced countries that are under-represented under the quota formula or the GDP blend receive a uniform reduction in out-of-lineness with respect to the quota formula or the GDP blend, whichever is greater.

  • ➢ For Set 3, EMDCs and advanced countries receive a uniform reduction in out-of-lineness with respect to the GDP blend variable; EMDCs and advanced countries that are under-represented with respect to the quota formula but not with respect to the GDP blend are protected at their post selective quota share (as before).

(vi) Formula-based approach with large selective increase—Mr. Kiekens (Tables 6 and A6)

Table 6.

Illustrative Scenarios: Request by Mr. Kiekens 1/

(In percent)

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Source: Finance Department.

The simulations assume a 50, 100, and 150 percent increase of post second round quotas, mostly selective. The ad hoc increase is applied to ensure that (i) PRGT-eligible countries receive at least their post second round actual quota share; (ii) all under-represented countries (based on formula) receive at least 85% of their calculated quota share; and (iii) over-represented countries are protected against becoming under-represented.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

Including Korea and Singapore.

Includes all under-represented EMDCs plus other dynamic EMDCs defined as those whose PPP GDP share divided by post second round quota share is greater than 1 and who are not over-represented by more than 25 percent.

Table A6.

Illustrative Scenarios: Request by Mr. Kiekens -- by Member 1/

(In percent)

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Source: Finance Department.

The simulations assume a 50, 100, and 150 percent increase of post second round quotas, mostly selective. The ad hoc increase is applied to ensure that (i) PRGT-eligible countries receive at least their post second round actual quota share; (ii) all under-represented countries (based on formula) receive at least 85% of their calculated quota share; and (iii) over-represented countries are protected against becoming under-represented.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

Includes China, P.R., Hong Kong SAR, and Macao SAR.

Overall increases of 50%, 100%, and 150% are assumed which are primarily selective (i.e., allocated on the basis of members’ calculated quota shares). A small ad hoc increase is applied so that the simulated quota shares of all under-represented countries are at least 85 percent of their calculated quota share; over-represented countries are protected at their calculated quota share; and PRGT-eligible countries receive at least their post second round actual quota share.

(vii) Set 2 in the June paper with additional protection for countries that contribute more than proportionally (based on their quota share) to the non-GRA financed activities and the NAB—Mr. Kotegawa (Tables 7 and A7)

Table A7.

Illustrative Scenarios: Request by Mr. Kotegawa -- by Member 1/

(In percent)

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Source: Finance Department.

The simulations are based on Set 2 in Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 4A) with an overall increase of 100% and distributed in the proportion of 0/60/40 and 0/75/25. An additional amount is allocated to countries based on their contributions provided: (1) the country contributes to all of the following activities: PRGT, externally financed Fund technical assistance and the NAB; and (2) its average share in contributions relative to its post second round quota share (the Average Misalignment Factor (AMF), as defined in Mr. Weber’s scenario) is greater than 2. The eligible member may be either over-represented or under-represented under the formula. In cases where the eligible country was “capped” in Set 2, the cap is removed. For the eligible countries, their new quota share would be equal to the average of their post second round quota share (PSRQS) and the quota share that results from the selective and ad hoc increases as in Set 2 (SET2QS) increased by the AMF in percentage points (e.g. an AMF of 2 would imply a 2 percent increase in SET2QS): (PSRQS + SET2QS * (1+ AMF/100))/2.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, compressed using a factor of 0.95.

The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of x/y/z, respectively.

Includes China, P.R., Hong Kong SAR, and Macao SAR.

The simulations are based on Set 2 in Fourteenth General Review of Quotas—Realigning Quotas Shares: Further Considerations (Table 4A) with an overall increase of 100% and distributed in the proportion of 0/60/40 and 0/75/25. An additional amount is allocated to countries based on their contributions provided: (1) the country contributes to all of the following activities: PRGT, externally financed Fund technical assistance and the NAB; and (2) its average share in contributions relative to its post second round quota share (the Average Misalignment Factor (AMF), as defined in Mr. Weber’s scenario) is greater than 2. The eligible member may be either over-represented or under-represented under the formula. In cases where the eligible country was “capped” in Set 2, the cap is removed. For the eligible countries, their new quota share would be equal to the average of their post second round quota share (PSRQS) and the quota share that results from the selective and ad hoc increases as in Set 2 (SET2QS) increased by the AMF in percentage points (e.g. an AMF of 2 would imply a 2 percent increase in SET2QS): (PSRQS+SET2QS * (1+ AMF/100))/2.

(viii) Sets 2 and 3 in the June paper with a higher ad hoc element, the GDP blend without compression, and a wider range of overall increases—Ms. Lundsager (Tables 8a, 8b, A8a, and A8b)

Table 8a.

Illustrative Scenarios: Request by Ms. Lundsager 1/

(In percent)

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Source: Finance Department.

The simulations assume a 35, 50, 75, and 100 percent increase of post second round quotas. Ad hoc increase uses an uncompressed GDP blend as a distribution key in addition to the formula. Other assumptions correspond to Set 2 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 4A).

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, uncompressed.

The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of x/y/z, respectively.

Including Korea and Singapore.

Includes all under-represented EMDCs plus other dynamic EMDCs defined as those whose PPP GDP share divided by post second round quota share is greater than 1 and who are not over-represented by more than 25 percent.

Uniform proportional reduction in the gap between calculated and post-selective quota share or GDP blend (see footnote 3) and post-selective quota share, whichever is applicable.

Table 8b.

Illustrative Scenarios: Request by Ms. Lundsager 1/

(In percent)

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Source: Finance Department.

The simulations assume a 35, 50, 75, and 100 percent increase of post second round quotas. Ad hoc increase uses an uncompressed GDP blend as a distribution key. Other assumptions correspond to Set 3 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 5A).

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, uncompressed.

The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of x/y/z, respectively.

Including Korea and Singapore.

Includes all under-represented EMDCs plus other dynamic EMDCs defined as those whose PPP GDP share divided by post second round quota share is greater than 1 and who are not over-represented by more than 25 percent.

Uniform proportional reduction in the gap between the GDP blend (see footnote 3) and post-selective quota share.

Table A8a.

Illustrative Scenarios: Request by Ms. Lundsager -- by Member 1/

(In percent)

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Source: Finance Department.

The simulations assume a 35, 50, 75, and 100 percent increase of post second round quotas. Ad hoc increase uses an uncompressed GDP blend as a distribution key in addition to the formula. Other assumptions correspond to Set 2 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 4A).

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, uncompressed.

The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of x/y/z, respectively.

Includes China, P.R., Hong Kong SAR, and Macao SAR.

Table A8b.

Illustrative Scenarios: Request by Ms. Lundsager -- by Member 1/

(In percent)

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article image
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Source: Finance Department.

The simulations assume a 35, 50, 75, and 100 percent increase of post second round quotas. Ad hoc increase uses an uncompressed GDP blend as a distribution key. Other assumptions correspond to Set 3 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 5A).

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, uncompressed.

The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of x/y/z, respectively.

Includes China, P.R., Hong Kong SAR, and Macao SAR.

Sets 2 and 3 in the June paper are modified so that the ad hoc increase uses an uncompressed GDP blend (instead of the compressed GDP blend) as a distribution key. Overall quota increases of 35%, 50%, 75% and 100% are allocated between equiproportional/selective/ad hoc in the proportion of 0/30/70 percent, respectively. In addition, countries that would become under-represented are provided full protection at their calculated quota share.

(ix) Increases allocated on the basis of members’ calculated quota share and PPP GDP share—Mr. Mozhin and Mr. Virmani (Tables 9 and A9)

Table A9.

Illustrative Scenarios: Request by Mr. Mozhin and Mr. Virmani -- by Member 1/

(In percent)

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Source: Finance Department.

The simulations assume a 100 percent increase of post second round quotas. 15 percent increase is allocated on the basis of members’ calculated quota shares. The remaining 85 percent increase is allocated on the basis of members' PPP GDP share, compressed by a factor of 0.95, and protection of PRGT-eligible countries at the individual level.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, compressed using a factor of 0.95.

Including China, P.R., Hong Kong SAR, and Macao SAR.

The simulation assumes an overall quota increase of 100 percent. An increase of 15 percent is allocated on the basis of members’ calculated quota shares. The remaining 85 percent is allocated on the basis of members’ PPP GDP share, compressed by a factor of 0.95, and to ensure that PRGT-eligible countries receive at least their post second round quota share.

(x) Set 3 in the June paper using compressed PPP GDP as the distribution key, 85 percent protection for countries that are over-represented under the formula or PPP GDP —Mr. Virmani (Tables 10 and A10)

Table 10.

Illustrative Scenarios: Request by Virmani 1/

(In percent)

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Source: Finance Department.

The simulations assume a 100 percent increase of post second round quotas. The ad hoc increase is distributed to all countries that are under-represented with respect to the compressed PPP GDP share. Eligible EMDCs receive a uniform reduction in their out-of-lineness with respect to the compressed PPP GDP share (see footnote 8). Countries that are over-represented with respect to the quota formula or with respect to PPP GDP are allowed to become under-represented with respect to the quota formula or PPP GDP share by up to 15 percent, respectively. Eligible advanced countries (those which are under-represented with respect to PPP GDP) are capped at their post selective or post-second round quota share whichever is greater. PRGT-eligible countries receive at least their post-second round quota share.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

Compressed using a factor of 0.95.

Advanced countries and EMDCs that are under-represented with respect to the quota formula but not eligible for an ad hoc increase are protected at their post selective quota share (as in Set 3 in Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations).

Without the protection noted in footnote 4.

Including Korea and Singapore.

Includes all under-represented EMDCs plus other dynamic EMDCs defined as those whose PPP GDP share divided by post second round quota share is greater than 1 and who are not over-represented by more than 25 percent.

Uniform proportional reduction in the gap between the compressed PPP GDP share and post-selective quota share.

Table A10.

Illustrative Scenarios: Request by Mr. Virmani -- by Member 1/

(In percent)

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Source: Finance Department.

The simulations assume a 100 percent increase of post second round quotas. The ad hoc increase is distributed to all countries that are under-represented with respect to the compressed PPP GDP share. Eligible EMDCs receive a uniform reduction in their out-of-lineness with respect to the compressed PPP GDP share (see footnote 8). Countries that are over-represented with respect to the quota formula or with respect to PPP GDP are allowed to become under-represented with respect to the quota formula or PPP GDP share by up to 15 percent, respectively. Eligible advanced countries (those which are under-represented with respect to PPP GDP) are capped at their post selective or post-second round quota share whichever is greater. PRGT-eligible countries receive at least their post-second round quota share.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid for, their quota increases, 11th Review proposed quotas are used.

Compressed using a factor of 0.95.

Advanced countries and EMDCs that are under-represented with respect to the quota formula but not eligible for an ad hoc increase are protected at their post selective quota share (as in Set 3 in Fourteenth General of Quotas-Realigning Quota Shares-Further Considerations).

Without protection noted in footnote 4.

Including China, P.R., Hong Kong SAR, and Macao SAR.

Set 3 in the June paper (Fourteenth General Review of Quotas—Realigning Quota Shares: Further Considerations) is modified so that the ad hoc increase uses compressed PPP GDP (using a compression factor of 0.95) as the distribution key instead of the compressed GDP blend. The caps and floors are modified as follows: (i) countries that are over-represented with respect to the quota formula or with respect to PPP GDP are allowed to become under-represented with respect to the quota formula or PPP GDP share by up to 15 percent (or protected at 85 percent of their calculated quota share or 85 percent of the PPP GDP share), respectively; (ii) eligible advanced countries (those which are under-represented with respect to PPP GDP) are capped at their post selective or post-second round quota share, whichever is greater. Two variations are shown, one in which advanced countries and EMDCs that are under-represented with respect to the quota formula but not eligible for an ad hoc increase are protected at their post selective quota share (as in Set 3 in Fourteenth General Review of Quotas—Realigning Quota Shares: Further Considerations) and one without this protection. Four simulations are run with an overall increase of 100 percent distributed in the proportion of 0/60/40 and 0/40/60.

(xi) Set 2 in the June paper with additional protection for countries that contribute more than proportionally (based on their quota share) to the non-GRA financed activities and the NAB—Mr. Weber (Tables 11 and A11)

Table A11.

Illustrative Scenarios: Request by Mr. Weber -- by Member 1/

(In percent)

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Source: Finance Department.

The simulations assume a 100 percent increase of post second round quotas. Simulations are based on Set 2 of Fourteenth General Review of Quotas-Realigning Quota Shares-Further Considerations (Table 4A) except that additional protection is provided to members that meet the following criteria: contribute to all of the following activities: PRGT, externally financed Fund technical assistance and the NAB; (ii) the country's average share in contributions is greater than its post second round quota share; and (iii) the country is over-represented and will lose quota share relative to its post second round quota share. The maximum loss in quota share (difference between post second round and calculated quota share) for all eligible over-represented countries is reduced in proportion to the country's average out-of-lineness with respect to the 4 categories of financial contributions (PRGT loans, PRGT subsidies, technical assistance and the NAB). The out-of-lineness is definded as the country's share in the financial contributions divided by its post second round quota share.

Includes ad hoc increases for 54 eligible members that are not yet effective; also includes Kosovo and Tuvalu which became members on June 29, 2009 and June 24, 2010, respectively. For the two countries that have not yet consented to, and paid fo their quota increases, 11th Review proposed quotas are used.

GDP blended using 60 percent market and 40 percent PPP exchange rates, compressed using a factor of 0.95.

The overall increase is distributed to members on an equiproportional, selective and ad hoc basis in the proportion of x/y/z, respectively.

Including China, P.R., Hong Kong SAR, and Macao SAR.

Simulations based on Set 2 in Fourteenth General Review of Quotas—Realigning Quota Shares: Further Considerations are included, with an overall quota increase of 100 percent and a 0/60/40 (equiproportional/selective/ad hoc) distribution. A country would need to meet the following criteria to qualify for additional protection based on contributions: (1) Contribute to all of the following activities: PRGT, externally financed Fund technical assistance and the NAB; (2) The country’s average share in contributions is greater than its post second round quota share; and (3) The country is over-represented and will lose quota share relative to its post second round quota share. The maximum loss in quota share for an over-represented country (AQS-CQS) is reduced in proportion to the country’s average out-of-lineness (AMF) with respect to the four categories of financial contributions (PRGT loans, PRGT subsidies, technical assistance and the NAB). The out-of-lineness (AMF) is defined as the country’s share in the financial contribution divided by its post second round quota share.

Attachment 1. Assumptions for Ad hoc Increases in June Quota Paper (Fourteenth General Review of Quotas—Realigning Quota Shares: Further Considerations)

Methods used for allocating ad hoc increases:

Set 1: Ad hoc increases to dynamic EMDCs (Tables 3A and 3B, and Tables A1 and A2).

The ad hoc increases are allocated mainly to under-represented EMDCs and other EMDCs that meet the dynamic criterion based on their share in PPP GDP (see Box 1 of Fourteenth General Review of Quotas—Realigning Quota Shares: Further Considerations). Eligible over-represented EMDCs receive a given fixed percentage increase over their post selective nominal quota “the minimum ad hoc increase to dynamic EMDCs;” eligible under-represented EMDCs receive the uniform reduction of out-of-lineness or the minimum ad hoc increase allocated to dynamic EMDCs, whichever is greater; advanced countries that are under-represented under the quota formula are protected at their post selective quota share.

Set 2: Ad hoc increases to countries that are under-represented either with respect to the quota formula or with respect to the GDP blend variable.3 A county is under-represented with respect to the GDP blend if its post selective quota share4 is smaller than its share in the GDP blend variable.

EMDCs that are under-represented under the quota formula only, receive a uniform reduction in out-of-lineness with respect to the quota formula; EMDCs that are under-represented under the GDP blend only, receive a uniform reduction in out-of-lineness with respect to the GDP blend variable; EMDCs that are under-represented with respect to the quota formula as well as with respect to the GDP blend variable, receive the greater of the two uniform reductions; advanced countries that are under-represented under the GDP blend only are capped at their post second round quota share; advanced countries that are under-represented under the quota formula only or under both criteria, are capped at their post selective quota share.

Set 3: Ad hoc increases to countries that are under-represented with respect to the GDP blend variable.

Eligible EMDCs receive a uniform reduction in out-of-lineness with respect to the GDP blend variable; eligible advanced countries that are over-represented with respect to the quota formula are capped at their post second round quota share; eligible advanced countries that are under-represented with respect to the quota formula are capped at their post selective quota share; countries that are under-represented with respect to the quota formula but not with respect to the GDP blend are protected at their post selective quota share

Protection for over-represented countries: countries that are over-represented with respect to the quota formula are either fully or partially protected against becoming under-represented. With full protection, the simulated quota share of an over-represented country cannot fall below its calculated quota share. With partial protection, the simulated quota share of an over-represented country cannot fall below 95 percent of its calculated quota share.5

Protection for the poorest: PRGT-eligible countries receive at least their post second round actual quota share.

Attachment 2. Assumptions for Ad hoc Increases in March Quota Paper (Fourteenth General Review of Quotas—Realigning Quota Shares—Initial Considerations)

In addition to purely selective increases (Tables 5 and 3a of Fourteenth General Review of Quotas—Realigning Quota Shares—Initial Considerations), ad hoc increases were illustrated based on three different groups of countries:

(i) all under-represented countries: all eligible under-represented advanced countries and EMDCs receive a uniform proportionate reduction in out-of-lineness (as measured by the difference between its calculated and post-selective/equiproportional quota share). Table 6 and 4a of Fourteenth General Review of Quotas—Realigning Quota Shares—Initial Considerations;

(ii) all under-represented countries and other dynamic EMDCs: In case (ii), eligible under-represented advanced countries receive a uniform reduction in out-of-lineness. Eligible under-represented EMDCs receive a uniform proportionate reduction in out-of-lineness or the minimum percentage increase above their post selective nominal quota, whichever is greater; eligible over-represented EMDCs receive the minimum percentage increase above their post selective nominal quota. Tables 7, 9, 11, 5a, 7a, and 9a of Fourteenth General Review of Quotas—Realigning Quota Shares—Initial Considerations.

(iii) dynamic EMDCs: dynamic EMDCs include all under-represented EMDCs plus other dynamic EMDCs defined as those whose PPP GDP share divided by post second round quota share is greater than 1 and not over-represented by more than 25 percent. Eligible under-represented EMDCs receive a uniform proportionate reduction in out-of-lineness or the minimum percentage increase above their post selective nominal quota, whichever is greater; eligible over-represented EMDCs receive the minimum percentage increase above their post selective nominal quota. For under-represented advanced economies, which are assumed to forego ad hoc increases, their final quota share cannot fall below their post second round quota share. Tables 8, 10, 12, 6a, 8a, and 10a of Fourteenth General Review of Quotas—Realigning Quota Shares—Initial Considerations.

Protection of over-represented countries: countries are protected against becoming under-represented (they receive at least their calculated quota share) except in the simulations which included an equiproportional element and a small ad hoc quota increase (Tables 11-12 and 9a-10a of Fourteenth General Review of Quotas—Realigning Quota Shares—Initial Considerations).

Protection of the Poorest: PRGT-eligible countries receive at least their post second round actual quota share.

1

Prepared by a staff team led by S. Bassett and comprising H. Lin, R. Rozenov, L. Kohler, H. Treichel, C. Visconti, B. Wennerholm, and C. Reinisch. T. Krueger (all FIN) also contributed.

2

See also Fourteenth General Review of Quotas-Realigning Quota Shares: Further Considerations (6/22/2010).

3

Consistent with the quota formula, the GDP blend variable is a weighted average of GDP at market prices (60 percent) and PPP GDP (40 percent), compressed by a factor of 0.95.

4

A country’s post selective quota share is the simulated quota share that would result if only the equiproportional and selective increase were implemented.

5

Specifically, to ensure that countries do not become out-of-line by more than 5 percent, the lower limit is set at CQS/(1+0.05) which is equal to 95.24 percent of calculated quota share.

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