MIGA BILL:
HOUSE OF COMMONS COMMITTEE STAGE
SPEAKING NOTES
CLAUSE 2: PAYMENTS TO AND FROM THE AGENCY
As explained in the "Notes on Clauses", we shall be obliged to
pay 10% of the cost of our shareholding (probably US$5,258,520) in cash, and the same amount in promissory notes, within 90 days of the Convention entering into force for the United Kingdom. The
remaining 80% (US$42,068,160) will be callable. There may also
be further payments to MIGA, eg a British contribution to any increase in MIGA's authorised capital. In the unlikely event
that sums would be received from MIGA (eg refund of capital which has been called), they would be paid into the Consolidated Fund. Any such further payments or receipts from MIGA would be subjects of statutory instruments, drafts of which would be laid before this House for its approval.
It is intended that MIGA will be financially self-sufficient, and that earnings from payment of premia, fees and other charges will
be enough to meet its claims payments and its administrative
expenses. The 10% of share cost paid in cash is designed to
cover start-up costs, administrative expenditure and possible
claims until a reserve is built up from payments of premia, fees
etc. It is not directly related to the scale of MIGA's
operations; although the total amount of MIGA's initial
contingent liabilities will be limited to 15% of its unimpaired
subscribed capital and its reserves plus (in certain
circumstances) part of its reinsurance cover.
MIGA is intended to benefit developing countries in particular,
so it is right that our contributions should be treated as an Aid
expenditure. We shall be reporting our contributions to the
Development Assistance Committee (DAC) on that basis. However,
half the initial cash contribution from UK will not be met from
existing ODA resources. This proportion will be met from the
Reserve, and there will be a corresponding increase in the ODA's
cash limit.
No comments yet.
Private notes are available after approval.