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Proposal for a change in the fee system for small and less developed countries

Proposal for a change in the fee system for small and less developed countries. TERENA GA – Cyprus, 21 October 200 4. The problem. The TERENA fee system is based on the GNI of a country Countries with smaller GNI pay a smaller fee

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Proposal for a change in the fee system for small and less developed countries

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  1. Proposal for a change in the fee system for small and less developed countries TERENA GA – Cyprus, 21 October 2004

  2. The problem • The TERENA fee system is based on the GNI of a country • Countries with smaller GNI pay a smaller fee • As the relation is not linear, countries with a small GNI pay relatively more (compared with their GNI) • The problem is acute for small countries with low per-capita income (as the fee for TERENA could be larger than the yearly cost of their staff) • As a consequence TERENA could lose some of its members and not attract some possible new members • This contradicts one of the goals in TERENA activity plan “to support the development of research networking in “underserved” regions”

  3. A small adaptation would be useful • A small adaptation in the fee structure is proposed affecting only smaller countries. • Definition: A country is considered small if it is in the smallest TERENA category (one unit contribution) • Present members considered as small countries: Malta, FYRoMacedonia, Iceland, Latvia, Cyprus, Lithuania, Serbia&Montenegro.

  4. Proposal A For small countries • The membership fee would be reduced by 25% for those countries which fall in the upper middle group (WB) (i.e. Estonia, Latvia and Lithuania) • The membership fee would be reduced by 75% for those countries which fall in the groups below that (WB) (i.e. Sebia&Montenegro and FYRMacedonia) WB groups • High income economy • Upper-middle income economy • Lower middle income economy • Low income economy

  5. Proposal B • Introduce a new membership category for countries with a very low GNI. The contribution for these countries would be 0,5 units and in addition: • For small countries • The membership fee would be reduced by 20 % for those countries which fall in the upper middle group (WB) (i.e. Estonia, Latvia and Lithuania) • The membership fee would be reduced by 40 % for those countries which fall in the lower-middle group (WB) (this is Sebia&Montenegro and FYRMacedonia) • The membership fee would be reduced by 60 % for those countries which fall in the low group (WB) (no present members)

  6. Proposals A and B for present members

  7. Fee Proposals A and B for some possible future members

  8. Proposals A and B in the future • Low income countries in Europe tend to become richer • Reductions according to lower-middle and upper–middle categories will disappear • Proposal A will converge into the present system • Proposal B will evolve into a system where the present category 1 is divided in two subcategories (1 and 0,5) (really small countries will remain really small)

  9. Voting weights • Both proposals envisage lowering the voting weights according to the lowered fees. • To avoid decimal numbers all the votes are multiplied by the same number (by 4 for proposal A and by 10 for proposal B).

  10. Consequences for TERENA budget Probably neutral • The maximum cost would beProposal A:1,5 units (EUR 7,050) • Proposal B: 2,6 units (EUR 12.220) • Potential benefit would be • Some countries will continue to be members(and continue to pay their (smaller) fees) • Some new countries could now join and afford the fee (Bulgaria, Serbia and Montenegro, Bosnia and Herzegovina, Albania etc)

  11. Is it fair for others ?

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