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Reference........HKK 5/13
D26/8
Mr. Wilde (Financial Policy and Aid Department, G65A/2)
You have asked for comments on the aid framework. I ought to begin by saying that in Mr. Carter's absence on leave I cannot be sure that the views I am going to express will be entirely in line with his thinking. But I believe that he would generally share them.
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2. It is good to know that there has been a review of the criteria which should guide our aid effort. From what you say in your circular of 7 August there has been at least some modification of the philosophy of British aid. No doubt the "moral basis" remains but if more account is to be taken of our political and commercial interests as well it seems to me that a better formula may evolve.
13. From the standpoint of this department therefore
this is a timely opportunity to comment on the aid programme. As you know we have encountered strong resistance from ODM to the proposal that aid funds should be made available for expenditure on the development of Kai Tak Airport. ODM's argument has been that Hong Kong is relatively wealthy and there- fore does not qualify for aid. In fact in the case of the two Hong Kong applications for CD&W grants which we are about to submit to ODM they have taken their opposition to the point of refusing the requests without even seeing them. Although I have not got the Kai Tak files with me I remember ODM expressing "surprise that we should sponsor" Hong Kong's request for aid. This reaction illustrates the almost auto- matic response of ODM to any request for aid which does not emanate from the poorer countries and to that extent seems to me to disregard those more hard headed considerations which ought also to have a bearing. I am not suggesting that we should give aid invariably for reasons of self-interest but only that we should have regard to self-interest as well as to the moral considerations.
14.
All this, of course, has a bearing on aid to Hong Kong.
Unless there is a change of heart, so long as Hong Kong is regarded as relatively affluent she will continue to remain at the back of the aid queue.
5. It is easy to see how current impressions of Hong Kong have been formed, but it is often less easy to find facts to substantiate them. Industrialization has brought with it serious problems in housing, immigra- tion, social welfare, communications, etc. The presence of active Communists in the Colony is always a problem, and large masses of urbanized industrial workers are better material for political agitation than predominantly rural communities.
6. Given her present prosperity, there tends to be the assumption that Hong Kong will continue to prosper. However this assumption is not necessarily correct. Hong Kong must always be prepared for political tension to come to the surface. She would therefore be greatly aided by practical demonstrations of British confidence in her future.
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