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Mr. Carter (Hong Kong Dept.)
Hong Kong Airport
Your minute of 1 April refers. This is an ex- tremely awkward problem and with the best will in the world I find it difficult to be of help.
2.
As you suggest, the O.D.M. will doubtless fight to the last ditch. I would not relish fouling-up our relations with 0.D.M. at this stage; but there are also good F.C.0. reasons why I would be re- luctant to have this item included within the Aid Programme. As you are aware, we are stuck with a basic aid ceiling of £205 m. per annum. This is un- likely to rise in the near future and, with devalua- tion and rising costs, the real value of the Aid Programme has been seriously reduced. We are al- ready under considerable pressure and any new item on the Aid Programme can of course only be accommodated at the expense of an existing item or another claim- ant.
Our room for manoeuvre is thus seriously limited and I would much prefer to see Hong Kong raise the necessary money elsewhere. But if all else fails, we should be prepared to tackle the 0.D.M. on this.
3. If we were to do so, we should need to be con- vinced that the Hong Kong Government themselves were really dedicated to this development project and that they had no other means of financing it. Paragraph 2 of Mr. Steele's letter throws some doubt on the first point: Hong Kong's own buoyant economy throws further doubt on the second point.
(T.J. O'Brien) 10 April 1969
c.c.: Miss Brown, A.M.T.D.
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