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substantial repayments of debt have been made, a
very large burden of short and medium-term
official debt remains outstanding.
These debts
The
have to be repaid in the next few years.
need for the UK to maintain a substantial and
continuing surplus on current account not only
to repay remaining debt but also to cover large
capital outflows associated with aid, overseas
investment and trade credit, and to achieve a
more sustained economic growth than in the past,
has not therefore diminished.
3. It is fully realised that Hong Kong faces
large financial commitments in the years ahead.
It was precisely for this reason that HMG
informed me, in reply to my enquiry, that they
were ready to accept £8.5 million, but only as
But
the very minimum contribution to which they could
reasonably agree. Such a contribution would do
no more than restore the situation (as regards
the proportion of total costs which it would
represent) which obtained when the current
contribution was negotiated in 1966. It would
represent some 3.9 per cent of Hong Kong's
estimated revenue for 1971/72;
in 1967/68 the
corresponding figure was 4.25 per cent;
immediately after the war it was 5.5 per cent.
4. It has long been HMG's policy that the
governments of dependent territories should
provide for their own internal security (on the
grounds that the maintenance of law and order
must be one of the first priorities of any
government) and that they should also provide as
far as possible for their own local defence.
(8430) Dd.033246 600m 9/66 G.W.B.Ltd. Gp.863
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