territory could absorb the additional aid, and that so far as possible aid would continue to be devoted to the promotion of economic growth, a substantial proportion would in practice be devoted to social infrastructure, and this might tend to produce internal economic stresses leading to inflation and social problems; the territories would inevitably be committed to increased recurrent expenditure not matched by local revenue. Even if local resources were tapped to the limit through taxation, the end result in many territories would be prolonged if not permanent financial dependence on Britain for budgetary aid and for expatriate personnel. The long term risks would have to be weighed against any short term political advantages in choosing this option.
Conclusions
19.
To sum up, it is timely to review our policy towards the remaining seventeen dependencies and five Associated States, both in terms of their future political development and economic aid. In doing so we may have to make a choice between HMG's own interests which generally tend to lie in the direction of "accelerated decolonisation", and those of the inhabitants of the territories which in some cases at least might lie in continued dependence. We may be faced with a rather similar choice in considering future aid policy: that is whether to continue aid at about the present level with the ultimate objective of promoting economic independence at tolerable standards of living, or alternatively to provide more aid aiming at rather higher standards, even if these are unlikely ever to be self-sustaining, and accepting that this may commit us to indefinitely continued financial aid, incompatible with economic independence. In any case the circumstances, needs and resources of individual territories differ so widely that these questions have to be considered and answered separately in relation to each.
Recommendations
20a. The FCO (in consultation as appropriate with ODM, MOD and MPT) should, therefore, set in train individual
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