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aid can further serve our economic and political interests. Overseas private
investment, however, as distinct from exports and domestic industrial opportunities,
was not examined in depth, as the 1971 Cand Paper 4656 has already set out fresh
Government policies in this sphere, whose impact cannot yet be fully assessed.
Similarly the use of aid to support new British initiatives in the minerals field
in developing countries was not examined, as it has been considered by the Working
Party on Raw Materials Procurement and Foreign Policy.
6
Because of the pressures on the aid programme, it is important, in
considering our economic interests, to distinguish between the distribution of our
aid between countries and institutions and the ways in which the aid so distribu-
ted can best be used. These ways can themselves have different effects on the
balance of payments and on the internal economy of the UK. Insofar as aid is used
to procure goods and services in the UK the cost in foreign exchange is reduced;
and there may also be a reduction in the claim on our real resources if orders
fall on sectors of British industry which are slack. The report examines the
possibility mentioned in the Adams Report of steering our aid towards the projects,
goods and services which both accord with the recipient governments' plans for
development and offer best prospects for ultimate commercial gain. Paragraphs 29
to 32 set out the ways in which capital aid might help these processes, primarily
by promoting additional exports on commercial terms. Annex D lists the goods to
which these considerations appear at present to apply most strongly.
commercial and developmental interests would be in broad harmony.
Here the
7. There is also the possibility of procuring aid financed contracts to tide
particular industries suffering from a temporary lack of demand over periods of
difficulty. Paragraphs 33 to 37 discuss the circumstances in which this might
be achieved. It would have to be undertaken with discretion but need not conflict
with our developmental objectives. The limited circumstances in which there might
/be
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