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11.
Aid is the provision on concessional terms of foreign exchange resources for
development to countries which cannot command these resources commercially.
If
there were a concentration of aid resources by the UK and other donors on the
developing countries which are closest to commanding full commercial procurement
and so offer the most attractive markets there would be a significant diversion of
resources away from the poorer countries. This would seriously weaken the
international developmental effort. It would not be in harmony with the
Community's policy expressed in the Summit communique to increase its effort in
aid and technical assistance to the least favoured people, and might well force
more of the poorer developing countries to choose between foregoing development
and risking the accumulation of unmanageable debts.
12. Of the three components of the total financial flows to developing countries
which count towards the target of 1% of GNP, the bulk of both private investment
and commercial credit will naturally gravitate to the wealthier developing
countries. If aid flows were also to be concentrated increasingly in these
countries only a very small proportion of total flows would find their way to the
poorer developing countries.
13. The study as a whole reinforces the view of aid as simply one important
aspect, which cannot be seen in isolation, of our relations with the Third World.
But aid is also an aspect of our relations with other donors and our membership of
In addition to the the Community will put both these aspects into a fresh focus.
Community's aid programmes through channels such as the EDF, the Community is
committed to the adoption of a comprehensive policy on development on a world-wide
scale. This Community policy could have major implications for our bilateral
programmes and may put in a different perspective much of the Adams Report, this
study and the attitude to the balance of bilateral programmes which underlies them.
14. Because of the difficulty of demonstrating the links between aid and trade we
/cannot
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