CONFIDENTIAL

British aid to Indo-China

The Minister of Overseas Development has over-ruled her officials

who have recommended a continuance of our aid programmes in Indo-China

on current lines. We have yet to be told exactly what cuts are to be

made; but it is likely that the ODM will not continue the modest

capital aid programme in South Vietnam when the 'current loan agreement

of £l million for village electricity distribution and water supplies

in 1975 is spent, probably this your, A further loan offer of £1 million was

envisaged in the Aid framework, though not yet communicated to the South Vietnamese).

CONFIDENTIAL

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