G.F. 323
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機密
ANNEX A TO XCS(75)6
DEFENCE COSTS AGREEMENT
Opening Session with the Minister of State for Defence, Rt. Hon. William Rodgers MP
28th October 1975
Minister's Statement
As you know, the purpose of my visit to Hong Kong is to put Her Majesty's Government's position on the terms of a new defence costs agreement to succeed the present arrangements which expire at the end of March 1976. The Government of Hong Kong has made a financial contribution to the cost of the Hong Kong garrison for many years in a succession of agreements.
My task is to explain to you the reasons why it is now necessary to ask for a very substantial increase in that contribution.
I want to make it clear from the outset that Her Majesty's Government's commitment to the integrity and security of Hong Kong and the well-being of its inhabitants remains unchanged. We are conscious that a garrison adequate in military terms is an important manifestation of this. It is both an assurance of internal security and an indication to the outside world of our continuing interest. But in our view it can no longer be right for Her Majesty's Government to bear so much of the financial burden of providing for your security. In past years your defence contribution has represented only a small part of the costs of the garrison. Moreover, owing to inflation and the relative movement of currencies, the contribution you under- took to make under the present agreement in 1971 has declined in value from just under 30% of the total cost to about 17% now.
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You may point out that no one could then have foreseen the impact of worldwide inflation and may offer to redress the imbalance occuring since 1971. But in Her Majesty's Government's view that could not be a sufficient step. it as inappropriate that Hong Kong's defence contribution should continue to cover only a minor part of the cost. Hong Kong is unique among our remaining dependent territories, in that it is rapidly developing economically, has considerable international economic significance in its own right, and for all practical purposes enjoys economic and financial autonomy. Indeed, if Hong Kong were to be asked to bear the full cost of the garrison, it would be in our view well within the capacity of your economy to pay.
Hong Kong's economy enjoyed rapid growth throughout the 1960s and, even after allowing for the setback of the last few years, is well placed to resume a rapid rate of growth as soon as the upturn in world trade gets underway. Even if Hong Kong bore the full cost of the garrison, this would represent only about 6% of your total public expenditure programmes and a bare 1% of total GNP. In comparison with many independent states at the same stage of economic development, which bear the whole cost of their defence, this would not be a severe burden. The time has come for Hong Kong to bear a share of its defence costs more in keeping with its wealth and economic maturity.
We recognise, as I have said, that special factors apply to Hong Kong's situation, and that the maintenance of political and economic confidence within the Colony necessitates
/some UK
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