CONFIDENTIAL
share of about 9.6% of the resources made available for the IDA und the fourth replenishment. The reasons for the reduced scale of procurement from British firms are not known and the LOT is pursuing with individual firms an investigation into the attitudes of UK firms towards business generated through the international lending agencies and the World Bank Group in particular.
46 In the case of the EEC, the main elements are EEC food aid and the European Development Fund. The UK element of the EEC food aid, which could rise to £50m by 1979/80, creates no direct demand for UK goods and services. The developmental arguments for this aid are finely balanced, since possible additions to world aid flows by food aid from our EEC partners are offset by doubts about geographical allocation, cost-effectiveness and disincentive effects on 1dc food production. It is difficult to see how further increases in this aid can assist UK exports. There should be more scope for UK benefit from procurement from the EDF, to which the UK contribution could rise to £30m by 1979/80, but we have so far gained little commercial advantage and further efforts will be needed to ensure that we make maximum use of the trade opportunities.
47
Whether or not there is any commercial advantage to be gained from changing the present ratio of multilateral/bilateral aid is a longer term question which Departments are considering, and this will depend to some extent on the results of the DOT investigation referred to in para 45. Ministers may wish to note that this is under review.
48 There are a number of minor steps which might be taken meanwhile to improve the UK share of the commercial work arising from multi- lateral aid. These are:
(a)
(b)
to emphasise to UK permanent representatives to multi- lateral agencies the need to maintain close liaison with the DOT on export opportunities.
to remind other overseas Posts of the need to try to influence the selection of projects funded through multilateral agencies and to feed information back to DOT regarding future projects at the earliest possible stage.
to review the arrangements for making UK firms aware of opportunities through multilateral aid.
(c)
(d)
to consider ways of strengthening DGVIII in Brussels with UK personnel.
(e)
(f)
to seek to ensure that we achieve a satisfactory form of tender documentation in the EDF so as to ensure fair competition with other EEC suppliers.
to explore ways of associating multilateral finance with UK commercial funds in projects which benefit UK exporters.
Much of this is already in hand.
X
IMPLEMENTATION OF RECOMMENDATIONS
49
We have suggested in this Report a number of measures designed to improve the commercial benefit we obtain from UK aid, and there is no doubt that to some degree their implementation will involve a
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