September 1981 but this could well slip. The conflicts in

and the continuing failure to

Guatemala and El Salvador

P

reach a settlement of the Guatemala/Belize dispute

had all,

in their different ways, had the effect of making independence

a divisive subject. There was now a risk of independence being

delayed and of communist influence gaining ground. Progress

had however recently been made on the question of defence after

independence; it was now proposed that British forces should

remain 'for a reasonable period' after independence, by which

time the effectiveness of local forces would have been improved

and Belize would have its own supporters in the UN and in the

region. The key to the future lay in reaching a settlement of

+

the Guatemala dispute and of obtaining US support of an

independent Belize. There was a rough year ahead but there

was still hope.

c) BVI

5.

Unlike Belize, BVI's problems were largely of the parish

pump variety. Security was good, though there was always the

risk of a sudden blow-up. The economy was set fair with tourism,

financial centre operations and the prospect of off-shore oil.

There could be political pressure for control of the civil service

and the police, though control of at least the latter would

not be surrendered by HMG in advance of independence.

Independence in a decade was possible; a perpetual commitment to

dependent status was not welcome to HMG.

d) Caymans

6.

On the political and constitutional front, the November 1980

elections had resulted, for the first time, in two political

/groupings

2

PERSONAL AND CONFIDENTIAL

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