GRS 450
CONFIDENTIAL
FM HONG KONG
TO HIMMEDIATE FCO
CONFIDENTIAL
TOP COPY
HKK 1001
RECLA
GISTRY
- 5 MAR 1986
TELNO 693
OF 050945Z MARCH 86
AND TO IMMEDIATE ODA
INFO HIMMEDIATE PEKING
DEGK
NDEX
PA
AjB 5/31
ASIAN DEVELOPMENT BANKT SECOND CONTRIBUTION BY HONG KONG TO THE
ASIAN DEVELOPMENT FUND
A.D.B. HAVE ASKED WHETHER WE INTEND TO CONTRIBUTE TO THE NEXT
REPLENISHMENT OF THE ASIAN DEVELOPMENT FUND (A.D.F. V) WHICH WILL
COVER THE BANK'S CONCESSIONARY LENDING FROM 1987 90 TO ITS POORER
DEVELOPING MEMBER COUNTRIES. CONTRIBUTIONS ARE PURELY VOLUNTARY.
TRADITIONAL DONORS ARE DEVELOPED COUNTRY MEMBERS, BUT HONG KONG (AND INDONESHA, KOREA AND TAIWAN) CONTRIBUTED, FOR THE FIRST TIME, TO A.D.F. IV. OURS WAS A SYMBOLIC CONTRIBUTION OF US DOLLARS 1M,
FOR DRAW DOWN BY 1992, AGAINST A TOTAL REPLENISHMENT OF MORE THAN
US DOLLARS 3B.
2. ARGUMENTS FOR A FURTHER CONTRIBUTION ARE EVENLY BALANCED. WE
WANT TO DEMONSTRATE THAT HONG KONG'S CONTINUED ACTIVITY IN THE
A.D.B. IS A REALITY WHICH WILL NOT CEASE IN 1997 OR WHEN THE P.P.C.
JOIN THE BANK. AGAINST THIS WE DO NOT WISH TO LOSE THE GROUND
GAINED WITH THE CHINESE IN THE NEGOTIATION OF OUR CONTINUED
MEMBERSHIP.
3. ARGUMENTS FOR A SMALL CONTRIBUTION INCLUDE: DEMONSTRATION THAT
WE ARE PLAYING A FULL PART AS A MEMBER OF THE BANK AND WE HAVE
SOMETHING TO OFFER OUR LESS DEVELOPED REGIONAL PARTNERS SEMICOLON
MEETING THE BANK'S EXPECTATION THAT WE ARE FINANCIALLY STRONG
ENOUGH TO PLAY OUR ROLE SEMICOLON SECURING GOODWILL IN THE BANK
AGAINST THE DAY THAT HONG KONG MIGHT ITSELF REQUIRE TO BORROW FROM
ORDINARY CAPITAL RESOURCES SEMICOLON AND INDICATION THAT HONG KONG
GOVERNMENT IS CONFIDENT ABOUT OUR FUTURE PROSPECTS AND ABILITY TO
CONDUCT NORMAL BUSINESS IN THE LEAD-UP TO 1997.
4. ARGUMENTS AGAINST ARE PRIMARILY FINANCIAL: A SECOND
SUCCESSIVE CONTRIBUTION WILL SET A PATTERN FROM WHICH IT MAY BE
DIFFICULT TO DISENGAGE SEMICOLON THERE IS NO DIRECT FINANCIAL
BENEFIT AND IT IS NOT CERTAIN THAT GOODWILL WILL BE A CASHABLE
CHEQUE. WE HAVE ALREADY DECIDED TO SUBSCRIBE TO THE THIRD GENERAL
CAPITAL INCREASE AND OUR FUTURE PARTICIPATION AT THE BANK IS
ASSURED SEMICOLON NOT ALL DEVELOPING MEMBER COUNTRIES CONTRIBUTED
TO A.D.F. IV (SINGAPORE DID NOT) AND OUR CONTINUED CONTRIBUTION
COULD BE SEEN AS CONFIRMING A MORE ADVANCED STATUS, WITH
IMPLICATIONS ON THE TRADE POLICY FRONT..ma
CONFIDENTIAL
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