ASIAN DEVELOPMENT BANK:
UK GUARANTEE OF HONG KONG'S
Note No A8
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OBLIGATIONS
NOTES FOR SUPPLEMENTARIES AND WINDING UP
Isn't Hong Kong too well off to be borrowing from the ADB?
The Bank's developing member countries, including Hong Kong, are eligible to
receive ADB loans under the terms of its Charter. Wealthier developing countries (in terms of GNP per capita) such as Hong Kong are only eligible for ordinary, interest bearing loans.
2.
Hong Kong indicated several years ago that it was unlikely to take up
further Bank loans, but reserved its right to do so should circumstances require
it to seek further assistance.
[Background Notes
1.0 Of 724 Bank loans, Hong Kong has received only five ordinary, interest- bearing loans, or about 0.65% of the total amount lent; the last was approved in 1980. These loans have not detracted from the Bank's ability to meet the
ordinary loan needs of other developing member countries.
2. Such loans as Hong Kong has received have been for social infrastructure projects with shorter maturities (mainly 13 years) and grace period (3 years) than might otherwise have been the case.
3. Hong Kong has had to face enormous social problems during the post-war period, arising from large scale immigration. The population has increased from 600,000 in 1945 to over 5 millions at present. The Hong Kong Government has relied almost entirely on its own resources for dealing with the territory's problems. The ADB provides one appropriate source of finance for Hong Kong. In the past, HMG has supported these few applications which Hong Kong has made to the ADB for loans, in view of its general responsibilities towards Hong Kong and of the fact that the loans in question have been for projects designed to improve the welfare of the population.