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regime and the resistance.

In these circumstances, most refugees will presumably not return. But if interim arrangements are agreed (as both Cordovez and Zia believe to be likely), the number of returning refugees will be dictated by the perceived acceptability and durability of any settlement. Even if an ideal settlement were to be agreed, it has been estimated (by the Pakistan Ambassador in London) that up to 30% of the refugees would not return because they had found jobs or had fully settled in Pakistan. The refugee problem is therefore likely to persist, in one form or another, for some time to come.

17.

There are obvious benefits to be gained from a return of refugees:

(i) the burden on Pakistan would be considerably lightened. The tensions between the refugees and the indigenous population would reduce the strain on Pakistan's fledgling democratic institutions. (ii) (ii) a comprehensive settlement might encourage the return of highly qualified Afghan exiles from abroad, people who would be instrumental in rebuilding the country after the war.

(iii) on a bilateral level, the UK's extensive aid to the refugees could be cut down. We have provided £50 million to refugees in Pakistan since 1980 and £500,000 to refugees in Iran (as block grants to the UNHCR).

18. But there are also obvious difficulties:

(i) Many refugees would not return immediately but would wait to see how a settlement was shaping up. This might cause friction between them and a Pakistani government that wanted to be rid of their burden as quickly as possible. It would also be important to make sure that refugees actually return to their villages and not simply to slums around Kabul.

(ii) There would need to be a major programme of resettlement and reconstruction aid to Afghanistan. (We are clearly focussing on the implications and modalities of such a programme). This might be expensive. Such a programme would only feasible if a large number of refugees returned: if fighting continued on any scale, it would be difficult to implement an aid programme, even if we wished to under such circumstances.

SRI LANKA: TAMIL REFUGEES

19. On 29 July 1987 President Jayewardene and Rajiv Gandhi signed the Indo Sri Lanka Agreement, designed to resolve the ethnic conflict between Tamils and Sinhalese which has troubled Sri Lanka since inter-communal rioting broke out in 1983. The agreement provides for the linking of the northern and eastern provinces (where most Tamils live) in one administrative unit, with its own elected provincial council, governor, Chief Minister and board of Ministers. It also includes provisions for an amnesty for political and other prisoners held in custody under the Prevention of Terrorism Act. On 30 July, at the linvitation of

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