CONFIDENTIAL
1
feasible on financial and political grounds. To press this case would carry the false implication that there is no British but only a Hong Kong interest involved. It would run the risk of reopening the whole issue of the defence costs argument which, although dormant, remains potentially controversial in Hong Kong. I cannot accept that it would make sense for HMG to run these risks, at a
crucial stage of the transition, in the hope of saving
part of our share of the costs of running the patrol
craft over 5 years.
As in the case of the Falklands, I would be more
inclined if necessary to look elsewhere in Hong Kong for savings possibly through further economies in the
running of the garrison, for example, by reductions in personnel or equipment, such as helicopters. Given that the commitment is time-limited, however, I question
whether the short term budgetary benefits of economies in the Hong Kong garrison are worth the potential political risks to the delicate transition process.
The other out of area commitment which involves
substantial extra expenditure is of course the Belize Garrison. Our objective has long been to withdraw the garrison, preferably sooner rather than later. But we have been concerned not to withdraw in circumstances
which would undermine the prospects for a settlement
between Belize and Guatemala. We hope that the new government of Guatemala will accept the draft settlement negotiated by its predecessor with Belize. Meanwhile I would see no objection to beginning contingency plans for the withdrawal of the garrison and its replacement by a rapid reinforcement plan, provided that the latter could be demonstrated through periodic exercises. We must however bear in mind that the departure of the garrison