RESTRICTED
RESTRICTED
FM FCO
TO PRIORITY HONG KONG
TELNO 539
OF 28090OZ MAY 93
HKB 091/3
RECEIVED IN REGISTRY
1 J! 100-
DESK OFFICER
PA
REGISTRY Action Taken
KING
AND TO PRIORITY PEKING
389
117324
MDLOAN 4589
TOP COPY Q DIST?
OECD: DAC LIST: HONG KONG
·
1 In December 1992, the High Level Meeting of the Development Assistance Committee (DAC) commissioned a review of the DAC List. The list was originally used for statistical purposes and only aid to countries on the list is recorded by the DAC as counting towards donor countries' total aid flows. The List has developed without any real criteria for inclusion and now, apart from a few countries (eg Spain) which have been removed at their own request, it includes all countries that have received aid or have asked to be on it. However, it has also acquired a status as a List of countries deserving aid. The High Level Meeting's decision to commission a review, prompted in part by requests for inclusion of Former Soviet Union (FSU) countries, is intended to establish rational criteria for a poverty-focused list.
2. At the time of commissioning the review five of the richest countries were deleted (including Singapore and Brunei) and five Asian republics of the FSU were added. Papers recently circulated by the DAC Secretariat suggest an upper per capita income limit for the list which would admit Lower Middle Income Countries but exclude Upper Middle Income Countries (UMICs). There was some debate at a recent DAC meeting over whether some UMICs would be admitted under special circumstances. However, Hong Kong, which is in the income category above this, is likely to be removed from the list along with Saudi Arabia, Greece, the Bahamas, and some others.
3. In practical terms, the effect on Hong Kong should be negligible. Hong Kong is not a major aid recipient and does not need to be on the
the list to receive aid (some of the Eastern European countries have received substantial aid from bilateral and multilateral donors without being on the list). Most of Hong Kong's aid receipts at the moment are related to Vietnamese migrants and this would be expected to continue. There will probably be a three-year transition period for countries leaving
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