Background
3.
IMF/World Bank Annual Meetings are held outside Washington
once every three years. 1997 is Asia's turn; and Hong Kong has for some time registered its wish to host the meetings. Bank and Fund staff have visited Hong Kong, and are extremely satisfied
with the facilities on offer. If Hong Kong's bid is accepted, some expenditure will need to be incurred before the July 1997
handover to China. The main item will be staff costs for the
planning team; but there will also be advance hire charges for
the Convention Centre and office accommodation. Hong Kong
estimates that the costs it will incur up to July 1997 will be
some HK$35mn, around £3.5mn at the current rate of exchange.
Throughout the
4. One complication has been that Hong Kong is not a member of the Bank or Fund in its own right. Accordingly, we have been negotiating with the Chinese for over a year about the precise role the Hong Kong authorities would play; but some politically
sensitive details remain to be settled.
negotiations, we have been seeking to ensure that assurances on the provision of facilities and so on in the period up to 1 July
1997 would be signed by the Hong Kong authorities, not HMG. Bank and Fund staff, together with the Chinese, have resisted this. The outcome is a complex package of texts, including a memorandum of understanding (MOU) which would be signed by the Bank and Fund, and UK and Chinese Governors (the UK with responsibility
up to July 1997, the Chinese thereafter). The Treasury
Solicitor's clear advice is that, taken together, the package
constitutes an assurance by HMG that it stands behind Hong Kong's obligations in the period up to 1 July 1997 to provide services and facilities for the meetings; and that we are very unlikely
to be able to secure changes to avoid this without unpicking the
whole package. They conclude that, for the purposes of reporting
/ to Parliament..