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Wednesday, March 1, 1972
This figure compares favourably with $1,726 million two years
ago and $1,173 million at March 31, 1968 after Hong Kong had borne
the strain of the devaluation of sterling.
Mr. Haddon-Cave pointed out that in considering Hong Kong's
reserve position the main, and indeed the primary, determinant of incomeв
and hence of revenue yields, "is the economy's export performance over
which we can exercise but a limited degree of control",
"This exposed external position means that we must maintain
a strong roserve position in relation to annual expenditure," he strogsed.
"Obviously, should our trade and hence the growth of our revenue
ever slacken off seriously we must be in a position to maintain recurrent services and the level of capital expenditure either until the rate picks up again or, if this takes too long and our reserves are in danger of being rapidly depleted, until we can cut the rate of growth of
expenditure methodically."
The Financial Secretary pointed out that that would not be easy.
A eutback of plans for a steady expansion of recurrent services
could only be achieved at a social and administrative cost, he said.
To slow down expenditure on capital works would probably be costly
in the sense that nugatory expenditure would be involved, he added.
In addition, such a slowdown would certainly be difficult to
organise, not only because of the problem of selecting the projects to
be slowed down, but also because of the sheer size of the Public Works
Programme, he said.
The expenditure commitment as at February 9 in Category A projects
in the Public Works Programme was a massive $3,424 million compared with
only $1,736 million about the same time in 1971.
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