FRIDAY, APRIL 26, 1974
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MR. HADDON-CAVE ADDED THAT WHILE HONG KONG LOOKED TO THE ASIAN DEVELOPMENT BANK FOR THE PROVISION OF SOME LOAN FINANCE FOR ITS FUTURE DEVELOPMENT, WE RECOGNISED THAT ON ANY SENSIBLE VIEW WE WERE ELIGIBLE FOR LOANS FROM ORDINARY RESOURCES ONLY.
AS REGARDS THE LENDING RATE, THE FINANCIAL SECRETARY SAID THAT WHILE HE UNDERSTOOD AND WELCOMED THE RECENT DECISION TO STANDARDISE AND REDUCE THE RATE APPLICABLE TO LOANS FROM SPECIAL FUNDS, +1 CAN SEE NO NECESSARY REASON WHY ALL LOANS TO BORROWING MEMBER COUNTRIES FROM ORDINARY RESOURCES SHOULD BE AT A STANDARD RATE, WHATEVER THAT RATE MAY BE FROM TIME TO TIME, PROVIDED ANY CONCESSIONARY RATE AT WHICH OTHER LOANS ARE EXTENDED FROM ORDINARY RESOURCES ONLY REFLECTS THE INFLUENCE OF INTEREST-FREE CALLABLE FUNDS.+
MR. HADDON-CAVE NOTED THAT SO FAR HONG KONG HAD MANAGED TO FINANCE ITS CAPITAL WORKS PROGRAMMES VIRTUALLY WITHOUT RECOURSE TO LOAN FUNDS FROM OVERSEAS OR ELSEWHERE.
ON THE BASIS OF A NUMBER OF +RATHER OPTIMISTIC ASSUMPTIONS+ ABOUT HONG KONG'S ECONOMIC PERFORMANCE, HE ESTIMATED THAT OVER THE THREE-YEAR PERIOD 1975-1977 HONG KONG WOULD BE ABLE TO FINANCE US $1,100 MILLION WORTH OF CAPITAL EXPENDITURE CAT 1974 PRICES).
HOWEVER, OUR VARIOUS PROGRAMMES ENVISAGE EXPENDITURE OF US $1,850 MILLION, SO WE FACE A RESOURCE GAP OF US $750 MILLION, + MR. HADDON-CAVE SAID.
+AFTER A SOMEWHAT AGONISING RE-APPRAISAL OF OUR VARIOUS PROGRAMMES HAVING REGARD TO LIKELY AVAILABLE RESOURCES, WE HAVE HAD TO ACCEPT THAT ROUGHLY HALF THIS GAP WILL HAVE TO BE DEALT WITH BY A RE-PHASING OF EXPENDITURE ON SOME PROJECTS AND BY ECONOMIES IN PLANNING.
+BUT ADDITIONAL RESOURCES MUST BE FOUND THROUGH HIGHER TAXATION, ADDITIONAL CAPITAL REVENUE AND THE RAISING OF LOANS TO ENABLE US TO FINANCE THE OTHER HALF CABOUT US $375 MILLION) BECAUSE THE PROJECTS CONCERNED COULD ONLY BE RE-PHASED AT AN UNACCEPTABLE COST IN TERMS OF ECONOMIC DEVELOPMENT AND SOCIAL PROGRESS, + HE EXPLAINED.
IT WAS THEREFORE FINANCIALLY PRUDENT FOR HONG KONG TO RAISE US $75 MILLION IN LOANS OVER THE NEXT THREE YEARS, LEAVING US $300 MILLION TO BE FOUND IN OTHER WAYS.
REFERRING TO HONG KONG'S AVAILABLE FISCAL RESERVES, THE FINANCIAL SECRETARY SAID THEY MUST BE KEPT IN HAND IN CASE OUR FORECAST OF THE REVENUE TREND GOES ASTRAY, +AN EVER-PRESENT 'POSSIBILITY GIVEN THE TOTAL DEPENDENCE OF THE HONG KONG ECONOMY ON EXTERNAL FACTORS, OUR TOTAL LACK OF NATURAL RESOURCES OF ANY KIND, AND THE SOMEWHAT UNCERTAIN PROSPECTS WE ALL FACE AT THE PRESENT TIME.+
NOTE TO EDITORS:
COPIES OF THE FULL TEXT OF MR. HADDON-CAVE'S SPEECH ARE BOXED FOR COLLECTION.
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