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There are no reliable figures for long-term capital
movements, but such indications as there are puggest that
they are small and can safely be ignored for present
purposes.
6. On invisible account (items (b), (c), (e) and (2))
the U.K. showed a net deficit in 1966 of $10 million.
After the loss of Hong Kong and on the assumptions in
paragraph 3 items (b) and (e) would simply cease.
We
It is
do not know the composition of (c), but the figure is
small and some part of it may well represent transfer
payments (rather than payments for serviços).
therefore assumed as a matter of convenience that these
U.K. earnings would cease and their cessation would
release no resources. While the balances are assumed
to be blocked, carninge on them would continue to accrue
((2)). Although these would not be transferred they
*
would be recorded as an invisible debit in the basic
balance of payments ("financed" by a corresponding monetary
inflow). While this debit would be reduced in so far as
releases from the balances were made to U.X, residents,
for present purposes we assume that a debit of £15 million
would continue, The overall result on invisibles
therefore would be that we would show a total not deficit
of £15 million, as oppoced to £10 million in 1966 1.e. a
net loss to the balance of payments of £5 million,
7. The effects of the loss of Hong Kong on the visible
account would depend to a major extent on the use (if any)
to which the resources currently used for exports for
Hong Kong wero put (and at what speed) and how far U.K.
resources were fully employed at the time, The extreme
worst assumptions might be:
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