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Nepal
57. One of the consequences of withdrawal would be the total disbandment of
the Brigade of Gurkhas by 1975-76. The Gurkhas provide Nepal with about 30 per cent of her convertible foreign exchange though the importance of this should not be exaggerated since Nepal receives far more substantial resources in non-convertible form, i.c. in tied aid and Indian rupees. The Nepalese have already been told that the Brigade is to be reduced from 14,500 to 10,000 by 1969 and have accepted this. They are also aware that we are contemplating further reductions below 10,000, though we have not indicated that we may propose a complete rundown. The Ministry of Defence will compensate individual soldiers discharged prematurely, and the Ministry of Overseas Development All provide limited resettlement training under the British aid programme. The new plan would entail the rundown of the Gurkhas
from 10,000 to nil between 1969 and 1975. Terminal grants and pensions falling on the Ministry of Defence Vote are estimated at just over £3 million of which about £900,000 would be attributable to the rundown from 14,500 to 10,000, and the rest to the rundown from 10,000 to nil.
58. The complete rundown of the Brigade of Gurkhas would have severe social as well as foreign exchange consequences for Nepal. (The Gurkhas are recruited from high unemployment areas in some villages practically all the men between 18 and 35 are away with the British or Indian armies.) Terminal grants and pensions payable by the Ministry of Defence to individual Gurkhas are unlikely to satisfy the Nepalese. There will be strong pressure on us for mitigating aid to the Government of Nepal in addition to payment to individuals. It seems unlikely that such aid could be provided within the framework of our existing aid projections for Nepal. The proposal currently under study that Britain should build a 75-mile stretch of the Asian Highway may, if approved, help to absorb some ex-Gurkhas during the 1970s, particularly those with relevant skills, but would hardly provide work for them all.
59. The need for compensation to Nepal should presumably be added to the balance-sheet, together with some indication of the political stresses which would result from complete rundown (the latter would probably include regional tensions within Nepal, between the Gurkha communities and the Central Government, as well as the strain to which Anglo-Nepalese relations would be subject during the period of the rundown).
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