TNAG-0128-FCO40-164-Development-aid-1969 — Page 20

CONFIDENTIAL

27)

Reference.......

Mr

Stewart (Hong Kong Department)

R&R

Copy to : Mr. Combs

Aid Framework 1970/71

I have some sympathy with the views expressed in your minute to Mr. Wilde of 12 August (your reference HKK 5/13). Since then we have also seen ODM's letter of 22 August declining to devote any aid monies to the Kai Tak Airport project. This letter does not altogether surprise me since ODM are obliged to maintain some sort of yardstick in respect of territories whose development (in terms of capital assistance) should not be promoted under the aid programme proper. I appreciate your cautionary words about taking Hong Kong's present prosperity too much for granted. But we do not hear echoes of these doubts from Hong Kong itself; Sir J. Cowperthwaite's recent performance to the Treasury and FCO over the level of Hong Kong's borrowing powers (in the context of the sterling agree- ment) left a picture of a soundly based, booming economy that could not decently expect any 'aid.from us in the foreseen future.

2. But I do believe that we should apply rather different criteria in the case of technical assistance. At last week's aid framework meeting, I put down a marker with ODM that we would wish to discuss increased provision of technical assistance to Latin America and to the Middle East (copy of minute attached), I told Ronald Belcher (ODM) that similar considerations applied in Hong Kong's case. He was not over-enthusiastic but admitted that special circumstances existed here and that ODM would listen to any good case we put up.

3. If you wish to pursue this pretty grudging opening this is the time to do so. You will, however, need to accept that money will be very tight in 1970/71 and that anything extra directed to Hong Kong will be at the expense of more needy aid recipients who have any amount of genuinely development-worthy projects which we could otherwise support. If you have any technical assist- ance schemes on the stocks which would stand up to this sort of scrutiny, could you let FPAD know about them before you engage the ODM.

Фрідай

LAST

REF.

DEXT

***

RECEIVED IN REGISTRY No.51

27 AUG 1969

HIKK 5/13

(T. J. O'Brien) 25 August, 1969.

CONFIDENTIAL