TNAG-0128-FCO40-164-Development-aid-1969 — Page 60

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Information for

Vr. ilde

9413

Hanagement of Aid:

R2PA-3)

! RECEIVED IN

ARCHIVES No.31

2 5 MAR 1969

Dependent Territories and Associated

States

In your minute P 23/3 of January you requested comments on a revised draft circular saving despatch to Dependent Territories and Associated States. I regret that we have not replied before now apart from the general comments which were made orally by Mr. P. H. Brown to Miss Turbin in the context of the draft despatch about development aid after March, 1970 referred to in paragraph 2 of your minute.

2. As far as procedure for development aid applications is concerned, the proposals in the latter draft, as since revised, should result in a marked improvement over the present system; and if they are accepted we would like to see them brought into effect forthwith paragraph 3 of your minute refers.

3. We have the following comments on detail of the other parts of the draft Sote annexed to the draft circular saving despatch enclosed with your minute: -

(a) Paragraph 1: In view of paragraph & of the

draft despatch on aid after March, 1973, the words "or sectors of a development programme. might be addeŭ after "

roads, etc.'

(b)

(c)

Paragraph 5(h) and paragraph 6 V.: The draft envisages that apart from the "development element" the cost of reconstruction programmes following natural disasters would be borne on F.C.6. votes. In graat aided territories since 1967 capital expenditure is in effect provided only from C.1. & 5. funds (and this principle should presumably continue until such time as a territory becomes able to balance its recurrent budget from locai revenues). The distinction drawn between the replacement and the development elesen ts of a reconstruction programme appears to be no longer consistent with the concept of C.D. & W. aid introduced in 1967, under which capital expenditure in a grant aided territory is no longer subjected to the test whether it amounts to development in the narrow sense. For instance, the whole coat of replacing an obsolete hospital would now be borne on the capital side of the estimutes and thus wholly from C.D. & V. funds, rather than only the development element as formerly. Perhaps this part of the draft needs to be reconsidered:

ara ranh 6,VI(D): As HKOCS is not a form of technical assistance but the remaining permanent and pensionable cadre of the former Colonial Service it would be preferable that

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