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responsible, from 1 April, 1971, for that portion
of the cost of expatriate pensions which relates
to pre-independence service. The extra cost of
this proposal would be some £11.5 m. per annum.
This will be accommodated within the Aid
Programme, which is expected to rise from £227 m.
to £245 m. in the financial year 1971/72.
This O.D.M. proposal would remove a long-
standing irritant in our relations with
independent Cormonwealth countries and a threat
to the conduct of sensible and constructive aid
policies. There is growing pressure on the U.K.
Other
to accept responsibility for the payment of
expatriate pensions. The most serious form this
has taken is in Tanzania which repudiated her
obligations with the result that we were obliged
to cut off aid. The Kenya Government has
"decided" to cease the payment of pensions to
expatriates and has asked for discussions in the
context of the next round of aid talks.
countries, possibly less dependent on our aid or
believing that we will submit to pressure, are
likely to follow either Tanzania's or Kenya's
example sooner or later. Although our present
position has a perfectly logical basis and has
been hallowed in independence agreements it is an
issue which rouses many strong emotions in many
"new" countries which find themselves forced to
foster an emergent and often extreme nationalism.
b) Dependent Territories and Associated States
Whatever the outcome of the meeting, if
Hong Kong is not included in the take-over we
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