countries in which the Corporation operates, whose development needs
are greater. Approval for previous C.D.C. investment in Hong Kong
had been exceptional and given with reluctance. In any case the C.D.C. which now pays 87% on its advances could not on-lend at less than about 10% and the same problem of subvention of interest rate
noted in paragraph 21 above would arise.
Other Possibilities
23.
Other possibilities that have been examined are:-
(i) Loan from the World Bank
(ii) Loan from the Asian Development Bank
iii) Continental Loan
Some thought has been given to the possibility of interesting the World Bank in this project. But the most recent IBRD report on Hong Kong (following a visit by the Bank's team in 1968) indicates
quite clearly that an application to the Bank would not succeed in the present buoyant state of the Colony's finances and while the Colony's
reserves remain as large as they are.
24. Hong Kong became a member of the Asian Development Bank in March of this year. In the course of joining Hong Kong more than
once expressed the intention of seeking no loan from the Bank in the
near future. To backtrack on this now would be difficult,
particularly to the extent of a loan that would exceed Hong Kong's
nominal subscription to the Bank of U.S.28 million. Other points
bearing on this question are:-
(a) Any loan from the A.D.B. to Hong Kong would need to be
guaranteed by HMG.
(b) The largest loans the Bank has granted to date have been
for U.S. 10m.; the Bank's current rate of interest on
-11-
No comments yet.
Private notes are available after approval.