relationships, and its codification either for exchange control or for reserve holding purposes is a comparatively recent development. Britain's trade with the Commonwealth, for instance, still accounts for 21% of our total trade. The UK is a major investor in Commonwealth 'countries; the estimated book value of UK direct investment (excluding oil, insurance and banking) in Commonwealth countries amounted to no less than £3385m. in 1970, about 53% of our total direct investment abroad. Although we have now applied exchange controls, the restrictions on investment in OSA countries are in fact much less stringent than those on investment in the non-Sterling Area. We continue to regard the Sterling Area as a valuable link between developed and developing countries, and consider the annual meetings of the Commonwealth Finance Ministers (this year's falls on 19-22 September) particularly useful in this respect; not least in enabling delegates to clear their minds on a number of subjects before the IMF and IBRD annual meetings.
:
Financial Policy and Aid Department
August 1972
3
CONFIDENTIAL
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