TNAG-0339-FCO40-375-Aid-to-Hong-Kong-from-UK-1972 — Page 21

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- 7 APR 1972

Miss Emery

AXK5/1

Mr Watt

Mr Huijsman

Reference......

..copy to each.

"MORATORIUM" ON AID TERMS

1.

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As agreed at this afternoon's meeting I have had a word with Mr M G Smith about his circular minute of 29 March on the Aid Framework 1972/73 addressed to all Heads of Department.

2.

Mr Smith explained that the caveat on entering into any new commitments applied to all projects big or small during the interim period pending a Ministerial decision on the aid programme. The only exception related to projects and expenditure under the technical assistance programme. There was no objection to approving new aid projects or variations in projects on an "in principle" basis, but it was essential to avoid giving any approvals or promises of a final nature which would involve, an irrevocable commitment of aid monies.

3. Mr Smith said that he hoped that the period of this "Moratorium" would not be as long as four weeks, but gave the impression that he had used this figure as

a conservative estimate. He saw no objection in specific cases to departments consulting the head of Finance. Dept ODA if they wished to argue the case for an exception.

4. My own view is that if we wish to argue a case centrally with ODA for excepting dependent territory aid schemes from the scope of the moratorium we shall need to support it with specific instances where the delay in approval of schemes and aid proposals clearly results in major impediments and inconvenience in the territories concerned. It might be better therefore to wait for a few days to see the actual effects of the new policy in relation to individual proposals from the territories.

JOBS

J D B Shaw DTG D MA 291

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CC: Sir Leslie Monson

Mr D A Scott

Mr Laid HKD ✔ Mrs Maccoll

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Joint Econ. Unit.

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DD #96639 140609 50011 7/71 GM 3443/2