TNAG-0339-FCO40-375-Aid-to-Hong-Kong-from-UK-1972 — Page 54

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to have this carefully examined in ODA and by the Development Division in the Caribbean.

iii.Ghana - The figures in the revised Aid Framework were acceptable only on the understanding that they were directly related to our negotiating position with the Ghanaians' over debt. We, and the other creditors, were generally agreed that no new capital aid should be provided for Ghana until a debt settlement had been achieved, but that existing commitments should be honoured. If we succeeded in reaching a debt agreement, we should wish the figures in the original Aid Framework for Ghana to be reinstated. It was more than likely that part of the price of any debt settlement would be new capital aid to Ghana. Ghana was still important to us. We had our second highest African investment there. Our investments totalled some £105 million and the debts owed to us represented another £90 millions. On the other hand should we fail to reach an agreement with Ghana and the Ghanaians stood inflexibly by their statement on debt repudiation, Ministers in that event might wish to consider whether we should have a programme at all.

iv. Ceylon The revised figures were acceptable. But, were the

Ceylonese to pull themselves together, some new capital aid might be necessary.

v. Pakistan and Bangladesh

The revised Aid Framework proposals

only provided £1 million for each country in new money in 1972/73. This was not a realistic figure. A substantial sum might be required as our share of any debt rescheduling exercise in Pakistan.

Although Pakistan as a whole had been a slow spender of aid, Bangladesh might disburse aid a good deal faster.

vi. Bangladesh Relief and Reconstruction Separate provision would

be required for this but it would probably not be necessary or possible to spend as much as £20 million on reconstruction and rehabilitation in 1972/73.

India

vii. We were already firmly committed to the figure of £58 million

for 1972/73. It would not be possible to allocate less without a significant political upset and damage to our exports. Even so, the figure did not take account of the possibility that we might have to find a further £10m. for compensation to India as part of the cotton textile agreement, at least some of which might be required in 1972/73. A continued high level of programme aid was important since this was linked to licences for our exports to India. In 1971 the provision of such licences had enabled us to double our exports to India to a total of £140 millions.

viii. Malta and Cyprus

JA

If the present negotiations on Malta were successful, an extra £1 million yearly (probably from a Defence Vote) might have to be found over and above the existing provision of £3.5 millions. Malta agreement might also encourage the Cyprus government to press for more aid. On the other hand were the talks to fail we might save some or all of the £3 millions annual aid for Malta.

/ix.

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