CHINA MAIL
17/9/73
One of the two English language afternoon newspapers. Circulation : 26,000.
Haddon-Caye may lobby for sterling
172
0735
By Jack Spackman, Financial Editor
FINANCIAL Secretary Philip Haddon-Cave heads for "East Africa tonight on a last-ditch effort to secure a
better deal for Hongkong's sterling reserves.
By the time he gets there the five-year-old Basle Agreement with have less than five working days to run.
All but the most optimistic people believe he is on a Mission Impossible.
He may be able to sit down with Mr Anthony Barber, Britain's Chancellor of the Exchequer, in a hotel lobby and strike a bargain over the sterling reserves. But the chances are slim.
Mr Haddon-Cave and Mr Barber are going to Dar-es-Salaam, capital of Tanzania, for the annual Commonwealth Finance Ministers conference.
The conference takes place on Wednesday and Thursday, with preliminary discussions tomorrow.
Mr. Barber so far has not been involved in talks over the future of ongkong's reserves, but has left Treasury officials to handle all discussions with Mr Haddon-Cave.
Not high
Things could be different in Dar-es-Salaam but even if Mr Barber does decide to enter discussions, the chances of concluding an agreement are far from high.
The logistics of negotiating in a third country are in no-one's favour.
Mr Haddon Cave will be travelling along to Dar-es-Salaam because Hongkong is allowed only one seat at the Commonwealth meeting.
If he suddenly makes a breakthrough towards a new sterling agreement he will probably have to call in a lawyer and a team of clerical assistants to help prepare the documents.
The Basle Agreement that guarantees Hongkong's $9,500 million reserves against wild fluctuations in the value of sterling, officially expires at midnight next Monday.
But because of a 30-day clause it has been inoperative for the past three weeks unless Hongkong accepts an offer of an extension made by Britain to about 60 countries in the world with sterling reserves.
Sterling value
The Governor, Sir Murray MacLehose, on his return from London last night said Hongkong wants to ensure that Britain's proposal is adapted to Hongkong's special requirements.
He said Mr Haddon-Cave would be involved in a further round of detailed talks in London.
This remark has puzzled Government officials who are aware of Mr Haddon-Cave's programme for the next 10 days, by which time the Basle Agreement will have expired.
The Financial Secretary is due in Nairobi, next Monday for the annual meeting of International Monetary Fund.
He will have the weekend free between the Commonwealth and IMF meetings but it is unlikely he will go to London at that time.
Unless, of course, he has achieved something dramatic with Mr Barber in that hotel lobby.
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