CONFIDENTIAL
exercise of our responsibility, or actions by dependency governments emselves, are liable to involve us in domestic and international embarrassment, particularly if we have to use the Armed Services to maintain law and order. We think it is in our long term interest to keep a few territories as dependencies; but in general we are convinced that we should encourage the remainder to seek independence, or (in a few cases) association with a third power as soon as inter- national constraints and local circumstances allow (we acknowledge that in the case of Gibraltar this last is unlikely to be practical politics in the foreseeable future, but the long term objective remains valid).
3.
We think that if possible we should try to treat the Caribbean countries as a group which might include independent countries as well as Associated States. There are already some signs of thinking in this direction in the area. The concept might help to solve the Anguilla problem, on which a separate memorandum is being submitted to the DOPC.
ECONOMIC AID POLICY
4. The review distinguishes two main options. First essentially our present policy to seek where possible to establish an economic and social infrastructure which a territory can ultimately, though not, necessarily immediately, sustain from its own resources. Alternative- ly, to aim, at least in certain territories, at a somewhat higher standard, even if it is not likely to be self-sustaining, accepting that this implies continued financial (or even budgetary) dependence in order to pre-empt criticism that HMG may be propelling territories into independence in discreditable social and economic conditions. An initial rough estimate suggests that the second policy, applied across the board, could require about £24 million a year additional aid (nearly as much again as present UK aid allocations to the dependencies and Associated States). However, the absorptive, capacity
CONFIDENTIAL,
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