TNAG-0429-FCO40-494-Programme-Analysis-and-Review-(PAR)-Future-of-Dependent-Terr-1974 — Page 95

1

inte independence in discreditate socine and conmic conditions.

Alternatively,

resources. Second, 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 assistance, in ordu to pre-empo criticism that tim

may be propelling territories 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 of some territories is restricted, and this constraint might well limit the additional

expenditure to about £15 million. If we remain in

the EEC a proportion of the cost of aid to our

dependencies will after 1975 be met from the European

Development Fund so long as they are dependencies,

This flow might be substantial, particularly if a

special and favourable allocation for dependent

territories is retained in the new Fund to be

established in 1975.

4. We agree with the Review that our economic aid

policies must be consistent with our political objec-

tives, and that we should specify our political

objectives as clearly as possible, territory by

territory, so that the appropriate economic aid

policy can be adopted. Our objectives must of course

de defined not only in the light of the future

constitutional status of each territory, but also

of the political considerations arising from the

nature and extent of future British interest in the

territory and our concern for its social and economic

conditions. Generally, this will mean that, where

our objective is constitutional independence, aid

(17865) Dd145178 400m 5/73 G.W.B.Ltd. Gp.863

NOTHING TO BE WRITTEN IN THIS MARGIN

CONFIDENTIAL

/policy