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CONFIDENTIAL
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BRITISH INDIAN OCEAN TERRITORY (CONTD)
BRITISH VIRGIN ISLANDS
CAYMAN ISLANDS
FALKLAND ISLANDS AND DEPENDENCIES
Present Constitution and Prospects for Independence
In a published Exchange of Notes with the United States Government in 1966 (CMND 3231), the Territory was made available to meet the defence needs of the United Kingdom and US Governments, the agreement to run for an initial period of 50 years. There was a further Exchange of Notes (CMND 5160) in 1972 concerning the establishment of a limited US Naval Comminication facility on Diego Garcia. In February 1976 this was superseded by an Exchange (CMND 6413), allowing for the controlled expansion of the facility.
New Constitution to come into force in June 1977. No local pressures for independence but a desire to proceed to internal self-government and remain at that stage indefinitely.
"Member"-type constitution. No obstacle to self-government except the apparent wishes of the people to retain their links with the UK. While the 1976 election campaign was fought inter alia on the maintenance of the constitutional status quo it is however thought that the ambitious of the new political leaders may provide more fruitful ground for constitutional advance.
The Governor is advised by an Executive Council and there is a Legislative Council which, in accordance with recent constitutional changes will in future have an elected unofficial majority. The Governor can act contrary to the advice of his Executive Council and he has the right to legislate by declaration, but either course could provoke a constitutional crisis. There is no demand for independence. There are no political parties and all classes are united by a desire to remain British. But the British Government's long term interest lies in a settlement of the sovereignty dispute with Argentina.
Considerations affecting Aid Policy
Grant-aided. Should become economically viable within the next decade.
Not grant-aided. High GNP. Near economic viability. Independence possible if people so wish, but dependent status gives confidence to investors and financiers.
The Islands are not grant- aided. At present they are economically viable but are vunerable to world price movements in wool only product.
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CONFIDENTIAL
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