TNAG-0618-FCO40-766-Aid-framework-from-UK-to-Hong-Kong-1977 — Page 38

II.

1.

THE FLOW OF FINANCIAL RESOURCES

OFFICIAL DEVELOPMENT ASSISTANCE

to

developing countries

Volume

6. The United Kingdom has accepted the United Nations 1% GNP target for combined

official and private flows and has accepted in principle the 0.7% GNP target

for official development assistance. We will try to move towards the target

in the years ahead but the pace at which we can do so must be governed by the pace of our economic recovery and by other calls on our resources.

7. Because of the high priority it attaches to the needs of the poorest in the

world the Government had previously, for the most part, exempted the aid programme

from successive expenditure cuts. However in December 1976 it was decided,

with great reluctance, that the aid programme would have to take a share, with other programmes, of the reductions in public expenditure in 1977-78 and 1978-79. These reductions were a direct consequence of the need to reduce both further expenditure and the public sector borrowing requirement. Despite these reductions from the previously planned levels a small growth of 1.6% in real terms in our aid programme is planned between 1976-77 and 1978-79.

The United Kingdom's performance against the 0.7% target was 0.38 per cent in 1976 compared with 0.37 per cent in 1975. It is too soon to give a precise estimate of the United Kingdom's performance against the 1 per cent target, as many of the component parts which comprise total private flows are subject to considerable revision. The first preliminary estimate indicates that private flows were 0.99 per cent of GNP in 1976, excluding £2,725 million of so-called

s/were 'Eurocurrency Flows', or 3.24 per cent if these flows are included. This compares with 1.02 per cent of GNP and 2.78 per cent of GNP respectively in 1975.