TNAG-0622-FCO40-770-Budget-of-Hong-Kong-1977 — Page 95

CONFIDENTIAL

financial haven, there is scope for considerable development in the field of

financial statistics, eg flow of funds. Thirdly, the GDP figures are derived

expenditure, as compared with an income or output approach.

on a weak basis

CONCLUSION

13.

Whilst it would not be too perplexing to understand any local short-term

welcome to this Budget, it is one which is somewhat difficult to defend when

looked at in terms of economic intellect and equity. Conceptually it was

outdated and lacked an overall theme; it did little to remove doubts as to

lack of appreciation of the relationship and use of Budgets to achieve

economic and social objectives.

14.

I would accede to the view that whilst there has been some progress

we still have some considerable way to go in bringing Hong Kong into the

second half of the 20th Century on its economic thinking. I do wonder

therefore if this might be assisted by a re-issue of the Lennox Boyd

instruction of 14 January 1958 (copy attached) amended appropriately.

Economists Department

Foreign & Commonwealth Office

25 March 1977

CONFIDENTIAL