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Implications for Aid Policy

12.

The choice of an appropriate aid policy is essentially

political, though the criteria to be applied and the forms in which the aid is given must depend also on economic judgments.

As indicated in paragraph 8, in the allocation of aid the reasonable needs of dependencies are given priority, but at least in the short term independence need not necessarily have a

significant effect on the amount of aid which we provide. have continued to give relatively generous aid to newly independent

countries, at least for a transitional period before normal

criteria start to apply, and other donors can be expected to show

an interest also.

13.

We

Our aid policy ought to be related to HMG's political

objectives for the territory concerned, and should not obstruct

the attainment of those objectives. But in territories where

political independence is the objective, we should be cautious

before embarking on aid policies which would tend to increase or

perpetuate economic dependence on HMG. There are territories

whose governments may themselves be reluctant to seek or accept

independence, for fear that our aid may be reduced; there are

others which have such limited resources or lack the necessary

skills, so that progress towards independence may take time.

Finally there are a few territories which, on present indications,

appear to hold out little prospect of ever being economically viable.

In these cases, as in territories where the political advantage for HMG or for the inhabitants lies in continued dependence, or

even in integration with the UK, the level of services to be maintained by our aid will be the question to be determined.

14. It is theoretically open to us to impose conditions on the grant of continued or increased levels of aid, as an inducement to the territory to adopt policies which we consider to be desirable, eg political independence, collaboration in regional groupings or services, more effective use of economic resources, or better

administration. But in practice there may be considerable political difficulty in enforcing any such conditions on a reluctant Dependent

Territory.

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