TNAG-1001-FCO40-1237-Future-of-the-Dependent-Territories-including--Report-of-the-1981 — Page 196

AGENDA ITEM

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AID POLICY TOWARDS DEPENDENT TERRITORIES

The reasonable needs of dependent territories remain a first

charge on aid funds. There are however a good many first charges

on aid funds, particularly where multilateral aid is concerned.

2. Within the financial constraints of the overall aid

allocation, the level of aid to a dependent territory is determined

by its reasonable and identifiable needs. It is not determined

solely by its absorptive capacity, though this is of course a

very relevant factor.

3. The primary purpose of aid to a dependent territory is to

promote financial viability; to create the conditions which

will attract both local and overseas investment and thus provide

economic growth; and, in appropriate circumstances, to support

progress towards independence. Bilateral aid from Britain does

not cease on independence; multilateral aid can normally be

expected to increase, and (hopefully) new bilateral sources of

aid will become available.

4.

Application of aid policy must vary from territory to

territory according to needs, characteristics and opportunities

for development. In some, the emphasis may be on direct revenue-

earning projects, in so far as this may be possible; in others, on

the provision of infrastructure in support of private sector

investment which will yield additional revenue; in others,

particularly where there is already an ability to fund recurrent

costs, the emphasis may be on the improvement of the social

infrastructure. In many, it will be a mixture of all three aims.

5. Aid policies must have due regard to the possibilities of

aid from other sources, eg CDB, EDF, ELB, UNDP, CIDA etc. Such

sources often seem to be approached as a last resort, eg, where

a project can not be accommodated within a territory's existing

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