TNAG-1022-FCO40-1272-Relations-between-Hong-Kong-and-the-United-Nations-1981 — Page 44

AID POLICY

BACKGROUND BRIEF

CONFIDENTIAL

UMP 02111

RECEIVED IN REGISTRY NO. 6

བ་།

9 JUL 1981

REGISTRY

PA

Action Taken

DESK OFFICER INDEX

(16)

Volume

1. The Government intends, within the limits of our economic circumstances, to

maintain a substantial programme of assistance to developing countries. The amount available for spending in the current financial year (1981-82) is £1,037 million gross, up about 8% on last year in cash terms. This is a significant sum by any reckoning, especially when set against the background of our current economic

difficulties. In 1980, only four western countries gave more money than we did

as official development assistance: the United States, France, West Germany and

Japan, all countries with stronger economies than our own; and besides these,

Saudi Arabia.

2. The Government's overriding priority is to curb inflation, and this has meant

that we have had to apply strict limits to public spending. Many difficult decisions

have had to be made about domestic programmes such as education and health, and

overseas aid has had to bear a share of the reductions in public expenditure.

UK Aid Performance

3.

There are two UN targets for resource transfers:

a.

combined private and official flows equal to 1% of GNP;

and

b.

net official development assistance equal to 0.7% of GNP by 1985.

The former target has been completely overshadowed by the latter, partly because governments of developed countries have little direct control over the major element, the transfer of private capital to developing countries, and its indirect

and uncertain link with official aid. It is worth noting, however, that for many

years Britain has substantially exceeded the target for combined flows.

4. The Government accepts in principle the 0.7% of GNP aid target, but is not committed to a timetable for reaching it. Successive governments have made it clear that progress towards the target must depend on our own economic conditions and other calls on our resources. In 1980, net official development assistance totalled £767m, provisionally estimated as 0.34% of GNP. This compares with £992m (0.52%) in 1979. Exceptional external factors largely explain the fall in

CONFVOLMTIAL

/1980