TNAG-1022-FCO40-1272-Relations-between-Hong-Kong-and-the-United-Nations-1981 — Page 45

CONFIDENTIAL

1980. No promissory note was deposited in respect of the Sixth Replenishment

of the International Development Association before the end of 1980 because the

failure of the then US Congress to ratify the Agreement prevented it from coming into effect. (Had the promissory note been deposited in full, the 1980 aid/GNP ratio would have been 0.42%). Another important factor was that bilateral drawings

by certain recipients, notably India, were slower in comparison with 1979 in relation

to the resources available.

Aid Allocations

5. In a statement on aid policy in Parliament in February 1980, the Government

announced that greater weight would be given to political, industrial and commercial

considerations alongside the basic developmental objectives in decisions on

allocations of aid. Developmental objectives remain central, however, and the

Government has confirmed repeatedly that the poorest countries will remain major

beneficiaries of our aid. In 1980, more than three-fifths of our bilateral aid

went to the poorest countries, especially the populous Commonwealth countries of South Asia and sub-Saharan Africa (part of the "poverty belt" highlighted in the Brandt Commission Report). These countries also benefit from our contributions to multilateral programmes such as the European Development Fund (EDF) and the International Development Association (IDA).

6. The share of bilateral aid is expected to fall over the next few years because

of the weight of our existing multilateral commitments, especially those arising

from our membership of the European Community and IDA. Our share of EDFV will be about £475m (at current exchange rates), and we have agreed to contribute £555m (10.1% of the total) to the Sixth Replenishment of IDA. Expenditure will be spread

over several years. Contributions to various UN programmes, notably UNDP, and to the regional development banks are other significant elements of our multilateral

aid. Britain also supports a number of Commonwealth programmes, the largest being the Commonwealth Fund for Technical Cooperation (CFTC); and makes loans to the Commonwealth Development Corporation which invests in developing countries (mainly but not exclusively Commonwealth).

7.

The Government has declared its intention of examining critically expenditure

on multilateral aid because of the need for more room for manoeuvre in bilateral

aid. The Government recognises that existing commitments limit the scope for

shifting the balance; but has made it clear that as a general aim we will seek to reduce our shares in future negotiated replenishments to a level more consistent with our relative economic strength among traditional Western donors.

Aid Policy Department Foreign and Commonwealth Office

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