TNAG-1393-FCO40-1865-Future-of-Hong-Kong-briefing-for-meetings-and-visits-1985 — Page 57

fficult

Dave

harder

to sustain it over

have had to

contemplate

basis

for

2

than others) it Can be 22 leath as

a period of

of years. Hany countries accept a reduction in living standards and cast still

period of restraint as they established a Boundar

But this is the contribution vhich Čebtor

vhich s necessary finance

finance 42-

growth.

not be forthcoming anu could not be effective.

The part played by the Fund remains essential. Fund supported adjustment programas have often been unfairly characterised simply meaning QUES La Budget deficits and imports. Command unsound fiscal 200 Honetary policies is certainly a element of such programmes, but adjustment also involves structural reforms aimed at improving future performance. The Fund has tirEA rightly sought realistic exchange rates and pricing policien, to ensure that

scarce resources are not vasted. The Republic

of Korea is a practical and highly instructive model of laws developing country Cen combine adjustment with growth and productive use of capital inflows.

As part of this longer-term strategy for debt, the United Kingdom would support a larger and core effective role for the World Bank

and its affiliates over the next few years. The Bank is alresdy providing fast-disbursing loans in support of broad policy refer While project financing should continue

continue to be the main forms of

the Bank's activities, lending linked with improved economic policies has the potential for greatly increasing the efficiency. and growth of debtor economies. It is an approach which I baliem

should be further strengthened and expanded. Increased lending by the IBRD, if it can be matched by improved policies and performance by borrowers, should help to encourage additional bank finance and private investment in their economies. She laitos Kingdom will look sympathetically at the need for the Ima add to its resources as its lending programme expands.

1

The third element is finance from the private sector, particala

Commercial banks. Decisions on lending Lust remain

for judgment by the commercial banks themselves and for pac

the

7