TNAG-1461-FCO40-1987-Future-of-the-Dependent-Territories-Hong-Kong--Gibraltar-and-1986 — Page 23

17

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27 At the moment there is not enough information available to draw up an economic programme for each territory.

If Ministers

agree with the general conclusions of this paper the economic aspects will need to be studied further. The ODA fairly point out that without it we can not be certain of whether, and if so how much, of an increase in the aid framework will be necessary. Some or all of the following could be needed to promote private and large institutional investment in the Caribbean economies,

and to diversify them:

i.)

ii)

iii)

iv)

The establishment of a more powerful, and visible, developmental organisation in the region. One option might be to establish an Economic Development Office (on the lines of new town development bodies) either individually for each territory or collectively for the Caribbean region. Their remit would be economic diversification, both by sector and source (though inevitably US investors would be expected to dominate). Care would be needed to ensure that their increased powers did not undermine attempts to establish more responsible and democratic local administrations.

At

A programme aimed at increasing the awareness of UK businessmen to opportunities in the territories. present the UK business presence in the dependencies is small compared with that of the US. Few UK businesses see them as offering viable commercial opportunities. Whether or not it proved possible to change this attitude it would nonetheless be important to ensure that the process of disengagement could not be characterised as handing a valuable asset to the US without having given

British business a chance.

Targetted investment by HMG on projects that avoid continuing dependence, preferably linked to commitments to invest already made by the private sector. Encouragement to the development of intra-regional

economic links on the lines of para 16 above.

These measures are in line with the recommendations of the 1985

OD paper on the security of small states. Some territories

(notably Bermuda and the Caymans) are already economically

CONFIDENTIAL