TNAG-1461-FCO40-1987-Future-of-the-Dependent-Territories-Hong-Kong--Gibraltar-and-1986 — Page 99

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CONFIDENTIAL

(HMG and the local island authorities) with an element of turnkey

funding from HMG.

26 In brief the type of economic programme that will be necessary prior to independence mutatis/mutandis for all of the

territories is as follows:

i) An increased effort to diversify investment in the

islands and to attract more of it, particularly from the private sector. One way of doing this might be to establish an Economic Development Office (on the lines of new town development bodies) for each territory with considerable developmental powers. Outside appointees would almost certainly be necessary to ensure that such offices operated effectively. Their remit would be economic diversification, both by sector and source

(though inevitably US investors would be expected to

dominate).

ii)

A programme of education aimed particularly at businessmen in the UK designed to encourage investment in the dependencies. At 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 were 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;

hence the need to be seen to encourage increased UK business actively.

iii) Increased investment by HMG particularly in

infrastructure but targetted on projects that avoid dependence on such aid in the long term and preferably linked to commitments to invest already made by the

private sector.

iv) 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.

CONFIDENTIAL