TNAG-1489-FCO40-2046-Hong-Kong-and-the-Asian-Development-Bank-1986 — Page 121

ASIAN DEVELOPMENT BANK: UK GUARANTEE OF HONG KONG'S

Note No A1

OBLIGATIONS

NOTES FOR SUPPLEMENTARIES AND WINDING UP

Justification for allowing Hong Kong to purchase additional shares

Hong Kong wishes to maintain its position in the Bank, and its good image with

the Bank and with other regional member countries, by subscribing its allotted

shares in this general capital increase. If it does not take up its shares,

doubts might be cast on Hong Kong's ability to continue to play a role in

international organisations; this in turn might affect international confidence

in the territory. That is clearly to be avoided.

[Notes:

1. Hong Kong participated fully in the Bank's activities, including subscribing

to the capital stock through its initial subscription and subsequent general

capital increases; also through a US$1 million contribution to the last

replenishment of the concessional Asian Development Fund (to benefit the poorer

developing member countries) and a US$100,000 contribution to the Bank's

Technical Assistance Special Fund.

[2. It could be argued that there is no apparent benefit in Hong Kong

participating in this capital increase, since its membership of the Bank does not

depend upon doing so, and the balance of voting power will not be significantly

affected one way or the other. Hong Kong's voting power is currently 0.969%.]