TNAG-1489-FCO40-2046-Hong-Kong-and-the-Asian-Development-Bank-1986 — Page 49

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3. On the question of China's representation on the Board of Directors, Mr. Ainscow said that China should have an Executive Director. However, the UK would prefer to see the size of the Board remain at 12 with some re-arrangement among the regional constituencies. wondered whether this would be possible. Mr. Fujioka said there was wide support for an additional seat to accommodate China, which was what he had proposed. increase would be a second best solution. Mr. Ainscow referred to the argument that two new seats might be preferable to one. Mr. Fujioka said he was collecting Governors' views on this subject, and he hoped that a decision could soon be reached. Mr. Ainscow mentioned our concern about keeping down the cost of any solution.

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4. Mr. Ainscow referred to the earlier proposal for a second time-zone office. He said that the UK believed that it would be financially advantageous to the Bank, and that London would be the right venue because of the financial interests available there. Mr. Fujioka said

it was a matter of timing. He felt the cost of setting up an office in Europe was not justified by the present volume of borrowing. Perhaps it might be looked at after the next GCI, when an increased amount of financing would be needed. His priority was to open regional offices in countries such as Indonesia, to help with the Bank's operational programme in that country in a manner similar to the World Bank's country offices. Mr. Ainscow thought the two questions were not linked. He pointed out that whether such offices were justified depended on their marginal cost. Their costs should be offset by savings at headquarters. The UK supported the principles of such offices, e.g. our own Development Divisions. Mr. Narasimham said that there would probably be some net additional cost.

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