would
Arguments for and against Hong Kong contributing to ADF V
5
There are advantages in
It contributing. enable Hong Kong to maintain the established goodwill with the ADB. This will be useful in the event that Hong Kong wishes to borrow from the Bank. Hong Kong has borrowed from the Bank on five occasions in the past. Although there is at present no perceived need for such borrowing, the possibility of tapping this
of finance
source
infrastructural project financial conditions So
for
a worthwhile
at some future date when domestic demand should not be ruled out. It seems therefore to be in the overall interest of Hong Kong to continue to be supportive of the Bank's activities.
6
To those who are interested in the affairs of Hong Kong, contribution would only be interpreted, here and abroad, as an indication of the Hong Kong Government's confidence in Hong Kong's future. It would also serve as a useful reminder that Hong Kong's position in the Bank will remain unchanged after 1997, as assured through agreement reached in the Joint Liaison Group in accordance with the relevant provisions of the Sino-British Joint Declaration.
7
These are admittedly rather intangible benefits and there is no way of assessing whether the contribution of, say, another US$1 million will represent good value for money. But there is certainly little serious downside risk in contributing. The only risks are that contributing would make it more difficult for Hong Kong to opt out of ADF VI, if there is going to be one, in 1991,
in 1991, and would confirm Hong Kong's status as a relatively advanced DMC, which it
it is, although this may have trade implications.
8
On the contrary, the downside risk of not contributing could be serious. Having agreed to contribute to ADF IV in 1982, that is before Hong Kong's future position in the Bank was settled, a change in Hong Kong's supportive stance in the Bank's activities now could be open to all sorts of unfavourable interpretations. Not contributing may be seen to be an indication that Hong Kong, or even Britain or China, are having second thoughts on whether Hong Kong should continue to play the role
role it has been playing in fostering development in the Region. It may be associated with, ΟΥ attributed to, China's recent membership in the Bank. There may also be suspicion, here and abroad, that China wishes to suppress Hong Kong's role, notwithstanding the overt support given for Hong Kong's continued participation in international organisations in its own right.
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