TNAG-1768-FCO40-2522-Hong-Kong-and-the-Multilateral-Investment-Guarantee-Agency-(-1988 — Page 14

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islands or small peninsulas. As such, they are vulnerable in a

particular way and deserve sympathetic consideration.

4.

Hong Kong

(a) (If a Board member queries UK's request in view of

Hong Kong's change of status in 1997).

United Kingdom is presently responsible for Hong Kong's international relations and on that basis we request Hong Kong's designation as a developing member country for the purposes of Article 14. We understand that the Government

of the Peoples Republic of China have no objections to this. After 1997 Hong Kong will be part of the Peoples Republic of China which is, of course, a Category Two country under the Convention to HKC cuffe '97 Convention

The exact method of the application

of the IMIGA

will be the subject of discussin

betwen

MK/PRC in the

Cause

(b)

(If a Board member challenges the appropriateness of

"developing member country" classification for one of

Asia's economic dragons).

At least one other so-called dragon (Korea) is a Category

Two member of MIGA. Another (Singapore) is also classified

as Category Two in the Convention although it is not yet a

member. Why should Hong Kong be treated differently?

Moreover, IFC's Board of Directors approved investments in

Hong Kong last year without any dissenting voice. Why should MIGA treat Hong Kong differently? [If challenge

comes from US Executive Director. US investors are the

largest source of overseas investment in Hong Kong's

manufacturing sector. DMC status for Hong Kong would thus

provide extra comfort for US investors.]

5.

Falkland Islands: (If any Board member challenges UK's

right to request developing member country status). The Falkland

Islands are a British dependent territory and the British

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