TNAG-2030-FCO40-2892-Gulf-crisis-sharing-the-financial-burden-possible-Hong-Kong-1990 — Page 60

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044352 MDHIAN 0631

HK B 020 127

RECE

02 OCT 1990

W

FM UKDEL IMF/IBRD WASHINGTON

TO DESKBY 24083OZ FCO TELNO 343

OF 23200OZ SEPTEMBER 1990

AND TO DESKBY 24083OZ CABINET OFFICE, HM TREASURY INFO PRIORITY TOKYO, BONN, PARIS, ROME, OTTAWA, RIYADH INFO PRIORITY SEOUL, ABU DHABI, DOHA, UKREP BRUSSELS INFO PRIORITY UKMIS NEW YORK, ANKARA, CAIRO, AMMAN

FCO FOR TOMKYS, MILES, YOUNG (EMERGENCY UNIT) AND MILLETT (ERD), CABINET OFFICE FOR APPLEYARD, AND GOWAN, HM TREASURY FOR MOUNTFIELD, PICKERING AND MRS. S. BROWN, EMERGENCY UNIT AND YOUNG

IRAQ/KUWAIT: BURDEN SHARING

1.

THE US HAS CALLED A MEETING OF CREDITOR COUNTRIES IN WASHINGTON ON WEDNESDAY, 26 SEPTEMBER TO FOLLOW UP EARLIER DISCUSSIONS ON PROVIDING ECONOMIC ASSISTANCE TO FRONT-LINE STATES. THOSE INVITED ARE G7, SAUDI ARABIA, KUWAIT, UAE, QATAR, KOREA, GCC, EC COMMISSION, WITH TECHNICAL SUPPORT FROM IMF AND WORLD BANK. MULFORD (US TREASURY) WILL CHAIR. UK WILL BE REPRESENTED BY WICKS AND ALLAN (TREASURY) AND BONE (FCO).

2.

US HAVE CIRCULATED A PAPER FOR THE MEETING PROPOSING A QUOTE GULF CRISIS FINANCIAL COORDINATION GROUP UNQUOTE (COPY BY FAX TO TREASURY AND FCO). THE US PROPOSE THAT THE GROUP SHOULD BE CHAIRED BY A US TREASURY OFFICIAL WITH A STATE DEPARTMENT OFFICIAL AS DEPUTY CHAIRMAN. MEMBERSHIP WOULD BE AS PER INVITEES TO THIS MEETING PLUS QUOTE POSSIBLY OTHER NEW CREDITORS UNQUOTE. THE IMF AND WORLD BANK WILL PROVIDE TECHNICAL ADVICE AND ANALYTICAL SUPPORT.

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THE PAPER MAKES CLEAR THAT THE OBJECTIVE WOULD BE TO COORDINATE EXCEPTIONAL FINANCIAL RESOURCES TO THE FRONT-LINE STATES AND OTHER COUNTRIES SERIOUSLY AFFECTED BY THE GULF CRISIS. DISBURSEMENTS IN 1990 WOULD BE PROVIDED ON AN UNCONDITIONAL BASIS, BUT IN 1991 QUOTE CONSIDERATION COULD BE GIVEN TO ASSOCIATING APPROPRIATE AND REALISTIC ECONOMIC REFORM COMMITMENTS UNQUOTE.

IN THE G7 MEETING ON 23 SEPTEMBER, MULFORD SAID THERE WERE THREE MAIN OBJECTIVES:

4.

(A) TO DISCUSS PREFERENCE ABOUT THE METHODOLOGY OF GIVING (CASH, IN KIND, ETC.)

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