TNAG-2030-FCO40-2892-Gulf-crisis-sharing-the-financial-burden-possible-Hong-Kong-1990 — Page 62

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HKB 020 127

043007 MDLOAN 7620

VE

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FM FCO

TO PRIORITY BERNE

TELNO 151

OF 21180OZ SEPTEMBER 90

가

AND TO PRIORITY OSLO, STOCKHOLM, SINGAPORE, VIENNA, KUALA LUMPUR AND TO PRIORITY BANDAR SERI BEGAWAN, RIYADH, JEDDA, DOHA, BAHRAIN AND TO PRIORITY MUSCAT, HELSINKI, CANBERRA, WELLINGTON, REYKJAVIK AND TO PRIORITY MEXICO CITY, CARACAS, HONG KONG, MODUK, SEOUL AND TO PRIORITY JAKARTA

INFO ROUTINE EC POSTS, TOKYO, UKREP BRUSSELS, WASHINGTON INFO ROUTINE ABU DHABI, OTTAWA, ANKARA, AMMAN, CAIRO, LAGOS INFO ROUTINE UKMIS NEW YORK, UKMIS GENEVA

INFO ROUTINE UKDEL IMF/IBRD WASHINGTON

GULF CRISIS

SUMMARY

BURDEN-SHARING

1. YOU SHOULD TAKE ANY OPPORTUNITIES TO LOBBY HOST GOVERNMENTS FOR A CONTRIBUTION TO ECONOMIC ASSISTANCE TO STATES MOST AFFECTED BY THE COSTS OF MAKING SANCTIONS EFFECTIVE. ANY POSITIVE INDICATIONS

BEFORE THE FOREIGN AFFAIRS COUNCIL ON 4 OCTOBER WOULD BE PARTICULARLY HELPFUL.

DETAIL

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2.

THE BURDEN OF MEETING THE COSTS OF IRAQ'S AGGRESSION IS FALLING PRIMARILY ON THE SHOULDERS OF G7 COUNTRIES. (SAUDI

ARABIA IS MAKING A SUBSTANTIAL CONTRIBUTION BUT IS ALSO BENEFITTING FROM INCREASED OIL REVENUES). IT IS ONLY RIGHT

THAT THIS BURDEN SHOULD BE SHARED AMONGST OTHER COUNTRIES IN A

POSITION TO CONTRIBUTE. THESE WILL BE MAINLY OTHER MEMBERS OF

OECD, NIES AND DEVELOPING COUNTRY OIL PRODUCERS. THE CASE FOR SUCH CONTRIBUTIONS RESTS ON THREE INTERESTS SHARED BY THE

INTERNATIONAL COMMUNITY.

A) COLLECTIVE SECURITY: ALL MEMBERS OF THE WORLD COMMUNITY WILL

BENEFIT FROM AN EFFECTIVE RESOLUTION OF THE GULF CRISIS. B) DEFENCE OF TERRITORY: THE GULF STATES ARE THE MAIN BENEFICIARIES FROM HAVING THEIR TERRITORY AND OIL EARNINGS DEFENDED.

OIL

C) SAFE GUARDING OIL SUPPLIES AND KEEPING OIL PRICES DOWN: IMPORTING COUNTRIES HAVE A SUBSTANTIAL INTEREST IN THE SUCCESS OF THE MILITARY EFFORT TO THE EXTENT THAT IT SAFEGUARDS OIL SUPPLIES AND HOLDS DOWN OIL PRICES IN THE MEDIUM TERM AND THEREFORE REDUCES UNWELCOME INFLATION AND BALANCE OF PAYMENTS EFFECTS. THOSE WHO ARE GAINING FROM HIGHER OIL PRICES HAVE A

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