TNAG-2030-FCO40-2892-Gulf-crisis-sharing-the-financial-burden-possible-Hong-Kong-1990 — Page 64

RESTRICTED

043007 MDLOAN 7620

THAT THE COST OF UK FORCES ALREADY IN THE GULF IS 1 MILLION POUNDS A DAY, PLUS A ONE-OFF SUM OF 75 MILLION POUNDS. ON THIS BASIS THE COST TO END 1990 WILL BE ABOUT 228M POUNDS AND FOR A FULL YEAR THEREAFTER ABOUT 365 MILLION POUNDS. HMG HAS SUBSEQUENTLY ANNOUNCED THE INTENDED DEPLOYMENT OF AN ARMOURED BRIGADE: THIS IS EXPECTED TO DOUBLE THE RUNNING COST OF UK TROOPS TO 2M POUNDS A DAY AND TAKE ONE-OFF COSTS TO 100 MILLION POUNDS. (E) IN ADDITION TO OUR SUBSTANTIAL MILITARY CONTRIBUTION, THE UK HAS ALREADY PLEGED 10 MILLION POUNDS FOR REFUGEES 2.8 MILLION BILATERALLY AND 7.2 MILLION THROUGH EC CHANNELS.

B

(F) EC FOREIGN MINISTERS HAVE AGREED THAT THE EUROPEAN COMMUNITY AND ITS MEMBER STATES WILL CONTRIBUTE TO THE ECONOMIC ASSISTANCE EFFORT. THE TOTAL SUM AND THE DIVISION BETWEEN THE EC BUDGET AND NATIONAL CONTRIBUTIONS HAS STILL TO BE DECIDED. ANY CONTRIBUTION THROUGH THE EC BUDGET WILL AUTOMATICALLY INVOLVE A COST TO THE UK. WHETHER WE SHOULD MAKE A FINANCIAL CONTRIBUTION ON

A NATIONAL BASIS IS STILL

UNDER CONSIDERATION, BUT OUR MAIN EFFORT WILL BE ON THE MILITARY SIDE.

BACKGROUND

6. FCO GUIDANCE TELNO 54 OF 18 SEPTEMBER EXPLAINED WHITEHALL THINKING ON ECONOMIC ASSISTANCE TO THE STATES MOST AFFECTED BY THE GULF CRISIS. WE HAVE SINCE LEARNT THAT US ARE LIKELY TO PROPOSE US-CHAIRED MEETING IN MARGINS OF IMF/IBRD ANNUAL MEETINGS

(23-25 SEPTEMBER 1990). THIS COULD LEAD TO ESTABLISHMENT OF A GULF CRISIS FINANCIAL SUPPORT GROUP CHAIRED BY THE US WITH SECRETARIAT FROM IMF AND WORLD BANK.

7. US, UK AND FRANCE ARE BEARING HEAVY MILITARY COSTS. OTHERS INCLUDING ITALY, AUSTRALIA AND CANADA ARE ALSO MAKING A MILITARY CONTRIBUTION. JAPAN, GERMANY, SAUDI ARABIA, ITALY AND CANADA HAVE MADE FINANCIAL PLEDGES OF VARYING SIGNIFICANCE. THE UAE AND KUWAIT HAVE INDICATED THEY MAY CONTRIBUTE. WE THINK THAT THERE IS SCOPE IN PARTICULAR FOR FINANCIAL CONTRIBUTIONS

FROM THE RICH NEUTRAL EFTA COUNTRIES.

8.

FOLLOWING PARAGRAPHS OFFER SUPPLEMENTARY GUIDANCE FOR SOME

ADDRESEE POSTS.

9. (FOR RIYADH). SAUDIA ARABIA IS ALREADY MAKING SIGNIFICANT CONTRIBUTIONS TO EGYPT, TURKEY AND SYRIA AND TO THE COSTS OF THE MILITARY OPERATION. YOU SHOULD CONTINUE TO STRESS IMPORTANCE OF ASSISTING JORDAN, WHICH IS IN A PARTICULARLY SENSITIVE POSITION (DESPITE THE FACT THAT THE SAUDIS ARE LESS THAN HAPPY ABOUT THE

POSITION TAKEN BY KING HUSSEIN).

10. (FOR BLACKLEY, JEDDA). ACKNOWLEDGE FINANCIAL DISARRAY CAUSED BY INVASION, BUT LACK OF FIRM PLEDGE FROM KUWAIT IS

3

PAGE

RESTRICTED