particular time, is helped by the fact that the Hong Kong dollar is at a 23 year low of 15.1 to 1 against the pound. They would, of course argue that any sterling guaranteed rate should be appreciably more favourable, say 11 to 1.
HKG
16. HKG's policy is that sterling safeguards is not a matter for them but is one for HMG for the following
reasons:
C
D
(a) HKG's responsibility, as the employer, is to pay its staff salaries and pensions in Hong Kong dollars, and to maintain the value of pensions by adjusting them in line with the cost of living locally. This policy dates back to 1947 so very few, if any, officers can claim they were "misled" when they joined;
(b) It is also HKG's policy to treat both local and
overseas officers equally in the payment of pensions. Any special arrangements for expatriates would be highly divisive and would cause serious problems with the civil service;
(c) The HKG cannot introduce any measures which could be construed as implying a lack of faith in the HK$/US$ link. Thus ExCo decided in January 1989 that HKG should not introduce measures to protect the value of pensions against currency fluctuations at this stage; and
(d) HMG has accepted a special obligation towards members of HMOCS and ExCo therefore considers the question of sterling safeguards for them as a matter for HMG. HKG
see no possibility of a change in this position.
ROZAUD/7
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