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action. Although it was not comparable in seriousness, Japan faced an influx of several thousand immigrants. They were working on legislation to allow a proportion of economic immigrants to work in Japan for a certain time and then leave.
Mr. Nakayama described his discussions in Vietnam on the boat people. Many of those now in Hong Kong had returned to Vietnam once and had now gone back to Hong Kong because they knew they would get a hand-out for being repatriated. There had just been a re-shuffle in the Vietnamese Government. The new Secretary-General of the Communist Party was a clever, clear- headed man with a good understanding of the issues. He advised us to get through to him the importance of a positive response to our approach.
The Foreign Secretary expressed gratitude for Japanese co- operation on this issue and described the present state of negotiations. We have taken no decision on double-backers but it was possible that we would have to act before we had full agreement with the Vietnamese on internationally managed centres.
Mr. Gorbachev
Mr. Kaifu said his initial assessment of Mr. Gorbachev's message to the G7 Summit was that it laid much stress on fundamental reform but was based on the Pavlov plan, while calling for external help as per Yavlinsky. There were many references to a mixed economy but the document was also clearly drafted to gain the support of Soviet conservatives. It was far from being a full programme for economic reform. There were major gaps and doubts about whether the plan could be implemented. Many of the measures had been on the table since last year and nothing had happened since. The document referred to the 9+1 agreement. Certainly, following the agreement, relations between the Centre and the Republics had improved but the status of those relations was fluid and unstable and different Republics had different objectives. The Soviet Union needed a government with public support but Gorbachev was relying on the Pavlov government to persuade the Republics and that government was full of conservative bureaucrats.
We
The Prime Minister said our assessment was very similar. had very real doubts about the proposals on taxation, the emphasis on centralised control, what was meant by privatisation and price liberalisation, the size of the deficit and the strong hint of re-scheduling. How could the plan be implemented when many of the mechanisms were now in the hands of the Republics, whose commitment to the 9+1 agreement was partial and contingent? The document was disappointing but unsurprising. We needed to ask some difficult questions of Gorbachev. We also needed to decide how to follow up the meeting. Gorbachev needed a success even though we should not give him large scale financial help. The Sherpas had discussed various formulas. An associate relationship with the IMF was clearly desirable. We were inclined to think there should be some framework for follow up which we should discuss. It might perhaps be based around the
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