TNAG-2470-FCO40-3594-Budget-of-Hong-Kong-1992 — Page 123

CONFIDENTIAL

71-270 2721

fax: 071-270 3369

31 January 1992

1/21/20

Mrs J R Lomax

Deputy Chief Economic Adviser

HM Treasury

Room 126/2

Parliament Street

London

Vitor Rachel Калил

HONG KONG: BUDGET PLANNING

Foreign and Commonwealth Office

London SW1A 2AH

la

Tam of me

2. M

Mr Gx

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4 M

M21/15

Odel he did'nt mention His

didisch (which is new to me) this morning

1. We discussed last year the idea that you might take a look at Hong Kong's budget planning procedures and their implementation. You will remember that Nigel Wicks and Hugh Evans were concerned about the economics of the Airport project and about Hong Kong's project appraisal and budget planning procedures more generally.

2. I subsequently had various discussions with Hong Kong Government officials, from which the thought emerged that they would like to be sure that they were taking full advantage of outside experience. Having failed to turn up relevant literature, and to interest the OECD (who thought they had nothing to teach Hong Kong) I suggested last November to K Y. Yeung, the Secretary for the Treasury (who is responsible for public expenditure) that you might be persuaded to pay them a visit to discuss these issues. I also left them the attached background paper which they accept as a fair critique of their system.

3. I have now heard from Yeung who asks whether you might visit for, say, a week:

"for a series of discussions on budgetary planning at the conceptual level. The sort of subject we would go into could include definitions of public sector spending for budgetary purposes, the size of the public sector relative to GDP, various forms of privatisation, techniques for the evaluation of major capital projects, and so on. We would like to share our experience with you and to draw inspiration from the UK experience."

CONFIDENTIAL

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