TNAG-2473-FCO40-3600-Asian-Development-Bank-liabilities-of-Hong-Kong-1992 — Page 87

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YOUR TELNOS. 862 AND 936:- NORTH KOREA:- OBSERVER STATUS AT 1992 ASIAN DEVELOPMENT BANK ANNUAL MEETING IN HONG KONG.

SUMMARY.

1. NO OBJECTION IN PRINCIPLE TO NORTH KOREAN OBSERVERS BEING INVITED TO THE ADB ANNUAL MEETING. WE SO INFORMED THE U.S. EMBASSY IN LONDON IN EARLY MARCH.

DETAIL.

2. WE HAD ALREADY HEARD AT THE END OF JANUARY FROM OUR EXECUTIVE DIRECTOR IN MANILA (DR. HEINZ BUHLER) THAT THE NORTH KOREANS HAD EXPLORED THE POSSIBILITY OF MEMBERSHIP OF THE ADB THROUGH THE UNDP RESIDENT REPRESENTATIVE IN MANILA. ADB MANAGEMENT REPLIED THAT THEY WOULD NEED A FORMAL APPLICATION BY THE NORTH KOREAN GOVERNMENT BEFORE SOUNDING OUT THE VIEWS OF MEMBER COUNTRIES ON NORTH KOREAN MEMBERSHIP.

3. WE TOLD DR. BUHLER THAT HMG RECOGNISED NORTH KOREA IN AUGUST 1991 WHILE SUPPORTING ITS ENTRY TO THE UNITED NATIONS. WE HAD NO PLANS TO ESTABLISH DIPLOMATIC RELATIONS. WE SAW NO POLITICAL OBJECTIONS TO NORTH KOREA MEMBERSHIP OF THE ADB BUT WOULD NEED TO CONSIDER THIS IN DETAIL ONCE A FORMAL APPLICATION WERE MADE. AS YOU HAVE INDICATED, THE NORTH KOREANS HAVE NOT YET MADE A FORMAL APPROACH EVEN FOR OBSERVER STATUS.

4. WE ARE NATURALLY CONCERNED ABOUT THE NUCLEAR ISSUE, BUT OUR STANDARD POLICY IS THAT MATTERS RELATING TO INTERNATIONAL FINANCIAL INSTITUTIONS ARE DECIDED ON ECONOMIC AND TECHNICAL RATHER THAN ON POLITICAL GROUNDS. WE SPOKE ON THESE LINES TO THE U.S. EMBASSY IN EARLY MARCH IN RESPONSE TO AN ORAL DEMARCHE SIMILAR TO THAT WHICH YOU HAVE RECEIVED FROM THE U.S. CONSULATE-GENERAL CAPOLOGIES FOR

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