TNAG-2743-FCO40-3958-Visits-by-Commonwealth-officials--ministers-and-public-figur-1993 — Page 60

Secretariat draft

21 June 1993

realistic level. The response to the MMC noted that it was likely that the

Review would conclude that CDC should no longer maintain a separate RNR

target. There is no reason to change this conclusion. While CDC will

continue to exploit its capacity to invest successfully in this sector, it

is not considered any longer appropriate to single out the RNR sector for

a quantified target.

6.10 More generally, the appropriate sectors for CDC to invest in will be

determined by the needs of the countries in which it operates, taking

account of the balancing of risk across sectors. We do not therefore make

any specic recommendation about the sectoral balance of the programme.

Country targets

6.11 The countries in which CDC is currently authorised to operate are

indicated in Annex 0. Of these, CDC agreed in 1984 to consult ODA before

considering new investments in Hong Kong, Singapore, Cyprus, Gibraltar,

Malta and Trinidad, and before initiating activity in Rwanda, Tunisia and

Zaire.

6.12

Section 2 above considered CDC's role and the rationale for its

status as a public sector body. In essence this is to operate in countries

where private direct investors are reluctant to go, and to demonstrate to

them and to developing country governments, the possibility of sucessful

direct investment in these countries. CDC should not displace private

investment but should endevour to attract private sector co-investors.

6.13 This role has hitherto been seen as being fulfilled by concentrating

on poor countries: CDC has therefore been set a target for the level of

commitments in these countries. This is currently to invest 60% in

countries with a per capita income of $800 in 1983 (roughly the upper

limit of IDA eligibility which now (1991) stands at $1235 per capita).

Since 1986 CDC has exceeded the target assisted by extending its

operations to India and Pakistan. Recently, poor countries have accounted

for nearly 70 per cent of investment.

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