§ Lieut.-Colonel Hamilton
asked the Chancellor of the Exchequer whether he will publish the terms of the Financial Agreement recently reached with the Government of Burma.277W
§ Mr. Dalton
Yes. The text is as follows:
FINANCIAL AGREEMENT BETWEEN HIS MAJESTY'S GOVERNMENT IN THE UNITED KINGDOM AND THE GOVERNMENT OF BURMA.
1. The Government of Burma recognise the vital importance of fostering general confidence in Burma's willingness and capacity to restore her economic and financial position, and with this object in view they have intimated their decision to take immediate and firm measures to increase revenues, to effect reductions in Government expenditure, and to withdraw surplus purchasing power from circulation, in particular by stimulating savings among the general public.
2. His Majesty's Government agree to increase their contribution towards the deficit on Burma's Ordinary Budget for 1946–47 to an amount not exceeding 12 million (16 crores). Any unspent balance on the grant of £2.5 million (3.3 crores) previously promised in aid of the Frontier Areas Budget for 1946–47 will also be available for this purpose.
3. His Majesty's Government take note of the statement of the Government of Burma that the Government of Burma will not be capable of making any further contribution to defence beyond the 335 lakhs already included in the Budget.
The Government of Burma maintain the view that in principle the estimated cost of maintaining troops in Burma, including the cost of supplies and services required by these troops, on a peace-time basis, to meet the peace-time requirements of Burma, is an appropriate charge on Burma revenues, without prejudice to
and they agree accordingly to furnish His Majesty's Government as soon as possible with a reply to the Burma Office letter of 22nd February, 1947, setting out their counter proposals in detail on this basis and including their views on paragraph 6 of that letter.
- (a) the eventual decision as to the strength and composition of the Burma Army;
- (b) a decision on the figures of cost now being calculated by Burma Command;
- (c) the statement on capacity to pay quoted above;
4. His Majesty's Government agree to make advances to Burma towards the net expenditure in 1946–47 on Projects (including public utilities, etc.) within a ceiling of £18,375.000 (24.5 crores).
5. The Government of Burma agree to pay over to His Majesty's Government the proceeds from the sale of Civil Affairs Service (Burma) stores which are not lend-lease equipment bought from the United States of America. They also agree that on the liquidation of any of the Projects the proceeds of the sale of their capital assets shall be paid over in reduction of outstanding loans after deducting the cost of liquidation. It is further agreed that there shall be the fullest exchange of information relating to the Projects between the two Governments, and that the liquidator shall furnish to His 278W Majesty's Government any information which they may require relating to the disposal of the assets.
6. It is agreed between the two Governments that the possibility of converting part of the interest-free loan into a grant, referred to in paragraph 5 of Annex B to the London Agreement, shall remain open for further consideration in the light of future developments in the general economic and financial situation.
Signed on behalf of His Majesty's Government in the United Kingdom:
J. I. C. CROMBIE.
Signed on behalf of the Government of Burma:
30th April, 1947.