§ North Borneo
- (i) His Majesty's Government, in consultation with the Governor, have had under consideration the means whereby the Colony of North Borneo, which suffered wide devastation during the war, could be assisted to regain and develop a balanced and sound economy, especially owing to its present inability to meet the cost of entire rehabilitation from its own resources. Since the Civil Government took over on 15th July, 1946, the Government of North Borneo has been in receipt of grants and loans in aid from the United Kingdom Exchequer to meet various commitments and to assist in rehabilitation. His Majesty's Government consider that the financial position of the Colony and its various liabilities are now sufficiently clear to permit of a final financial settlement between His Majesty's Government and the Colony on the following lines:
- (ii) Any expenditure on account of the amount to be paid to the British North Borneo (Chartered) Company by His Majesty's Government for acquiring North Borneo's sovereign rights and assets will be borne by His Majesty's Government outside the terms of this settlement.
- (iii) Including a grant-in- aid of £650,000 for the year 1948–49, expenditure on rehabilitation from past grants-in-aid and contributions from the Colony's revenue will have been such as to leave a balance to be found of £1,400,000. It is proposed that the Colony should find a sum of £150,000 a year for the two years 1949 and 1950 (making a total of £300,000), and that His Majesty's Government, subject to Parliamentary approval, shall make further grants in all totalling £1,100,000 for the financial years 1949£50 and 1950£51, the period to be extended if it is not possible to complete the reconstruction programme in that time. Furthermore, if it is not possible to expend the whole of the £650,000 1948£49 grant in aid by the end of the United Kingdom's current financial year such unexpended portion, subject to Parliamentary approval, shall be carried forward.
- (iv) In view of the magnitude, in relation to North Borneo's total budget., of the assistance from His Majesty's Government, general control of the Colony's finances by His Majesty's Government must continue to be maintained, although some relaxation from the existing form of control may be agreed to.
- (v) In addition to the programme of reconstruction the Governor envisages a programme of development to cost some £3,300,000. It is estimated that this programme will have to be financed:
- (a) From revenue to the extent of £750,000 over the five years 1951–55, though every effort will be made to increase this figure.
- (b) From the Colony's existing allocation of £750,000 from Colonial Development and Welfare funds.
- (c) From a loan which it is estimated will be required to be raised in 1953 amounting to £1,300,000, subject to his Majesty's Government being able to agree at the time for a public loan of this amount to be raised.
- (d) From a further allocation of £500,000 from Colonial Development and Welfare funds which would be subject to review in three years' time, in the light of the Colony's ability to use its total revised allocation.
- (vi) a loan already provided by His Majesty's Government of £502,296 to enable the Colony to redeem currency issued by the British North Borneo (Chartered) Company will, subject to Parliamentary approval, be converted into a free grant.
- (vii) His Majesty's Government will not seek any contribution towards the cost of the military administration which functioned prior to civil Government being re-established, but further consideration will be given to the incidence of charge of certain stores ordered for the military Administration which arrived after civil government had been re-established.
§ Sarawak and Brunei
§ His Majesty's Government are awaiting a revised estimate of the financial position and future liabilities of the Government of Sarawak and any request for assistance beyond that referred to below will be considered on its merits in the light of that information when received. In the meantime, His Majesty's Government has agreed with the Governments of Sarawak and Brunei that
- (i) His Majesty's Government will not seek for any contributions from the Governments of Sarawak and Brunei
133 towards the cost of the Military Administrations which functioned prior to Civil Government being established. but further consideration will be given to the incidence of charge of certain stores ordered for the Military Administrations which arrived after Civil Governments had been re established. - (ii) There should be an increase of £500,000 in the existing allocation to Sarawak from Colonial Development and Welfare funds, subject to review in three years' time in the light of the Colony's ability to use its total revised allocation.