Coll 30/224 'Currency Arrangements in the Arab Sheikhdoms of the Persian Gulf' [‎34v] (76/157)

-12-
tl)
(il)
m ,, sll ch bui*p 1 us®s can t>® utilised
Let Oeveloprnent
Corporation*
o not) np purchaeing power created
wmX? i ;SS£‘S 4 ^'
.
i
- , .n„n of capital fortr«tion and preeervation
while |ii) i le B «V«»tion of income consumption.
(b; The or * rall . 8 , rpl ^? # ? 0 TO r or t another t Bhouid t he
particular Sheikhdom and in conver ted to other fonns
preaerwed as capital. ^ ! ‘ e ^ .oternatiwe revenue to oil royalties
of capital if ^^K-fi fre u" iy o the r forms of expenditui-e
will result. But w h i c h do not by themselves produce
which should be undertaken .. .! 10 ole. hospitals, clinics,
a money income. I “•^.^Umlte causes for expenditure of
oanitetion measurea, nrojecta will provide something
royalties, then c “™ pl lfchao(M but no incoa* - or very little,
of great Talue .J° ^^tatolt hment tney will be a permanent
After eon*tottetl» e t bli o tt aolarie6f wages, equipment etc,
tmrden on the State ^ through a ceasation of oil
etc. If Budget ln ®°? e tave to close down. On the
royalties such social service ^ y h^ eeent availti ble it would
other hand, when capital e d with the building of schools,
MSS'-sr:.-- •«
failing.
(c) As a solution to this problem I 8 ^ 8 S* a J im tion
should persuade the Sheikhs to ,. ^ echool^r'e hospital or
of their capital “«» 1 «“*;*^ n ?r^dJi^ object is sanctioned,
any other ro r t * oal } ior the mctwtl building of
«r^if°hoaD!tat 8 ^c! Lrtheii installation equip^nt, but
scnoolSf hospxtaiB eT,c* t* u 4 in British Government
in addition a capital sum to be lavested in Br e8 titaated
securities to produce an income suf.iclent to ccver tne estu ^
» s^Sj-IHHrsr*
and aoministered by a Trust. This policy of endowment has
seTeral virtues :**
1. It will preserve intact but in different iorra tae
annual patrimony frwi oil*
2 * xt absorbs surpluses faster than ottierviiBe woul^
be possible•
It avoids the risk of closing down of social
betterment schemes through loss of revenue*
It lessens the risk of wild-cat speeding through
possession of too much money.
It will tend to develop a civic aenae in the
Sheikhdoms*
(d)
NVt , As regards point (ii) in sub-para, (a) above -
inc me consumption — this is best met by the import of consumer
goods on as large a scale as possible and by taxation.
However difficult it may be to persuade the dheikhs to iia^ooe
taxation on the rich - they will or course take the line that
/oil will