ARCHIVES HISTORIQUES
DELACOMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (78)446
Vol.1978/0167

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COMMISSION OFTHEEUROPEANCOMMUNITIES
COM(78)446 final .
Brussels ,13September 1978
.V .' < • .
REPORT FROM THE COMMISSION TOTHE COUNCIL
ontheuseofthefunds transferred for1975 for1976 tothe
OCTunder theexport earnings stabilization system setuplaythe
Decision onthe association ofthe OCT with the ESC
COM(78)446final

I.Introduction
1.InaccordancewithArticle29oftheInternalAgreementonthe
financingandadministration ofCommunityaid,theCommissionisforwardingtotheMemberStatestheOCTreports,ontheusetowhichtheyhaveputthe
fundstransferredfor1975andfor1976undertheexportearningsstabiliza­
tionsystem.
2.Informationconcerningtheutilizationofresourcestransferredin
1975andin1976toDjiboutiandComoros(formerOCTbutnowACPstates)is
examinedintheACPreportsonutilisation.
3.AlthoughtheseannualreportsareobligatoryunderArticle22ofthe
CouncilDecisionontheAssociationoftheOverseasCountriesandTerrito­
rieswiththeEuropeanEconomicCommunity,oneOCT,Tuvalu,hasstillto
sendareporttotheCommission.ACommissionrepresentative wasinformed
duringarecentmission,thatthefundstransferredmightbeusedtoimprove x
thelocalelectricitysupply.TheDelegateoftheCommissionhasbeenasked
topursuethismatter.TheCommissionwillforwardthiscountry'sreport
totheCounciljassoonasithasbeenreceived. ,
•4.TheremainingOCT,*:hichbenefited .fromtransfersin1975andin1976
haveprovidedtheCommissionwiththeannualinformationontheuseofthe
resourcestransferred ,asrequiredbyArticle22oftheAssociationDecision.
However,mostofthereportsweresenttotheCommissionlaterthanthetime
limitlaiddownintheTransferAgreements.
\
5.Thematerialreceived,showsthattherecipientcountrieshaveused
thefundsinoneoftwoways:eithertoimprpvetheeconomyoftheproduct
inrespectofwhichthefallinexportearningsentitledthemtoatransfer,
orforother,purposes.Onecountryhasnottouchedtheresourcesreceived*
II.Utilization ofthefundstransferred-breakdownbycountry
2.1.InBELIZE,theoriginal1975transferwasaccordedtothreeorgani­
sations:47%ofthefundswenttotheBananaControlBord,31fotothe
ForestryDepartment,and22%totheMarketingBoard.Additionalinformation
isasfollows:
'Theoriginaltransferwasallocatedasfollows:
/ • .
P150,000totheBananaControlBoard
-j£100,000totheForestryDepartment
$68,986totheMarketingBoard.
TheallocationtotheForestryDepartmentwasforinvestmentinrevenue
"producingoperations.Howevertheyhadnotspentanythingbythetimewewere
notifiedoftherepayment ■andsotheamountallocatedtothemwaswithdrawn
fortherepayment.Therestoftherepaymentwasmetf!romgeneralrevenue.
./

-2-
Theothersumswerespentasfollows:
BananaControlBoard(j2>150,000)-improvingaccessroads,part
establishment ofca"blewaysandcompletionofonepackingstation.
Thisexpenditurefacilitatesthedeliveryofbananastothe
packingplantbyfarmers,thepackingofthemandthesubsequent
movementtotheshippingpoint..
MarketingBoard($68,986)-purchaseofequipment(bassewing
•machineandmoisturemeter),bagsandseeds.Theseedswillbe
soldtofarmersonarevolvingfundbasis.'
2.2.TheGILBERTISLAM'Sauthoritiesdidnotusethe1976,transfer.
Theypreferedtoawaitresultsfor1977»andtoknowtheamounttobe
reconstituted totheSysteitu
'STABEX-Transfer19762theSTABEXallocatedamounttothe
Gilbertsforcopra1976hasneverbeentouched,bytheGovern­
ment.TheamounthasbeenlyingidleintheBank,asitwas
foreseenbythetimeofreceivingthismoney,thatthereference
levelsfor1977wouldbeexceeded.' N
Theaboveinformation wastransmitted bytheDelegateoftheCommission.
TheGilbertIslandsarerequiredtoreconstitute 174»972EUA-approximately
16iooftheoriginaltransfer.TheDelegatehasnowbeenaskedtofindout,
ifandhow,theoutstanding sumhasbeenutilized.Detailswillbepassed
totheCouncil,whentheybecomeavailable. /
2.3.TheHEWHEBRIDEShasusedthe1975transfertorebalancethe1976
budgetaryprogramme.The1976paymentislikewisetobeincorporated with
thebudgetaryoperationfor1978«TheNewHebridianGovernmentintendsto
createadevelopment bank,andtointroduceasystemtoregularizeand
stabilizecoprapricesandpricesofothercoconutproducts.Bothprojects
wouldhaveadirectimpact ,upontheeconomicdevelopmentofthecountry.The
nationalcompetentauthorities haveprovidedthefollowinginformation :
'Thefirsttransferamountingto1,103,499 (99*5millionHHP),
basedonthelossofcopraexportsduring1975»hasallowedare­
balanceofthe1976budgetaryoperation,whichwasendangeredby
insufficient publicresources ,-resultingfromthediminuation ,as
muchfromexportduesoncoprasales,asfromimportduties,which
areinfluencedbytherestriction oftheinternalrevenue.
,If,lateron,theeconomicconjuncture improves,thesecond
transferof327»364EGA(29*5millionNHF),basedonexternal
tradestatisticsfor1976,muststillbeincorporated withthe
1978budgetaryexercise:withtheaccessionoftheHewHebrides
totheregimeofinternalautonomy,publicchargeswillbe
increasedinproportionsthataxestilldifficulttoappreciate
exactly,aslongasthefusionandthetransferoftheunited
servicesarenotfullycarriedout. •
Imightaddthatthenewexpenses,whichwemusttakeon,donot
complywiththerequirements fortheworkingoftheadministration .
Amongmygovernment'sprojects,figuretwoobjectives,whichwill

have adirect impact oneconomic development :namely the
creation ofadevelopment "bank andthesetting upofasystem
, ;fcoregularize andtostabilize ,copra prices andtheprices of
products derived from thegrowing ofnuts.'
2.4 .Thefunds transferred totheSOLOMON ISLAKDS -for19"!6,arebeing
used toimprove thecopra industry ,andtodirect government
investment towards fisheries andagricultural projects .Thefollowing report
has been received :
'The 1976 Stabex transfer amounted toSI$1,368,067 ,converting
EUAtoSIf>at1,074 .Ofthis amount ,$>750,000 wastransferred
toaspecial fund ,tofinance thedevelopment ofanew copras -
handling port intheWestern Solomons .TheGopra Board isdeve­
loping this facility toimprove ,the "efficiency oftheindustry ,
and sostrengthen theBoard 'sability tosecure favourable prices
'• • .forproducers .Work hasbegan onthe 'newport .Itislikely
that some aspects oftheport may befinanced bybilat-eral aid .
Theremaining $618,067 waspassed through government revenue
andexpenditure tothecapital funds ofthe Government Share­
holding Agency .This isastatutory corporation which makes
andmanages thegovernment 'sdirect investments inmajor .
commercial enterprises ,inajoint-venture framework .Since
theStabex transfer wasmade ,theAgency hasbeen investing in
anewjoint "company (National Fisheries -Development Ltd )to
build andoperate tuna /-fishing vessels (themain source offunds
being aloan from theAsian Development Bank ),andin .theexpan­
sion oftheSolomon Islands only international-grade tourist and
business-trade hotel .GSAisactively negotiating investments
> aimed atexpanding thecopra andtimber industries .' ' •
III .Conclusión
3.1.Theforegoing reports (excluding Djibouti ,Comoros andTuvalu )
cover anamount of1,243,149 EUA ,that is ,69%ofthetotal funds transfer­
redin1975 *For1976 these cover ,asumof2,684 ,102EUAandaccount for
81%ofthetransferred resources .Therefore with respect tothecombined
1975 and1976 operations thereports cover 3,927,251 EUA ,that is77%of
allthetransfers carried out . ' , .
3.2.Allowing forthevagueness ofsome ofthese reports ,itcanbe
estimated that approximately 50%ofthe1Q75 and1976 total wasspent on
developing theproducts ,which gave rise tothetransfers .Smaller
proportions were used foragricultural orinfrastructural projects andtoboost cash resources .
3.3.These initial reports areinteresting ,butitisdifficult at
this stage todraw anydefinite conclusions ;taking into account thefact •
that clarifications havebeen requested from certain countries .Itwould •
therefore bebetter toconsider these reports asbeing provisional .
Moreover ,thefactthatwearedealing withtheresults fromasingle
operation requires thegreatest caution .
3.4'Thepresent method ofreporting does emphasise theneed fora,
f^anfo£dorjedreP°rtin&form «Thisquestion having recently been settled with
theACPStates ,thereports relating toutilization oftransfers fortheyears
ofapplication 77, .78and79will bepresented inastandardized manner .