International Monetary Fund
Published Date:
March 2004
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Over 90 percent of world trade is conducted on the basis of cash or short-term credit, with the remainder supported by medium- and long-term credit and other means of financing. Trade financing therefore is an important component of external financing for developing countries. Export credits supported by official export credit agencies (ECAs) are a key element of nonconcessional financing from bilateral sources to developing countries and economies in transition (Box 2.1).7 The Berne Union of ECAs accounted for more than 16 percent of the total indebtedness of these countries and almost half of their indebtedness to official creditors in 2001.8

Export Credit Supported by Export Credit Agencies

The exposure of ECAs to developing countries and economies in transition increased in 2002 following a three-year decline. The increase in 2002 was the result of both a recovery in new commitments and larger stock of arrears and unrecovered claims, including outstanding claims that have been rescheduled (Figure 2.1).9 Approximately two-thirds of the total exposure of ECAs represented outstanding commitments in short-, medium-, and long-term export credits, while unrecovered claims and arrears accounted for the remaining one-third. Although short-term exposure has remained virtually unchanged in the last several years, medium- and long-term exposure declined in 1995-2000. The declining trend appears to have been arrested during 2001–02, mainly reflecting higher new commitments. Arrears and unrecovered claims increased in 2002 as a number of emerging market economies in Latin America experienced financial difficulties.

Figure 2.1.Berne Union: Structure of Export Credits

(Billions of U.S. dollars)

Sources: Berne Union; and IMF staff estimates.

1Arrears and unrecovered claims: These include debt refinanced or rescheduled. Overdue payments by borrowers are classified as arrears if these payments have not yet resulted in claims on export credit agencies.

2Commitments: Total amount of loans by, or guaranteed or insured by, an export credit agency, either globally or to entities in a specific country, excluding amounts that are in arrears or on which claims have been paid. Usually includes principal and contractual interest payable by the importing country on disbursed and undisbursed credits, and sometimes includes not only liabilities of the agency but also uninsured parts of the loan.

3Short-term commitments: Commitments that provide repayment within a short period, usually six months. Some agencies define short-term credits as those with repayment terms of up to one or two years.

4Including IMF staff estimates of rescheduled amounts originating from commitments to the former Soviet Union, which were reported by some but not all agencies that had reported such claims earlier.

ECAs’ exposure remained concentrated in relatively few, mostly middle-income, countries. The 20 major recipients (Figure 2.2) accounted for over 80 percent of the agencies’ total exposure. In particular, the ECAs’ exposure to Russia and China far exceeded that to other countries, accounting for about 15 percent and 10 percent, respectively, of their total exposure in 2002. Asian countries represented about 30 percent of the total exposure; Middle East and Africa, about 30 percent; economies in transition, one-fourth; and Latin American countries, one-fifth.

Figure 2.2.Exposure of Export Credit Agencies to Selected Major Developing Countries and Countries in Transition, 1995 and 20021,2

(Percent of total export credit agencies’ exposure)

Sources: Berne Union; and IMF staff estimates.

1Berne Union reporting agencies.

2Data for 2002 include IMF staff estimates of rescheduled amounts originating from commitments to the former Soviet Union.

New commitments of ECAs to developing countries and economies in transition fluctuated significantly between 1998 and 2002 (Figure 2.3). These fluctuations were caused by several factors, including the recovery in 2000 from the effects of the Asian crisis; the involvement of ECAs in some large projects; weak oil prices in 2001; and strong demand for trade credit in countries with improved growth outlook (e.g., China) in 2002. These effects were felt by all regions but were most pronounced in Asia and the Middle East (Figure 2.4). About 90 percent of the new commitments in 2001–02 were made to middle-income countries and economies in transition, with the remaining 10 percent heavily concentrated on a few low-income countries in Asia (Bangladesh, India, Indonesia, Pakistan, and Vietnam). New commitments to HIPCs stayed at 2–3 percent of total new commitments.10

Figure 2.3.Officially Supported Export Credits: New Commitments

(Billions of U.S. dollars)

Source: Berne Union.

Figure 2.4.New Export Credit Commitments in Selected Major Markets, 1996–2002

(Billions of U.S. dollars)

Sources: Berne Union; and IMF staff estimates.

Box 2.1.Trade Financing and Official Export Credit Agencies

Financing international trade is a complex process, involving importers, exporters, and commercial banks in both exporting and importing countries, as well as central banks acting as regulators of commercial banks. Among the potential problems of trade financing are commercial risks (inadequate information about foreign customers), exchange risks (abrupt changes in the value of the relevant currency or financial crisis), and political risks (exchange controls).1

Official ECAs—which have been established in most industrial countries and many developing countries—provide insurance or guarantees to short-term as well as medium- and long-term export credits with the main purpose of promoting their own countries’ exports. Only a few EGAs provide export credit directly.2 Short-term cover often includes both commercial and political risks. During the 1990s, the provision of cover for short-term trade finance underwent a major transformation as the private sector increased its willingness and capacity to undertake such business, and a significant part of official EGA operations has been privatized. Between 85 percent and 90 percent of short-term export credit insurance is now underwritten by insurers and reinsurers in the private sector, without the involvement of governments.3

The provision of trade financing and corresponding insurance cover depends on a number of factors, in most cases: (1) exporters who want to do business with the countries concerned and who are prepared to bear part of the risk of the transaction; (2) importers ready to buy goods; (3) in some cases, importing country governments prepared to guarantee the credits particularly for medium-term financing; (4) local banks willing to make letters of credit available to importers and banks in exporting countries ready to confirm them and provide credit lines as needed.

ECAs commit insurance or guarantees either directly to exporters or to exporters’ banks only after this complex chain of transactions has taken place. Moreover, ECAs’ insurance coverage is limited to 85 percent of the total shipment cost under the OECD guidelines.

World Trade Volumes and New Commitments by ECAs1

(1995 = 100)

Sources: Berne Union; and IMF staff estimates.

1New commitments in U.S. dollars of 1995.

There is usually a major time lag involved between identification of an export to be covered and the decision to cover it, as a result of contract and documentation requirements, especially in the case of capital goods. With the possible exception of some short-term finance, export credit finance thus cannot be manipulated easily or quickly. Over the long term, ECAs appear to have facilitated a steady stream of finance to support imports in developing countries through their insurance coverage, as suggested by the long-term relationship between the volume of world trade and EGAs’ new commitments by EGAs (see figure).4

1For a more detailed explanation of techniques and sources of international trade financing, see George and Giddy (1988).2For example, JBIC provides direct lending to finance trade and loans for balance of payments financing.3See Stephens (1999), p. 33.4The two series are statistically significantly correlated (cointegration at 5 percent level according to the Johansen test).

Export credits accounted, on average, for about 25 percent of the total external debt of the main recipients of export credits by the end of 2001 (Figure 2.5). For several oil producing countries (e.g., Algeria and the Islamic Republic of Iran), export credits represented more than half of their external debt. In the cases of Algeria and Nigeria, this represents long-standing rescheduled debt or arrears rather than recent new commitments. For other countries with a more diversified base of foreign financing, such as major Latin American and Asian countries, export credits represented less than 20 percent of their external debt.

Figure 2.5.Main Recipients of Export Credits Among Developing Countries and Countries in Transition, 20011

(Percent share of export credits in total external debt)

Sources: Berne Union; and IMF staff estimates.

1Data for stocks of debt of the Islamic Republic of Iran and Iraq are not available or could not be reconciled.

Financial Performance of Export Credit Agencies

The financial performance of most ECAs, as measured by net cash flow (the sum of premium income and recoveries minus claim payments), improved significantly during 2000–02 (Figure 2.6; data for 2003 are not yet available).11 The net cash flow of Berne Union members has been in surplus since 1996, following negative balances since 1981. The surplus increased from $2.9 billion in 1999 to an average of about

6 billion in 2001–02. The improvement of the net cash flow during 2000–01 was mainly due to the increase in recoveries and the decline in the payments of claims. A sharp increase in recoveries in 2001 reflected the payments made by Nigeria in the context of the Paris Club rescheduling, as well as continued payments by other countries that had rescheduled their debt with the Paris Club in the past (e.g., Russia).

Figure 2.6.Export Credit Agencies: Premium Income, Recoveries, Claims, and Net Cash Flow1

(Billions of U.S. dollars)

Source: Berne Union.

1Medium-Term, Long-Term, and Short-Term Committees’ data only. Investment Committee’s data are not included.

New Commitments and Cover Policy for Selected Countries

The export cover policy of ECAs can vary from very cautious to very active, and significantly affects new commitments to specific countries. Business demand for insurance cover has an impact on cover policy, as rising business opportunities in a country may stimulate ECAs’ commercial interests and encourage them to adopt an active policy stance. The macroeconomic situation of the country to be covered, the economic policies of its government, and its payments record will also affect cover policies.

ECAs’ cover policies to Asian markets were generally positive during 2001–02. For China, the largest recipient of new commitments, all agencies remained open for business, generally without restrictions. New commitments rose sharply to about

17 billion in 2002, building on the recovery since 2000. As agencies’ payments experience was generally positive, they were open for short-, medium-, and long-term business with bank or sovereign guarantees. New commitments to Hong Kong SAR, Indonesia, Malaysia, and Thailand followed a similar trend: new commitments increased, in some cases quite strongly in 2002 (e.g., Malaysia), but fell in 2001. However, demand for export credit cover still remains fragile in several countries. Many agencies reported arrears and restructuring operations in Indonesia; hence, cover policies remained restrictive. New commitments to Thailand declined sharply in 1998 because of the Asian crisis, and have remained at relatively low levels since then. New commitments to the Philippines fell by over 20 percent each year in 2001–02, following a surge in 2000 on account of investments in mobile telephone operations.

The ECAs significantly tightened their cover policy in major Latin American markets during 2001–02. New commitments to Brazil declined by 11 percent and 20 percent, respectively, in 2001 and 2002, as the country’s financial crisis deepened. New commitments to Argentina halved to

1 billion in 2001 and almost came to a halt in 2002, falling to only
0.2 billion. Reflecting Argentina’s financial difficulties, arrears and overdue claims began to accumulate in the second quarter of 2001, leading many ECAs to tighten their cover policy in the middle of 2001. Participants in the export credit arrangement (OECD consensus) downgraded the country risk category for Argentina to 7 (the worst). While ECAs remained open for business, generally without restriction, in Mexico, new commitments declined in 2001–02 in part on account of concerns about the financial stability in the region.

With the strong economic recovery in Russia, ECAs eased their cover policy and new commitments increased during 2000–02. The large increase in the second quarter of 2000 was related to the gas pipeline project under the Black Sea extending from Russia to Turkey. New commitments to Poland and Romania increased in 2002, but fell in the Czech Republic and the Slovak Republic.

New commitments to Turkey swung erratically during 2000–02: after a 63 percent increase in 2000, they fell by 65 percent in 2001 and remained little changed in 2002. The surge of commitments in 2000 was partly due to investment activity following the earthquake of 1999, while the subsequent decline reflected the effect of the financial crisis at the end of 2000 and the resulting economic slowdown. New commitments to the Islamic Republic of Iran increased markedly in 2000 and remained at relatively high levels in 2001–02, as several agencies eased their cover policy on account of improved diplomatic relations between the Islamic Republic of Iran and some European countries and demand for export credit for oil-related projects. As a result of high oil prices, new commitments to Saudi Arabia rose by 176 percent in 2000, with continued high levels of commitments in 2001–02. New commitments to Algeria increased by 52 percent and 18 percent, respectively, in 2000 and 2001, and remained at about $1.5 billion in 2002 because of large gas and oil projects. In contrast, new commitments to Egypt and Tunisia declined during 2000–01, but recovered somewhat in 2002.

Institutional Changes

In November 2001, the members of the OECD Working Party on Export Credits and Credit Guarantees (ECG) agreed on a recommendation to improve transparency by reporting on the environmental effects of projects financed by export credits. The discussions on this subject in the ECG started in 1998. With the 2001 recommendation, the members are expected to identify and evaluate the environmental impact of projects.

In July 2001, in support of the HIPC Initiative, ECG members adopted a Statement of Principles designed to discourage the provision of officially supported credits for “unproductive” expenditures in HIPCs. Unproductive expenditure generally refers to transactions that are not consistent with countries’ poverty reduction and debt sustainability strategies and do not contribute to their social and/or economic development. ECG members agreed to review their commitments to HIPCs on an annual basis. During 2002, official ECAs committed some

2.4 billion to HIPCs, with roughly
1.1 billion provided to Vietnam.12 Other major HIPC recipients of export credit in 2001–02 include Angola, Cameroon, Ghana, and Kenya.

In December 2000, ECG members adopted the Action Statement on bribery and officially supported export credits. The Action Statement calls for members to take appropriate measures to deter bribery related to officially supported export credits and to take appropriate action in cases where bribery is found to be involved in the awarding of an export contract. The ECG will review periodically measures taken by the members pursuant to the Action Statement.

As regards changes in individual ECAs, in April 2001 the export insurance division of the Japanese Ministry of Economy, Trade, and Industry was transformed into an independent agency, called Nippon Export and Investment Insurance (NEXI). In November 2001, the China Export and Credit Insurance Corporation (Sinosure) was founded, combining the business and personnel of the export credit insurance department of the People’s Insurance Company of China (PICC) and China Exim Bank.

Trade Financing in Financial Crises13

Virtually all recent financial crises in emerging market economies were associated with a sharp contraction in imports and exports. While import contraction could be caused by factors other than the availability of external financing, such as exchange rate depreciation, weak domestic demand, or insolvency problems in local banks and the corporate sector, declines in trade financing could have depressed exports and other activities that depended on imported inputs, exacerbating recession in crisis countries. The bulk of the trade financing to emerging market economies is provided by the private sector in the form of bank-financed (short-term) credit, but official ECAs also play an important role in providing insurance, particularly for medium- and long-term projects. The demand for ECAs’ insurance is a derived demand from exporters, importers, and banks involved in trade finance. ECAs’ operations during financial crises thus reflect their own policies in granting insurance cover and business demand in crisis countries.

Available evidence from recent financial crises appears to suggest that ECAs responded to crises procyclically. New commitments by official ECAs typically fell during financial crises, but the extent and duration of the decline appear to be related to the duration of a crisis and whether there had been accumulation of arrears (Box 2.2). A short crisis in the absence of arrears brings about a fast recovery of new ECA commitments as suggested by the cases of Brazil (1999), Malaysia (1997), and the Philippines (1997/98), whereas a protracted crisis in the presence of large arrears discourages new ECA commitments as suggested by the cases of Argentina (2002) and Indonesia (1997/98). Consistent with these observations, a study found that the 1997 crisis in South East Asia was not caused by ECAs, nor did their subsequent actions contribute to a recovery.14

It is worth noting that country authorities attempted to address the sudden loss of access to trade financing during financial crises, often with international support. As summarized in Box 2.3, the central banks of Brazil, Indonesia, and Korea launched facilities to support exports and imports, with foreign funding in the cases of Indonesia and Korea. Korean commercial banks worked with the U.S. Ex-Im Bank, a key trading partner country, to enable local firms to import.

IFI Schemes to Support Trade Financing

International financial institutions (IFIs) have played an increasingly active role in the area of export credit insurance and finance. IFIs have supported programs fostering national and regional trade development in developing countries, with a variety of approaches. The World Bank’s Multilateral Investment Guarantee Agency (MIGA) was created in 1988 to promote foreign direct investment in emerging market economies by offering political risk insurance (guarantees) to investors and lenders. Other multilateral development banks also established trade finance schemes to promote foreign trade in their member countries.15 While many such schemes attempt to address political and/or commercial risks in the context of medium- and long-term project financing, several IFIs have set up trade finance facilities to address problems arising from financial crises as well as trade development problems (Table 2.1).

Table 2.1.Selected Trade Finance Facilities of International Financial Institutions
International Finance CorporationAsian Development BankEuropean Bank for Reconstruction and DevelopmentInter-American Development Bank
Name of facilityTrade Finance Facility.Export Financing Facility.Small/Medium Enterprises Trade Enhancement Facility.Trade Facilitation Program.International Trade Finance Reactivation Program.
Key objectivesAddress the shortages of trade finance resulting from the cutback in credit lines being offered to crisis country banks.Provide credit to private exporters suffering currency turmoil.Increase access of small and medium-sized enterprises and emerging exporters to trade finance.Promote foreign trade.Help countries suffering recent economic crises to resume growth.
Mode of operationDirect credit to private commercial banks that are major players of foreign trade finance.In the case of Thailand, loan to the Ex-lm Bank of Thailand for on-lending to Thai banks.In the case of Pakistan, loan to the State Bank of Pakistan for a foreign exchange-based trade finance facility; partial risk guarantee.Short-term loan to local banks for on-lending to local exporters and importers; and EBRD guarantees (stand-by letter of credit).Loans and guarantees to the private sector.
Terms of financingShort-term (360 days) market rates.5 years, 1½ years grace, cost plus 1 percent.Market rates.Short-term (180–360 days) market rates.Credit lines as short as 160 days, market rates.
Sector targetedExport sector (pre- and post-shipment).Export sector (pre- and post-shipment).Small and medium-sized exporters.Export and import sectors (pre- and post-shipment and working capital for trade).Export and import sectors.
Recent casesBrazil (2002–03).Thailand (1998).Pakistan (2002).27 Commonwealth of Independent States and Eastern European Countries.$1 billion program approved in March 2003.
Sources: Websites of international financial institutions.
Sources: Websites of international financial institutions.

During the Asian crisis, the Asian Development Bank (AsDB) provided loans to Thailand for on-lending to local banks that would in turn provide working capital to small and medium-sized enterprises in order to enable them to continue exporting. More recently, the AsDB also supported trade financing facilities in Pakistan to cope with the difficulties in the aftermath of the war in a neighboring country. In response to the shortages of liquidity in Brazil’s export sector as foreign banks cut back their trade credit lines to Brazilian financial institutions, the International Finance Corporation (IFC) of the World Bank Group began in 2002 to extend credit to Brazilian banks that were major players in the country’s trade finance sector. Preliminary assessment suggests that the IFC-supported trade finance facilities have been successful in convincing international banks to re-extend trade finance that had been withdrawn and thus contributed to the government’s crisis resolution efforts. The Trade Facilitation Program (TFP) of the European Bank for Reconstruction and Development (EBRD) includes guarantees for import- and export-related transactions, as well as financing to banks for on-lending to traders. Thus far, the EBRD has provided, under the TFP, guarantees totaling over

1 billion to foreign banks to support their trade credit lines to local banks in developing member countries.

Box 2.2.New Commitments by Official Export Credit Agencies to Crisis Countries

The ECAs’ policy to provide insurance cover or guarantee for exports is typically reviewed and adjusted in light of an importing country’s economic situation, including business opportunities, government policies, and payment records. As illustrated below, new commitments by ECAs to crisis countries tend to be procyclical. The figures showing ECAs’ new commitments are in billions of U.S. dollars.

Argentina. As the crisis deepened and arrears accumulated, ECAs’ new commitments declined for two consecutive years in 2001–02, and their total exposure is estimated to have fallen by

2.6 billion to
7.4 billion in 2002. Many ECAs tightened their cover policy substantially in the middle of 2001. The country risk for Argentina was downgraded by ECAs to 7 (the worst).

Brazil. At the height of the 1999 crisis, only one agency closed its business with Brazil, and a year later almost all ECAs were open for business without restrictions. Operations were hardly affected as the crisis was relatively short and there was no accumulation of arrears. New commitments fell in 2002 as the country ran into payment difficulties.

Indonesia. As the 1977/78 crisis persisted, many ECAs reported arrears and restructuring operations in Indonesia, hence cover policies remained restrictive, resulting in substantially lower levels of ECAs’ commitments in 1999–2002 compared with precrisis levels.

Thailand. Demand for export credit cover remained fragile for Thailand after the Asian crisis. It is possible that the level of precrisis imports was inflated by overinvestment, leading to the apparent weak recovery to ECAs’ commitments.

Malaysia. ECAs’ commitments to Malaysia recovered rapidly after the Asian crisis, reflecting relatively mild economic slowdown and no accumulation of arrears. The surge in new commitments in 2000 was related to specific investments and telecommunications projects.

Philippines. New commitments after the Asian crisis also recovered relatively quickly. The increase in 2000 reflected investments in mobile telephone operations.

Russia. The 1998 default on external debt had a devastating effect on ECAs’ new commitments in 1999. In mid-1998 all ECAs were open for business, although many had already adopted a case-by-case approach. A year later, four ECAs suspended their business and the remaining adopted a cautious case-by-case approach. With the subsequent strong economic recovery, ECAs eased their cover policy and increased their operations, but the level of new commitments has not recovered to precrisis level. The large increase in new commitments in 2000 was mainly related to the gas pipeline project under the Black Sea from Russia to Turkey.

Turkey. ECAs’ operations in Turkey surged in 2000 largely reflecting investments in reconstruction following the earthquake of 1999, and fell sharply in 2001 as a result of the financial crisis at the end of 2000 and the resulting economic slowdown.

Box 2.3.Recent Approaches to Support Trade Financing in Financial Crises

Three schemes implemented by crisis country authorities to mitigate the loss in trade financing to importers and exporters in their countries are worth mentioning.1


At the height of the 1997–98 crisis, Indonesia established two facilities to help export-oriented firms finance imported inputs. This was in addition to trade facilities under the Frankfurt agreement of June 4, 1998.2 Bank Indonesia deposited reserves of $1 billion in banks abroad to guarantee letters of credit issued by Indonesian banks. The Export-Import Bank of Japan (JEXIM) also provided funding via Bank Indonesia to guarantee payment of letters of credit issued by Indonesian banks. Bank Indonesia also agreed to maintain a minimum foreign exchange balance no less than the amount of actual and contingent liabilities of the foreign banks related to letters of credit issued by Indonesian local banks. According to an IMF staff assessment in 1999, the Bank Indonesia scheme was relatively successful but guaranteed mostly imports by public entities, while the JEXIM scheme was hardly used initially because it had less attractive terms than the Bank Indonesia scheme. Despite these efforts, trade financing plummeted. The lack of financing for trade activities may have reflected the difficult situation of Indonesia’s domestic banks, which may have been using all their liquidity to cover losses associated with negative spreads and large nonperforming loans.


Immediately after the outbreak of the 1997 financial crisis, as trade financing provided by the Korean banking sector fell abruptly, the Bank of Korea set up facilities with total funding of

2.3 billion from its official foreign exchange reserves. Of this amount,
2 billion were used for payment of imports of raw materials, and
0.3 billion for the purchase of export bills of exchange from export companies. The role of the Bank of Korea was restricted to providing financial support to banks that handled trade financing.3

During 1998, the U.S. Ex-Im Bank provided insurance to letters of credit issued by several Korean banks to enable Korean firms to import from the United States. The U.S. Ex-Im Bank supported about

1 billion out of the total of
16 billion U.S. exports to Korea in 1998. The prompt action by the U.S. Ex-Im Bank sent a positive signal to financial markets on the Korean market’s financial viability despite its temporary difficulties.4


In August 2002, the Brazilian central bank announced that it would provide about

1 billion in foreign exchange from its reserves to meet the demand for export finance. The credit lines had a 90- to 180-day maturity and carried a market-determined interest rate. The central bank decided to auction the
1 billion through the end of 2002, to offset in part the reduction in external trade credit lines by foreign banks to Brazilian exporters. From August 23 to October 18, 2002, the central bank provided
1.5 billion in trade credits. The central bank announced on November 11 that it would stop financing exports as trade financing seemed to be normalizing, but it would be vigilant in monitoring trade financing conditions and it could still intervene if market conditions deteriorated.

1See International Monetary Fund (2003).2The agreement, signed between Indonesia and the Bank Steering Committee representing foreign creditor banks, had three main elements: (1) a voluntary program that created a framework for the restructuring of the external debt of the Indonesian private sector to creditor banks and provided debtors and creditors with foreign exchange rate protection; (2) a scheme under which obligations owed by Indonesian domestic banks to foreign banks were exchanged for new loans with tenors of up to four years; and (3) an arrangement on the maintenance of trade credit wherein foreign banks were asked to maintain their exposure in letters of credit at the level of end-April 1998.3Information provided by the Bank of Korea.4See Hufbauer and Goodrich (2002), p. 2.

For a discussion of the role of export credit agencies in financing developing countries and economies in transition and of the basic features of official export credits, see Stephens (1999).

The Berne Union—the International Union of Credit and Investment Insurers—works for international acceptance of sound principles of export credit insurance and foreign investment insurance. It now has 51 members, including multilateral (Multilateral Investment Guarantee Agency), governmental, and some private institutions, from 42 countries and locations. Sixteen members are from non-OECD countries. Among members, HERMES (Germany), the U.S. Ex-Im Bank, the Nippon Export and Investment Insurance (Japan), the Export Credits Guarantee Department (United Kingdom), the Compagnie Francaise du Commerce Extérieur—COFACE (France), and SACE (Italy) represent about 70 percent of the total exposure of the Berne Union’s members. There are some official ECAs such as the Japan Bank for International Cooperation (JBIC) that are not members of the Berne Union. JBIC provides direct lending to support Japanese exports.

The discussion in this chapter is based on the data provided quarterly by the Berne Union Secretariat. The data do not reflect the entire activities of the Berne Union’s ECAs as they cover only 65 developing countries. The trend should be analyzed with caution because new commitments could change erratically if large projects are funded. Also, the classification between categories is not consistent among agencies, and, occasionally, data are not fully updated by all agencies. For problems relating to export credit statistics, see Kuhn, Horvath, and Jarvis (1995).

Data provided by the Berne Union Secretariat cover eight HIPCs—Angola, Cameroon, Côte d’Ivoire, Ghana, Kenya, Uganda, Vietnam, and Zambia

Accounting practices of agencies differ, and only net cash flow data—not accrual data—are available on a consistent basis from all ECAs. Assessing the financial position of ECAs on an accrual basis requires, among other steps, estimating the expected recovery of claims and provisioning for possible eventual losses. An increasing number of agencies have moved toward more sophisticated accounting systems, but interagency comparisons remain extremely difficult, given agencies’ different accounting practices.

Vietnam’s external debt is expected to be sustainable after full use of traditional debt relief mechanisms, and, therefore, the country would not require debt relief under the HIPC Initiative.

For a more detailed assessment of key issues, see International Monetary Fund (2003).

See Stephens and Smallridge (2002).

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