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Ms. Chanpen Puckahtikom and Mr. Eduard H. Brau

Abstract

In the current environment of payments difficulties, a principal role of the Fund remains the encouragement and support of timely adjustment policies of member countries.

International Monetary Fund

unrecovered claims and arrears accounted for the remaining one-third. Total export credit commitments outstanding, which had contributed to the rise in total exposure during 1992–95, declined by some 4 percent in 1996 as repayments exceeded new commitments. In addition, unrecovered claims have risen sharply in recent years—the majority of this increase represents payments of insurance claims by agencies in the context of a few large Paris Club reschedulings. Export credit agenciesexposure is concentrated in relatively few countries—the 10 (20) main recipients accounted

Mr. Christopher J. Jarvis, Mr. Balázs Horváth, and Mr. Michael G. Kuhn

staff estimates. China The rise in export credit agenciesexposure to China, as shown in Chart 10 , is striking. It has been driven in large part by increases in demand associated with China’s high growth rate and increases in the investment ratio. The increase in exposure is entirely a reflection of new commitments. China was by far the most important market for export credit agencies in 1993, receiving more than twice as much in new commitments as any other single country, and this trend has continued in 1994. By end-September 1994, export credit agencies

International Monetary Fund

credit exposure to developing countries and economies in transition in recent years is attributable to some extent to an increase in agenciesexposure in the form of arrears and unrecovered claims (resulting from payment of insurance claims by agencies, usually in the context of Paris Club reschedulings). However, the most important source of increases in exposure since 1992 has been an increase in new export credit commitments, driven in part by more aggressive export promotion as well as a resurgence of import demand by many developing countries. Chart 9 , which

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; that is, for export credits denominated in U.S. dollars, EID/MITI reports to the OECD in terms of the underlying loan contract rather than the currency of the insurance contract. It would appear that the only cases where foreign currency denominated credits carried and reported at contract rates account for more than one fourth of agency exposure are the agencies of France, Spain, and Sweden. These are, however, important cases. Given these problems, it is not possible to derive a series that will reflect the exchange rate adjusted flows of export credits. It is

International Monetary Fund
Export credit agencies (ECAs) have played a critical role in financing for developing countries in recent years, and officially supported export credits have been growing in volume. The current export credit exposure to developing countries and economies in transition has reached almost half a trillion dollars. This paper reviews developments in export credit markets affecting exposure, new commitments, and cover policy for developing countries and economies in transition and discusses three key issues affecting export credit markets: a more widespread involvement of ECAs in project financing transactions, a strong presence of ECAs in the market for investment insurance, and a deepening of the forfeiting market.
International Monetary Fund

; that is, for export credits denominated in U.S. dollars, EID/MITI reports to the OECD in terms of the underlying loan contract rather than the currency of the insurance contract. It would appear that the only cases where foreign currency denominated credits carried and reported at contract rates account for more than one fourth of agency exposure are the agencies of France, Spain, and Sweden. These are, however, important cases. Given these problems, it is not possible to derive a series that will reflect the exchange rate adjusted flows of export credits. It is

International Monetary Fund

-term credits as those with repayment terms of up to one or two years. Note: The 1994 and 1995 figures reflect an enhanced debtor country coverage by the Berne Union of 19 countries with total exposure that amounted to $9.2 billion in 1994 and $35.4 billion in 1995. See Chart 5 . During 1995, the exposure of export credit agencies remained heavily concentrated in ten middle- and low-income countries, which accounted for half total agenciesexposure at the end of 1995 ( Chart 2 ): exposure was largest to Russia (12 percent of total exposure largely as a result of

International Monetary Fund

trends in agency exposure, including short-term exposure, on an exchange rate adjusted basis and using both BIS/OECD and Berne Union data, are also presented, both for each of the 14 countries and broken down between countries that did and did not have payments difficulties ( Charts 3 through 8 ). As explained in Section III , there are many problems with these numbers and they should be considered in the light of all of the caveats given in that section and Appendix II . Given these shortcomings, no attempt has been made to explain them in the text of each case

Mr. Christopher J. Jarvis, Mr. Balázs Horváth, and Mr. Michael G. Kuhn

countries, but the portfolio of export credit agencies remains heavily concentrated: 4 the ten largest recipients of export credits account for about 63 percent and the largest 20 for 87 percent of export credit agenciesexposure ( Chart 2 ). There have been significant shifts in relative exposure across countries and these are discussed in Chapter IV . Chart 2. Twenty Main Recipients of Export Credits: Share in Agencies’ Portfolio (In percent) Sources: Berne Union; and IMF staff estimates. Total exposure has also increased sharply in recent years