Front Matter

Front Matter

Chanpen Puckahtikom, and Eduard Brau
Published Date:
August 1985
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© 1985 International Monetary Fund

Library of Congress Cataloging in Publication Data

Brau, Eduard H.

Export credit cover policies and payments difficulties.

(Occasional paper, ISSN 0251-6365 ; no. 37) “August 1985.”

1. Insurance, Export credit. 2. Debts, External. I. Puckahtikom, Chanpen. II. Title. III. Series: Occasional paper (International Monetary Fund) ; no. 37.

HG9977.B7 1985 336.3’435 85-19145

ISBN 0-939934-49-3

Price: US$7.50 (US$4.50 to university libraries, faculty members, and students)

Address orders to: External Relations Department, Attention Publications International Monetary Fund, Washington, D.C. 20431


The following symbols have been used throughout this paper:

  • … to indicate that data are not available;
  • — to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;
  • – between years or months (e.g., 1979–81 or January–June) to indicate the years or months covered, including the beginning and ending years or months;
  • / between years (e.g., 1980/81) to indicate a crop or fiscal (financial) year.

“Billion” means a thousand million.

Minor discrepancies between constituent figures and totals are due to rounding.


In April-June 1984, Eduard H. Brau, Senior Advisor, and Chanpen Puckahtikom, Assistant Division Chief, both of the Exchange and Trade Relations Department, held informal discussions with representatives of ten major official export credit agencies and, in some instances, their “guardian authorities” within the government. These discussions were held to offer an exchange of views and to improve the mutual understanding of experiences with export credit cover policies for borrowing countries in balance of payments difficulties and for those experiencing payments improvements.

Following preliminary consultations, and because of the complexities of the subject and the confidentiality of some of the material, it was agreed that the most useful approach would be to have an informal exchange of views. The ten agencies participating in the review were the Export-Import Bank of the United States (Eximbank); Export Credits Guarantee Department (ECGD), United Kingdom; Compagnie Francaise d’Assurance pour le Commerce Exterieur (CO-FACE), France; Hermes Kreditversicherungs-Aktiengesellschaft (HERMES), Federal Republic of Germany; Export Insurance Division, International Trade Policy Bureau, Ministry of International Trade and Industry (EID/MITI), Japan; Export Development Corporation (EDC), Canada; Exportkreditnamnden (EKN), Sweden; Nederlandsche Credietverzekering Maatschappij N. V. (NCM), the Netherlands; Sezione Speciale per l’Assicurazione del Credito all’Esportazione (SACE), Italy; and Office National du Ducroire (OND), Belgium. For agencies that are not autonomous in these matters and act as agents of their governments, the guardian authorities of these agencies also participated in the informal discussions. The generous cooperation of the agencies, their national authorities, and the Secretariat of the International Union of Credit and Investment Insurers (Berne Union) is gratefully acknowledged. To preserve confidentiality, the views of individual agencies or governments are not divulged nor are data supplied to the staff by any individual agency. The paper reflects information available prior to June 1984.

To help focus the discussions, the staff reviewed with the agencies specific examples of how their country exposure policies have developed, and a sample of eleven debtor countries was selected for this purpose—Argentina, Brazil, Madagascar, Mexico, Nigeria, Peru, the Philippines, Romania, Turkey, Venezuela, and Yugoslavia. The sample is believed to be broadly representative of the varying payments difficulties faced by debtor countries, ranging from mild or sporadic to acute or chronic. Most of the countries in the sample have undertaken, or approached, a Paris Club (or a similar official creditor group) debt rescheduling. The sample countries account for some one fourth of the estimated total trade-related credits for all developing countries.

Chapter I presents background and a summary of conclusions to the study. Chapter II provides an introductory discussion of general principles and traditional considerations guiding cover policy and the range of policy measures utilized by agencies. Chapter III reviews developments in the policies and practices of the agencies following the external debt-servicing difficulties since 1982. It deals with the adaptation of approaches in the changed environment and their effects on the agencies’ practices. It examines a number of practical aspects, including the move toward a more comprehensive risk assessment, the agencies’ responses to debt reschedulings, their criteria for resumption of normal cover policy, the role of internationally coordinated export credit arrangements, and the implications for borrowing countries. Appendix I reviews the experience of the agencies with the sample of eleven debtor countries during the period 1980 to mid-1984. For each country, the description takes account, where appropriate, of developments during the debt buildup phase, the policy turning point, and prospects and issues. Appendix II contains a brief technical note and a glossary of terms used in this paper.

The paper summarizes the authors’ understanding of the experiences of the ten agencies in general as well as with the eleven sample debtor countries over the period 1980 to mid-1984. While the authors have benefited from helpful comments by government and agency officials and by Executive Directors of the Fund, the descriptions of the practices of the agencies and the issues raised by their experiences, especially with individual countries, reflect the views of the authors and should not be attributed to any individual agency or national government, the Berne Union or its Secretariat, nor to the management and Executive Directors of the International Monetary Fund. Research assistance was ably provided by David Hicks, then of the Exchange and Trade Relations Department. The authors also wish to thank the editor, Jennie Lee Carter, of the External Relations Department.

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