Letters to the editor

• Author: Delio E. Gianturco
• Position: President First Washington Associates Arlington, Virginia

Export credit agencies

The June 1999 issue of Finance & Development, which dealt with the accomplishments and problems of economies in transition, was superb. The articles devoted to this subject provide a valuable insight into the extraordinary progress achieved against overwhelming odds in undoing decades of economic mismanagement in the afflicted countries of the former Soviet Union and its erstwhile satellite nations. Although two of the articles in this issue hint at the importance of exporting to economic development by indicating the growth of trade, this absolutely critical element is not addressed in the text. A fascinating chart would have been a correlation of export growth rates with the activities of officially sponsored export credit agencies (ECAs).

For example, the highest average annual growth rate of exports (24 percent) is shown for the Baltics, where Latvia's national ECA, Latvijas Eksportkredits, is rapidly expanding its activity. The same can be said of Lithuania's ECA, Lietuvos Eksport ir Importo Draudimas, and of Estonia's Export Development Agency. In Central Europe, with average annual export growth rates of more than 15 percent, effective and well-managed ECAs include EGAP in the Czech Republic, Hungary's Export-Import Bank, Poland's KUKE, the Export-Import Bank of the Slovak Republic, and the Slovene Export Corporation.

In southeastern Europe, with export growth rates of 3 percent, Romania's Eximbank is less dynamic than the examples cited above, while Bulgaria has only recently established the Bulgarian Export Insurance Agency. Both Albania and Bosnia and Herzegovina have fledgling trade finance agencies, supported by the World Bank, that offer repayment guarantees to those selling on credit to private sector buyers if...