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					                    Structured Trade
                                      &
                 Investment Finance

       A Multilateral Emerging Market ECA:
       A Key Driver for Sustainable Development

                                  Paul Mudde
      Senior Vice President Reputation Management & Sustainable Development


Export Credits & Political Risks, London February 2003               ABN AMRO bank
               Structured Trade & Investment Finance

Agenda

I.     Introduction

II. The Rationale for EMECA

III. The Role of EMECA

IV. EMECA & Co-operation with the Market

V. Summary & Conclusions



     Export Credits & Political Risks, London February 2003   ABN AMRO bank
 II.      The Rationale for EMECA
Main Considerations:

1. Debt Constraints Emerging Markets

2. Official Flow Constraints
3. Ambitious UN new Millennium Goals
4. Importance of Private Capital Flows
5. Support for Exports from Emerging Markets
6. Support for Intra-Regional Trade
7. Level Playing Field OECD Exporters & Exporters
  Emerging markets
8. No Dedicated Program to support Trade between
  Emerging Markets
   Export Credits & Political Risks, London February 2003   ABN AMRO bank
II.       The Rationale for EMECA
                                                           Year       1990       2000          2001
Debt Constraints EM
                                                           Total    1458.4       2492        2442.1
      Stock of Total Debt Developing Countries by Region in Bln. US$m
900

800

700
                                                                       Europe & Central Asia
600                                                                    Latin America &Caribbean
500                                                                    Middle East & North Africa
400                                                                    South Asia

300                                                                    Sub-Saharan Africa
                                                                       East Asia & Pacific
200

100
 0
         1970        1980         1990         2000          2001     Source: OECD & World Bank


  Export Credits & Political Risks, London February 2003                            ABN AMRO bank
 II.         The Rationale for EMECA
                                                      MLT Export Credit Debt to BU Members

Debt Constraints EM                                            1999                 2000
                                                               324.1                334.6
           Composition of Debt of Developing Countries in Bln. US$m
 3000
                                                                               Total
 2500
                                                                               LT
 2000
                                                                               LT Public
 1500
                                                                               LT Private
 1000
                                                                               ST
  500
                                                                               IMF Credit
       0
             1970       1980        1990        2000       2001
                                                                  Source: OECD & World Bank

  Export Credits & Political Risks, London February 2003                          ABN AMRO bank
 II.       The Rationale for EMECA

Debt Constraints EM: Debt Indicators All Developing Countries
EDT /XGS: NPV External Debt as a % of annual Exports Goods & Services
EDT/GNI: NPV External Debt as a % of annual Gross National Income


  200

  150
                                                                         EDT/XGS
  100
                                                                         EDT/GNI
   50

       0
           1970          1980           1990         2000   2001
                                                                   Source: World Bank


  Export Credits & Political Risks, London February 2003                   ABN AMRO bank
   II.         The Rationale for EMECA
Debt Constraints EM
                            5%       4%     3%          Top Ten Debtors in 2000
                5%         Turkey   India Thailand
             Korea Rep.                                 Percentage of Total Debt
      6%
                                                        Developing Countries
  Russian Fed.                                          Total Debt US$ 2,492 Billion
   6%
  Mexico


   6%                                                        35% Other Dev.
  China                                                        Countries


    6%
 Indonesia
                                                                       Heavily Indebted (HIPC)
        6%                                                             Severely Indebted
     Argentina                                                         Moderately Indebted
                                           8%                          Less Indebted
                          10%
                          Brazil          HIPC
                                                                                 Source: World Bank

    Export Credits & Political Risks, London February 2003                           ABN AMRO bank
   II.       The Rationale for EMECA
Main Consequences of Debt Problem Emerging Markets:
• Financial Crises in various EM (Asia, Brazil, Russia, Turkey, Argentina)
• Local Currency Devaluation
• Payment Defaults & Private Sector Bankruptcies
• Loss of Jobs and large Social Damages
• EM Governments enhance process of Liberalisation & Privatisation

Response of Financial Markets:
• Credit Crunch
• Increased Pricing
• London Club Rescheduling
• Commercial Work-outs

Response IMF, ECAs, MLAs, Bilateral Donors
• IMF / MLA Support combined with Conditions re. Liberalisation & Privatisation
• Bilateral Aid Loans (e.g. Balance of Payment support)
• Technical Assistance
• Paris Club Rescheduling (Since 1983: 352 Agreements covering US$ 406 Bln.)
• HIPC Debt Relief & Chapter 11 for Sovereigns
    Export Credits & Political Risks, London February 2003               ABN AMRO bank
 II.       The Rationale for EMECA

Official Flow Constraints & Importance of Private Flows

       Net MLT Capital Flows to Developing Countries in Bln. US$
400
350
300
250                                                                      Total
200                                                                      Official
150
                                                                         Private
100
 50
  0
       1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
                                                                Source: World Bank

  Export Credits & Political Risks, London February 2003              ABN AMRO bank
 II.          The Rationale for EMECA
                                                               Gross Official Flows in Bln. US$
                                                                      90     91      98        99
Official Flow Constraints                                      Total 74.1   72.8    78.3      79.2
     Gross Official Flows to Developing Countries in Bln. US$
40
35
30                                                                                     America
25                                                                                     Africa
20                                                                                     Asia
15                                                                                     Ocenia
10                                                                                     Europe
 5
 0
         90      91      92      93      94       95      96    97    98     99
                                                                              Source: World Bank

     Export Credits & Political Risks, London February 2003                        ABN AMRO bank
 II.      The Rationale for EMECA
                                                      MLT Export Credit Debt to BU Members
Official Flow Constraints (IMF)                                1999                 2000
                                                               324.1                334.6

                                                                          Source: IMF
       Stock of Debt Developing Countries to IMF in Bln. US$m
 100

  80

  60

  40

  20

   0
       84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99                      0   1   2
                                                                       Source: OECD, BU & IMF

  Export Credits & Political Risks, London February 2003                         ABN AMRO bank
 II.            The Rationale for EMECA                                          Top Te n Re cipie nts                2000
                                                                                 Am ounts in M illion US$
Official Flow Constraints (OECD DAC)                                              1       Indone s ia               2,456
                                                                                  2       China                     2,097
                                                                                  3       Rus s ia                  1,495
Bilateral Aid 2000: Total US$ 43.3 Billion                                        4       Egypt                     1,442
                                                                                  5       India                     1,438
                                                                                  6       Thailand                  1,187
                                                                                  7       V ie tnam                 1,153
                                                                                  8       Is r ae l                 1,000
                                                                                  9       Philippine s                 990
  Bilateral OECD DAC Aid by Income Group                                         10       Banglade s h                 825

                                                                                 70,000
                                                                                          Total Aid all DAC Members in Mln US$
                                            LLD C

                                                                                 60,000
       10,886                   7,789
                                            O t h e r L o w - I n c o me
                                                                                 50,000
                                                                                                                        ODA
                                            L o w e r M i d d l e - I n c o me   40,000
    32                                                                                                                  OA
                                                                                 30,000
                                                                                                                        Tot al
                                            U p p e r M i d d l e - I n c o me
  1,839                                                                          20,000

                                            H i g h - I n c o me                 10,000

                                 11,739                                               0
       11,358
                                            U nal l ocat ed                                   1999       2000

                                                                                                                Source: OECD
          Export Credits & Political Risks, London February 2003                                             ABN AMRO bank
  II.      The Rationale for EMECA
Official Flow Constraints (OECD DAC)

                               2000: Net ODA as a % of GNI




                                                                UN Target 0.7


                                                             OECD Average: 0.39




                                                                          Source: OECD
    Export Credits & Political Risks, London February 2003                 ABN AMRO bank
II.      The Rationale for EMECA

Ambitious Development Goals for the new Millennium

UN Millennium Development Goals:
1. Eradicate extreme Poverty & Hunger
2. Achieve universal Primary Education
3. Promote gender equality & empower Women
4. Reduce Child mortality
5. Improve Maternal Health
6. Combat HIV / AIDS
7. Ensure Environmental Sustainability
8. Develop Global Partnership for Development

WB Estimate: US$ 40 - 60 Billion of additional Aid per Annum
Internationally Agreed Aid Target:                 0.7% of GDP
Actual Average OECD DAC Countries:                         0.39% of GDP (2000)
To meet Millennium Goals:                                  0.49% of GDP


  Export Credits & Political Risks, London February 2003                     ABN AMRO bank
 II.       The Rationale for EMECA

Importance of Private Capital Flows to Emerging Markets

       Net MLT Private Flows to Developing Countries by Source in Bln. US$
350
300

250
                                                                          Total
200                                                                       Banks
150                                                                       Bonds

100                                                                       FDI
                                                                          Other
 50
  0
       1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
-50
                                                                 Source: World Bank

  Export Credits & Political Risks, London February 2003             ABN AMRO bank
 II.       The Rationale for EMECA

Importance of Private Capital Flows to Emerging Markets


Key Developments re Private Capital Flows:
• Importance of FDI (approx. 30% mergers & acquisitions)

• Volatility of Debt Flows (Bank Loans / Bonds)

• Concentration in Financial Markets

• BIS II Solvency Rules (2006)




  Export Credits & Political Risks, London February 2003   ABN AMRO bank
 II.      The Rationale for EMECA

Concentration in Financial Markets
Mergers & Acquisitions in the:
• Bank Sector
    » Europe (e.g. Germany: Landesbanks)
    » Bad Loan problems (e.g. Japan)
• Insurance Sector
    » General Insurance: Allianz, AXA, AIG, ING
    » Credit Insurance: Gerling / NCM, Euler / HERMES,
                         COFACE, Lloyds, ACE, CHUBB, AIG

                                      • Concentration Constraints
                                      • Less Competition
   1+1=?
                                      • Funding and Mitigation Capacity
                                        will likely become more expensive
 Export Credits & Political Risks, London February 2003          ABN AMRO bank
 II.      The Rationale for EMECA
   BIS II Solvency Changes for Sovereigns Borrowers
                           Oct. 02               Current         New
Country                     S&P                 Solvency       Solvency
Es tonia                  A-                               8      1.6
Chili                     A-                               8      1.6
Ma la ys ia               BBB+                             8      1.6
La tvia                   BBB+                             8       4
Lithua nia                BBB                              8       4
Tha ila nd                BBB-                             8       4
South Africa              BBB-                             8       4
Bulga ria                 BB                               8       8
India                     BB                               8       8
Roma nia                  B+                               8       8
Bra zil                   B+                               8       8
Ukra ine                  B                                8       8
Urugua y                  B                                8       8
Pa kista n                B-                               8       8
Turke y *                 B-                               0       8
Indone s  ia              CCC+                             8      12
Ecua dor                  CCC+                             8      12
Arge ntina                SD                               8      12

* Turke y = OECD Country

  Export Credits & Political Risks, London February 2003          ABN AMRO bank
  II.       The Rationale for EMECA
                                                     Year    Total    Dev.     EE       DC
                                                     1990    887.4    556.1    41.9    270.0
Supporting Exports                                   1997    1798.0   1013.3   88.2    651.0
from Developing Countries                            2000    2284.7   1622.0   81.9    519.6

        Exports from Developing Countries by Destination in Bln. US$

 2000                                                                 Developed countries

 1500
                                                                      Countries in Eastern
 1000                                                                 Europe
  500                                                                 Developing countries
    0
         1990     1995    1996      1997     1998    1999   2000
                                                                               Source: Unctad

   Export Credits & Political Risks, London February 2003                      ABN AMRO bank
  II.       The Rationale for EMECA

Supporting Exports                                         Exports of Manufactures
from Developing Countries                                  have become more Important !

        Composition of Exports Developing Countries in % of Total Exports
 70                                                               Food
                                                  66%
 60
                   54%                                            A g r icult ur al R aw
 50                                                               M at er ials
 40                                                               F uels

 30
                                                                  Or es & M et als
 20
 10                                                               M anuf act ur es

  0                                                               Ot her
                 1990                           1999
                                                                           Source: Unctad

  Export Credits & Political Risks, London February 2003                     ABN AMRO bank
  II.      The Rationale for EMECA

Supporting Exports
from Developing Countries

Focus on Private Sector Development in EM
• Private Sector is the engine for Sustained Economic Growth
• Private Sector is main source for job creation & employment
• Employment is main Route to combat Poverty & to Improve
  Living Standards
• Private sector is main source of (tax) income for Public Sector
  Expenditures in Health, Education, etc.


Focus on the Support of Exports
• Exports Income is key for GDP Growth of Developing Countries
• Exports Income is key in solving Debt problem of Developing Countries
• By Supporting Exports Future Crises can be Prevented
   Export Credits & Political Risks, London February 2003           ABN AMRO bank
II.         The Rationale for EMECA
                                                               BU New MLT Business in Bln. US$
                                                                               1993    1999     2000

ECAs play a Key role in supporting                              Total          84       76      84
                                                                Exports        78       62      71
Exports to EM & Development of EM                               Investm ents    6       14      13


           Berne Union Members MLT New Business Covered in Bln. US$
  120
  100
      80                                                                              Total
      60                                                                              Exports
      40                                                                              Investments
      20
      0
            1993    1994     1995    1996     1997     1998    1999     2000
                                                                               Source: Berne Union

      Export Credits & Political Risks, London February 2003                          ABN AMRO bank
  II.           The Rationale for EMECA

Supporting Intra Regional Trade: Key for Regional Development


 %
                         intra regional trade                 inter regional trade        2000

10 0
 90
 80
 70
 60
 50
 40
 30
 20
 10
   0

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                                                                                     Source: World Bank

       Export Credits & Political Risks, London February 2003                          ABN AMRO bank
   II.      The Rationale for EMECA
Level Playing Field OECD Exporters & EM Exporters


Bottlenecks for MLT Finance of exports from EM:
• MLT Finance in Local Currency Not Available
• MLT Finance in Hard Currency Hardly Available
  No adequate MLT Insurance / Guarantee Facilities
  for Financing Banks




There is no ECA                                               There is an ECA,
                                                              but adequate cover
                                                              is not Available.

Most EM ECAs are only / mainly involved in ST Supplier Credits.
     Export Credits & Political Risks, London February 2003              ABN AMRO bank
  II.      The Rationale for EMECA

Level Playing Field OECD Exporters & EM Exporters
ECA Counter- Party Risk: A Comparison of two ECAs

United Kingdom: AAA                                          Argentina: SD


        Exporter                                               Exporter




         Bank                              Sovereign             Bank
                                           Buyer /
                                           Borrower

         ECGD                                                    CASC


                                        Philippines: BB+
    Export Credits & Political Risks, London February 2003           ABN AMRO bank
 II.          The Rationale for EMECA

Level Playing Field OECD Exporters & EM Exporters
ECA Counter- Party Risk: A Comparison of two ECAs

United Kingdom: AAA                                              Argentina: SD

• Zero Solvency                                                 • 8% Solvency
• No Country Risk                                               • Country Risk
  Provisioning                                                    Provisioning


          ECGD                                Sovereign               CASC
                                              Buyer /
                                              Borrower


                                                                   MLT Finance
        MLT Finance
                                                                 Hardly Available
         Available
                                           Philippines: BB+     or (too) Expensive
       Export Credits & Political Risks, London February 2003             ABN AMRO bank
 II.         The Rationale for EMECA

Level Playing Field OECD Exporters & EM Exporters

ECA Counter- Party Risk: A Comparison of two ECAs
United Kingdom: AAA

                                                                Result:
         Exporter                                               • No Level Playing
                                                                  Field
                                                                • Argentinean Exporter
           Bank                               Sovereign           will not be able
                                              Buyer /             to win the
                                              Borrower            Export Contract
           ECGD


                                           Philippines: BB+
       Export Credits & Political Risks, London February 2003               ABN AMRO bank
       III.     The Role of EMECA
ECA Counter- Party Risk: EMECA as Counter-guarantor
   Exporting EM                                                    Importing EM
                                     1.
       Exporter
                                                                      Importer

                                     2.
         Bank


  3.
                                AAA rated Country
                                                            1. Export Contract
    ECA
                                                            2. Export Finance Contract
                                                            3. Export Credit Insurance
                           4.                               4. EMECA Counter Guarantee
  5.                                  EMECA                 5. ECA / EMECA Co-operation
                                                              Agreement

   Export Credits & Political Risks, London February 2003                        ABN AMRO bank
       III.     The Role of EMECA
No ECA in EM: EMECA the Solution
   Exporting EM                                                     Importing EM
                                     1.
       Exporter
                                                                       Importer

                                     2.
         Bank


  3.
                                AAA rated Country

                                                            1. Export Contract
                                                            2. Export Finance Contract
                                                            3. Export Credit Insurance
                                      EMECA


   Export Credits & Political Risks, London February 2003                         ABN AMRO bank
 II.        The Rationale for EMECA

No Dedicated Program to support Exports from
Developing Countries

Main Characteristics of the Official Financial Support
to Developing Countries:
• Bilateral & MLA Support is mainly provided to Public Sector in
  Developing Countries
• Limited Support for Private Sector Development (Mainly IFC, MIGA)




  Some MLAs are explicitly not allowed to be
  involved in ECA Exports Business
  Examples: EBRD & MIGA

       Export Credits & Political Risks, London February 2003   ABN AMRO bank
       III.       The Role of EMECA
Mandate: Act as ECA & provide insurance / guarantees to
Banks, EM exporters, Capital Market Financiers
to support Trade between EM

Location: EMECA should be located in AAA rated country

Main Business Principles:
• Support within framework International Rules
   (OECD Consensus, WTO Break even)
• No Competition, but active Co-operation with the Market
   (Banks, EM Exporters, PRIs, Capital Market Investors)
• Active Co-operation with other Official Agencies
   (MLAs, OECD ECAs & ECAs in EM, DAC Donor Agencies, Governments)

Main Business Area:
• Non Marketable risks (MLT): Main Role act as Insurer / Guarantor
• Marketable risks (ST < 2 Year): Main Role act as intermediary for PRIs
      Export Credits & Political Risks, London February 2003          ABN AMRO bank
   III.     The Role of EMECA
The main Benefits of EMECA
Benefits for Emerging Markets (EM):
• Trade is Sustainable Aid
• Support Private Sector Development (e.g. EM Exporters)
• Support Private Capital Flows to EM Borrowers
• Enhance Trade & Investments between Emerging Markets
   (e.g. Intra Regional Trade, South / South Trade)
• Increased Access to Stable MLT Finance
• Improvement of Financial Infrastructure in EM
    - Local ECA & Bank Business / Expertise
    - Implementation of sound commercial business practices
• Increase Local Knowledge re. Export Finance / Insurance
• Positive Developmental Impact in two EM
          Exporting EM:          Increase Hard Currency Income,
                                 Sustainable Jobs, Additional Tax Income
          Importing EM:          Decrease of Import Costs
• Increase Independence & Decrease Aid Dependency
   Export Credits & Political Risks, London February 2003        ABN AMRO bank
     III.      The Role of EMECA
The main Benefits of EMECA

Benefits for EM Exporters:
• Level Playing Field with OECD Exporters
• Financial Stability (exports = Hard Currency Income)

Benefits for Banks:
• Allow Banks to Finance MLT Trade Transactions between EM
• Incentive for Banks to Originate Export Business in EM
• Improved RAROC for Business with EM clients

Benefits for Private Risk Insurers:
• Co / Re - insurance opportunities with EMECA (e.g. MIGA CUP)
• “Umbrella”- Protection EMECA

Benefits for OECD Donor Countries:
• Instrument to achieve Sustainable Development & UN Millennium Goals
• Increase Aid Efficiency

    Export Credits & Political Risks, London February 2003       ABN AMRO bank
       III.      The Role of EMECA
Ranking Emerging Markets & Capital Goods Exports
No. 1 - 10 (Average Exports 1995 - 1999)                          1996         1997         1998         1999
                                                               140,057.25   158,156.71   171,088.56   180,587.34
               Exports of Machinery and Transport Equipment in million US$ (SITC 7)
   70,000.00
   60,000.00                                                                                    1 M alaysia
                                                                                                2 China
   50,000.00                                                                                    3 Thailand

   40,000.00                                                                                    4 Philippines
                                                                                                5 Brazil
   30,000.00                                                                                    6 Russia

   20,000.00                                                                                    7 Indonesia
                                                                                                8 Turkey
   10,000.00                                                                                    9 Argentina

        0.00                                                                                    10 South Africa

                 1990        1995       1996        1997       1998         1999
                                                                                          Source: Unctad

      Export Credits & Political Risks, London February 2003                                   ABN AMRO bank
       III.      The Role of EMECA
Ranking Emerging Markets & Capital Goods Exports                                Average
No. 10 - 20 (Average Exports 1995-1999)                                         95 - 99
                                                                               10,248.39
              Exports of Machinery and Transport Equipment in million US$ (SITC 7)
   3,000.00

   2,500.00                                                                       11 India
                                                                                  12 Belarus
   2,000.00                                                                       13 Romania
                                                                                  14 Croatia
   1,500.00                                                                       15 Oman
                                                                                  16 Tunisia
   1,000.00
                                                                                  17 Lithuania
                                                                                  18 Estonia
    500.00
                                                                                  19 Bulgaria
                                                                                  20 Venezuela
      0.00
                1990       1995        1996        1997        1998   1999
                                                                             Source: Unctad

      Export Credits & Political Risks, London February 2003                   ABN AMRO bank
      III.      The Role of EMECA
Ranking Emerging Markets & Capital Goods Exports                             Average
No. 20 - 30 (Average Exports 1995-1999)                                       95 - 99
                                                                             2,434.49
             Exports of Machinery and Transport Equipment in million US$ (SITC 7)
  1,000.00
                                                                        21 Chile

    800.00                                                              22 M orocco
                                                                        23 Kazakhstan
    600.00                                                              24 Saudi Arabia
                                                                        25 Yugoslavia, Rep.
    400.00                                                              26 Sri Lanka
                                                                        27 Kuwait
    200.00
                                                                        28 Latvia

      0.00                                                              29 Uruguay
                                                                        30 Nigeria
               1990      1995       1996       1997       1998   1999
                                                                        Source: Unctad

     Export Credits & Political Risks, London February 2003                 ABN AMRO bank
          III.        The Role of EMECA
                      Top 30 EM Capital Good Exporters & OECD ECA Rating / OECD Aid / IMF Credit
                       OECD    Aid in 2000 IMF Credit Oct. 02                     OECD Aid in 2000 IMF Credit Oct. 02
No.   Country         Rating   in Mln US$     in Mln US$      No. Country         Rating in Mln US$   in Mln US$
 1     Malaysia          2               181             0.00 16 Tunisia            3            223             0.00
 2     China             2             1,735             0.00 17 Lithuania          4             99       122,638.16
 3     Thailand          3               641       578,676.88 18 Estonia            3             64             0.00
 4     Philippines       4               578     1,675,794.22 19 Bulgaria           5            311     1,051,622.87
 5     Brazil            6               322   17,334,335.23 20 Venezuela           6             77             0.00
 6     Russia            5             1,565     6,637,688.75 21 Chile              2             49             0.00
 7     Indonesia         6             1,731     8,742,679.33 22 Morocco            4            419             0.00
 8     Turkey            6               325   21,487,972.03 23 Kazakhstan          6            189             0.00
 9     Argentina         7                76   13,995,395.14 24 Saudi Arabia        3             31             0.00
10     South Africa      4               488             0.00 25 Yugoslavia, Rep.   7          1,135       551,462.53
11     India             3             1,487             0.00 26 Sri Lanka          5            276       301,573.32
12     Belarus           7                40        54,086.99 27 Kuwait             2              3             0.00
13     Romania           6               432       446,087.34 28 Latvia             4             91        17,649.64
14     Croatia           4                66        93,428.21 29 Uruguay            6             17     1,763,244.97
15     Oman              3                46             0.00 30 Nigeria            7            185             0.00

      Total for these 30 Countries     in % of Total
      OECD Aid        US$ 12.9 Billion approx. 20%
      IMF Credit      US$ 74.9 Billion     81.90%
                                                                                            Source: OECD & IMF

         Export Credits & Political Risks, London February 2003                                    ABN AMRO bank
   IV.        EMECA & Co-operation with the Market


Some examples of Public & Private Sector risk Participation:

1. Equity participation by public & private sector
2. Treaty Re-insurance
3. Partial Credit Insurance
4. Partial Risk Insurance
5. Country risk specific risk sharing Public / Private Sector
6. Risk participation by the Insured (private sector)

               These risk sharing arrangements do show the
                    Huge leverage potential of EMECA




   Export Credits & Political Risks, London February 2003    ABN AMRO bank
     IV.        EMECA & Co-operation with the Market

1.      Risk Participation: Equity.


                                    EMECA

                                             Shareholders


Public Sector:                                           Private Sector:
• Emerging Market countries                              • Banks
• High Income countries (OECD)                           • Insurance companies
• Multilateral Development Banks                         • Re-insurance companies
• Bilateral Development Banks                            • Investors
                                                         • Exporting companies

     Export Credits & Political Risks, London February 2003               ABN AMRO bank
     IV.        EMECA & Co-operation with the Market


2.        Risk Participation: Treaty Re-insurance.


                                    EMECA


                                             Treaty Re-insurance

 1st re-insurance layer provided by Public sector participants

2nd re-insurance layer provided by Private sector (re-)insurers

                           3rd layer of risk takers: Equity

     Export Credits & Political Risks, London February 2003        ABN AMRO bank
     IV.        EMECA & Co-operation with the Market

3.      Risk Participation: Partial Credit Insurance.

        Stretching the Market Tenor (syndicated loan / PRI market)
                                                     Can be arranged through:
                                                     • Re-insurance
                                                     • Co-insurance
Amount
 at Risk

                   Private       Public
                   Sector        Sector
                   Participation Participation
                                         Year 4                 Year 8
                                      Tenor of the loan
     Export Credits & Political Risks, London February 2003              ABN AMRO bank
     IV.        EMECA & Co-operation with the Market

4.       Risk Participation: Partial Risk Insurance.


                                EMECA
                                                              Can be arranged through:
                                                              • Re-insurance
                                                              • Co-insurance

      Public Sector                            Private Sector
       Participants                             Participants
      Political Risks                         Commercial Risks



     Export Credits & Political Risks, London February 2003                  ABN AMRO bank
      IV.        EMECA & Co-operation with the Market

 5.      Country risk specific risk sharing Public / Private Sector.

             120
             100
              80
                                                                       Private
% Share       60
                                                                       Public
 in Risk      40
              20
                0
                       1       2        3       4       5      6   7

                           OECD Country risk category

      Export Credits & Political Risks, London February 2003                ABN AMRO bank
     IV.        EMECA & Co-operation with the Market

6.     Risk Participation: Participation by Insured (private sector).


                                   Borrower

             EMECA                                         Tied Commercial
           Covered Loan                                          Loan
                                                         (15% down payment)

                                       Bank

         95% Insurance
                                                Total Risk Participation Bank:
                                                • 5% uncovered portion of the
                                                  EMECA loan
         EMECA                                  • 15% down payment loan

     Export Credits & Political Risks, London February 2003                   ABN AMRO bank
IV.        Summary & Conclusions




   EMECA is Key for
Sustainable Development
           of
   Emerging Markets

Export Credits & Political Risks, London February 2003   ABN AMRO bank
                         ABN AMRO Bank




Export Credits & Political Risks, London February 2003   ABN AMRO bank
Annex I

   Se ve re ly Inde bte d Low -Income (33)
   Angola                                               M adags car
   Be nin                                               M alaw i
   Bur undi                                             M aur itania
   Cam e r oon                                          M yanm ar
   Ce ntr al Afr ican Re public                         Nicar agua
   Chad                                                 Nige r
   Com or os                                            Nige r ia
   Congo, De m . Re p. Of                               Pak is tan
   Congo Re p. Of                                       Rw anda
   Cote d Ívoir e                                       Sao Tom e
   Ethopia                                              Sie r r a Le one
   Guine a                                              Som alia
   Guine a-Bis s au                                     Sudan
   Indone s ia                                          Tajik is tan
   Kyr gys r e public                                   Tanzania
   Loa PDR                                              Zam bia
   Libe r ia
   Export Credits & Political Risks, London February 2003                  ABN AMRO bank
Annex I

   Severely Indebted Low-Income Countries
   Debt in Billions US$m


    400
                                                                   Total
    300                                                            LT
                                                                   LT Public
    200
                                                                   LT Private
    100                                                            ST
                                                                   IMF Credit
       0
              1970         1980         1990         1999   2000

   Export Credits & Political Risks, London February 2003           ABN AMRO bank
Annex I

   Debt Indicators: Severely Indebted Low-Income Countries
   EDT /XGS: NPV External Debt as a % of annual Exports Goods & Services
   EDT/GNI: NPV External Debt as a% of annual Gross National Income


   350
   300
   250
   200                                                                 EDT/XGS
   150                                                                 EDT/GNI
   100
    50
     0
              1970          1980         1990          1999   2000

   Export Credits & Political Risks, London February 2003                  ABN AMRO bank
Annex II

   Severely Indebted Middle-Income (8)
   Ar ge ntina                                          Guyana
   Br azil                                              Jor dan
   Ecudaor                                              Pe r u
   Gabon                                                Syr ian Ar ab Re p.


   Moderately Indebted Low -Income (16)
   Bur k ina Fas o                                      M ongolia
   Cam bodia                                            M ozam bique
   Gam bia                                              Se ne gal
   Ghana                                                Togo
   Haiti                                                Uganda
   Ke nya                                               Uzbe k is tan
   M ali                                                Ye m e n
   M oldova                                             Zim babw e
   Export Credits & Political Risks, London February 2003                ABN AMRO bank
Annex II

 Severely Indebted Middle-Income Countries
 Debt in Billion US$


     600
                                                                    Total
     500
                                                                    LT
     400
                                                                    LT Public
     300
                                                                    LT Private
     200
                                                                    ST
     100
                                                                    IMF Credit
         0
                1970        1980        1990        1999     2000

    Export Credits & Political Risks, London February 2003           ABN AMRO bank
Annex II

 Debt Indicators: Severely Indebted Middle-Income Countries
 EDT /XGS: NPV External Debt as a % of annual Exports Goods & Services
 EDT/GNI: NPV External Debt as a % of annual Gross National Income



      500

      400

      300                                                                EDT/XGS
      200                                                                EDT/GNI

      100

         0
                 1970         1980         1990         1999   2000


    Export Credits & Political Risks, London February 2003                ABN AMRO bank
Annex II

 Moderately Indebted Low-Income Countries
 Debt in Billion US$


     60
                                                                    Total
     50
                                                                    LT
     40
                                                                    LT Public
     30
                                                                    LT Private
     20
                                                                    ST
     10
                                                                    IMF Credit
      0
             1970         1980         1990        1999      2000

    Export Credits & Political Risks, London February 2003           ABN AMRO bank
Annex II

 Debt Indicators: Moderately Indebted Low-Income Countries
 EDT /XGS: NPV External Debt as a % of annual Exports Goods & Services
 EDT/GNI: NPV External Debt as a % of annual Gross National Income



      250
      200
      150                                                                EDT/XGS
      100                                                                EDT/GNI

        50

         0
                 1970        1980         1990         1999   2000


    Export Credits & Political Risks, London February 2003                  ABN AMRO bank
Annex III
  Moderately Indebted Middle-Income (27)
  Alge ria                                         M auritius
  Be lize                                          Panam a
  Bolivia                                          Papua ne w Guine a
  Bos nia & He rze govina                          Philippine s
  Bulgaria                                         Rus s ia
  Chili                                            Sam oa
  Colom bia                                        St Vince nt
  Croatia                                          Thailand
  Es tonia                                         Tune s ia
  Honduras                                         Turk e y
  Hungary                                          Turk m e nis tan
  Jam aica                                         Uruguay
  Le banon                                         Ve ne zue la
  M alys ia
   Export Credits & Political Risks, London February 2003               ABN AMRO bank
Annex III

 Moderately Indebted Middle-Income Countries
 Debt in Billion US$


      800
      700                                                           Total
      600                                                           LT
      500
                                                                    LT Public
      400
      300                                                           LT Private
      200                                                           ST
      100                                                           IMF Credit
        0
                1970        1980       1990        1999      2000


    Export Credits & Political Risks, London February 2003               ABN AMRO bank
Annex III

 Debt Indicators: Moderately Indebted Middle-Income Countries
 EDT /XGS: NPV External Debt as a % of annual Exports Goods & Services
 EDT/GNI: NPV External Debt as a % of annual Gross National Income



       160
       140
       120
       100
                                                                         EDT/XGS
        80
        60                                                               EDT/GNI
        40
        20
         0
                 1970         1980         1990         1999   2000

    Export Credits & Political Risks, London February 2003                ABN AMRO bank

				
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