
Issue No 37		29 October 1999

Economics

Who the EFIC are you?

By James Arvanitakis

If you have not heard of Export Credit Agencies, don't be surprised because it seems they're not too interested in letting the public know what they do.

On Wednesday, 27 October 1999, AID/WATCH and the Mineral Policy Institute (MPI) held a workshop, chaired by Ann Symonds, to raise awareness about the Australia's export credit agency (ECA), the Export Finance and Insurance Corporation (EFIC). This is a brief overview of ECAs, EFIC and the issues discussed at the workshop.

ECAs are publicly funded government agencies that provide lending and insurance to help companies compete overseas. As aid and development become increasingly commercialised, ECAs have been taking an increasingly prominent role in large-scale infrastructure development projects. Internationally, lending by ECAs increased over the eight years from 1988 to 1996 by 400%, from $US26 billion to $US105 billion. This is part of ECAs support of around $US430 billion of overseas investment overall. Around 56% of official low income country debt is owed to ECAs, more than is owed to the World Bank and the IMF. It's corporate welfare on a global scale.

And what they are involved in is not a pretty story. Without even the social and environmental guidelines that the development banks have adopted in recent years, most ECAs are able to step in and fund projects development banks have rejected.

EFIC is a statutory corporation that has existed under predecessor statutes since 1956 and its record is not good. In recent years EFIC has made loans to the Indonesian government to buy Australian weapons, to a bank in China to buy Australian nuclear technology for the expansion a nuclear power plant. EFIC also made loans for the Ok Tedi mine in PNG and provided risk guarantees for commercial banks backing the Bougainville copper mine.

About 40 guests attended the workshop. It was agreed that there is nothing wrong with government supporting exports, but the support should be aimed at small to medium sized business, it should be transparent and it should be governed by ethical and environmental standards. The way EFIC currently operates is anti-democratic, anti-environment and like the WTO, risks workers rights internationally.

The workshop was the third in the Globalisation series of four. The fourth workshop 'Challenging Globalisation' is scheduled for 27 November.

For more information, contact AID/WATCH on

mailto: [email protected], ph: 9387 5210, fax: 9386 1497,.

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Issue 37 contents

Republic: Yes, It's Time
Opposition leader Kim Beazley invoked the spirit of '72 when he launched the ALP's Republic campaign.

Interview: What Price a Just Republic?
Magistrate Pat O�Shane is far from happy with the republican model. But she still believes a Yes vote is her best chance for genuine constitutional reform.

Economics: Who the EFIC are you?
If you have not heard of Export Credit Agencies, don't be surprised because it seems they're not too interested in letting the public know what they do.

Unions: Old Habits Die Hard
With the release of its blue print unions@work the ACTU seems to know where it wants to go. But again it has failed to face up to the underlying structural issues preventing it from getting there.

Legal: Second Wave: Reith's Non-Right to Strike
Peter Reith has called his new laws the Workplace relations Amendment (More Jobs Better Pay) Bill 1999. If legislation is to carry these new, colloquial titles then the �More Control, Less Freedom� Bill would be a better title.

International: Wahid�s New Team
Indonesias new government is blemished by Suharto-era appointees but an advance for reform, says Indonesia�s trade unions.

History: They Fought Them on the Airwaves
Radio broadcasts were an important weapon in the long-running struggle for equal pay.

Satire: Revealed: SOCOG Reserving Gold Medals for Tattersalls
The scandal over the secret allotment of premium tickets for the 2000 Olympics escalated today with the news that members of Sydney�s elite Tattersall�s Club will receive Gold Medals without actually competing.

Review: What The Age Wouldn�t Print
Some time before Monday 18 October, Age editor Michael Gawenda saw red and then got out his blue pencil. An article, heavily critical of Robert Manne, written by Overland editor Ian Syson, was pulled by Gawenda.

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