Unleashing ECA potential ECAs and their importance in Trade Finance Qatar context

Transcription

1 Unleashing ECA potential ECAs and their importance in Trade Finance Qatar context AMAN UNION - Fourth Annual Meeting Doha, State of Qatar 10 December 2013 Draft Dr. Andreas Klasen Partner, Head of Economics & Policy, PwC Vice President of the Berne Union

2 Agenda 1. The Role of ECAs: From Traditional to Modern 2. How ECAs can fill the Financing Gap 3. The Future of ECAs Today

3 1. The Role of ECAs: From Traditional to Modern Draft 2

4 With a shift of economic power to the east and rising GDP as well as trade figures globally, economies face new challenges Draft GDP development Exports Economic power shifts towards China, Asia in general and the MENA region Global policy formulation will mirror this trend leading to a more inclusive role of the east The importance of economic growth will remain central in global policy setting Source: IMF WEO April 2013, UNCTAD (trillion dollars, current prices) 3

5 Qatar addresses economic challenges and opportunities with its ambitious National Vision Diversification 2. Export growth 3. SME contribution GDP distribution by sector in % 10% 8% 9% 58% 10% Mining & Quarrying Manufacturing Government Services Financial Sector Trade, Restaurant & Hotels Others Qatar total exports and re-exports (QAR in bn) CAGR 25% SME contribution to GDP (%) Average share of SME sector contribution to GDP in highincome countries EU USA UAE Saudi Arabia Qatar Suitable economic diversification Sound Economic Management Responsible Exploitation of Oil & Gas Source: Qatar Statistics Authority, World Bank Working Paper 2003, Gulf Investment Corporation, PwC Analysis 4

6 In the context of trade finance challenges, ECAs gain importance as drivers for export and economic growth Draft From insurance Berne Union members new cover volume per year INV medium to long-term short-term total to financing Trillion USD Source: OECD Statistics, Berne Union Member Statistics, PwC Analysis 5

7 Innovation Index (range 0-100) Draft In Qatar, TASDEER is aiming to be one of the drivers of private sector and SME development The relation between innovation and income for high income countries 70 UK USA Singapore Saudi Arabia Germany UAE Kuwait Luxembourg Qatar GDP per capita, PPP, USD Foreign direct investment, net inflows (% of GDP) 20% 15% 10% 5% 0% Qatar Kuwait Saudi Arabia UAE Bahrain Oman ECA change their role towards being financing enablers Diversification Knowledge-based economy Sustainable economic growth Financial & economic stability Stimulating business climate Global competitiveness Strategic consumption of resources Source: Global Innovation Index 2013, International Monetary Fund, World Bank, PwC Analysis 6

8 2. How ECAs can fill the Financing Gap 7

9 A holistic perspective on ECA setup and development can help to achieve ambitious objectives The institutional setup is important to combine promotion perspective with risk control and efficiency Banks and exporters need to trust in the value of ECA cover and know about the benefits ECAs need to chose the right approach addressing the national financing environment and private bank sector conditions Supportive framework conditions Product & Mechanism Strong ECA benefits Acceptance & Awareness Institutional Setup 8

10 A sound promotion approach combined with private market risk orientation is crucial Strong ECA benefits Public Steps in and takes risks where the private market leaves market gaps High trust in state offer Higher power in recovery Financing impact Private Quick responsiveness to market trends and changes (e.g. products) Financing enabler through quick cover decisions Fast decision-making in claims Promotion orientation meets Risk control and efficiency Part of Development Bank QDB Unified coherent promotion approach towards QNV 2030 QDB is a recognized brand in Qatar, yielding reputation benefits Regulatory space (bank vs. insurance) Risk appetite Trust in state offer + - 9

11 Involvement of commercial banks through solid technical layout enables fungibility of ECA cover Strong ECA benefits Bank acceptance State guarantee Rating Product design Qatar has a rating of AA Full faith and credit of the government? Transparent standards and norms Cover as a collateral Balance sheet easing effect Full faith and credit of the government Explicit or implicit state guarantee Positive guarantee effect only valid with good rating BIII puts more weight on effect Bank products Bankability of export covers Portfolio approach Bank and bankable products? Transparent standards and norms including experts? Awareness for balance sheet effects? 10

12 Extent of ECA s financing role depends on market requirements and capabilities Strong ECA benefits Level of private bank s integration Pure risk cover Triggers private bank financing capacity through bankable products Low steering capabilities Pre/post shipment Cover for banks, investors & exporters Export, entrepreneurs, leasing etc. guarantees Refinancing enabler Provides risk mitigation and refinancing for private banks More complex KfW refinancing (1.5 bn EUR per year) USD refinancing (3 bn EUR) Long-term refinancing (4.7 bn EUR) Level of direct financing support Direct Lending Independent from private banking market High public budget impact Conventional, Islamic financing & insurance Direct lending: 11 bn EUR in 2011 Direct lending: 22 bn EUR in 2010 QDB/TASDEER has the potential to grow along the financing requirements 11

13 3. The Future of ECAs Today 12

14 ECAs mobilizing capacities to take on the new role in order to unlock the potential ECA environment, challenges and chances ECAs are involved in various discussions ECA solutions to tap new financing sources Enhance competitiveness and react on trends & risk Embeddedness in promotion framework Global Standards Sustainability Climate Finance From bank financing to capital market financing Open markets and global competition Fast occurring crisis and trends Development Banks Export Credit Agencies Incubator Centres Investment Parks Foreign Aid Agencies Chambers Investment Authorities etc. 13

15 ECA Export, Creativity, Ambition Dr. Andreas Klasen Partner T: +49 (40) M: +49 (15) Vorsitzender des Aufsichtsrats: WP StB Dr. Norbert Vogelpoth Vorstand: WP StB Prof. Dr. Norbert Winkeljohann, WP StB Dr. Peter Bartels, WP StB CPA Markus Burghardt, StB Prof. Dr. Dieter Endres, WP StB Petra Justenhoven, WP StB Prof. Dr. Georg Kämpfer, WP StB Harald Kayser, WP RA StB Dr. Jan Konerding, StB Marius Möller, WP StB Martin Scholich Sitz der Gesellschaft: Frankfurt am Main, Amtsgericht Frankfurt am Main HRB PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft ist Mitglied von PricewaterhouseCoopers International, einer Company limited by guarantee registriert in England und Wales