India joins major exporters

Written by Sanjay Jog | Mumbai | Updated: Dec 16 2008, 05:22am hrs
India has joined the thirty-five exporting countries, including 29 OECD (Organisation for Economic Cooperation & Development) countries and Brazil, Estonia, Israel, Romania, Russia and Slovenia, which pledged continued export-credit support for international trade deals in line with a call by G20 leaders for emerging and developing economies to retain access to financing for imports in the present financial crisis.

This action will contribute to the fulfillment of one of the undertakings identified in point seven of the declaration by leaders of the G20 countries, expressed at the summit on financial markets and the world economy, held in Washington on November 15. The declaration said, Help emerging and developing economies gain access to finance in current difficult financial conditions, including through liquidity facilities and program support.

OECD members of the working party on export credits and credit guarantees, the participants to the arrangement on officially supported export credits, non-member economies and WTO secretariat met to discuss the impact of the global financial crisis on official export credits. The governments confirmed their strong commitment to continue to be reliable partners to exporters and financing banks; a global problem requires a coordinated global solution.

Interestingly, India has responded positively and joined major exporters pledging ongoing credit support for developing country imports.

Official export credit support and finance play an enhanced key role in counterbalancing instability in periods of economic uncertainty and risk-averse behaviours of economic players, by helping to fill up the gap where market capacities are temporarily limited.

In the light of these considerations, OECD believes that member and non-member governments are determined to maintain their export credit support and ensure that sufficient capacity is available with the aim of supporting international trade flows, in line with sound underwriting principles, within the limits of their respective international obligations.

OECD recalled that during previous financial crises, governments developed experience of expedient and coordinated use of their schemes for officially supported export credits and are utilising this experience to limit the impact of the present crisis on the financing of trade transactions in the world.

Members and non-member economies are closely monitoring developments, exchanging information and taking appropriate measures as deemed necessary and in accordance with their respective international obligations.

OECD has highlighted the failures in corporate governance that the crisis has revealed and urged that internationally agreed standards, such as the OECD principles of corporate governance, be strengthened. OECD will also address taxation policy and its implications for growth, and the need for increased transparency in cross-border financial transactions.