During its involvement in the LILL Global Symposium, UAE export credit agency, Etihad Credit Insurance (ECI), has reinforced the country’s trade resilience. The agency highlighted the role of strategic financing options, insurance options and risk mitigation measures in facilitating UAE exporters to grow their international presence amid the uncertainties of trade.
The talks take place against a backdrop of geopolitical unrest, interest rates, shifting trade alliances, etc., which is a context in which world trade chains are still adjusting.
What were ECI’s messages at the LILL Global Symposium?
During the symposium, ECI highlighted its role in helping the UAE businesses to mitigate trade risks and accessing international markets by providing credit protection and financing assistance.
Some of the main themes that were raised were:
- Improving competitiveness of UAE non-oil exports
- Increasing the access to trade finance for SMEs and large corporates.
- Facilitating cross-border investment flows through appropriate measures.
- Avoiding global credit and payment risks
ECI officials also emphasized the importance of resilience in global trade systems, particularly for export-driven economies like the UAE.
Why is resilience important for the UAE economy? The importance of the UAE economy’s resilience?
Growth of trade resilience has been a key part of UAE’s economic diversification plan, particularly in a context of a country moving away from hydrocarbons and towards non-oil industries.
The UAE Ministry of Economy has continually emphasized the UAE foreign trade performance in the past few years with impressive records in non-oil foreign trade, owing to the free trade treaties, logistics infrastructure, and flourishing financial services.
Factors that contribute to resilience include:
- A diverse export base that includes manufacturing, services and logistics.
- A convenient location is the key to its geographic position between Asia, Europe and Africa.
- Top class ports and air transport facilities.
- Sovereign-backed financial institutions that are strong and reliable. Strong and reliable sovereign-backed financial institutions.
All these contribute to protect the UAE economy from the global supply chain disruptions.
How ECI supports UAE exporters
Etihad Credit Insurance is vital in allowing UAE businesses to go about their trading with confidence in high-risk markets.
Core services include:
Export credit insurance
Insures UAE exporters from non-payment risks incurred by foreign buyers.
Trade finance guarantees
Aids banks to provide loans for exporters for whom risk exposure is diminished.
Investment insurance
Facilitates UAE companies investing overseas to address political and commercial risks.
Market intelligence support
Delivers data-based intelligence to enable businesses to enter new markets safely.
This approach serves to help small businesses and big enterprises expand globally without excessive risk to the company’s finances.
Economic prospects in the UAE in an uncertain global economy. UAE trade prospects in an uncertain global economy.
The world trade environment is still quite dynamic, and is influenced by:
- Ongoing geopolitical tensions
- The increase in protectionism in important markets. Protectionism in important markets.
- Supply chain realignments
- Uncertainty about interest rates in the major economies
However, policy changes and corporate deals have enabled the UAE to market its business presence despite these challenges, and the Emirati government has consistently promoted growth.
The UAE’s efforts to establish itself as a trusted trade hub in the world are also evident in its inclusion in international forums such as the LILL Symposium, which ECI has attended. Inclusion in global forums such as the LILL Symposium also highlights the UAE’s aim to be a trusted partner for global trade.
The increasing significance of Export Credit Agencies in the world.
In increasingly complex world trade, export credit agencies (ECAs) such as ECI are increasing in significance.
They are becoming increasingly involved in:
- Commercial lending is not enough to cover the financing shortfall; this is the gap that must be addressed by filling.
- Fostering trade in new markets and high-risk markets
- Promoting free flow of investment across national boundaries
- Regulatory measures for stability in supply chain financing in a crisis situation
In the world today, ECAs are being recognized as key tools for economic diplomacy and trade growth.
How this fits into the UAE economic strategy
The UAE economic strategy is based on a long-term vision that aims to develop a diversified, innovation-based economy.
ECI’s efforts contribute to:
- The UAE’s economic diversification plan.
- The national targets for export growth
- SME development programs
- Connectivity targets at the national and global levels.
The elimination of financial risk barriers means that more UAE companies are able to engage in the global flow of trade.
The implications for UAE companies and businesses. The impact on UAE companies and businesses.
In the UAE, ECI’s function means:
- More convenient communication with foreign clients
- Minimized payment default risk
- Enhanced access to bank loans. Better access to bank credit.
- An increase in confidence to move into new markets
This is especially relevant to SMEs, who may be less likely to obtain trade finance in other markets due to not having collateral or credit history.
FAQ
What is ECI?
Etihad Credit Insurance (ECI) is the UAE’s federal export credit agency that offers export insurance, export guarantees, and export financing support to facilitate the UAE’s local companies to expand in global markets.
So what was discussed at the LILL Global Symposium?
ECI’s involvement in enhancing UAE trade resilience was underscored by its assistance to exporters by providing credit insurance, trade finance solutions, and risk mitigation strategies.
What is meant by resilient trade for the UAE?
Trade resilience enables the UAE to continue to grow and develop its economy in the face of the global uncertainties through diversified exports and minimising reliance on any one market or sector.
What are the benefits ECI can offer UAE exporters?
With lower financial risk, UAE businesses can trade globally with the help of ECI’s various export credit insurance, investment protection, and trade finance guarantees.
Stay ahead with DKI
Dubai Key Insights (DKI) provides analysis of UAE economic strategy, trade policy and financial sector developments, assisting businesses and professionals to gain insight into the changes impacting the nation’s global competitiveness and how institutions such as ECI are contributing to these developments.
