Britain underwrites exports

Britain underwrites exports

LONDON (AFP): The British government on Monday moved to encourage small-scale trade with Indonesia with a pledge to underwrite export contracts, a year after private insurers pulled out in the face of economic and civil turmoil there.

"Indonesia has traditionally been one of Britain's major trading partners. Although the country is experiencing some serious economic difficulties at present, we remain hopeful that it will pull through before too long," British Trade Minister Brian Wilson said.

The announcement followed a decision by G7 finance ministers in February 1998 to ensure that adequate short term credit facilities for Indonesia were maintained.

Private short term credit lines, which cover consumer goods such as spare parts and foodstuffs, to exporters have been cut amid deep-seated unrest sparked by economic crisis and the collapse of President Soeharto's military rule in Indonesia.

Wilson said that the Export Credits Guarantee Department, the official British export credit agency, would now underwrite export contracts for consumer goods.

"The provision of a reinsurance facility from ECGD should go some way to ensuring that Indonesia is not starved of the necessary short term credit to enable those imports, essential for the revival of Indonesian industry, to be purchased," the minister said.