Insurance for Dutch firms set to spur trade with RI

Insurance for Dutch firms set to spur trade with RI

AMSTERDAM (Reuters): The Netherlands said on Tuesday credit
insurance facilities would be granted to Dutch companies
exporting to Indonesia, in an effort to stimulate trade between
the two countries.

During the current year, insurance facilities for short term
export transactions with Indonesia of up to a total of 250
million guilders (US$123.5 million) per quarter will be granted,
the finance and economic affairs ministries said in a statement.

"Based upon a credit term of on average some three months, a
total annual export volume of one billion guilders can be
realized," the ministries said.

A Finance Ministry spokesman valued Dutch exports to
Indonesia at around one billion guilders in 1997.

"As a result of the economic crisis in Indonesia, trade of the
Netherlands with that country has nearly come to a standstill ...
with negative consequences for the Indonesian population and
Dutch trade and industry," the ministries said.

The credit insurance facility will become available after the
International Monetary Fund (IMF) has taken a formal decision on
its agreement with Indonesia and has said it will effectively
resume payments to the former Dutch colony.

If the proposed export credit insurance spurs imports, the
measure will probably lead to a picking up of Indonesian
production and exports, the ministries said.

"This can lead to a gradual recovery of confidence in the
Indonesian economy, resulting in a possible raise of the value of
the rupiah," the ministries said.

The insurance facilities would also help Indonesia with the
import of essential goods such as food and drugs, they added.

The short term export credit insurance facilities will be
handled by the Nederlandsche Credietverzekering maatschappij NV
(NCM), which specializes in providing credit insurance to both
national and international firms.