Trade Finance Workshop
OFID concludes Trade Finance Workshop
06/2008 March 10, 2008 Vienna, Austria
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A two day Workshop, March 6 - 7, 2008, organized by OFID, the OPEC Fund for International Development, ended with participants in agreement that the event had been a useful exercise worthy of further pursuit and follow-up. OFID would hold consultations with key partners and arrive at an agreement on when and where the next workshop would hold.
More than 35 experts from 25 global financial institutions, regional development banks, export credit agencies and commercial- as well as local Austrian banks and sister organizations of OFID’s, attended the workshop. Most of the institutions took the opportunity to showcase their activities and experience in the field of trade financing. The presentations served as a backdrop for discussions on the features of trade finance and on the synergies derivable from different programs. The workshop highlighted the importance of trade financing as a key instrument for the advancement of emerging markets and countries at the threshold of development.
Opening the workshop, Mr. Suleiman J. Al-Herbish, Director-General, OFID, said the institution gave great importance to the meeting, which was in a field where it was still a newcomer. He expressed his delight at seeing so many participants from different horizons and noted the diversity of organizations represented. The large number of participants from such diversity of cultures and regions, said Mr. Al-Herbish, demonstrated the paramount importance of trade finance and the need for cooperation among institutions for the greater benefit of partner countries.
Mr. Al-Herbish informed the workshop that OFID has now some 32 years of experience operating as a multilateral development finance institution. With time and experience, OFID is becoming more diversified in its activities and of greater service to its partners. By end-2007, OFID had conducted operations in over 120 countries. In its concessional lending, said the Director-General, OFID assistance is primarily directed toward low income countries, with particular emphasis on the poorest among them. To some extent, he added, the institution’s support also targeted lower middle income countries. And countries “graduating” from OFID’s concessional financing remain eligible to what it calls the “Blend Facility,” which offers lending terms that are less concessional but still below commercial rates. As for OFID’s outright grants, operations are focused on the social and humanitarian development needs of the poorest segments of the population in the poorest countries.
Another opportunity, said Mr. Al-Herbish, is offered to OFID partner countries through its Private Sector Facility, which provides financing to private sector entities. This Facility was created in 1998 at the request of said partner countries, the majority of which are now placing emphasis on the private sector for sustainable development. OFID’s most recent Facility, established in 2006, is the Trade Finance Facility (TFF). By engaging in trade financing, OFID is providing an additional and affordable finance mechanism to assist partner countries with their overall growth and economic development.
Mr. Al-Herbish said international trade “constituted the bedrock of a long period of prosperity and stability in the world.” It is the means by which technology is often acquired; it is the forerunner of capital investments; it helps to create jobs and raise incomes; it encourages competition and leads to more economic efficiency, thus leading to lower prices for goods and services. As such, trade improves the welfare of people.
Said Mr. Al-Herbish: In recent years, the world economy had expanded at historically high rates. The highest rates of growth have been achieved in those developing countries which have been able to take advantage of the upsurge in world trade. Examples where trade was an important factor for industrialization are China, India, Mexico and Korea. Trade financing, Mr. Al-Herbish said, is largely the domain of commercial banks but this does not exclude a role for multilateral development institutions.
Workshop presentations by participating institutions detailed their varied experience with trade financing, but all were agreed that trade finance remained a key instrument of development. It was noted that development aid per se was necessary, especially for countries with few items to trade. However, the larger majority of developing countries would wish to see greater access to global markets and fewer trade barriers. This is based on their belief that trade was an engine of growth and the opportunity it offered should eagerly be seized.
Among the institutions present were the Abu Dhabi Fund; the Banco de Desarrollo Economico y Social de Venezuela (BANDES); the Inter-American Development Bank (IADB); the International Finance Corporation (IFC); the International Trade Centre (ITC); and the European Bank for Reconstruction & Development (EBRD). Others were the African Export-Import Bank (Afreximbank); the African Trade Insurance (ATI); the Arab Bank for Economic Development in Africa; the Arab Banking Corporation (ABC); the Arab Trade Financing Program (ATFP); the International Islamic Trade Finance Corporation (ITFC); the Saudi Export Program (SFD); and the Union de Banques Arabes et Françaises (UBAF).
Also in attendance were the Oesterreichische Kontrollbank (OeKB); the Austrian Development Bank; the BankAustria-Creditanstalt; the Raiffeisen Zentralbank (RFZ); the ING Bank; the Central American Bank for Economic Integration (CABEI); the Corporacion Andina de Fomento (CAF); the Eastern and Southern African Trade and Development Bank (PTA Bank); and the Standard Chartered Bank.
Related documents
Workshop Agenda
Opec Fund For International Development (OFID)
The Trade Finance Bank for Africa (AFREXIMBNAK)
Arab Trade Financing Program (ATFP)
Trade Facilitation Programme European Bank (EBRD)
Inter American Development Bank (IDB)
Global Trade Finance Corporation (IFC)
International Trade Center (ITC)
International Islamic trade Finance Corporation (ITFC)
Raiffeisen Banking Group (RZB)
Union de banques Arabes et Francaises (UBAF)