Exporters’ Embrace Riskier Markets: Reliance on EGAP Coverage GrowsČTK
Prague, Feb 7 (CTK) – Czech exporters are increasingly more interested in riskier countries such as Laos and Cuba, according to data of state-run Export Guarantee and Insurance Company (EGAP).
Last year, EGAP insured almost Kc8bn worth of exports of goods and services and investment to the riskiest countries, up from Kc6.3bn annually.
The riskiest territories where EGAP can insure exports include countries in categories 6 and 7 of the Organisation for Economic Co-operation and Development’s (OECD) country risk classification.
Czech companies export food and machinery spare parts to Cuba, and also to Ukraine and Laos, for example. The volume of insured exports to Cuba and Ukraine rose year-on-year by 70 percent and by nearly 50 percent, respectively.
“One of EGAP’s key roles is to support Czech companies in countries which are too risky for commercial insurers,” EGAP head Jan Prochazka said.
Over the past ten years, EGAP has insured exports to risky countries worth Kc74bn.
Last week’s data of the Czech Export Bank (CEB) suggested that small and medium-sized enterprises have been more successful in finding new export markets.
In 2013, almost 40 percent of exports supported by CEB headed to Russia, with the list changing in the past three years. Slovakia ranks first followed by Indonesia, Azerbaijan, the USA, Iraq, Russia, Brazil, Cuba, Mauritius and the Isle of Man.
Czech exports increased yr/yr by 5.7 percent to record-breaking Kc4,200bn last year, with exports to China going up by 20 percent and to Germany by 7.3 percent.
EGAP signed insurance deals worth Kc42.8bn last year, which is a third more annually. The company supported Czech exports to 33 countries.
The state exercises the ownership rights at the company through the Finance, Industry and Trade, Agriculture and Foreign Ministries.