Export insurance, 2008

Export credit insurance may be instrumental in diversifying the Russian export mostly due to hidden potential of the nuclear industry and the military industrial complex.

Poor diversification of the Russian export is one of the most urgent economic problems in the country. According to the Federal Customs Service, in 2007 more than 67% of domestic export abroad was covered by fuel and energy sector 2007 (see dgr.1). Metallurgy followed suit with 14%. The country's global ability to compete depends on quick and efficient increase of high-tech share in the total export volumes.

As to encouraging export of other industrial branches, it should be borne in mind: high quality of products is extremely important, but another beneficial element in competition for global markets relates to more favorable supply conditions (for instance, allowing longer payment delays and offering more convenient payment conditions). Obviously improved quality requires continuous and sizeable investments to R&D, but contractual conditions may be improved immediately. More convenient and profitable payment mechanisms are widely used in developed countries: supplying exporters can offer to their clients more favorable conditions. The world experience shows that one of the most viable mechanisms of the sort is insurance of exporter credit risks. Credit insurance helps to cover both commercial and political risks, which is extremely important in dealing with importers from countries with unstable political situation.

Some of our neighbors (Kazakhstan), understanding the importance of insuring export credits, have already implemented such mechanisms. Russia needs to build its own efficient model of insuring export credits on the basis of the world experience and particulars of the national economy.