The Arab Investment and Export Credit Guarantee Corporation (Dhaman) has revealed that the value of outstanding commitments for insuring investments, financing, and exports to Arab countries against commercial and political risks has decreased by 1% to reach $219 billion by the end of 2021, representing approximately 7.4% of total global commitments for the same year.
The corporation explained in a press release on the occasion of the publication of the 3rd quarterly bulletin for 2022, that the new commitments to ensure finance and exports to Arab countries (Imports) against trade and political risks decreased slightly by 0.1% in 2021 to $100.6 billion, even though the economic performance improved in most Arab countries, the return of activity in the production and service sectors, the Arab trade recovery, and the marked rise in FDI flows to Arab countries in 2021, these commitments covered about 10.4% of total Arab merchandise imports for the same year.
In the editorial of bulletin, the corporation said that within the framework of monitoring and follow-up in depth on market developments and on the trade and investment insurance sector globally and regionally, and in cooperation with the Berne Union, it has monitored the main features and details concerning the sector of investment, finance, and exports to Arab countries insurance, as follows:
– Arab countries accounted for 3.7% of all new commitments for insuring investment, finance, and exports in the world by the end of 2021.
– Insurance of exports to Arab countries in both short and medium-long terms acquired the largest share of new commitments with 93.8%, while the share of insurance against political risks reached 4.5%, and about 1.7% for other additional products.
– The new insurance commitments concentrated geographically in 5 Arab countries that accounted for 77.6% of the total: the UAE 25.1%, Saudi Arabia 17.2%, Egypt 16.1%, Qatar 11%, and Morocco 8.1%.
– Public export credit agencies in the Arab region continued to acquire the largest share of total new commitments, with 63% during 2021, compared to a share of 37% for private insurance agencies.
– During 2021, the new export insurance commitments in both medium and long terms were concentrated in the sectors of transportation, natural resources, manufacturing, infrastructure, and energy with a total share of about 55%, while these sectors accounted for about 76.7% of the total new commitments for insurance against political risks in the Arab region in the same year.
– The claims paid for insurance in the Arab region decreased by 44.4% to reach about $357 million during 2021, and the recoveries also fell by 12% to about $417 million during the same year.
Furthermore, the corporation affirmed its willingness to follow closely the major global challenges due to the Russian-Ukrainian war, the increase in tensions in several regions of the world, the disruption of global supply chains, the rising of inflation rates, price levels and the change in the structure and nature of trade and investment transactions, as well as high levels of political and commercial risks, which are key guiding insurance elements cross-border transactions.
In this context, the corporation affirms its endeavor to strengthen its capabilities to meet existing and potential challenges and strengthen its alliances with the most important regional and international players in the insurance industry, including Berne Union, Aman Union and all export and investment insurance agencies in the region and in the world.
Given its experience in the markets with total transactions exceeding $23 billion, the corporation will continue to support exporters and investors in the region by securing their operations against political and commercial risks for the benefit of the various parties and the economies of the member countries.
The Arab Investment & Export Credit Guarantee Corporation (Dhaman) is a multilateral credit and political risk insurance provider. Established in Kuwait in 1974, Dhaman comprises all Arab countries and four joint Arab financial institutions. It provides insurance services against credit and political risks to facilitate the flow of Foreign Direct Investment into Arab Countries and to support Arab exports and imports.
Source: Jordan News Agency
