Ukraine’s lack of an export credit agency is giving the country a competitive disadvantage and hurting the business of its exporters, according to experts.

Speakers at IBcontacts’ ‘Enhancing Eastern European co-operation: attracting finance and mitigating risks’ conference in Kiev in November said the establishment of an ECA was a key condition to the development of Ukraine’s exports, as the country is still considered as high-risk.

“Today Ukraine is the only country, besides a few African ones, that does not have its own export credit agency,” said Kateryna Barabash, managing director of IBcontacts. “The establishment of a Ukrainian ECA will allow insuring the risks of Ukrainian exporters and in turn, it will help them to enter new markets and expand their exports.”

“I believe that it is highly important for Ukraine to have its own ECA, as the country has an export industry which needs complex support from private and state structures. The most important point is that it will help to foster export volumes. Please consider the fact that all exporting countries have such institutions,” added Hans-Joachim Pfloksch, head of international relations department of PricewaterhouseCoopers (Germany).

According to Ukraine’s ministry of economic development and trade, a new version of the draft law about the creation of an ECA is under consideration and will be adopted “soon”. The ministry’s head of foreign policy, Iryna Ivanova, explained: “Support and risk insurance for Ukrainian producers is one of the central points of the governmental programme of export support, and the establishment of an ECA is an instrument for such institutional support of Ukrainian exporters.”

The Ukrainian ECA is being designed under a structure made to fit the government’s existing support mechanisms. Yuliya Osmolovska, co-ordinator of international economic integration at the co-ordination centre for the implementation of economic reforms under the president of Ukraine, said: “It’s going to be a state structure, but the model of state company’s positioning may differ from the one proposed in the first draft law about the state ECA’s establishment. Now different forms are being designed, in accordance with existing mechanisms of export support. It may be a banking institution that performs export activity.”

She added that the ECA would aim to become a member of the Berne Union and the Prague Club and obtain international credit rating for Ukrainian institutions.