“Dhaman”: New commitments for insuring investment, finance and exports to Arab countries hit USD 108 billion at end of 2020 - Dhaman

“Dhaman”: New commitments for insuring investment, finance and exports to Arab countries hit USD 108 billion at end of 2020

Abdullah Al-Sabeeh: We stand prepared to address changes for reversing trade rules, finance and insurance, and the latest advancements of the age of information and technology

The Arab Investment & Export Credit Guarantee Corporation (Dhaman) revealed a drop in outstanding commitments for insuring investment, finance and exports to Arab countries against commercial and political risks by 1.2% to USD 201.5 billion in 2020, making up 7.1% of the global total.

The corporation said in a press release on the occasion of the issuance of the third quarterly bulletin “Investment Insurance” in 2021 that due to the disruption of various trade activities over the Coronavirus pandemic, the drop in trade and the slight rise in foreign direct investment inflows into Arab countries during 2020, new insurance commitments to investment, finance and exports to Arab countries against commercial and political risks fell by 7.1% to USD 108 billion, covering 13.6% of the total Arab merchandise imports.

Mr. Abdullah Ahmad Al-Sabeeh, the corporation’s Director-General, said in the editorial that in the context of closely following and considering the developments of the market and the sector of commerce and investment insurance globally and regionally, and in collaboration with Berne Union, the first specialized study has been conducted. It unprecedentedly revealed the characteristics and details of the sector of commerce and investment insurance in Arab countries. They mainly come as follows:

  • Arab countries acquired 4.3% of new commitments for insuring investment, finance and exports in the world at the end of 2020.
  • Export insurance in different terms had the lion’s share in new commitments by 92.1%, insurance against political risks hit 4.4%, and the rest went to other additional products.
  • New insurance commitments were geographically concentrated in five Arab countries which had 67% of the total. They are Saudi Arabia by 23.7%, UAE by 21%, Egypt by 17.2%, Morocco by 8.4% and Qatar by 5.9%.
  • Export credit agencies acquired the largest share of the total new commitments in the region during 2020 by 63%, as private agencies came second by 36%, followed by multiparty agencies.
  • New medium and long term export insurance commitments were concentrated in the sectors of energy, infrastructure, transport, natural resources and manufacturing by a total share of over 70%.
  • Commitments for insuring investment, finance and exports to Arab countries slightly fell to USD 79.9 billion during the first half of 2021, buoying forecasts that new commitments for 2021 would mostly maintain the same value of 2020.

In this regard, Al-Sabeeh reiterated the corporation’s interest in closely following the latest global political, economic, health and technological developments that have reflected on the structure and nature of trade and investment dealings and the levels of political and trade risks, which are considered one of the key governing elements of insurance on cross-border dealings.

He underlined that the corporation seeks to boost its comprehensive capabilities in face of existing and looming challenges that include reversing the governing rules and regulations of trade and its finance and insurance, the latest developments of the age of information and technology, automation, digitalization, e-learning applications and series production and value, while striving to to explore opportunities created by these developments by means of offering fresh services and broadening the scope of its business in different world countries. it also seeks to boost its alliances with main regional and international players in the sector of insurance, mainly Berne Unio, Aman Union, and all export insurance agencies in the region and the whole world.

Al-Sabeeh noted that based on its operations worth USD 21 billion till the end of 2020, the corporation would keep baking exporters and investors in the region by insuring its operations against political and commercial risks for the benefit of all parties and member countries’ economies.

Dhaman Quarterly Bulletin Q3-2021