Rome, Italy, February 14, 2009
—The Japanese government has launched a $1.0 billion trade finance facilitation initiative to be developed in close cooperation with IFC, a member of the World Bank Group, and the Asian Development Bank. The initiative, announced today by Japan’s Finance Minister Shoichi Nakagawa after a meeting of G7 finance ministers, will help importers and exporters in developing countries and support continued trade flows during the current economic crisis.
Japan’s commitment to the new trade finance initiative follows a $2 billion contribution made through Japan Bank for International Cooperation (JBIC) to IFC’s Bank Recapitalization Fund announced earlier this month.
“We would like to thank the Japanese government for their continued generous support for the World Bank Group’s economic crisis response,” said World Bank Group President,
Robert B. Zoellick.
“Japan’s initiative recognizes the important role that trade plays in an integrated world. Keeping trade flowing is vital to saving jobs and curbing the impact of the crisis on people in developing countries.”
The global financial crisis has prompted banks around the world to reduce lending to emerging markets and cut trade finance lines to importers and exporters. This means essential goods cannot be imported, and presents a threat to the businesses of exporters in developing countries. IFC’s existing and proposed trade finance initiatives seek to ensure trade credit is available in the market.
Lars Thunell
, CEO and Executive Vice President, IFC, said: “Trade can help offset declines in domestic consumption and limit damage to the economy during the crisis. IFC’s initiatives are supporting trade in some of the world’s most challenging markets, and Japan’s initiative will support our efforts to do more of this vital work.”
The IFC Global Trade Finance Program, which was increased from $1.0 billion to $3.0 billion in response to the financial crisis, provides unfunded support in the form of guarantees for trade transactions in emerging markets. IFC is also developing a program to provide funded support to major financial institutions with wide trade finance networks in emerging markets, and to increase engagement with export credit agencies.
IFC has a track record of facilitating trade during times of crisis. It responded to the Brazilian financial crisis of 2002 with an initiative to provide large, syndicated trade lines to domestic private sector banks, and provided major dedicated support to trade through South Korean banks during the Asian financial crisis.
IFC has also launched crisis-response initiatives targeting the microfinance, infrastructure, and banking sectors, and providing advisory services to clients. The IFC Bank Recapitalization Fund, of which Japan is a founding partner, aims to provide additional capital for banks in developing countries to ensure they can continue to lend and support economic recovery and job creation through the current economic and financial crisis.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit
www.ifc.org
