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Eximbanka's fruitless harvest

Eximbanka was just one of many projects the government seeded last year to boost the export performance of Slovak enterprises. But the harvest so far has been poor, and critics allege that the government is not serious about raising a crop of strong exporters.
Created in July 1997, Eximbanka was conceived to insure Slovak producers against risks while exporting to countries like Russia, to extend export loans to them and to enhance their export capacities. But the bank remains without a budget in 1998, largely because of irregularities in the disposition of 1997 funds.

Eximbanka was just one of many projects the government seeded last year to boost the export performance of Slovak enterprises. But the harvest so far has been poor, and critics allege that the government is not serious about raising a crop of strong exporters.

Created in July 1997, Eximbanka was conceived to insure Slovak producers against risks while exporting to countries like Russia, to extend export loans to them and to enhance their export capacities. But the bank remains without a budget in 1998, largely because of irregularities in the disposition of 1997 funds.

Although the 1998 Slovak state budget calls for 65% of Eximbank's assets, or 4.3 billion Sk, to be spent on "direct export assistance," most of the bank's current assets of 6.6 billion Sk are tied up in time deposits in other banks (2.8 billion Sk) or have been set aside for the purchase of state treasury bills (1.1 billion Sk) to help finance the state budget deficit. Only 2 billion Sk has actually been lent to exporters.

Eximbanka Governor František Orolín was quoted by the Slovak business weekly Trend as saying that "the 1998 [Eximbanka] draft budget aims to spend 70% of all funds, which means about 4.6 billion Sk, for export assistance." But as Trend notes, the budget fails to specify which Eximbanka assets will be employed, and which export projects will be supported.

Brigita Schmögnerová, an economic expert with the opposition reformed communist SDĽ party, was even more critical. Eximbanka's assets, which are 30% borrowed, are set to be inflated by another foreign loan, she said. "This money will be used 80% for insuring exports to Russia. I am extremely unhappy about this, because Russia is a very unstable country, and it is very unlikely that these loans, once extended, will be recovered."

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