Campaign of the Month: Campaign against ECAs by Campaign Against Arms Trade in the Netherlands
Export Credit Agencies (ECAs) – are publicly backed government or semi-government agencies which give financial guarantees to companies operating abroad – they are the single largest source of taxpayer support for private sector companies seeking to off-load on to the public the financial risks of their business projects in the South and Eastern Europe.
In 1999, it became clear that the Dutch export credit agency was involved in the financing of arms to Indonesia. Arms exports to Indonesia had been our focus since the mid nineties, so this involvement triggered the interest for the issue. The importance of the issue soon became clear enough. Defence News cited an American official stating that: “arms sales to Indonesia are not possible without a flexible financing program en low interest loans”. A British research concluded that without ECA guarantee, there would very often be no financing; so no arms deal.
Moreover, an executive of a British bank in charge of arms deals stated: “You see, before we advance monies to a Company, we always insist on any funds being covered by the Government’s Export Credits Guarantee Department… We can’t lose. … It’s beautiful.” The companies he aimed at, in that time exported arms to Iraq.
The general aim of our campaign is to end ECA support for arms exports; since this would make the export of large, expensive weapon systems to developing countries almost impossible.
Until recently our campaigning focussed on a government agency, using tax payers money to finance (or with other words subsidize) controversial arms deals and on the fact that in this way the government, which is supposed to be an independent guardian of the European cod of conduct on arms exports, becomes financially involved in arms exports.
This year our focus has broadened to the issue coherence with development policies: debts and the millennium development goals, aiming to involve debt campaigners and development organisations with the issue. Almost 35% of the global debt burden is ECA debt, which makes ECAs the single largest source of developing countries debt. Since between 20 to 30 percent of ECA backed deals are arms deals, this means that at least almost 10% of the global debt is military debt.