Aussie defence fund a reminder of ECAs’ murky history with the arms industry

(Global Trade Review, London, 31 January 2018) The Australian export credit agency (ECA), Efic, has been armed with A$3.8bn to help companies sell military equipment overseas. Over the years, ECAs have been heavily criticised for selling arms which often help prop up tyrannical regimes and which can fall into the wrong hands. Indeed, the murky track record of the UK’s ECA was reportedly one of the reasons behind its rebranding from the Export Credits Guarantee Department (ECGD) to UK Export Finance (UKEF). ECGD was found to have funded a succession of arms deals involving despotic regimes including a £49mn loan made to Zimbabwean President Robert Mugabe to buy a fleet of fighter jets and police Land Rovers. Alas, its successor UKEF has continued the trend. It was reported in 2015 to have guaranteed £130mn in financing for repressive governments to spend on arms over the previous years. These include loan guarantees for the Indonesian government to purchase anti-aircraft missiles and a bond guarantee for Saudi Arabia to buy unspecified arms amid Saudi Arabia’s ongoing offensive in Yemen. Over half of UKEF support in the last annual report was for defence... and UKEF is by no means the only ECA involved in funding weaponry. Last year, US Ex-IM was questioned over its funding of dual-use goods which ended up in the militaries of Cameroon, Mexico and Qatar. Last year, the Russian ECA Exiar lent US$100mn to the Armenian government for the purchase of Russian-made munitions and French ECA Coface issued a 50% guarantee on a US$5.9bn loan from a group of French banks to the Egyptian air force to buy 24 multi-role fighter jets built by French company Dassault.