Exporters call for export credit insurance

With war looming in the Gulf last night, exporters urged the Government to re-introduce a controversial scheme indemnifying companies trading in the Middle East against unforeseen losses.

Warning that conflict will jeopardise the Republic's €1.3 billion trade with the region, the Irish Exporters Association called on the Tánaiste, Ms Harney, to provide political insurance cover - a euphemism for export credit insurance - to firms selling to Middle East states.

Export credit was withdrawn in 1998, when the Tánaiste described it as an anachronism with little benefit to taxpayers.

The majority of European governments have undertaken to indemnify businesses against losses in the event of a second Gulf war, placing Irish rivals at a severe competitive disadvantage, the association said.

Though companies are continuing to trade as normal in the Middle East, the situation is likely to change drastically should war erupt, chief executive Mr John Whelan predicted.

Banking systems and export routes risk being thrown into disarray, making it difficult - perhaps impossible - for companies to fulfil orders or collect payment.

"Customers in the Gulf will look favourably on companies that stay when war breaks out. If Irish exporters pull out, it will auger poorly for their future prospects," said Mr Whelan.

"The time to act is now - before war breaks out. It's too late stepping in to clean the mess up afterwards."

The Tánaiste's office dismissed the appeal, saying Ms Harney's opposition to export credit insurance has not diminished in the past five years.

Enterprise Ireland sounded a more diffident note, saying Irish firms operating in the Middle East appear unruffled by the imminent outbreak of hostilities. Twenty companies booked for a trade fair in Riyadh, Saudi Arabia, in May have indicated their intention to attend.

ESB International, which has seven workers in Bahrain, said it does not plan to withdraw them, adding that staff had remained during the 1991 Gulf war.

Dublin Business School employs three at a clearing office in Dubai. They will stay there barring a major change in circumstances.

The Department of Foreign Affairs has advised Irish citizens against "non-essential" travel to Saudi Arabia, Qatar and Bahrain, adding it is up to individuals to decide whether their plans are "non-essential".