Big companies are happy to collect profits in newly privatized markets but they prefer the public to cover the risks: political instability and popular resistance. Remarkably, pliant governments are happy to oblige. One of their favorite tools for subsidizing corporate investments in the developing world is the export credit agency (ECA).

ECAs are public institutions that provide insurance, loans and loan guarantees to companies expanding into ‘emerging markets’. The G7 industrialized nations all have at least one ECA. Together, the agencies supported more than $390 billion in private-sector investment in 1998. They are, in the words of one supporter, ‘the unsung giants of international trade and finance’.

Many international financial institutions – like the World Bank – disguise their operations under the cloak of ‘poverty reduction’. But not export credit agencies. Their goal is simple – to make sure that companies based in the ECA’s home country thrive overseas. Yet ECAs work in tandem with the World Bank and others. As Aaron Goldzimer of the Environmental Defense Fund explains, the World Bank, the IMF and the WTO ‘open countries up with the trade and economic policies that they impose’ while ‘ECAs provide the direct finance and cover for corporations to invest’.

German, Japanese, US and Italian ECAs played important roles in privatizing portions of Bolivia’s state oil company. Their financing of pipeline projects – over $650 million since 1997 – benefited Enron and Shell while endangering Bolivia’s ecologically sensitive Pantanal region, the world’s largest remaining wetland.

Besides directly underwriting privatization, ECAs make possible some of the dirtiest deals of corporate globalization – including projects that even the World Bank won’t touch. ECAs finance 14 of 19 nuclear-power plants currently under construction in the developing world. Over the years, more than 30 per cent of the guarantees provided by ECAs in France and Britain have served to finance arms sales. And, despite being slammed as an environmental disaster, construction on China’s massive Three Gorges Dam moves forward – thanks mainly to export credit contributions from countries like Canada, Germany, Sweden and Switzerland.

Responding to these abuses, 347 civil-society groups from 50 countries endorsed the Jakarta Declaration in May 2000. The statement calls for cancellation of the huge portion of the developing world’s foreign debt held by ECAs. It insists upon binding environmental, social and human-rights guidelines. And it demands that ECAs adopt transparent procedures to end the secrecy that has hidden many deals from public scrutiny.

Since Jakarta, activists have moved to link their campaigns internationally – with some success. Recently, the construction of the Ilisu Dam in Turkey was stopped. The Dam would have displaced 78,000 people, mostly ethnic Kurds.

If this movement continues to grow, unchecked public financing for corporate expansion may become a thing of the past – a development that would leave privatization with an uncertain future.