The fate and importance of the federal Export-Import Bank
The Indianapolis region is often synonymous with motorsports, pharmaceuticals and football. While our global reach may not be obvious, Indianapolis and the surrounding counties are in fact very competitive in the global marketplace. By virtue of its rich history of global commerce, the Indianapolis region is ranked 20th in the nation in export volume with nearly $16 billion in total value.
In addition, our region is home to multiple global powerhouses such as Rolls-Royce, Roche Diagnostics, Dow AgroSciences, Eli Lilly & Company, Allison Transmission, Cummins, as well as others, trading throughout the globe. While large exporting corporations like these are very important to our international economic impact, research has shown that our true growth potential lies in the hands of our Small and Medium Enterprises (SME).
Often times, SMEs need assistance to access export markets. The federal Export-Import Bank (Ex-Im Bank) is a key resource on which this group relies. In recent months, the fate of the Ex-Im Bank has been rocky as members of Congress debated whether or not to reauthorize its charter which is set to expire on September 30.
Earlier this year, Indy Chamber president Michael Huber wrote in support of a four-year reauthorization and increase in the lending cap for the Ex-Im Bank, noting that failure to reauthorize its operations at an internationally competitive level would leave companies—small and large—at a serious disadvantage in foreign markets, potentially resulting in the loss of thousands of jobs across the country and hampering future economic progress. Additionally, the ongoing existence of the Ex-Im Bank will play a major role in the Indy Chamber’s Global Cities Exchange strategy.
As the region’s leading economic development organization responsible for developing long term strategies to grow our economy and strengthen our workforce, the Indy Chamber is currently working with The Brookings Institution and JPMorgan Chase to develop a plan to launch programs that will help companies grow their global reach by expanding their export capabilities and networks. Throughout this process we have evaluated our region’s current exporting capacity. One major theme runs throughout: there are many obstacles for companies to grow an intentional export strategy and chief among these obstacles is financing. That is why the continued existence of the Ex-Im Bank is imperative.
While private commercial banks remain necessary to provide working capital and export finance, they exhibit a level of timidity in helping the SME market. Elimination of a valuable institution like the Ex-Im Bank, which has provided assistance to SMEs for over 80 years, will further erode our strategic advantages as the Crossroads of America.
Keep an eye out for updates as Congress is expected to move on the measure, one way or the other, by the end of the month.