Debt-Trade Follow-up in Ecuador
Loading...
Authors
Ansell, Harold S. (H. Sam)
Issue Date
1991
Type
Thesis
Language
en_US
Keywords
Alternative Title
Abstract
The Debt-for-Nature swap is the newest, most innovative
financial tool used in international conservation today. It is a
mechanism in which any given Third World country exchanges a
commitment to conservation for a portion of its outstanding
commercial debt. In theory all of the involved parties benefit. The
international conservation organization that buys the debt should
get more accomplished for less money due to the heavily discounted
prices of Third World debt. The debtor country benefits by a small
reduction in its foreign debt as well as the allocation of local
currency to finance domestic conservation projects. And finally, the
banks that sell the debt on the secondary market are ridding
themselves of these high risk loans that probably won't be paid back.
The economic benefits of the debt-for-nature swap are minimal.
What is at issue here is conservation in the Third World. Is the
debt-for-nature swap an effective tool in the struggle to save the
rain forests. And if so, is it being used effectively. That was the
fundamental question that I wanted answered when I began my
research on the debt-for-nature swap negotiated in Ecuador.
As there is very little published on the debt-for-nature swap,
it was necessary to go to Ecuador and do original research. Many of
the involved organizations were less than willing to provide me with
relevant information and my responsibilities became less like those
of a researcher and more like those of an investigative reporter. I
collected information from various conservation organizations, the
central bank, the Ministry of Agriculture, the Tribunal of
Constitutional Guarantees, independent environmental consultants,
ex-government employees, and various newspaper and magazine
articles.
The information that I collected is organized into a three part
analysis of the debt-for-nature swap. The first part is a detailed
description of the mechanism beginning with a history and ·ending
with an account of how the money from the swap is used. This first
section shows in detail the very wide dispersal of the funds
generated. The second section is a brief evaluation of the
effectiveness of the debt-for-nature swap as a financial mechanism.
In this section I illustrate how the debt-for-nature swap isn't
necessarily the "great buy" that international conservation
organizations hail it to be. In the third section I evaluate the
effectiveness with which the debt-for-nature swap addresses the
immediate conservation needs of Ecuador. I do this by focusing on
one of the protected areas that is supposed to receive support from
the debt-swap. I describe the immediate needs of that preserve and
I describe the very limited support ·that it actually received once the
proceeds from the $10 million debt-for-nature swap had been
distributed throughout the bureaucratic system.
My final conclusions indicate that the debt-for-nature swap is
a potentially very powerful financial mechanism that could go a long
way to protect the tropical rain forests of the developing world. In
the case of Ecuador, however, it has been managed very poorly and
any positive environmental impacts have been minimal.
Description
iv, 41 p.
Citation
Publisher
License
U.S. copyright laws protect this material. Commercial use or distribution of this material is not permitted without prior written permission of the copyright holder.