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Published:October 6th, 2006 02:04 EST
US Nature-for-debt swap called win-win deal for developing world

US Nature-for-debt swap called win-win deal for developing world

By SOP newswire

A U.S. conservation program enacted in 1998 is a "win-win" deal that helps protect the global environment while promoting the economies of the developing world, U.S. officials say.

Eleven developing countries are partners with the United States under the Tropical Forest Conservation Act (TFCA), which aims to help save the world's tropical forests by forgiving some of the official debt owed by these nations to the United States.

This so-called "debt-for-nature swap" also strengthens civil society by providing small grants to nongovernmental organizations (NGOs) and local communities.

The TFCA is run largely by three U.S. government agencies -- the State and Treasury departments and the U.S. Agency for International Development (USAID). Clay Lowery, Treasury's assistant secretary for international Affairs, calls the TFCA "special in a couple of ways.  It provides very long-term, predictable funding for forest conservation," and "also provides for a strong private/public partnership in managing TFCA programs."

The United States has signed 12 TFCA agreements overall in 11 countries (two with Panama).  Other countries in the program are Bangladesh, Botswana, Belize, Colombia, El Salvador, Guatemala, Jamaica, Paraguay, Peru and the Philippines.

"The promise of the TFCA has been fulfilled in the last few years to provide substantial benefits for the environment in participating countries," U.S. Assistant Secretary of State for Oceans, Environment and Science Claudia McMurray said.  "These benefits come at a small cost to the U.S. and a great benefit for all who care about the environment."

On October 5, Botswana signed agreements with the United States to become the latest country to join the TFCA, according to the State Department.  The agreements call for the African country’s debt payments to the United States to be reduced by over $8.3 million.  The funds will be used to support grants to conserve and restore important tropical forests throughout Botswana, including such areas as the Okavango Delta and Chobe National Park region.  The agreements were made possible through a nearly $7 million contribution from the United States, State said.

Guatemala joined the program October 2 with the United States in an agreement to invest $24 million over the next 15 years in conservation work, according to a Treasury Department announcement. In exchange, the United States will forgive part of Guatemala's official debt owed to America.


USAID's James Hester told the Washington File October 3 that the TFCA is an offshoot of the Enterprise for the Americas Initiative, which was established in 1991 to deal such issues as environmental protection, child survival and child development.

That regional initiative worked so well, Hester said, that the U.S. Congress said "let's build on that" by enacting a worldwide program focusing on a specific issue -- in this case tropical forests, which are being destroyed rapidly to make room for agriculture and supply firewood and other commodities.  Hester serves as vice chair of the Enterprise for the Americas Board, which is the U.S. government/private-sector group that oversees the TFCA.

Hester said the TFCA is enjoying success in a number of countries -- such as Belize, Colombia, El Salvador and Jamaica.  In such other countries as Bangladesh and the Philippines, the programs are only at the "start-up" phase, which means a fair analysis of their effectiveness is not yet available.

The true measurement of TFCA's effectiveness in helping to stop the destruction of tropical forests might have to wait for another five to 10 years, according to Hester.  Forests are a very "long-term thing" and it is unrealistic to believe that "after one year we've saved a million acres of forest [400,000 hectares] and now we no longer have to worry" about tropical forest destruction, he said.

"If you think about what forest conservation is, and see what are the approaches being used" on that issue, "I think you could have a great deal of confidence" that the TFCA is performing effectively, said Hester.  But he said it is shortsighted to carry out a short-term analysis of how much forestland is being saved in a long-term program.


An official with the State Department's Bureau of Oceans and International Environmental and Scientific Affairs (OES) told the Washington File that TFCA agreements will generate $135 million over 10 to 25 years to protect and better manage tropical forests, including national parks and other "high value conservation areas, and the species that depend on them."

According to the official, TFCA programs will help protect some 16 million hectares of national forest, provide grants to NGOs and establish endowment funds for long-term conservation financing.

The TFCA benefits both the United States and other countries. For the United States, the program is a way to advance its goal of protecting forests worldwide. Beneficiary countries can "redirect" their debt payments from the U.S. government into local funds, which provide a "steady steam of financing to support forest conservation projects."  The TFCA represents a "great example of public-private partnership," the OES official said.

NGOs such as the Nature Conservancy, Conservation International and the World Wildlife Fund have together contributed a total of $9.6 million to the TFCA deals in some of the countries in the program.  In addition, the TFCA also helps build civil society in developing countries by providing grants and other project funding to local community and conservation groups, which the State Department bureau praised as having the added benefit of advancing the United States’ global democracy objectives.

The nongovernmental community also praises the TFCA as bringing civil society into the process for saving the world's tropical forests while strengthening developing nations.

Kristina McNeff, legal adviser to the Global Conservation Fund at the Washington-based Conservation International, said in an October 4 interview that from the perspective of the nongovernmental community the debt-for-nature deal signed with Guatemala and the TFCA generally "provides an opportunity for us to work together with the debtor government and the U.S. government to strengthen in-country capacity for both bio-diversity conservation but also civil society institutions."

McNeff added that measures such as the TFCA offer a "great way to generate a large amount of money to go directly to local organizations" in the host country for conservation efforts.  Regarding the TFCA deal with Guatemala, the United States contributed about $15 million toward the cancellation of that country's debt, while Conservation International and the Virginia-based Nature Conservancy each contributed an additional $1 million for the debt swap.

The Nature Conservancy’s Susan Ruffo said her organization has been a big supporter of the TFCA since its 1998 enactment.

She said the TFCA is a "great way for developing countries to build some resources to protect their forests ... while lowering their debt burden and also to invest in their own countries."

Ruffo, her group's senior policy adviser for international government relations, called the TFCA a "win-win situation" that protects the forests, but also "benefits the communities that surround them."

The TFCA works fine for its intended purpose, said Ruffo.  But she added that her conservation organization would "love" to see the TFCA used as a model to expand debt-for nature swaps that would cover other ecosystems besides tropical forests, such as coral reefs and grassland.

The full text of the media note on the U.S.-Guatemalan agreement is available on the State Department Web site.

More information on the TFCA is available on the USAID Web site.

See also the State Department electronic journal, Protecting the Environment.

(The Washington File is a product of the Bureau of International Information Programs, U.S. Department of State. Web site:

By Eric Green
White House Staff Writer

Source: DoS