USA Offers Brazil Debt Pardon for Environmental Investment in Amazon
11/1/99
OVERVIEW & COMMENTARY
The U.S. may pardon some 650 million dollars of Brazil's debt if the
money is invested in the protection of the Amazon. Though a small
amount of Brazil's total foreign debt, it sets an important
precedent. Clearly maintenance of this huge Planetary ecosystem
engine is worth this and many billions more. Establishing mechanisms
to transfer funds from countries that benefit from rainforest's
existence to developing tropical countries will be a prerequisite for
sustaining rainforests. Canceling debt is a start, after which
annual revenue flows must be established to compensate governments
for not industrially developing rainforests.
g.b.
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Title: USA offers debt pardon for environmental investment
Source: BBC Monitoring Americas - Economic
Text of report by Brazilian newspaper `Correio Brasiliense'
Status: Copyright 1999, contact source for permission to reprint
Date: October 27, 1999
The United States can pardon 650m dollars in debt if the money is
invested in the protection of the Amazon. The United States is
offering the exchange of 650m dollars of Brazil's foreign debt for
investments in the environment. This type of debt reduction became
possible after the approval of a law last year in the US Congress and
is already in effect for some Latin American countries. The idea is
favoured by the Ministry for the Environment, but still has not been
evaluated by the government's economic team.
The 650m dollars are related to USAID debt, the US agency for
technical cooperation and development aid. The money would be
invested in projects of the Pilot Programme for the Protection of
Tropical Forests, the PPG-7. "But there is no official position of
the government so far," explains the secretary of the coordinating
office of the Amazon, Mary Helena Allegretti.
The funds freed by the pardoning of the debt would have to be
invested in "research and training of technical experts in the
environment", explained Janice Weber, the representative of the
United States at the meeting of the PPG-7 that is being held until
Friday [5th November] at the Tennis Academy. The meeting is
discussing a thorough restructuring of the programme, which was
created in 1991 as a partnership among the seven richest countries of
the world (G-7), the World Bank, and the Brazilian government.
Of a total of 338m dollars allocated by the PPG-7 for the programme,
about 280m dollars have already been contracted. Of these, 85m
dollars have already been used in hundreds of initiatives for the
promotion of sustainable development. Among the projects with the
greatest success are the 130 "demonstration" projects - small
experiments in sustainable development - in the Amazon and the
demarcation of 22m ha in Indian areas (another 22m ha are being
demarcated for the Javari Indians).
But the complications in the transfer of money - which has to comply
with bureaucratic requirements of the World Bank and the governments
of the donating countries - are delaying by up to two years the
realization of some projects. To make the PPG-7 more agile, the
Brazilian government is proposing that the Secretariat of the
Coordinating Office of the Amazon become a kind of "manager" of the
programme.
Another proposal is that the funds be used with greater "flexibility"
by Brazil in emergency situation, such as forest fires and in
activities that are not considered by the PPG-7, such as
environmental education and the fight against deforestation.
The donating countries (Germany, the European Union, Great Britain,
the United States, Japan, Italy, the Netherlands, France and Canada)
also want Brazil to take on with greater perseverance the
coordination of the hundreds of projects and the various financing
mechanisms of the PPG-7. On the other hand, they are reticent to give
more autonomy to the Brazilian government in administering the money
in a more flexible manner. "About 80 per cent of the funds of the
PPG- 7 come from European contributors and it is therefore natural
that we have to monitor it in some fashion; this does not mean an
interference in public policies of Brazil," explains Rolf Thiemans,
ambassador of the European Union