| Sourced From Channelnewsasia.com |
WASHINGTON: The United States has signed an agreement to forgive nearly US$30 million in Indonesian debt in return for the large Southeast Asian country agreeing to protect the forests on Sumatra Island.
The deal is the largest debt-for-nature swap the US government has organized so far under the US Tropical Forest Conservation Act. It is the first such deal with Indonesia which has one of the fastest deforestation rates in the world.
Indonesia’s massive deforestation rate makes the country the world’s third-largest emitter of carbon dioxide, behind the United States and China. Each year, the amount of forests Indonesia loses to logging is equal to the size of Switzerland.
Deforestation also affects Indonesia’s wildlife. These forests are home to some of the world’s most endangered species including endangered tigers, elephants, rhinos and orangutan.
In a new deal, the US has agreed to trade US$30 million in debt repayments for increased conservation of Indonesia’s habitat.
Jennifer Morris is the senior vice-president for the ecosystem finance division of Conservation International, the group which brokered the deal between the United States and Indonesia.
She said: “Basically, instead of repaying that debt, (Indonesia is) to put that money that it would have repaid to the US government into conservation. This deal, which is incredibly historic, is the largest ever debt, what’s called a debt swap…”
The deal signed by the US Treasury Department permits Indonesia to put the money into a trust to protect 13 areas of forests on the island of Sumatra.
Walter Lohman of the Heritage Foundation said he is concerned about the money getting to the right place, but he sees a lot of positives.
“It’s just another another way of giving assistance. You could ask the same question about why do we give the world US$20 billion in assistance every year? It’s about building a relationship, we’re building a relationship with the Indonesians,” he said.
That is a point underscored in key meetings between American and Indonesian officials.
US Secretary of State Hillary Clinton said: “I look forward to continuing to work with the foreign minister and the Indonesian government on all of these issues. And I am confident that our relationship will grow stronger and deeper in the future.”
Conservation International said the deal is an innovative way of helping both the people and the species of Indonesia.
The United States has signed similar, smaller agreements with countries such as the Philippines, Guatemala and Peru.
Ms Morris said: “It’s one of the best mechanisms that we have for development assistance from developed countries, where that money can be used in a different way.
“Instead of that money going directly back or instead of being forgiven, the government of Indonesia has made this really important commitment to invest in conservation for the local people and for these critical species.”