ENVIRONMENT | Protecting our natural resources
21 October 2008
United States, Peru Announce Debt-for-Nature Agreement
More than $25 million will support conservation of Peru’s rain forests
Washington — The United States has agreed to redirect $25 million of Peru’s debt into local funds to protect the country’s tropical forests, the State Department announced October 20.
The debt-for-nature agreement was made possible by the federal Tropical Forest Conservation Act (TFCA) of 1998.
Peru will become the largest beneficiary under the TFCA program, with more than $35 million generated for environmental conservation. Eleven other countries also participate in the program, which is administered by three U.S. government agencies — the State and Treasury departments and the U.S. Agency for International Development (USAID).
In a debt-for-nature agreement, countries redirect their debt payments to the United States into local funds that administer competitive grants that support forest conservation, according to James Hester, agency environmental coordinator at USAID and director of the Office of Natural Resource Management. Grants are awarded to nongovernmental and other local organizations for a broad range of conservation activities.
The new Peru agreement marks the 14th TFCA pact. Other agreements are in place with Bangladesh, Belize, Botswana, Colombia, Costa Rica, El Salvador, Guatemala, Jamaica, Panama (two agreements), Paraguay and the Philippines, as well as an earlier agreement with Peru. These pacts together will generate more than $188 million to protect tropical forests.
Clay Lowery, Treasury's assistant secretary for international affairs, says the TFCA is "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."
Claudia McMurray, the State Department’s assistant secretary for oceans, environment and science, told an audience in Cape Town, South Africa, in April that the programs established by the TFCA agreements will protect 20 million hectares of biologically rich tropical rain forests.
McMurray said the benefits of the TFCA come at a small cost to the United States and a “great benefit for all who care about the environment." (See “U.S. Program Helps Save Tropical Forests, Cut Foreign Debt.”)
PROTECTING FORESTS, BUILDING CIVIL SOCIETY
The new agreement complements a 2002 TFCA program in Peru, a 1997 debt swap under the Enterprise for the Americas Initiative and the United States-Peru Trade Promotion Agreement.
Funds generated by the debt-for-nature program will help Peru protect tropical rain forests of the southwestern Amazon Basin and dry forests of the central Andes, according to the State Department. Rivers supplying water to downstream settlements originate in many of these forests, and people living in and around the forests depend on them for their livelihood and survival.
These areas are home to dense concentrations of endemic birds such as the Andean condor and Andean parakeet; primates including the Peruvian yellow-tailed woolly monkey and howler monkey; other mammals such as the jaguar, Amazonian manatee, giant otter, spectacled bear and Amazon River dolphin; and many unique plants.
In addition to forest conservation and debt relief, TFCA aims to strengthen civil society by creating local foundations to support small grants to nongovernmental organizations and local communities. The program also offers a unique opportunity for public-private partnerships.
The Nature Conservancy, the World Wildlife Fund and Conservation International together contributed about $1.1 million to the previous Peru agreement in 2002, which already has generated $200,000 in grants for training and capacity building to manage two protected areas.
To be eligible for the TFCA, countries must have a democratically elected government, cooperate on international drug control measures and have a suitable economic reform program in place. They must not support international terrorism or violate human rights, according to the State Department.
