Slash-and-burn agriculture in the Amazon rain forest of Peru . (Photo by R. Butler)
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DEBT
In the 1980s, 1990s, and early 2000s, debt was driving commercial deforestation in some developing tropical countries. Strapped for cash, these countries turned toward their natural resources as the fastest and easiest way to service debt and interest payments. Readily available without capital investment or skilled labor, often non-renewable, forest products like mineral wealth, timber, oil, and hydroelectric power were liquidated in an effort to raise much-needed funds.
While efforts in the last couple of years have sought to reduce or eliminate debts of the world's poorest countries (World Bank / IMF), debt payments still are an important factor in the need for governments to pursue and exploit natural resources in a non-reponsible manner.
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Heavily Indebted Poor Countries (HIPCs)
| Country | | External debt
(millions) | | Date of
Information |
| Benin | | $1.600 | | 2000 |
| Bolivia | | $5.439 | | June 2004 est. |
| Burkina Faso | | $1.300 | | 2000 |
| Burundi | | $1.133 | | 2002 |
| Cameroon | | $8.460 | | 2004 est. |
| Chad | | $1.100 | | 2000 est. |
| Congo, Dem Rep of the | | $11.600 | | 2000 est. |
| Congo | | $5.000 | | 2000 est. |
| Cote d'Ivoire | | $11.810 | | 2004 est. |
| Ethiopia | | $2.900 | | 2001 est. |
| Gambia, The | | $0.476 | | 2001 est. |
| Ghana | | $7.396 | | 2004 est. |
| Guinea | | $3.250 | | 2001 est. |
| Guinea-Bissau | | $0.942 | | 2000 est. |
| Guyana | | $1.200 | | 2002 |
| Honduras | | $5.365 | | Sept 2004 est. |
| Kenya | | $6.792 | | 2004 est. |
| Madagascar | | $4.600 | | 2002 |
| Malawi | | $3.129 | | 2004 est. |
| Mali | | $3.300 | | 2000 |
| Mauritania | | $2.500 | | 2000 |
| Mozambique | | $0.966 | | 2002 est. |
| Nicaragua | | $4.573 | | 2004 est. |
| Niger | | $1.600 | | 1999 est. |
| Rwanda | | $1.300 | | 2000 est. |
| Sao Tome and Principe | | $0.318 | | 2002 |
| Senegal | | $3.476 | | 2004 est. |
| Sierra Leone | | $1.500 | | 2002 est. |
| Tanzania | | $7.321 | | 2004 est. |
| Uganda | | $3.865 | | 2004 est. |
| Yemen | | $5.400 | | 2004 est. |
| Zambia | | $5.353 | | 2004 est. |
| source: CIA World Factbook | | |
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The origin of international debt varies from country to country, but many borrowed heavily during the 1970s in an attempt to offset the rising price of oil and to keep their economies growing. Other debts were initiated by struggles for independence and civil wars that followed. Debt increased with the reign by corrupt, heavy-handed governments, which often used loans to purchase weapons or to finance wasteful or ill-conceived projects that neither benefited the majority of the population, the economy, nor the environment. High interest rates coupled with the global recession made it harder for developing countries to pay off debt.
Historically, much of the foreign aid flowing into such countries from multilateral lending organizations like the World Bank and the International Monetary Fund (IMF) financed projects that result in the destruction of the rainforests and thus further ensured future impoverishment and dependence on aid. These organizations funded such projects because they were most suited to large development projects and projects were chosen primarily based on those that yield the most immediate economic return, not necessarily the best long-term growth prospects.
The debt of developing countries continues to grow. Tropical forest countries own roughly two-thirds of the developing world's debt. In sub-Sahara Africa, for example, the total debt in 1980 was US$84 billion, while by early 2001 the debt had climbed past US$275 billion despite frantic development and a constant stream of refinancing.
Review questions:
- How does international debt impact deforestation in the tropics?
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Continued: Population & Poverty
This article was written by Rhett A. Butler [bibliographic citation for this page] and was last updated on the most recent date listed in the column on the right side.
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WEEKLY NEWSLETTER
INTERACT
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Recent news
Some toilet paper production destroys Indonesian rainforests, endangering tigers and elephants
(02/09/2012) American consumers are unwittingly contributing to the destruction of endangered rainforests in Sumatra by purchasing certain brands of toilet paper, asserts a new report published by the environmental group WWF. The report, Don't Flush Tiger Forests: Toilet Paper, U.S. Supermarkets, and the Destruction of Indonesia's Last Tiger Habitats, takes aim at two tissue brands that source fiber from Asia Pulp & Paper (APP), a paper products giant long criticized by environmentalists and scientists for its forestry practices on the Indonesian island of Sumatra. The brands — Paseo and Livi — are among the fastest growing, in terms of sales, in the United States.
Tropical ecologist: Australia must follow U.S. and EU in banning illegally logged wood
(02/09/2012) Australia should join the widening effort to stamp out illegal logging, according to testimony given this week by tropical ecologist William Laurance with James Cook University. Presenting before the Australian Senate's rural affairs committee, Laurance argued that the massive environmental and economic costs of illegal logging worldwide should press Australia to tighten regulations against importing illegally logged timber at home.
Humans drove rainforest into savannah in ancient Africa
(02/09/2012) Three thousand years ago (around 1000 BCE) several large sections of the Congo rainforest in central Africa suddenly vanished and became savannah. Scientists have long believed the loss of the forest was due to changes in the climate, however a new study in Science implicates an additional culprit: humans. The study argues that a migration of farmers into the region led to rapid land-use changes from agriculture and iron smelting, eventually causing the collapse of rainforest in places and a rise of grasslands. The study has implications for today as scientists warn that the potent combination of deforestation and climate change could flip parts of the Amazon rainforest as well into savannah.
More big companies disclosing impacts on forests
(02/07/2012) More companies are reporting on the impact of their operations on global forests, finds a new report. Eighty-seven global corporations disclosed their "forest footprint" in 2011, according to the third Forest Footprint Disclosure (FFD), which asks companies to report on their impact on forests based on their use of five commodities: soy, palm oil, timber and pulp, cattle, and biofuels. This is a 11 percent rise from the companies that reported in 2010, including the first reports by companies such as the Walt Disney Company, Tesco UK, and Johnson & Johnson. However a number of so-called "green" companies continue to refuse to disclose, including Patagonia, Stonyfield Farms, and Whole Foods Markets Inc.
New meteorological theory argues that the world's forests are rainmakers
(02/01/2012) New, radical theories in science often take time to be accepted, especially those that directly challenge longstanding ideas, contemporary policy or cultural norms. The fact that the Earth revolves around the sun, and not vice-versa, took centuries to gain widespread scientific and public acceptance. While Darwin's theory of evolution was quickly grasped by biologists, portions of the public today, especially in places like the U.S., still disbelieve. Currently, the near total consensus by climatologists that human activities are warming the Earth continues to be challenged by outsiders. Whether or not the biotic pump theory will one day fall into this grouping remains to be seen. First published in 2007 by two Russian physicists, Victor Gorshkov and Anastassia Makarieva, the still little-known biotic pump theory postulates that forests are the driving force behind precipitation over land masses.
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