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Slash-and-burn agriculture in the Amazon rain forest of Peru . (Photo by R. Butler)
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.
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
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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