The Pale Green Economic Summit

AT the 15th annual summit of the world's economic powers, the leaders not only achieved a traditional rhetorical consensus - they atypically reached accord on some important follow-up initiatives. They agreed on the principle of debt relief for developing countries. They embraced the so-called ``Brady Plan'' as the mechanism for negotiating this relief between debtor governments and creditor banks. In addition, the leaders endorsed assistance for Eastern Europe and sketched a plan to foster East-West economic ties.

Measured against past efforts, this summit was a success. But measured against the expectations raised by their own pre-summit publicity, the leaders disappointed their global audience in one crucial respect.

Environmental concerns were given great prominence in summit preparations. Each leader arrived with proposals and pledges for improving our planet's biological health. All the participants demonstrated a genuine wish to respond to what is quickly becoming the first global demand - a cleaner earth.

When the meetings concluded, the largest section of the final communiqu'e promised improved environmental conditions, particularly in developing countries. But for all the consensus regarding the problem's causes, cures, and urgency, the leaders did less than they could have to address it. Victory was claimed for decisions put off until tomorrow; little was done to help the environment today.

Two specific proposals were passed over that could have merged the concerns of debt and economic growth with the desire to restore the environment.

The first proposal requires coordinated support for so-called debt-for-nature exchanges. Originally put forward in 1984, these exchanges allow a private conservation group to buy and trade a portion of a country's outstanding debt for official commitments to support specific environmental projects. This approach recognizes that short-term plundering of developing countries' natural resources to pay off debt is in no one's interest: It's better for debtors and creditors to relieve debt in return for saving the earth's environment.

To illustrate, in 1987, Conservation International bought $650,000 of Bolivia's outstanding debt and then exchanged it with the Bolivian government for their commitment to protect a biologically diverse tropical rain forest. The trade also created a mixed-use buffer zone around the forest reserve, and a $250,000 endowment in local currency to help manage the project. Because Bolivian debt sells at a steep discount on the secondary market, Conservation International paid only $100,000 for the debt.

In addition to the Bolivian exchange, debt-for-nature swaps have been used successfully in Costa Rica, Ecuador, and the Philippines. But local and international environmental groups are constrained by their inability to raise sufficient funds. The demand exists, and world leaders meeting in Paris could have helped fill this void, but their final communiqu'e made only the tiniest mention of this innovative and tested technique.

A second opportunity was also missed. President Bush rallied support for the Brady Plan to reduce and restructure the debt of developing countries, beginning with Mexico. Finding unity on this issue was a major success. Yet the President failed to link his fellow leaders' commitments to relieve third-world debt to their concerns over the environment.

The final communiqu'e specifically urged the International Monetary Fund (IMF) and World Bank to provide financial support for interest rate and debt reduction to facilitate Brady Plan negotiations. Similar language could have been adopted calling on indebted countries to develop lists of environmental projects they could undertake in exchange for debt relief. The IMF could have been instructed to set aside a small portion of its debt reduction resources to facilitate environmental swaps. With billions of dollars involved, an environmental set-aside as small as 2 percent could make a tremendous contribution.

These two initiatives are not the solution to third-world debt distress, nor do they singlehandedly reverse globalwarming. Clearly the communiqu'e's environmental focus does represent an important step in a long-term response to these problems. Nevertheless, while the summit's ``green'' rhetoric may have eased political heat on our leaders, much stronger action is needed to relieve environmental heat on our planet.

You've read  of  free articles. Subscribe to continue.
QR Code to The Pale Green Economic Summit
Read this article in
QR Code to Subscription page
Start your subscription today