SEPTEMBER 1987 - VOLUME 8 - NUMBER9
L E T T E R S
The Tobacco TollBravo on your issue on the tobacco trade. ("The Tobacco Trap," July/August 1987.) Your magazine is getting better and better. I knew tobacco was pretty deadly but 2.5 million per year was still pretty startling.
Glad to see you focus on the international lung cancer lobby. ("The Tobacco Trap," July/August 1987.) No other issue except the nukes so reveals their true nature. And putting the toll in terms of 2 jumbo jets a day is a communications coup.
Charles C. Wiggin
The Debt-Equitree Swap
Your examination of the various situations worldwide in which rainforests are threatened was quite thorough. ("Paradise Lost: The Ravaged Rainforest," June 1987.)
Regarding solutions to deforestation of the rainforests and other critical areas in the world environment, however, you failed to mention a very recent development to set aside preserves known as debtequity swaps. Under these new programs, invented by Dr. Thomas Lovejoy, Executive Director of the World Wildlife Fund for the United States, environmental groups buy debt from Third World lenders and then allow the country to forfeit repayment if it sets aside rainforest preserves - a sort of debt-equitree swap.
So far these swaps have taken place only in Bolivia and Costa Rica, but Ecuador recently announced that it would consider such plans.
Last month, Conservation International offered to buy $650,000 of Bolivia's external debt at a discounted price of $100,000. In return, Bolivia will set aside 3.7 million acres of Amazon River country around the Beni Biosphere Reserve. Investment banks are eager to recoup whatever portion they can of their loans to Bolivia because the collapse of Bolivia's economy in the early 1980s has made any repayment almost impossible. The swaps will of course be more expensive to execute in countries whose debt is not discounted to such an extent.
Moreover the debt for nature swap alleviates one of the biggest problems with the debt-equity scheme: loss of control over equity. With the rainforests remaining under the supervised jurisdiction of the country in question, the debtor is not forced to sacrifice control over its assets to pay its foreign debt.
Although this program does not offer a comprehensive solution to the deforestation problem, it will increase the number of rainforest preserves and buy time for a more long-term solution.