Modern-Day Magic Turns $15-Million Debt into $26 Million for Conservation Projects

How do they do it? In a modern day magic trick, Costa Rica is about to turn a debt of $15 million into $26 million earmarked for environmental conservation in the country.

Officials from Costa Rica, the U.S., and two environmental, non-governmental organizations (NGOs) are currently fine-tuning an agreement that will pardon a $15-million debt that Costa Rica owes the U.S. In exchange, Costa Rica pledges to continue to make payments on the debt, but into a trust fund set aside to pay for conservation projects in the country.

The payments are expected to be about $1.5 million a year. Although the debt total is $15 million, with interest the amount deposited into the trust over the next 16 years will total $26 million.

The agreement is called a "Debt-for-Nature" swap, a debt-pardoning tool the U.S. and other countries have used to promote tropical forest conservation around the world. Panama and El Salvador have these agreements, and Guatemala last year signed what was then heralded as the largest Debt-for-Nature contract ever signed, for a total of $24 million.

Costa Rica's exchange, if signed later this month as expected, will break that record.

Environmental organizations Conservation International and The Nature Conservancy will also contribute a total of $2.6 million to the fund, and will join representatives from both the Costa Rica and U.S. governments on the board that administers the funding.

As part of the agreement, the money cannot be used to pay for government projects or work carried out by either of the NGOs.

"The projects are going to be developed by local, non-governmental organizations and the academia-Costa Rican universities," said Rubén Muñoz, head of the Costa Rican Environment Ministry's negotiating team. "All the projects have to be about recuperation of tropical forests."

The projects are to be carried out in six priority areas: the southern Osa Peninsula, home of the famous Corcovado National Park; Guanacaste's Rincón de la Vieja National Park; La Amistad Biosphere Reserve; the Nicoya Peninsula; Tortuguero National Park; and at La Maquenque Wildlife Refuge.

Costa Rican President Oscar Arias lobbied U.S. President George Bush for the "Debt-for-Nature" agreement when the two leaders met in December of 2006, and it appears his efforts were successful. President Arias wants Costa Rica to become the world's first carbon-neutral nation by 2021, largely by expanding and protecting Costa Rica's forests.

Your Latin America Insider,

Suzan Haskins
for International Living

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