U.S. Forgives Multimillion-Dollar Debt to Aid Guatemala Forests

October 10, 2006

In a "debt for nature" swap, the United States has agreed to forgive about 20 percent of the 108 million dollars owed by Guatemala. In exchange, the Central American country will invest 24.4 million dollars to protect species-rich subtropical and tropical ecosystems.

The recently announced agreement is the largest of ten such deals the U.S. government has undertaken in recent years under the Tropical Forest Conservation Act of 1998.

Under the deal, the Guatemalan government is to fund conservation efforts with money it would have otherwise used to begin to pay back the tens of millions of dollars it has borrowed from the U.S. (Guatemala map and facts).

Loggers, tour companies, farmers, developers, and hunters have battered Guatemala's wildlands, conservationists say. They hope the swap will help protect coastal mangrove swamps, high-altitude cloud forests, and rain forests in Guatemala, a country about the size of Tennessee. (Related: new bird found in a Colombian cloud forest, which was protected under a debt-for-nature swap.

Targeted Areas

One targeted area is Guatemala's Maya Biosphere Reserve. This home to jaguars accounts for a tenth of the country's land area.

The deal will also fund programs in the zone containing the Sierra de las Minas Biosphere Reserve, home to quetzal birds, manatees, and hundreds of other animal species.

The Sierra Madre Volcanic Chain—a string of 37 volcanoes with slopes of broadleaf cloud forest, pine-oak, and tropical-pine forests—is another focal point.

The mountainous Cuchumatanes region, another conservation priority, contains dozens of species that exist nowhere else in the wild: more than 60 species of flora, 19 species of birds, and several amphibian species, according to the Nature Conservancy. The Arlington, Virginia-based nonprofit is involved in the debt-for-nature deal.

Picking Up the Tab

The U.S. government will use about 15 million dollars from the U.S. Treasury Department's budget to "buy" Guatemalan debt.

The Washington, D.C.-based nonprofit Conservation International and the Nature Conservancy are subsidizing the buyout by donating a million dollars apiece, according John Beavers, director for the Nature Conservancy in Guatemala.

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