Will the $30 Million Debt-for-Nature Swap Between U.S. and Indonesia Save Sumatra’s Forests?

In the largest debt-for-nature swap the U.S. government has organized so far under the U.S. Tropical Forest Conservation Act, the United States has signed an agreement with Indonesia to forgive nearly $30 million in debt.

The U.S. government has agreed to forgive $30 million in Indonesian debt in exchange for Indonesia’s agreement to protect Sumatran forests, according to Conservation International.

Indonesia is said to be the world’s largest emitter of carbon dioxide, behind the United States and China, because of its deforestation rate. These forests are home to critically endangered Sumatran rhinos, tigers, orangutans, and other rare wildlife.

How it works (in a nutshell)

Instead of repaying the debt, Indonesia is to place the money in a trust, to be paid over eight years, which will be used to protect 13 forest areas on Sumatra. Grants from the trust will be issued for critical forest conservation and restoration work in Sumatra.

Jatna Supriatna, in an article on Conservation International, Vice President of Conservation International Indonesia, said:

This is a huge boost for the people and wildlife of Sumatra, and demonstrates a forward-looking policy on the part of the US government. The $30 million will help protect vital habitats and will also help deliver significant social benefits for the people of the island.

In a recent VOA article, the senior vice president for the ecosystem finance division of Conservation International, Jennifer Morris explained

Basically, instead of repaying that debt, to put that money that they would have repaid to the US government into conservation, so this deal which is incredibly historic, its the largest ever debt, what’s called a debt swap, that’s ever happened, and this one is specifically for the country of Indonesia.

Areas to benefit from the debt-for-nature swap

A list of the 13 areas, according to Conservation International:

The Northern Sumatra Region:

• Seulawah Heritage Forest
• Leuser Ecosystem and Leuser National Park
• Western Toba Watershed
• Batang Toru Forest Range
• Angkola Lowland Wilderness Tropical Forest Area
• Batang Gadis National Park

Central Sumatra Region

• Siak Kampar Peninsula
• Tesso Nilo Ecosystem
• Bukit Tigapuluh National Park
• Kerinci Seblat Ecosystem
• Siberut National Park and the rest of Mentawai Archipelago

Southern Sumatra Region

• Way Kambas National Park
• Bukit Barisan Selatan Forest Range

Opinion: What about accountability?

Should we be skeptical?

What are the metrics that Indonesia must provide, and how often will they need to be provided?

How will the trust disbursements be regulated?

Who’s doing the grant administration?

What if the destruction continues anyway?

We want this deal to work. The forests need this deal to work.

Let’s hope the debt-for-nature swap gives Indonesia the tools it needs to stop the rampant destruction of its forests. It would be a shame if this grand plan became bogged down in a bunch of bureaucratic red tape and political nonsense.

You can visit Conservation International for additional details.

Image source: http://www.flickr.com/photos/fizzlefish/ / CC BY-SA 2.0