Peru Trades Debt for Forest Conservation

WASHINGTON, DC, March 25, 2002 (ENS) - A portion of Peru's debt to the United States will be cancelled in return for the Peruvian government's commitment to conserve and maintain wildlife reserves and other protected forest areas.

U.S. President George W. Bush and Peruvian President Alejandro Toledo finalized the agreement Saturday during the visit of the American President to Peru.

During a joint press conference with President Toledo at the Presidential Palace, President Bush, acknowledged that he was the first sitting President of the United States to visit Peru. The two pledged partnership to combat terrorism and narcotics trafficking. "President Toledo and I both understand the importance of providing economic opportunity to all our citizens as a hopeful alternative to the drug trade," said Bush.


At the airport in Lima, Peru, from left: President George W. Bush, Laura Bush, President Alejandro Toledo and Eliane Toledo (Photo courtesy El Peruano)
"President Toledo and I have agreed to renew discussions on a bilateral investment treaty, and to complete a debt-for-nature agreement, to help Peru reduce debt payments while it protects its biodiversity," he said.

Under the agreement, Conservation International, The Nature Conservancy, and World Wildlife Fund will contribute $1.1 million and the United States will provide $5.5 million to cancel a portion of Peru's debt to the United States.

In return, the government of Peru will issue local currency obligations in which the payment streams will go to fund tropical forest conservation activities through local nongovernmental organizations in Peru.

As a result of the agreement, Peru will save over $14 million in debt payments over the next 16 years.

Peru will provide the local currency equivalent of $10.6 million toward conservation activities over the next 12 years. For every $1 in U.S. funds, almost $2 will be spent on conservation activities in Peru.

The debt for nature agreement derives its authority from the Tropical Forest Conservation Act (TFCA). Peru is the fifth country to benefit from programs under the TFCA - Bangladesh, Belize, El Salvador, and Thailand are the others.

Peru is home to 84 of the 103 types of "life zones" found on Earth, and ranks as one of the world's top "megabiodiverse" countries.


Huancabamba Canyon, Peru (Photo courtesy Parks Watch Peru)
This debt for nature agreement will help fund the establishment, restoration and maintenance of parks, protected areas, and reserves, as well as funding training for scientists, technicians, and managers involved in conservation.

Saturday night at the Presidential Palace, President Toldedo pledged "war without quarter against terrorism and drug trafficking."

"We have experienced the effects of terrorism here for 20 years," said the Peruvian President, referring to terrorists coming into his country from Colombia. "And I have here my friend, Colin Powell, with whom we have a very solid human relationship because, in this very palace, we were witnesses to the news of September 11th, while we were having breakfast."

"On this issue we are partners. I am stubborn," said President Toledo. "I do know there's been a decision from the U.S. government to increase support for the struggle against drug trafficking, and I appreciate that enormously."

In 1990, he said, there were 140,000 hectares under coca cultivation in Peru. Today, that number is down to 34,000 hectares, he said.

The U.S. has agreed to send the Peace Corps back to Peru after a 27 year absence. Peace Corps Director Gaddi Vasquez signed an agreement to re-establish the Peace Corps program in Peru. Volunteers will begin arriving in August, to work on health and agricultural development projects.

The U.S. will provide $782 million in fiscal year 2002 to the region to combat drug trafficking, strengthen democracy, and promote economic and social development. President Bush pledged to foster trade with Peru by urging the Senate to pass the Andean Trade Preferences Act.

The two presidents agreed to renew discussions on a bilateral investment treaty. The two countries will organize a fall 2002 regional trade mission led by U.S. Secretary of Commerce Donald Evans. They agreed to strengthen cooperation on sanitary and phytosanitary issues affecting agricultural trade.

Sworn into office in July 2001, Toledo became the first indigenous Peruvian to be elected President. He told reporters Saturday, "When I was born, the very first minute of my life when I opened my eyes, I saw the face of dire poverty. I know what this means. That's why I am convinced that we can make an effort to reduce military spending, to reorient those resources towards investment and justice and education and health. Because the defense of a country no longer depends on how many tanks, or ships, or aircraft we have. It's all about how strong our economy is, how educated our people are."