Debt for Nature

Although superficially attractive, there are several reasons why debt for nature swaps may not be desirable or feasible in Indonesia. The key problems associated with conservation in Indonesia are not associated with funding (or the lack of it) but government commitment. Indonesia's forests will always be threatened while the government follows a development paradigm dependent on the large-scale commercial exploitation of natural resource and a legal system which denies forest peoples' rights over these resources. Other contraindications are the following.

• Like the IMF's 1997 economic 'rescue package' for Indonesia, these deals are part of a strategy to keep indebted countries within the global financial system. Directly and indirectly, they strengthen the political and economic hold of the North over the South.

• The real winners of any debt purchasing schemes are private investors, including commercial banks. In Indonesia there is no neat separation between private and public debt, due to the corrupt relationships between the administration and business elite. Public and private lenders, eager to gamble on Suharto's business empire, have lost. Radical groups argue there is a strong case for simply cancelling this debt, rather than purchasing or repaying it.

• The majority of 'debt for nature' swaps in other countries generates funding for protected areas. This could violate the adat rights of indigenous communities in Indonesia, since current regulations prevent traditional land-use management systems within National Parks and Nature Reserves. Forest peoples who have been dispossessed by logging companies are then dispossessed by conservationists. Training park personnel, marking boundaries and carrying out environmental education does little to meet indigenous communities' needs for the land they need to sustain their livelihoods.

• Debt for nature swaps can be completely undemocratic. The deal is done between governments and donors. There is no obligation for the debtor nation to consult with civil society groups or local communities before committing itself to conservation programmes. This favours large, top-down projects, rather than small-scale local ones.

• Debt for nature swaps would only make a trivial contribution to overall size of Indonesia's debt. The amounts of money spent on purchasing debt may be more effective if donated to some form of community development projects.

• Designating Protected Areas has not ensured their protection from government-sanctioned 'development' projects. Parts of Kutai National Park in East Kalimantan were excised for coal mining and a LNG plant. In West Papua, the giant Freeport Indonesia's mineral concession area overlaps with the Lorentz National Park and waste from the gold mine pollutes thousands of hectares of pristine forest.