sustainable development 20 years on from the ... - José Eli da Veiga

<strong>20</strong>9
In Central America and the Caribbean in <strong>20</strong>10, debt-to-GDP ratios reached high levels in some
countries, such as Jamaica (104%), Grenada (99%), Belize (80%), Nicaragua (77%) and Dominica (73%),
limiting their capacity to allocate resources for social and environmental purposes.
Medium-to-long-term actions on the external debt are needed to enable countries to design
<strong>sustainable</strong> <strong>development</strong> strategies, and not fall hostage time and again to the constraints of available
resources for environmental and social protection. Debt-for-nature swaps have been implemented in this
context, 7 albeit with faltering intensity since <strong>20</strong>02. Although this type of swap has done little to alleviate
the debt of developing countries, in some cases the amounts forgiven have been significant and have
allowed more national resources to be allocated to conservation. For example, the nominal value of a
swap made between El Salvador and the United States in 1992 represented 5% of El Salvador’s GDP, and
made it possible to allocate resources equivalent to 0.5% of GDP to the environment.
5. Innovative mechanisms
The Monterrey Consensus recognized the “value of exploring innovative sources of finance” (United
Nations, <strong>20</strong>02, paragraph 44) thereby giving rise to what has become a broad-scope initiative to conceive
and implement new mechanisms to help countries of different <strong>development</strong> levels attain the Millennium
Development Goals. The experimental phase of that initiative can be considered concluded.
Such financing sources currently include initiatives ranging from voluntary contributions and
market mechanisms to loan guarantees, in addition to various proposals for new taxes. A second group of
initiatives includes mechanisms that aim to use available resources in an innovative way, improving
allocative efficiency, participation, transparency, and capacity to be held accountable for use.
A third and broader category includes initiatives to obtain resources from innovative sources and
also use them with mechanisms that depart from more traditional financial practices, by combining with
service provision and, at times, the supply and distribution of goods. Some of the initiatives already
underway are stable and long-term, and at the same time make it possible to supplement official public
assistance, with the stated purpose of distributing the benefits of globalization more widely (United
Nations, <strong>20</strong>09).
The rapid spread of the concept of innovation in this area is making it applicable to different
entities, such as thematic trust funds, public guarantee mechanisms (both shared and solidarity-based),
insurance and risk-transfer mechanisms, proposals for international cooperation on tax mechanisms, the
issuance of securities and bonds linked to growth or the reduction of greenhouse gases, countercyclical
lending and microfinance, among others.
One of the main characteristics of innovative financing is its emphasis on developing broad
participation by entities other than national governments, and on addressing market failures, for which the
International Finance Facility for Immunization (IFFIm) is an example.
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The most recent of these swaps have been signed between Colombia and the United States, The Nature
Conservancy (TNC), and the World Wide Fund for Nature (WWF) in <strong>20</strong>04; between Paraguay and the United
States in <strong>20</strong>06; between Ecuador and Spain in <strong>20</strong>05; and between Guatemala, the United States, Conservation
International and the TNC, for conservation of the Guatemalan tropical forest, in <strong>20</strong>06.