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24 Int'l L. 1071 (1990)
The Debt-for-Nature Swap: A Long-term Investment for the Economic Stability of Less Developed Countries

handle is hein.journals/intlyr24 and id is 1091 raw text is: COMMENT MARILYN POST* The Debt-for-Nature Swap: A Long- Term Investment for the Economic Stability of Less Developed Countries Many less developed countries (LDCs) are struggling to repay their loans from foreign creditors. These LDCs borrow from two sources in order to service their debts: (1) lending institutions; and (2) natural resources. A country borrows from its natural resources when it indiscriminately cuts down trees in order to increase the productivity necessary to generate export revenue. Unlike bank loans, environmental loans come interest free. On the other hand, debt servicing to a bank can, at least theoretically, last indefinitely by way of extensions or restructurings. Such is not the case with nonrenewable environmental resources. At some point the environmental bank will fold because its resources will be tapped out. As a result, some incentive must be created to curtail the destruction of the environment while providing an alternate method of debt-servicing. The debt-for-nature swap, a process whereby LDC debt is exchanged for conserva- tion measures on the part of an LDC, provides one promising solution. This comment explores the evolution of debt-for-nature swaps, their impact to date, and their potential for the future. *J.D. Candidate, 1991, Southern Methodist University. Associate Senior Editor, THE INTERNA- TIONAL LAWYER. The author gratefully acknowledges the assistance of Michael Chamberlin and Kathleen A. Campana, attorneys with Shearman & Sterling, New York, N.Y., and Jane Kaufman Winn, Assistant Professor of Law at Southern Methodist University.