Saving Trees and Saving Us From Peril of World Debt

The living greenbelt of rain forest circling the Equator is perhaps our single most valuable terrestrial asset. It is home to more species than any other ecosystem, and perhaps even all others combined: It is the planetary gene pool from which humanity itself emerged. It decisively regulates world climatic patterns, and forms the watershed protecting continental areas from becoming barren deserts like Australia.

Yet tropical rain forests, teeming with life in their natural state, are permanently sterilized by human exploitation. Their fertility is locked into the forest canopy itself rather than stored in the soil as in temperate zones. Once the forest is cleared, the blazing sun and torrential rains rapidly leach and bake the land into a desert or scrub zone. This is happening with frightening speed throughout the tropical world.

Impoverished tropical nations must be given a practical economic incentive to preserve this global life-support system. One powerful incentive--the reduction or elimination of a country’s foreign debt--might offer a way out of the world debt crises, through a settlement of accounts that factors in non-renewable habitat as a value offsetting the paper value of monetary debt. Third World nations could place their virgin tropical rain-forest lands in a United Nations trust or a world park as the common heritage of humanity--in return for the cancellation of foreign debts.

Obviously such a plan would benefit the Third World by relieving it of the crushing burden of foreign debt--and by protecting its lands from the man-made process of desertification that has 1634497125its impact upon banks and governments to whom these debts are due? Wouldn’t such a utopian scheme cause economic chaos and institutional collapse in the developed world?

First, we must realize that this idea is not idealistic, but grimly practical in the sense that it recognizes the inevitability of an eventual default. These massive debts simply cannot and will not be paid, and any adverse change in the world economic situation will put that open secret under the spotlight. Even an affluent nation like the United States cannot pay its way, as evidenced by its skyrocketing governmental debts and private-sector trade deficits. How much less can we, or should we, expect truly poor nations to pay? This proposal at least permits us to save tangible natural assets and ensure ecological stability in return for retiring devalued paper.

Third World nations owe the developed world about $1 trillion. This is less than the cost of the Reagan Administration’s $1.5-trillion defense buildup, and a mere fraction of the contemplated but highly uncertain Strategic Defense Initiative program. Surely if we can sink so much money into desirable but potentially unproductive military assets, we can find a way to absorb this much smaller cost for the long-term defense of our planet against certain environmental disaster.

Indeed, by the turn of the century we are more likely to be threatened by chaos in once-tropical nations turned into deserts--nations embittered by despoliation of their natural resources to feed the West’s wasteful consumerism--than by the unlikely prospect of war between the superpowers. This proposal would encourage international cooperation and rationality in policy-making. And there would be intangible benefits: A global tropical forest preserve would be a sanity buffer in an overpopulated world, a refuge for the human spirit as well as for endangered species.

Still, there is no doubt that implementation of this proposal would have a profound impact on the financial institutions and general economies of the developed world. But major adjustments are needed to adapt to recent structural changes in the world economy. Much of the international banks’ money actually comes from deposits by the Organization of Petroleum Exporting Countries derived from oil price hikes of 1973 and 1979. There was a historic shift in world economic relationship1932271730financial resources through the “loan” process. This massive transfer of wealth has fertilized and sustained Third World growth and generated a transformation of global economic realities. Such evolutionary change has now reached the point where the system must “molt”--throw off its old structural shell and formalize a new structure adequate to the current situation.

Unfortunately, the United States has not made use of this transition period to adapt and evolve. Our economy can absorb the politically inevitable loss of loan principal, which is but a fraction of its military burden. It can learn to live without the relatively minor tax, or interest, our financial institutions have charged to organize the global flow of capital. But can it survive the domestic changes that would be mandated by a controlled default?

Not in its present form. But the present form isn’t working anyway.

We tend automatically to assume that the health of the banks is the health of America, that “what’s good for GM is good for the country.” Yet our financial managers have failed. The federal government has doubled its debt in just six years. Our private sector is piling up reckless trade deficits abroad and pyramiding personal “plastic” debt at home. Our real economy has become distorted by these modern financial shenanigans: productive industry is in trouble, agriculture is depressed, the middle class is shrinking and our childrens’ future is hopelessly mortgaged.

This proposed solution to the world debt crisis would give us an opportunity to clear our own decks intelligently--after all, a general international default would inevitably induce a domestic default. In any case, does anyone think that the U.S. government has any realistic hope, or intention, of paying off its $2-trillion-plus debt? Or of actually paying for the hundreds of billions of dollars worth of goods we have imported on credit over the past few years?

We could take advantage of this foreseeable crisis to reorganize the obsolete elements of our economy, while preserving its free-enterprise character. Cashing in worthless international debt in return for preserving the world’s tropical rain forests would accomplish three goals:

--It would save a vital planetary asset, the most important climactic regulator and gene pool on earth. In the eyes of future generations--for eons to come, not merely our children and great-grandchildren--no other consideration even comes close to this.

--It would relieve misery-ridden Third World countries of an unbearable and politically intolerable burden. Such a move at this time would be a significant catalyst to support the fragile democracies that have recently emerged in Latin America and elsewhere.

--It would provide an honorable rationale to clean up many of our domestic structural problems. We could put the federal government on an honest financial basis. We could open up the free-enterprise system to decentralized, job-producing, energy- and resource-saving measures most people realize will eventually be necessary.