The United States has signed a deal to forgive $35 million of Indonesia’s debt in exchange for the Southeast Asian country committing to preserving its coral reef ecosystems, the U.S. Treasury Department said on July 8.
The debt-for-nature swap will redirect funds that Indonesia had initially earmarked for debt repayment to the United States into initiatives aimed at supporting coral reef ecosystem conservation activities.
The initiatives will support coral reef conservation activities in Indonesia’s Lesser Sunda-Banda Sea area and Bird’s Head Seascape, which is home to over 1,600 coral reef fish species and more than 600 hard coral species.
Projects will prioritize the conservation of endemic species that rely on coral reef ecosystems for critical habitat, protect vulnerable coral reef ecosystems of high conservation value, promote the sustainable use of coral reef biodiversity, and create new protected areas as needed.
Funds will be managed by an oversight committee comprising representatives from the Indonesian and U.S. governments, non-governmental organizations, and other civil society organizations, according to the embassy.
The agreement, signed on July 3, marked the fourth debt-for-nature swap the two countries have signed since 2009 under the Tropical Forest Conservation Act, according to a press release issued by the U.S. Embassy.
“Indonesia is home to some of the most biologically diverse coral reef ecosystems in the world that support the livelihoods of millions of Indonesians,” U.S. Assistant Secretary for International Trade and Development Alexia Latortue said in a statement.
“The U.S. Department of Treasury is committed to advancing efforts that protect valuable ecosystems while promoting economic development,” Ms. Latortue added.
Victor Gustaaf Manoppo, director general of marine spatial and ocean management in Indonesia’s Marine Affairs and Fisheries Ministry, said the debt-for-nature swap proved that a thriving ocean is a global interest and shared responsibility.
“Indonesia is strongly committed to safeguarding coral reefs and healthy marine ecosystems as a part of national development policy,” Mr. Gustaaf Manoppo said in a statement.
“What has been agreed upon by the governments of the Republic of Indonesia and the United States benefits not only Indonesian waters and local people, but also the global community,” he added.
The Southeast Asian nation sits in the Coral Triangle region and boasts approximately 51 million hectares of coral reefs, accounting for 18 percent of the world’s coral reefs, according to Indonesia’s Ministry of Tourism.
Indonesia benefited from previous debt-for-nature swaps with the United States in 2009, 2011, and 2014, which collectively generated nearly $70 million for the conservation and management of tropical forests.
The latest debt swap deal is the first to focus primarily on coral reefs.
