Ecuador Stops Protecting Its Rainforest—to Pay Off Debt to China

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http://www.theatlantic.com/china/archive/2013/08/ecuador-stops-protecting-its-rainforest-to-pay-off-debt-to-china/278863/


Ecuador is canceling a program to protect its rainforest in order to repay debt to China. (Dolores Ochoa/AP)

When a poor nation finds a massive oil reserve beneath a rainforest with more species per hectare than in all of North America, it makes for a nettlesome problem. When you add in a huge amount of debt to resource-hungry China, it makes for an environmental catastrophe.

Ecuador thought it found a unique way to solve it in 2007, after reserves of nearly 900 million barrels of oil worth some $10 billion were discovered beneath Yasuni national park, a world biological preserve home to several indigenous groups.

President Rafael Correa worked with the United Nations to create a trust fund that would pay Ecuador not to drill. Otherwise, a country with a 27 percent poverty rate could ill-afford to turn down a bounty equal to about a tenth of its gross domestic product. He cancelled the project last week after global donors only put up $13 million in cash (and $167 million in pledges) out of the agreed-upon $3.6 billion, about half the revenues the country expects to generate by extracting the petroleum.

Oil companies, anticipating the decision, have already built roads and drilling infrastructure adjacent to the park, and expect drilling to begin within weeks; Correa says the development will affect about 1 percent of the park's land.