The Galapagos Reserve is the Focus of a Controversial Debt Swap in Ecuador

By EFE  March 2, 2021 – 15:19

The environmental project promotes a “debt for nature” swap and is based on the purchase of 2030 debt bonds from Ecuador with an approximate 40% discount in amortization, which would guarantee the supervision of the expanded maritime area.

Photo: Archive

The Galapagos Marine Reserve is the center of an initiative that confronts the Ecuadorian fishing sector; conservationists propose a sovereign debt swap of one billion dollars in exchange for expanding the current protected area around the archipelago by 312,000 square kilometers.

“We emphatically reject this proposal that violates the Constitution and our rights. Ecuador cannot sell part of its maritime territory,” said Grace Unda, vice president of the Copes Fishing Cooperative and representative of the artisanal fishing community of Ecuador.

She did it this Tuesday at a virtual press conference in which the main artisanal fishing cooperatives of Ecuador intervened, as well as the National Fisheries Chamber (CNP), the Ecuadorian Tuna Boat Association and the Manta Shipowners Association for Fishing Production (Asoaman), among other representatives of the [fishing] sector.

MOBILIZED FISHERIES INDUSTRY

The country’s fishing industry condemned an initiative to expand restrictions on fishing around the Galapagos in exchange for reducing the country’s debt that was recently presented to President Lenín Moreno.

Unda described the proposal as “international and national interests disguised as a benefit for the country,” which in the end, “will put conditions on our sovereignty.”

And she warned about the problems involved in negotiating a swap and that, in her opinion, “it would put the sustainability of fishing in Ecuador at risk.”

In terms of their arguments, industrialists and representatives of small-scale fishing argue that any decision of the State on Ecuadorian insular waters must be endorsed by technical, environmental and economic studies, and not be an “imposition from foreign actors.”

The sector generates more than 1,600 million dollars in foreign currency and is the main sector in non-oil exports in the country; [the sector] interested in ensuring good practices to avoid seeing its catches reduced.

They argue that Ecuador has the second largest marine reserve in the region, and that these areas are equivalent to 13.3% of the waters of the Exclusive Economic Zones (EEZ), which comprise 200 miles from the coast.

The proposal seeks to expand the protected area from the current 133,000 square kilometers to 445,000.

The manager for Latin America of Island Conservation, and spokesperson for the local NGO Más Galapagos, Eliécer Cruz, confirmed to EFE that an alliance of environmental organizations delivered the proposal to the Ecuadorian president recently, and that it would be analyzed by several ministers, including those of Fishing and Environment.

The plan includes allowances for fishing in the southwest of the archipelago, but above all, ensuring the protection of endemic and endangered species such as sharks and turtles.

“We are looking for alternative financial mechanisms in case the new marine protected area is declared,” said Cruz.

The proposal includes resources for the Ecuadorian Navy to patrol and control an eventual expanded protected area.


 
DEBT FOR NATURE SWAP


 
The environmental project promotes a “debt for nature” swap and is based on the purchase of 2030 debt bonds from Ecuador with an approximate 40% discount on amortization; this would guarantee the [funds needed for] supervision of the expanded maritime area.

“The idea is to have a large purchase of these bonds; we aspire for a billion dollars at an approximate cost of 600 million dollars,” said Cruz.

To do this, he proceeded the Ocean Financial Company (OFC) organization foresees the purchase of risk insurance from the United States Development Office, which would facilitate that three private banking entities – whose identity he did not reveal – could buy the debt for 600 million .

“What do they gain? The country is going to have debt with these banks, but not for a billion, but 600 million. And Ecuador saves 400 million and the interest percentage will be much lower,” said the NGO representative.

“A part of the interest that Ecuador would stop paying with the exchange would then be used to pay the new associates for the 600 million managed by private banks; but another part,” he advanced, “would allow us to generate between 13 and 15 million dollars, [funds] which are reinvested in issues of management of the marine reserve and sustainable fisheries.”

According to the study’s calculations, the country would have eleven years to finish paying the new debt readjustment and also, private banks could issue “blue bonds” to investors interested in marine conservation.

“Ecuador saves a lot of money,” said Cruz, who places special emphasis on the fact that Galapagos would see reduced fishing in their environment in the east, south and west, while the rest “remains free for the fishing grounds of tuna and other species.”

The Galapagos are considered a hotbed of young tuna specimens, which when they grow up migrate beyond the insular perimeter, so they are at the mercy of the large international fishing fleets, with which the Ecuadorians have to compete.

Read the original coverage from El Economista at https://www.eleconomista.net/economia/La-reserva-de-Galapagos-en-el-foco-de-un-polemico-canje-de-deuda-en-Ecuador-20210302-0017.html


Informing and sharing news on marine life, flora, fauna and conservation in the Galápagos Islands since 2017
© SOS Galápagos, 2021

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s