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Department, and the Philippine Central Bank on March 8, 1983; in another form the mechanism has been tested by the United States Information Agency in Nigeria.

The mechanism for debt swaps is just being developed with the support of Treasury Secretary Baker. To acquire discounted debt instruments, the Smithsonian could seek donations of dollars, could employ existing Trust funds, or could seek its appropriations subcommittees' approvals to reprogram funds already appropriated. The staff will explore the acceptability of augmenting appropriations with debt swap procedures; it is known that the United States Agency for International Development has looked into this question of augmentation through purchase of discounted Third World debt as it would apply under its special circumstances and has encountered no objection.

Given the complexity of these mechanisms involving the banking community, Smithsonian staff will be seeking the assistance of a banker experienced in international debt management. The Regents' comments and questions on these mechanisms would be helpful before the staff proceeds further.

A Further Discussion of Debt Swaps

Three so-called "debt-for-nature" swaps have been lauded for their imaginative approach to two related international problems. Such swaps reduce the probably unrepayable Third World dollar debt, and they slow the destruction of tropical forests by debtor nations seeking to expand exports for dollars to repay their staggering debts. The first of these swaps involved the Bolivian government and a Bolivian conservation organization as general partners, and Conservation International as a limited partner. Conservation International provides program experience and access to scientific knowledge (Conservation Data Centers).

Development of strong local conservation institutions is a critical element of "debt-for-nature" swaps. In its Bolivian swap, Conservation International paid $100,000 for $650,000 in local currencies which have been devoted to development of the Beni Preserve as a Man and the Biosphere (MAB) Reserve. The Bolivian Government contributed $100,000 in local currencies and the U.S. Agency for International Development allocated $150,000 from U.S.-owned P.L.-480 local currencies toward an endowment for that Reserve. There, for example, "sustainable development" practices include "cropping" rather than "extracting" the wealth of the mahogany forest. These practices halt the destruction of the forest for short-term dollar export earnings. The program also provides an example and a training ground for other environmental program managers.

The World Wildlife Fund (WWF) acquired Ecuadoran dollar debt instruments with a face value of $1,000,000 for $354,500. In exchange for the dollar debt, Ecuador issued the sucres equivalent of $1,000,000 in monetary stabilization bonds to that nation's conservation organization, Fundacion Natura. The Fundacion will employ the interest on the bonds to maintain wildlife preserves and conservation programs in consultation with the WWF. The agreement with the Government of Ecuador provides for