The US Clears Indonesia's Debt Worth US$35 Million with One Condition

AS Hapus Utang Indonesia Senilai US$35 Juta dengan Satu Syarat AS Clears Indonesia's Debt Worth US$35 Million with One Condition

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Dream - The United States government (US) will cancel Indonesia's debt worth U$35 million or approximately Rp568.6 billion for the next nine years. However, the debt cancellation is not entirely "free". The US Treasury Secretary stated that Indonesia's debt can be forgiven on the condition that it restores and preserves coral reefs, which according to experts, are the areas with the highest biodiversity in the world.

The agreement is the fourth "debt-for-nature swap" conducted by both countries since 2009 and is estimated to fund at least 15 years of conservation activities in the two main regions of what is known as the "Coral Triangle."

The US Clears Indonesia's Debt Worth US$35 Million with One Condition

According to VOA, coral reefs are under an increasing threat worldwide. The majority of the damage is caused by climate change, which ultimately raises sea temperatures. Data from May shows that in the past year, nearly two-thirds of coral reefs have experienced stress due to severe heat, which can destroy them.

"The two regions are the center of biodiversity,"

kata Alexandre Portnoi, legal advisor from Conservation International who assisted in achieving this agreement.

Indonesia has 5.1 million hectares of coral reefs, which is 18 percent of the world's coral reef area, according to the Ministry of Tourism and Creative Economy. However, the coral bleaching issue this year has caused negative impacts.

Indonesia benefited from the previous debt cancellation with the US in 2009, 2011, and 2014, which collectively amounted to nearly US$70 million over time. This debt cancellation is the first one that focuses on coral reefs, instead of the previous one that focused on Indonesian rainforests, which are threatened by palm oil plantation expansion.

This agreement will eliminate Indonesia's debt of US$26 million, under the US Tropical Forest and Coral Reef Conservation Act. Conservation International will contribute US$3 million and another US$1.5 million will be donated by The Nature Conservancy, another group closely involved in this debt exchange.

The Indonesian government will commit to coral reef restoration while local NGOs will use conservation funds to support projects that directly benefit coral reef ecosystems. Similarly, sustainable livelihoods will be provided for those who depend on coral reefs.

"This is quite simple," said Portnoi, and explained that the debt being forgiven for the sake of nature is specifically designed to "break the cycle" of debt that contributes to environmental degradation."

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