Adding-up problem: why the environment suffers from debt

New Internationalist, May, 1999

Sustainable development requires the conservation of natural resources. One way of doing this is to make them more expensive. In fact, they are getting very much cheaper. World-market prices for raw materials - `commodities' like oil, timber, sugar, coffee or copper - have fallen to their lowest levels in living memory.

This is partly because there is less `demand' in times of economic recession and partly because of technological change. (Copper wiring, for example, is being replaced by optic fibres and silicon chips.) But it is mostly because of debt in the South, the source of many of the world's commodities. Structural-adjustment policies imposed by the IMF and World Bank mean that poor countries have to earn foreign currency to `service' their foreign debts, before they are allowed to do anything else. This means exporting the only things they can sell on world markets - raw materials. Because all poor countries have to increase their exports at once, there is a glut on world markets and prices fall - sometimes by as much as a half, so that twice as much has to be exported to earn the same amount of foreign currency. The beneficiaries are the rich countries. They not only get their debts `serviced', but cheap commodities keep prices down, profits up and inflation under control in the North. The losers are the people of the South - and the global environment.