Loren to Press Debt Swap for Disasters in UN Meet

Sen. Loren Legarda, chair of the Senate committee on climate change, will press for the adoption of her proposal to swap foreign debt for disaster mitigation and adaptation projects in developing countries during the United Nations Conference on Climate Change Adaptation to be held in Copenhagen, Denmark, on December 7 to 18.

Loren, who is also UN champion for disaster risk reduction in Asia-Pacific, initially made the
proposal during the world parliamentarians’ Global Platform 2009 in Geneva last June as a creative solution to raise funds for disaster risk reduction programs.

In announcing her plan to push her proposal at the Copenhagen conference, Loren said that the “huge devastation and the horrific casualties caused by typhoons Ondoy and Pepeng, as well as rising threats of even greater natural catastrophes in the future, make international cooperation more urgent in combating climate change.”

World parliamentarians adopted Loren’s proposal for a debt-for-risk reduction swap at the Global
Platform 2009 meeting in Geneva as a practical approach to climate change adaptation involving both developed and developing countries.

“It’s a new concept adopted at the UN Global Platform on DRR. This is the easiest because no new funds, financing or resources, are needed. This is a creative way of paying for debt and it’s a creative collaboration between the developed and poor developing nations. In this effort, nobody loses, humanity wins,” said Senator Loren Legarda, the United Nation’s International Strategy for Disaster Reduction (UNISDR) champion for disaster risk reduction and climate change
adaptation in the Asia Pacific region.

In a summary report on the global platform proceedings, the Chair said, “The Global Platform recognized a drastic mismatch between the resources required to address disaster risk in developing countries and those actually available. A massive scaling up of action is needed. Put bluntly, many countries must dedicate substantially more funds from national budgets – or increasingly suffer the consequences. This is also a must for the international community, since some countries suffer from institutional and capacity weaknesses and unless their capacities are strengthened implementation will not succeed.”

“A variety of innovations, such as incentives for retrofitting, risk transfer tools, risk-sensitive development, private sector involvement, debt swaps to finance disaster reduction measures and linkages with adaptation financing were proposed at the Global Platform,” the conference report said.

“Institutional innovations proposed included more direct resourcing of local initiatives and groups that are effective in reducing risks, such as grassroots women’s organizations.”

The Philippines has a foreign debt of around $52 billion, draining a huge portion for the national budget for payment of amortizations and interests every year and contributing to a huge deficit.

Through a debt swap, the creditor country cancels a portion of debt. In return, the debtor country invests the canceled amount in development projects according to conditions previously agreed by both parties.

Championed by the Philippines in the United Nations’ system, debt swaps have surfaced on the agenda of some donor or lending countries as a novel way to finance the UN Millennium Development goals.

Some of the projects that can be funded to lessen risks during disasters are the building of safe hospitals and schools, planting mangroves in coastal areas, cleaning up rivers in blighted urban areas and retrofitting unsafe public infrastructures as a protection against imminent earthquake, said the senator.

The Legarda proposal was commended by no less than UN Undersecretary General for Humanitarian Affairs John Holmes who considered it “a noble idea” along with the proposal to use 30 percent of the UN climate adaptation funds for DRR. Presently, 45 percent of the Philippine annual budget goes to debt service.

Source: http://www.lorenlegarda.com.ph/article-1257677621.html