Costa Rica Finances

In what was called the largest private "debt-for-nature" swap to date, the government of Costa Rica has agreed to take new steps to save its vanishing tropical forests in exchange for a reduction in its foreign debt, it was disclosed Thursday. Under an agreement announced in Washington, Costa Rica will not have to repay a $5.6-million loan it owed the American Express Bank.

Latin America's huge foreign debt, a crushing burden in every country, has brought a Midas-like windfall for nature conservation in three small nations seeking to protect their tropical rain forests. Ecuador, Costa Rica and Bolivia have swapped tiny portions of their debts for foreign investment in environmental projects, most of them aimed at saving the region's jungle areas.

President Bush's trip to Costa Rica today is expected to be buoyed by a surprise development--the announcement of a major debt-reduction package for that nation under a Third World debt-relief plan outlined by U.S. Treasury Secretary Nicholas F. Brady. Although details were still being ironed out Thursday, negotiators for Costa Rica and about 250 commercial banks were reported to have agreed in principle on a plan that would significantly pare back the estimated $1.

President Bush's trip to Costa Rica today is expected to be buoyed by a surprise development--the announcement of a major debt-reduction package for that nation under a Third World debt-relief plan outlined by U.S. Treasury Secretary Nicholas F. Brady. Although details were still being ironed out Thursday, negotiators for Costa Rica and about 250 commercial banks were reported to have agreed in principle on a plan that would significantly pare back the estimated $1.

Latin America's huge foreign debt, a crushing burden in every country, has brought a Midas-like windfall for nature conservation in three small nations seeking to protect their tropical rain forests. Ecuador, Costa Rica and Bolivia have swapped tiny portions of their debts for foreign investment in environmental projects, most of them aimed at saving the region's jungle areas.

The International Monetary Fund announced Wednesday its first two loans based on Treasury Secretary Nicholas F. Brady's plan to slash Third World debt. The loans, $1.17 billion to the Philippines and $52 million to Costa Rica, were approved after IMF directors endorsed the Brady plan at a lengthy, contentious board meeting that ended late Tuesday. The fund's approval is a big step forward for the debt initiative, which has been criticized as inadequate and ill defined since Brady unveiled it March 10. "We have the first concrete outcome in terms of the resources that will be put into place at the IMF and the terms on which those will be made available," Treasury Undersecretary David Mulford told a House Banking subcommittee.

The International Monetary Fund announced Wednesday its first two loans based on Treasury Secretary Nicholas F. Brady's plan to slash Third World debt. The loans, $1.17 billion to the Philippines and $52 million to Costa Rica, were approved after IMF directors endorsed the Brady plan at a lengthy, contentious board meeting that ended late Tuesday. The fund's approval is a big step forward for the debt initiative, which has been criticized as inadequate and ill defined since Brady unveiled it March 10. "We have the first concrete outcome in terms of the resources that will be put into place at the IMF and the terms on which those will be made available," Treasury Undersecretary David Mulford told a House Banking subcommittee.

In what was called the largest private "debt-for-nature" swap to date, the government of Costa Rica has agreed to take new steps to save its vanishing tropical forests in exchange for a reduction in its foreign debt, it was disclosed Thursday. Under an agreement announced in Washington, Costa Rica will not have to repay a $5.6-million loan it owed the American Express Bank.