established to help bring back some of those areas
most affected by Hurricane Mitch. The program is
aimed at fostering sustainable forestry practices
through improved forest management and represents a
more positive shift in management practices.22
However, it is unclear whether this new program will
be any more successful in avoiding forest exploitation.
It appears that overall donor coordination is poor,
since in the January 1999 Letter of Intent to the IMF,
the Nicaraguan government committed to public
employment reductions and set targets for public sector
savings. Facing possible budget and staff cutbacks,
it is uncertain whether the resources and institutional
capacity exist to adequately implement the rehabilitation
program. Currently, the government maintains
that it does not even have the resources to enforce a
ban on the export of mahogany.
The case of Nicaragua demonstrates how the IMF’s narrow,
short-term vision of economic stability can directly
undermine longer-term efforts to meet objectives of
sustainable development and sustainable use of natural
resources. By failing to reconcile goals of reducing
government spending with goals of environmental protection,
Nicaragua’s environment is suffering irreparable
losses.
Brazil
Brazil’s forests comprise a third of the remaining tropical
forests in the world, and are the largest repository
of unexamined biological diversity in existence. The
Amazon forest absorbs about 70 billion tons of carbon
from the atmosphere and cycles some 7 trillion tons of
water back into the atmosphere yearly. But Brazil has
been losing forests at an astounding rate and now,
under IMF guidance, it is at risk of losing more.
At the end of 1998, the turbulence of international
financial markets and the resulting pressures on their
own currency led Brazil to sign a $41.5 billion rescue
package with the IMF. As part of the agreement, the
Brazilian government adopted a stabilization program
and introduced budget cuts intended to save the government
$24 billion in 1999 and $84 billion by
2001.23
These cuts have included projects and programs in the
environmental sector, including those designed to protect
the country’s rainforests, manage its floodplains,
and demarcate lands belonging to indigenous peoples.
The result could be the reversal of the ecological gains
made in the last few years. Following worldwide concern over the loss of more
than 200,000 square miles of the Amazon jungle
between 1978 and 1996, Brazil’s government and a
host of international organizations instituted programs
to fight the unlawful exploitation of mahogany and to
protect the endangered rainforests.
However, because of IMF budget restrictions, as of July,
1999, funding for the enforcement of environmental
regulations and supervision programs was reduced by
over 50 percent. Disbursement of the Ministry of
Environment’s budget amounted to only 2.77 percent
of the approved 248 million real (R$). The Brazilian
Institute for the Environment and Renewable Natural
Resources, responsible for implementing Brazil’s environmental
and conservation protection programs, had
expenditures that totaled only 16.28 percent of its budget.24
Of the 16 environmental programs at the
Ministry of Environment that have budget allocations...
Source: SIAFI Sistema Ingtegrado de Administracao Financeira
Source: SIAFI Sistema Ingtegrado de Administracao Financeira
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