Q. Consider the following statements:
1.Debt-for-nature swaps mean that a country in debt promises to do things to help the environment in exchange for getting more debt.
2.A debt-for-nature swap can be multi-party or bilateral.
3.Debt-for-nature swaps often involve partnerships between governments, non-governmental organizations (NGOs), international conservation organizations, and financial institutions.
Which of the statements given above are correct?
Answer: B
Notes:
Explanation –
Statement 1 is incorrect. Debt-for-nature swaps allow heavily indebted developing countries to seek help from financial institutions in the developed world with paying off their debt if they agree to spend on conservation of natural resources. Usually banks in developed countries buy the debts of such countries and replace them with new loans which mature later. These have lower interest rates.
Statements 2 and 3 are correct. A debt-for-nature swap can be multi-party or bilateral. Debt-for-nature swaps often involve partnerships between governments, non-governmental organizations (NGOs), international conservation organizations, and financial institutions.
Source: ForumIAS
