Debt induced environmental degradation

The need to pay off international debts has driven many developing countries to sell off their natural resources, particularly timber and minerals, for whatever price they could obtain, often in environmentally-destructive ways. Export cash crops have been favoured over food production for local consumption. Environmental standards have been kept low or non-existent to help attract foreign investment. Structural adjustment programmes have required reductions in government expenditures, with the environment being one of the easiest areas to cut. The indebted countries have thus been pushed towards further environmental deterioration.

One of the signs of imbalance in the international economic system is the excessive level of international debts accumulated by many nations. Deteriorating terms of trade for developing countries exporting agricultural and other commodities have made it increasingly difficult for these countries to reimburse their debts.