VoxDev Development Economics S6 Ep11: Is debt leading to the unsustainable exploitation of natural resources?
Mar 19, 2025
Pushpam Kumar, an expert from the UN Environment Programme, discusses how rising debt in low-income countries threatens crucial river basins like the Congo and Amazon. He highlights the alarming debt-to-natural capital ratio and its implications for livelihoods and biodiversity. The conversation emphasizes the urgent need for integrated economic-environmental policies and rethinking measurements of economic health beyond GDP. Kumar also explores debt-for-nature swaps as a potential solution for alleviating debt while fostering conservation.
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Sustainability Metric
- The ratio of external debt to natural capital reveals an economy's sustainability from a nature perspective.
- This is a more accurate measure than the traditional debt-to-GDP ratio.
Declining Natural Capital
- Natural capital in three major river basins (Mekong, Congo, and Amazon) is declining due to economic pressures.
- This decline is driven by factors like urbanization, agricultural expansion, climate change, and deforestation.
Beyond GDP
- GDP doesn't fully capture economic activity, particularly regarding sustainability.
- A more comprehensive measure is the change in inclusive wealth per capita, which considers natural, produced, and human capital.