The countries mentioned in the preceding chapters – namely the United States, Italy, Germany and France – have the largest national programs for utilising debt exchanges for multiple purposes, whether as an arm of environmental policy, as a way to enhance aid levels or (regrettably) as a means of meeting international commitments to forgive developing country debt. Other donor countries have similar programs. This chapter looks at the bilateral debt exchanges entered into by Switzerland, Spain and Norway.

SWISS DEBT-FOR-DEVELOPMENT EXCHANGES

As debt-for-development exchanges became more widely used in the 1990s, Switzerland was the first donor country to use such exchanges as an integral part of its national development program. In March 1991 the establishment of the Swiss Debt Reduction Facility (SDRF) was announced at the parliamentary session celebrating the 700th anniversary of the Swiss Confederation. Its creation was the result of a sustained campaign by local nongovernmental organisations (NGOs), whose petition, ‘Debt Needs Debt Reduction’, had garnered 250,000 signatures in support of a comprehensive debt-reduction program. The SDRF was established with the objective of cancelling all official bilateral and commercial debt owed to Switzerland by highly indebted poor countries (HIPCs). Debt relief was channelled through the establishment of counterpart funds to invest in poverty-reduction schemes, income generation and environmental projects. The SDRF has been credited with ‘piloting’ debt-for-development conversions and the techniques of counterpart funding.

The SDRF was established with an endowment fund of CHF 500 million.