ENVIRONMENTAL CHALLENGES OF ECONOMIC DEVELOPMENT

Abstract

The global economic crisis along with the implementation of the neoliberal project has announced shifting of the global economy capital center from the manufacturing sector into financial sector, just like the economic activity is no longer important. So, primitive private freedom to capitalize on poverty in the form of secretly designed private benefits such as competition, as a key incentive for the development and monopoly generator was formalized. Ecology has entered a daily conversion between debtors and creditors. Dialog of interests among creditors and debtors is extremely facilitated by using a special type of debt conversion that is manifested through debt write-off for ecological preservation of green continent (debt-for-nature swaps). Today's world suffers from increasing pollution of the environment and the decreasing of the ozone layer. The scientists are suffering too because they do not know how to explain how it will affect agricultural yields, the health of the population, the level of the sea, the length of human life, the rise in temperature, the socio-economic development, the living standard of citizens. Therefore, environmental issues have become more economical, although environmental concerns increasingly moved to the plane of economic science, which has created new financial instruments in order to simultaneously address development and environmental problems. One of the latest financial instruments, which showed all its effectiveness, is a debt-for-nature swaps, through which the indebted countries forgives part of their debt in exchange for an increase in government investment in the field of preservation of ecological heritage that is significant for the whole planet. It is a win-win for everyone: debtor country, because it actually buys off foreign debt using domestic currency with a discount, and the country's creditors, because they do not have to invest fresh money for the preservation of the environment but they are using money from debtors, money that probably was not even payable.