Scraping the bottom of the barrel
There are many many good, dedicated, passionate people out there – struggling against the odds – working in developing countries to help improve the lives of some of the poorest and most marginalised people. Let’s make no mistake, these odds are regularly stacked against them. Corruption, world trade systems, lack of resources, the impact of global warming, natural disasters, you name it.
This week I read about another. They’re called Vulture Funds. And I felt sick.
Vulture Funds work like this. A company ‘buys’ the debt of a developing country from the original lender, often at a reduced rate (since they’re often about to be written off), and then sues the original borrower for the initial sum, plus escalated fees and interest. What’s more, it’s legal and ‘recognised’ by the International Monetary Fund, among others.
These Funds came to my attention this week while I was reading a news story from Zambia. A $4 million debt (money lent by the Romanian Government back in 1979, incidentally) had been purchased by one of these Funds, which then won a court case against the Government of Zambia for payment of $42 million by way of settlement. Yes, you heard that right – $42 million. A Zambian presidential adviser and consultant to Oxfam pointed out that $42 million was equal to all the debt relief the country received in 2006. “It also means the treatment, the Medicare, the medicines that would have been available to in excess of 100,000 people in the country will not be available”.
How do these people sleep at night? Sure, if you borrow money then it’s only right that it’s paid back. But chasing down some of the poorest countries in the world like this, to me, is really scraping the bottom of the barrel.