Opinion: A Long History of Predatory Practices Against Developing Countries
Opinion: A Long History of Predatory Practices Against Developing Countries
By Kinda Mohamadieh
In this column, Kinda Mohamadieh, a researcher at the South Centre, argues that the predatory practices of ‘vulture funds’ and their systemic implications represent a threat to the development of indebted poor countries.
GENEVA, Apr 6 2015 (IPS) - The world’s attention turned to the practices of vulture funds after the U.S. Supreme Court affirmed a lower court opinion in the NML Capital vs Argentina case, which forbids the country from making payments on its restructured debt.
Argentina had defaulted in 2001 and went through two rounds of negotiations to restructure its debt, both in 2005 and 2010. In June 2014, the court ordered Argentina to pay the ‘vulture funds’ that held out and did not accept the terms of the debt swaps.
The vulture funds had held out with the aim of achieving what amounts to a 1,600 percent return on their original investment. The funds concerned had purchased the Argentinian bonds in 2008 at 48 million dollars and the court ruling ordered Argentina to pay them 832 million dollars.
Nobel laureate Joseph Stiglitz noted that this was “the first time in history that a country was willing and able to pay its creditors, but was blocked by a judge from doing so”.
More:
http://www.ipsnews.net/2015/04/opinion-a-long-history-of-predatory-practices-against-developing-countries/
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