Independent UK: We must stop the 'vulture funds' that feed on the world's poor

[marmar]

Johann Hari: We must stop the 'vulture funds' that feed on the world's poor
The energy that drove Jubilee 2000 needs to be summoned again

Friday, 18 September 2009


Would you ever march up to a destitute African who is shivering with Aids and demand he "pay back" tens of thousands of pounds he didn't borrow – with interest? I only ask because this is in effect happening, here, in British and American courts, time after time. Some of the richest people in the world are making profit margins of 500 per cent by shaking money out of the poorest people in the world – for debt they did not incur.

Here's how it works. In the mid-1990s, a Republican businessman called Paul Singer invented a new type of hedge fund, quickly dubbed a "vulture fund." They buy debts racked up years ago by the poorest countries on earth, almost always when they were run by kleptocratic dictators, before most of the current population was born. They buy it for small sums – as little as 10 per cent of its paper value – from the original holder and then take the poor country to court in Britain or the US to demand 100 per cent of the debt is repaid immediately, plus interest built up over years, and court costs.

If they can't pay, the vulture fund goes after anybody who is paying the poor country money, trying to force them to give it to them instead. In one instance, a fund tried to get a court order freezing Belgian aid payments to the Congo, saying it should go into their bank account.

Let's look at an example. In 1979 – the year I was born – the dictator of Zambia, Kenneth Kaunda, took out a loan for $15m from the dictator of Romania to buy some tractors. Most didn't work. But after 20 years of non-repayment, the new democratically elected government of Zambia said it had no way to pay the loan, and negotiations began to cancel it. But a multi-millionaire called Michael Francis Sheehan, whose company Donegal International is based in a British tax haven, had spotted a chance. He bought the debt from Romania for $3m, and took Zambia to court in Britain for the full amount – which had now piled up to $55m.

The Zambian government explained that they don't have the money. A fifth of their people are HIV positive, and there are only 600 doctors covering more than 12m people. Most people are dead before their 38th birthday. The Zambian President's adviser, Martin Kalunga-Banda, explained – and aid groups verified – that if the government had to pay out for the dead dictator's bills, "medicines that would have been available to in excess of 100,000 people in the country will not be available.... in excess of 300,000 children will be prevented from going to school." The people who will go sick or uneducated were not alive when the loan was taken out. ........(more)

The complete piece is at: http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-we-must-stop-the-vulture-funds-that-feed-on-the-worlds-poor-1789257.html

[UndertheOcean]

1. Capitalists are pigs.

:(

[Cobalt-60]

2. It would be a real shame if pig Sheehan caught fire

or fell to his death.

[BlueMTexpat]

3. Never gonna happen ...

people like this are so evil even the Devil doesn't want them.
So we are stuck with them. x(

[HamdenRice]

4. I agree with how horrible vulture funds are, but I wouldn't call Kaunda a "dictator"

Kind of reduces the credibility of the reporter.

[Bluenorthwest]

5. He kept a state of emergency from 64 until the end

One party rule,absolute power.

[HamdenRice]

6. Maybe because Zambia really was under a state of emergency.

I remember having dinner with Mac Maharaj of the ANC around 1986 during a 3 day conference in the US. At the end of the conference, he received news that the South African Defense Force had sent commandos into Gaborone and killed several of his colleagues. Maharaj and most of his exiled ANC colleagues were based in Lusaka, Zambia, and Zambia bore the burden of many decades of attacks and sabotage from Rhodesia and South Africa.

Because of "tribal" conflicts, which were structured as "party" conflicts for a while after independence, several African countries experimented with one-party systems. There were competitive elections within each electoral district, but not by party. In several of them, the turnover of candidates -- ie losses by incumbents -- was much, much higher than in the US Congress.

Not every country has to look politically exactly like the United States to be a democracy -- although I suppose people like yourself who believe that they should look exactly like the US also support imposing systems that look exactly like ours by force, in places like Afghanistan and Iraq.

Few Africanists considered Kaunda a "dictator." He was among the mildest African leaders of his era, second probably only to Julius Nyerere (who also used a one-party democratic system after independence), and both were African socialists who invested everything they could afford in education and health -- until the IMF caught up with them.

[ArbustoBuster]

7. Hamden, I genuinely find your discussions of Africa to be learning experiences.

And this post of yours was mostly that, a cogent discussion of your knowledge about the subject at hand.

But then you accused Bluenorthwest in these terms: "I suppose people like yourself who believe that they should look exactly like the US also support imposing systems that look exactly like ours by force, in places like Afghanistan and Iraq."

Unless Bluenorthwest has actually intimated opinions like that in the past, I believe that this was out of line. Generally, it's enough to politely lay out your information in disproof of someone else's statements without resorting to accusing them of wanting to invade other countries. Your disproof will be enough of a rebuke.

[HamdenRice]

9. Because

Bluenorthwest is stalking me, disagreeing with whatever I write just for the sake of disagreeing even if he has no knowledge of the subject matter. So otherwise impolite language is a practical way to get him to go away.

[Bluenorthwest]

10. Actually Hamden, your knowledge of Africa is the only value I find

in your bitter and snarky posts. You know much. But you carry too much baggage, and throw too much mud. Just as you did with the author of the piece who makes a wonderful point about vulture funds that is not mitigated by his not agreeing with you. Many people agree with the author's statement. You don't. Big whoop. Congrats, you are now free of me, for you go on ignore, as your African experiences are all you have to share of value, and you can not even speak with civility about that. You attack with no cause.
Engaging a person in open discussion on an open forum is what people do on a discussion board. Those who have to call names and spout assumptions do so because of their own issues and lack of abilities. If you can not discuss, perhaps making sweeping statements without sharing your reasoning is not the right method? To dismiss the OP for an opinion, while not explaining why you do not agree with that opinion, is not very useful to others. He was not a dictator? Tell us why, don't just piss on the OP and run as if your word is enough to change minds, because it is not. Your reply was informative, and what should have been done in the first place. I know zero about the man in question, save a few things I've read. So you could easily be right, and I have no reason nor standing to disagree with you. But I can not learn from an unsupported declaration. Without the supporting facts, it is just like a slam of the OP who is making a worthwhile point that is not about their past, but about our present responsibilities.

[HamdenRice]

11. Talk about snark

You're still pissed off about the inauguration, and you and a few others have relentlessly attacked anyone who did not have exactly the same view as you about the politics of that spectacle. I've generally only been rude to people who have been rude to me, and I find it remarkable that you are giving a lecture on civility. There are many issues that you refuse to have an "open discussion" about, so the lamentation in your post seems to be so much crocodile tears.

I didn't attack the OPer or even the author of the article cited in the OP, but when someone calls Kaunda a dictator in a major newspaper, it shows the reporter didn't do his or her research. Imagine reading an otherwise valuable article that in an offhand manor mentioned the "dictator" Nelson Mandela or "dictator" Ghandi; you would wonder about the credibility of the rest of the article. That's the point. I wouldn't put Kaunda in the Mandela/Ghandi category, but he was generally considered a good man trying to do a difficult job under the worst of circumstances, all while supporting the liberation of Rhodesia, then South Africa and Namibia. He was the point man for all peace discussions in the region -- the kind of guy who could and would talk to anyone from Oliver Tambo to Chester Crocker to PW Botha to get a peaceful settlement in the subcontinent. He was also one of the first African leaders to speak out necessity of confronting AIDS and create programs to prevent its spread (his son died of it), and has devoted most of his retired life to combating the disease.

Anyway, thanks for putting me on ignore. I assume this means that I will no longer see your posts disagreeing with me for the sake of disagreeing with me.

[AllentownJake]

8. Why would this stop, didn't something worse just happen here with the bailouts?

Where they transferred private companies liabilities onto the federal government's balance sheet and used public debt to finance it?