Beating off the vulture funds
Vulture funds are a particularly ‘unpleasant and unacceptable face of capitalism’, as Ted Heath might have said. And they’re based on abusing your generosity. An attempt to crack down on these sordid little operations passed its second reading in the Commons on Friday with all party support, but the Conservative front-bench have denied it the easy ride that would see it on the statute books before the election, and they have not promised to reintroduce the Bill if they win the election. The TUC backs the Debt Relief (Developing Countries) Bill, and urges MPs to do whatever they can to get it passed. What you can do is write to your MP, and get your union or branch to affiliate to the Jubilee Debt Campaign who are the main proponents of the Bill.
Here’s how vulture funds work (there’s a more eloquent explanation on the BBC World Service). Over the last decade, campaigns for debt relief have persuaded rich countries to write off the debts the poorest countries owe to governments so that, rather than spend their limited resources on interest payments, they can spend it on health, education and sanitation. It’s all morally uplifting. But some people can spoil anything. Enter the ‘vulture funds’. They buy up the remaining private sector debts of really poor countries at prices which are rock bottom because the countries’ poverty means they are unlikely to be repaid. When debt relief kicks in and the countries have spare cash again (albeit cash earmarked for good works), yje vulture funds sue those countries for repayment of the debts, often making massive profits out of the money YOUR government gave up (which makes it YOUR money).
Andrew GwynneMP’s Debt Relief (Developing Countries) Bill would force commercial creditors litigating against Heavily Indebted Poor Countries on the basis of past debts to accept a HIPC-style write down – often accounting for as much as 90% of the face value of the debt. It’s a practical way to crack down on corporate greed and give poor countries a second chance.