19 December 2011
CAMPAIGN TO HALT SPECULATORS PREYING ON THE POOR
The Democratic Republic of the Congo should be one of Africa's richest countries. It has a mineral wealth estimated to be around $24-trillion (£15-tn). There are huge deposits of cobalt, diamonds, gold, copper, oil and 80 per cent of the world's supplies of coltan ore — a valuable mineral used in computers and mobile phones.
Yet 100 women a week are still dying in childbirth and 16,000 children under the age of five die every year. One in three children in the DRC will never get anything more than primary education.
One of the reasons the country has been unable to recover is that it is being pursued by international debt speculators, known as Vulture funds.
It has been 16 years since most of the world began writing off the debts of the poorest countries, but the vulture funds, a club of between 26 and 35 speculators, have done almost everything to ensure that these countries do not have a chance to get back on their feet.
Vulture funds operate by buying up a country's debt when it is in a state of chaos. When the country has stabilised, vulture funds return to demand millions of dollars in interest repayments and fees on the original debt.
The DRC is a heavily indebted poor country (HIPC). It had finally completed the long and tough process required to receive debt relief. Congo’s debt was due to be cut by over $7,000 million. The IMF, World Bank and African Development Bank had agreed to cancel 100 per cent of pre-2004 debts. Other creditors like the UK having committed to do the same.
But a Vulture Fund had been circling the DRC. Just as it reached HIPC completion point, FG Hemisphere swooped. Having bought one of the African nation’s debts cheaply on the secondary market, it refused to participate in the debt relief scheme, and instead began pursuing repayment of $100 million for this debt – $80 million more than the country would have been expected to pay for the debt under the HIPC process.
Recently, the NSW Supreme Court ruled in favour of FG Hemisphere Associates and said the Democratic Republic of Congo must hand over $30 million.
FG Hemisphere has now gone to Jersey to claim $100-m from the DRC because a legal loophole means that the island remains free of anti-vulture laws that were passed in the UK last year.
So far, according to the World Bank, the top 26 vultures have managed to collect $1-bn from the world's poorest countries and still have a further $1.3-bn to collect. Gordon Brown, the former British Prime Minister and long-time Finance Minister in Tony Blair's administrations, has described the payouts as ‘morally outrageous.’
In Australia you can take action by sending a message to the Australian Attorney General Nicola Roxon urging the introduction of legislation to prohibit vulture funds from accessing Australian courts
Yet 100 women a week are still dying in childbirth and 16,000 children under the age of five die every year. One in three children in the DRC will never get anything more than primary education.
One of the reasons the country has been unable to recover is that it is being pursued by international debt speculators, known as Vulture funds.
It has been 16 years since most of the world began writing off the debts of the poorest countries, but the vulture funds, a club of between 26 and 35 speculators, have done almost everything to ensure that these countries do not have a chance to get back on their feet.
Vulture funds operate by buying up a country's debt when it is in a state of chaos. When the country has stabilised, vulture funds return to demand millions of dollars in interest repayments and fees on the original debt.
The DRC is a heavily indebted poor country (HIPC). It had finally completed the long and tough process required to receive debt relief. Congo’s debt was due to be cut by over $7,000 million. The IMF, World Bank and African Development Bank had agreed to cancel 100 per cent of pre-2004 debts. Other creditors like the UK having committed to do the same.
But a Vulture Fund had been circling the DRC. Just as it reached HIPC completion point, FG Hemisphere swooped. Having bought one of the African nation’s debts cheaply on the secondary market, it refused to participate in the debt relief scheme, and instead began pursuing repayment of $100 million for this debt – $80 million more than the country would have been expected to pay for the debt under the HIPC process.
Recently, the NSW Supreme Court ruled in favour of FG Hemisphere Associates and said the Democratic Republic of Congo must hand over $30 million.
FG Hemisphere has now gone to Jersey to claim $100-m from the DRC because a legal loophole means that the island remains free of anti-vulture laws that were passed in the UK last year.
So far, according to the World Bank, the top 26 vultures have managed to collect $1-bn from the world's poorest countries and still have a further $1.3-bn to collect. Gordon Brown, the former British Prime Minister and long-time Finance Minister in Tony Blair's administrations, has described the payouts as ‘morally outrageous.’
In Australia you can take action by sending a message to the Australian Attorney General Nicola Roxon urging the introduction of legislation to prohibit vulture funds from accessing Australian courts
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