U.S. “Vulture” Funds Prey on Poor, Indebted Nations
Monday, August 24, 2009
A coalition of advocacy organizations including the NAACP and Africa Action are lobbying Congress to adopt new legislation that would prevent so-called “vulture” funds from buying up debts owed by developing countries to Western governments and financial institutions. This predatory practice often has resulted in vulture funds purchasing external debts for pennies on the dollar and then suing the governments of countries, especially in Africa, for huge settlements that drain resources away from health care, education and other programs needed by poverty-stricken populations.
Supporters of the “Stop Very Unscrupulous Loan Transfers from Underprivileged Countries to Rich, Exploitive Funds Act” cite examples such as the Democratic Republic of the Congo, which borrowed $30 million in 1980, but was forced to pay FG Hemisphere Fund $105 million following a court decision in Washington, DC.
-Noel Brinkerhoff
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