Liberia Ordered to Pay $20 Million to Vultures
In 1978, the poor West African country of Liberia borrowed $6 million from a New York bank. The Liberian government promised to use the money to buy and develop an oil refinery, and to pay the money back in seven years.
Today it's not clear if either of those things ever happened.
Two years after the loan, the Liberian government was overthrown in a coup, which later led to a 14-year civil war. Meanwhile, the loan was bought and sold several times, according to allAfrica.com.
But now two investment funds say they hold the note and are entitled to $20 million from the current government of Liberia — a claim upheld by a London court. Today Liberia is led by a democratic government whose president is working with the IMF and World Bank to settle old debts. The Guardian says Liberia struck deals with most of its private-sector creditors, but these two funds are refusing to settle, demanding full payment through the courts.
A representative for the Jubilee Debt Campaign, a coalition fighting for debt relief for the world's poorest countries, accuses funds like these of "profiting from poverty."
As Al-Jazeera's Barbara Serra reports:
So-called vulture funds have been condemned by several governments for preying on the world's poorest states. They buy up the debt of near-bankrupt nations at a cheap price from financial institutions. They then sue those nations in international courts for the full value of the debt, plus steep levels of interest and penalty charges. Every year, developed countries spend billions of dollars to help pay off the debts of poorer nations, but vulture funds siphon off that money for themselves.
Even the lawyer for Liberia says this is a moral issue as well as a legal one. Get the full scoop from this Al-Jazeera video:
Delicious
Digg
StumbleUpon
Reddit
Facebook
Google
Yahoo
Printer-friendly version
Comments
UPDATE: Following an
UPDATE:
Following an investigative report on BBC NewsNight, British Parliament has now passed a bill that will effectively bar vulture funds from pursuing debts of poorer nations in UK courts. It is expected to be signed into law soon.
If enacted, the bill would prevent assets from being seized even in cases that have already been brought-- a move which bodes well for Liberia and other nations, and decidedly less-so for the vultures.
Investigative reporter Greg Palast broke the story for BBC with this exposé, shedding light on the vultures subversion of Liberian debt-relief: http://news.bbc.co.uk/2/hi/programmes/newsnight/8538889.stm
More information is posted here: http://www.gregpalast.com/liberian-leader-urges-mps-to-back-action-again...
It's good to see the British government step up to address this important issue.
Vultures- the spotlight is on!
Much thanks.
Post new comment