Friday, February 16, 2007

How does White House spell relief?


Greg Palast's latest broadside about the scam of "vulture funds" that pray on the carrion of third world debt relief is as disapointing as it unsurprising. Naturally, the White House is up to their very smelly armpits in it, with George Bush leading the way for campaign donors to reap usury-level profits from what can no longer be called debt relief at all.
Vulture funds - as defined by the International Monetary Fund and Gordon Brown amongst others - are companies which buy up the debt of poor nations cheaply when it is about to be written off and then sue for the full value of the debt plus interest - which might be ten times what they paid for it.

Debt Advisory International (DAI) manages a number of vulture funds which buy up the debts of highly indebted poor countries cheaply and then sue for the original value of the debt plus interest. Zambia - where the average wage is just over a dollar a day - is one of the highly indebted poor countries which the world's governments agreed needed debt relief.

In 1979 the Romanian government lent Zambia money to buy Romanian tractors. Zambia was unable to keep up the payments and in 1999 Romania and Zambia negotiated to liquidate the debt for $3m.

Before the deal could be finalised one of DAI's vulture funds stepped in and bought the debt from Romania for less than $4m. They are now suing the Zambian government for the original debt plus interest which they calculate at over $40m and they expect to win.
Caroline Pierce of the Jubilee Debt campaign embraces her idealism tightly:
Profiteering doesn't get any more cynical than this. Zambia has been planning to spend the money released from debt cancellation on much-needed nurses, teachers and infrastructure: this is what debt cancellation is intended for not to line the pockets of businessmen based in rich countries.
And how do Republicans and namely George Bush figure in all this dreadful business? It starts with a man named Paul Singer, who "virtually invented vulture funds." Singer has been George Bush's biggest campaign donor in New York City, giving $1.7 million to Bush for his campaigns. Bush could end this heartless charade but he hasn't and no one expects him to as long as the generous donations to the RNC keep coming in.
George Bush can put an end to it all with a stroke of a pen. Under the US Constitution, the President has the power to stop the vultures from collecting a penny in a US courtroom, but he hasn't done it, even though just last month George Bush publicly committed his government to debt relief.
This story is getting some play -- as well it should. I see the indefatigable Cernig is on and I was alerted to it by email from a good friend of mine, Nils. One might expect it to be completely ignore by the US corporate media; it just doesn't fit into the narrative that US foreign policy is about delivering freedom and democracy and goodness to the world. These days, I don't quite know how anyone can believe that, but many still seem to and the role that the corporate media have assumed is to make sure as many people as possible are not disabused of that notion.


Blogger Tony said...

Don't Be Confused: DAI Is NOT "Debt Advisory International"
Author: DAI
Date: February 16, 2007

Check out our homepage, DAI is an employee-owned consulting firm whose mission is Advancing Human Prosperity. We have no connection of any kind with "Debt Advisory International," the company that was profiled on BBC's Newsnight program earlier this week. That program described a predatory investment company that trades in distressed debt from very poor countries such as Zambia. To our knowledge, "Debt Advisory International" does not use the name DAI, but the BBC program might lead some viewers to conclude that we are the same company. Nothing could be further from the truth. We have been operating for more than 36 years, supporting sustainable economic development and improving the lives and livelihoods of people in more than 150 countries. Please browse our site: see what a growing, global team of development professionals is doing to make the world a better place.

Tony Barclay, Chief Executive Officer

5:45 PM  
Blogger CLB said...

What about Palast and his piece lead you to comment that it is " disapointing as it unsurprising,"?

1:21 AM  
Blogger theBhc said...

The comment was about neither Palast nor his piece. The comment regarded the subject matter.

I have great respect for Palast and apologize if that was not understood.

2:35 AM  
Blogger theBhc said...

And further apologies to Tony Barclay above for the confusion sewn by the BBC story equating the carrion pickers of Debt Advisory International with DAI, Development Alternatives Inc., which looks like a very fine organisation.

1:59 PM  

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