Bible Studies
Written by Jim Jordal   
Friday, 13 July 2007


By Jim Jordal

 Woe to them that devise iniquity, and work evil upon their beds! when the morning is light, they practice it, because it is in the power of their hand. And they covet fields, and take them by violence; and houses, and take them away: so they oppress a man and his house, even a man and his heritage.

Micah 2:1-2 (KJV)

 Then I returned and saw all the oppressions that are done under the sun: and behold, the tears of those who were oppressed, and they had no comforter; and on the side of their oppressors there was power; but they had no comforter. 2 Therefore I praised the dead who have been long dead more than the living who are yet alive. 3 Yes, better than them both is him who has not yet been, who has not seen the evil work that is done under the sun.

Ecclesiastes 4:1-3 (WEB)

This is one of the most evil, disgusting situations I've recently encountered. What it amounts to is that some Western private capital funds purchase distressed debt of poor Third World countries for perhaps ten cents on the dollar, then sue the defaulting nation for the full amount of the debt plus interest and legal costs. If the vulture fund wins a settlement, they are then sometimes able to freeze the assets of the debtor country until they are paid. This may result in the poor country being unable to service other debt, or even might force them to cut public services such as education and health care in order to raise the money.

A recent example crossing my desk involves a vulture fund, British Virgin Islands-based Donegal International, which paid about ten cents on the dollar for a $42 million debt owed by the desperately poor African country of Zambia. Donegal then sued in the United Kingdom Royal Court of Justice in London for the full amount plus interest and costs. In what some call a victory for Zambia, Donegal was awarded only $15.4 million, plus costs.

But what a victory! According to a BBC news report, Zambian presidential advisor Martin Kalunga-Banda said that the settlement will take over one-third of the $40 million Zambia expected to receive this year following advocacy efforts by Jubilee campaigners and enacted by the IMF, World Bank, and the U.S. government. "It also means that the treatment…and medicines that would have been available to more than 100,000 people in the country will not be available," he said.

This disaster began in 1979 when the Romanian government lent Zambia money to buy Romanian tractors. Unable to keep up the payments, Zambia in 1999 negotiated a settlement with Romania to liquidate the debt for $3 million. But before the deal could be closed, Donegal International, owned in part by US-based Debt Advisory International, intervened to buy the debt from Romania for $4 million. So a debt that could have been settled for $3 million will now cost Zambia over $15 million, plus costs.

According to Caroline Pearce of the Jubilee Debt Campaign, British chancellor of the exchequer (treasury) Gordon Brown told the United Nations in 2002 that vulture funds were "perverse and immoral." He called their practice of purchasing debt at reduced prices in order to make a profit from the debtor country a "morally outrageous outcome." Ms Pearce followed with the comment that vulture funds "made a mockery" of the work done by governments to write off the debts of the poorest countries--a key theme of Jubilee debt campaigners. "Profiteering doesn't get any more cynical than this," she added.

"Zambia had been planning to spend the money released from debt cancellation on much-needed nurses, teachers and infrastructure," said Ms Pearce. "This is what debt cancellation is intended for, not to line the pockets of businessmen based in rich countries," she added.

So it appears that vulture funds are well named, since they circle over dying countries waiting to devour what little wealth might remain. It is a crime against humanity that they are allowed to perpetrate their greedy, heartless abuses. But greedy as they are, vulture funds represent only a small fraction of one percent of the calculated economic evil perpetrated upon poor nations and their starving people by rich nations and their cohorts aiming to keep wealth flowing from the poor to the rich.

This month Congress is committed to hold hearings on the practices of these vulture funds. President Bush is also scheduled to speak to the G-8 summit of wealthy countries June 6-8 in Germany. If you wish to raise your voice against these funds, write to President Bush and call your representatives in Congress.

Information taken from the BBC News and Jubilee USA web sites.