19 August 2009
Fifty advocacy organisations are calling on the U.S. Congress to put a stop to investment funds which purchase heavily indebted countries' debt and jeopardise the impact of bilateral and multilateral debt cancellation to over 30 countries.
The groups - which include the NAACP, the Jubilee USA Network, TransAfrica Forum, the American Jewish World Service, the United Methodist Church and Africa Action -are seeking a stop to what they have dubbed "Very Unscrupulous Loan Transfers from Underprivileged countries to Rich, Exploitive Funds".
These so-called VULTURE funds purchase heavily indebted countries debt at pennies to the dollar and then "aggressively pursu(e) their claims through the seizure of assets, litigation and political pressure, seeking repayments that are far in excess of the amount that they paid for the debt," the groups say.
The strategies used by VULTURE funds act in direct contradiction to international efforts to cancel debt for the world's poorest countries - a movement which has already cancelled over 90 billion dollars in debt.
"Since 1996 donor countries - including the U.S. - have committed 90 billion dollars in bilateral and multilateral debt relief to over 30 countries. VULTURE funds profit from this debt relief," Michael Stulman, associate director of policy and communications at Africa Action, told IPS.