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Africa: HIPC Countries to Get Reprieve
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Ghanaian Chronicle (Accra)
7 August 2008
Posted to the web 7 August 2008
Stephen Odoi Larbi
Highly Indebted Poor Countries (HIPC) would begin to heave a sigh of relief, if a proposed bill dubbed "Stop Vulture Funds Act" before the US House of Representatives, is passed to become an Act.
The proposed bill seeks to end the greed and corrupt business practices of the Vulture Fund, which takes advantage of the world's poor countries.
The bill, when passed into an Act, will clip the wings of the Vulture Fund, from further making excessive profits, off the debts of the world's poorest nations.
Poor countries, who have been victims of the Vulture Fund, have publicly cried about their inability to repay back monies owed to the Fund, resulting in the seizure of state assets, coupled with litigation and political pressure on their respective countries.
The Vulture Fund purchases defaulted debts of Heavily Indebted Poor Countries (HIPC), at much reduced prices, and then litigates against the debtor for greatly inflated sums.
Through the seizure of assets, litigation and political pressure, the Fund seeks repayments that are far in excess of the amount that they pay for the debt.
Presenting the bill before the House of Representatives, in the United States of America, the Jubilee USA Network, an alliance of 80 religious denominations and faith communities, development agencies, and human rights groups working for debt relief, said, "We welcome the strong leadership showed by the Congressional co-sponsors of this important new legislation.
"Vulture Funds are grabbing the proceeds from the debt relief of some of the poorest countries in the world. This bill should make Vulture Funds think twice, before suing the poor for profit."
Lead sponsor Congresswoman Maxine Waters said, "The Stop VULTURE Funds Act, would protect the world's poorest countries, from the predatory practices of vulture funds, and allow these countries to use their limited resources, to meet the needs of their people."
The Stop VULTURE Funds Act (H.R. 6796) outlaws profiteering from sovereign debt, by capping the amount of profit that a fund can reap, through litigating against poor countries, to collect defaulted debts.
It also requires disclosures from any fund, which pursues Vulture Fund activity, through the U.S. courts. Introduced by the Financial Services Committee Member Representative, Maxine Waters (D-Calif), the bill counts original cosponsors Representative John Conyers, Jr. (D-Mich.), Chairman of the Judiciary Committee and Representative Donald Payne (D-N.J.), Chairman of the Subcommittee on Africa and Global Health.
The International Monetary Fund, the World Bank, U.S. Treasury Secretary Henry Paulson and leading non-governmental organisations (NGOs), have all condemned the activities of the Vulture Funds.
Secretary Paulson stated in a Congressional testimony, that he "deplores what the Vulture Funds are doing."
"The profiteering tactics used by these Vulture Funds, are undercutting progress made towards relieving the debt burdens of the world's poorest countries," says Nicole Lee, Executive Director of Trans Africa Forum.
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He added, "HR 6796 is a key step in closing the legal loopholes, which has allowed these Vultures to operate in such a devious way."
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