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Fata Morgana
2007-02-22 16:50
Zambia national debt lawsuit
africa, economics, npr, politics, zambia
Here's your daily dose of evil, as heard on NPR a few minutes ago. Donegal International bought a portion of Zambia's national debt, worth $55 million, for $3 million a few years ago, counting on rumors that Zambia's debts would be canceled (and relying on precedents of another vulture company successfully suing two Latin American countries for canceled debts it purchased). Sure enough, the Zambian debts were canceled, and now they're suing the Zambian government for the full value of their "investment." One Zambian official said that this amount could have hired 6,000 teachers and opened a hospital ... but instead it has to be spent on making some billionaires even richer. Sort of defeats the purpose of debt cancellation, dunnit?

"A British court recently ruled that Donegal International ... has the right to profit from its purchase of millions of dollars worth of Zambia’s debt – acquired for a tiny fraction of its face value eight years ago. ... The Donegal case in Zambia shows just how skewed the current financial system is towards the interests of the wealthy. Before reaching a debt cancellation agreement, an impoverished country must borrow from the international financial institutions in order to repay wealthy creditors and those same financial institutions."
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2007-02-23 07:52 (UTC)
(no subject)
buying... debt.. makes no sense.
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Fata Morgana
2007-02-23 20:05 (UTC)
(no subject)
... unless you can buy it for pennies on the dollar and then sue for the full amount. ;~)

I'm sure Romania, the other partner in crime in this operation for agreeing to sell off their Zambia debts, is happy too -- they got $3 million when they wouldn't have gotten anything otherwise.
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