Vulture funds: Gordon Brown stands by and does nothing as the poorest suffer

I’m in The Guardian talking about the dreaded scourge of vulture funds:

Liberal Democrat shadow international development secretary Lynne Featherstone released figures she had requested from the World Bank about the extent to which British courts had been used by so-called “vulture” funds to sue poor countries.

These showed £237m-worth of suits had gone through British courts despite Britain being a vocal supporter of greater aid for poor countries.

“Gordon Brown talks at length about justice for Africa but instead his government should explore ways of creating an internationally binding system to ensure companies can’t prey on heavily indebted developing countries,” she said.

“Failing that, in the interim, the government should start looking at how our national laws can be changed to bar vulture funds from using Britain as a tool to milk heavily-indebted poor countries.”

Vulture funds buy up poor countries’ sovereign debt at a fraction of its face value and then sue for its full value plus interest in court. Many are US-based but use courts in Britain and France to pursue their victims.

UPDATE: There’s more in the story on the Liberal Democrat website.

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From a Foreign Policy magazine article on ‘vulture funds’:Sitting in his understated office in midtown Manhattan, Jay Newman doesn’t come across as socially irresponsible. A portfolio manager at Elliott Associates, he is slight and soft-spoken. But if Newman lacks Bono’s volume, he can almost match him in righteous fervor. His contempt for governments that refuse to pay what they owe runs deep, as does his belief that vulture funds are a critical check on the “moral hazard” of debt default. Where the debt forgiveness activists see poor countries in need of relief, Newman sees corrupt, deadbeat countries “dragging our legal system down by disregarding the rule of law.” Newman and his colleagues simply reject the idea that vulture funds are extracting money from the coffers of the poor. “Debt relief advocates should recognize that the beneficiaries of debt relief are often corrupt or incompetent regimes that squander their nations’ assets and then cry poverty to avoid legitimate debts,” says an Elliott spokesperson. “This cycle must be broken for countries to achieve economic development.”There are two sides to every story…

You also got coverage here – good work Lynne.

Anonymous on 7th Nov 2007 at 10:41 am said:

From a Foreign Policy magazine article on ‘vulture funds’:Sitting in his understated office in midtown Manhattan, Jay Newman doesn’t come across as socially irresponsible. A portfolio manager at Elliott Associates, he is slight and soft-spoken. But if Newman lacks Bono’s volume, he can almost match him in righteous fervor. His contempt for governments that refuse to pay what they owe runs deep, as does his belief that vulture funds are a critical check on the “moral hazard” of debt default. Where the debt forgiveness activists see poor countries in need of relief, Newman sees corrupt, deadbeat countries “dragging our legal system down by disregarding the rule of law.” Newman and his colleagues simply reject the idea that vulture funds are extracting money from the coffers of the poor. “Debt relief advocates should recognize that the beneficiaries of debt relief are often corrupt or incompetent regimes that squander their nations’ assets and then cry poverty to avoid legitimate debts,” says an Elliott spokesperson. “This cycle must be broken for countries to achieve economic development.”There are two sides to every story…
Stock Exchanger on 11th Nov 2007 at 12:54 am said:

You also got coverage here – good work Lynne.

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