World Leaders Challenge Hedge Funds In UN Dev Agreement

Some world leaders, the International Monetary Fund and other development organisations has recommended the elimination of “hedge funds” which had deepened developing countries in financial crisis.
The Tide source reports that the recommendation was made at the on-going third International Conference on Financing for Development in Addis Ababa, Ethiopia.
According to Eric LeCompte, the Executive Director of the Religious Development Organisation Jubilee USA Network, “the so called “vulture funds” are featured in a global agreement to be signed before the conference winds off.”
“These predatory funds undermine development and can destabilise a country’s economy.
“From Zambia to Peru, they target litigate and collect aid monies that should be building schools and hospitals,” LeCompte said.
He said that when countries faced economic hardship, “vulture funds” could buy a country cheaply and then sue for full repayment.
“After Zambia received international debt relief in 2006, a hedge fund called Donegal International sued Zambia to collect $55million on a $15 million debt the fund bought for $3.3 million on the secondary market.
“NML Capital sued Argentina over debt holdings and refuse to participate in Argentina’s debt restructuring.
“The Argentina case put a broader spotlight on this type of litigation.
“World leaders are saying enough is enough. The final agreement recommends changing contracts to prevent the behaviour or legislating the funds out of existence,” LeCompte said.
He said that Belgium was the latest country to have passed a law restricting this behaviour on July 1.
“It is inspiring to see the global community unified against this behaviour,” the director said.