On 8 April, Britain became the first country in the world to ban profiteering in “third world debt”, in the final hours of the last parliament. The Debt Relief (Developing Countries) Bill restricts the activities of so-called “vulture funds”. These funds are (generally secretive) investment companies that buy up the bad debts of some of the world’s poorest countries at a discount, and then use the courts to demand full repayment plus costs.
Last November, the British high court awarded two vulture funds $20m in debt repayment from Liberia – the second poorest country in the world – for a debt dating back to the 1970s. The new law is expected to make that verdict unenforceable. However, the law has a sunset clause which means it has to be reassessed to be made permanent in a year’s time.
Nick Dearden, director of Jubilee Debt Campaign, said: “This is a landmark law. It will mean the poorest countries in the world can no longer be attacked by these reprehensible investment funds who grow fat from the misery of others.”
Topics: International solidarity, Global south