do You know our newsletter? It’ll keep you briefed on what we publish. Please register, and you will get it every month.
Thanks and best wishes,
the editorial team
World Bank facility against vulture funds
The World Bank wants to protect highly indebted poor countries (HIPCs) from exposure to vulture funds. One step it has taken is to extend the Debt Reduction Facility (DRF), established in 1989, which will get a new five-year lease of life until July 2012. The DRF gives grants to HIPCs to enable them to settle their debts with commercial creditors and thus close the opportunities that vulture funds exploit. Vulture funds buy up debts from creditors at highly discounted prices and then present the debtor country with a demand for payment in full. In April, Zambia was ordered by a London court to pay $15.5 million to such a fund (see D+C/E+Z 6/2007, p. 226). According to World Bank figures, the DRF buy-back scheme has so far extinguished $ 8 billion of commercial debt for 21 HIPCs. The Bank estimates that more than a third of the poor countries that have benefited from public debts relief have been sued by private creditors. (ell)