Category Archives: Empire

Vulture Funds Prey on Third World Debt..

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Johann Hari has a critical piece on “vulture funds” at The Independent that is sure to be polarising:

“Would you ever march up to a destitute African who is shivering with Aids and demand he “pay back” tens of thousands of pounds he didn’t borrow – with interest? I only ask because this is in effect happening, here, in British and American courts, time after time. Some of the richest people in the world are making profit margins of 500 per cent by shaking money out of the poorest people in the world – for debt they did not incur.

Here’s how it works. In the mid-1990s, a Republican businessman called Paul Singer invented a new type of hedge fund, quickly dubbed a “vulture fund.” They buy debts racked up years ago by the poorest countries on earth, almost always when they were run by kleptocratic dictators, before most of the current population was born. They buy it for small sums – as little as 10 per cent of its paper value – from the original holder and then take the poor country to court in Britain or the US to demand 100 per cent of the debt is repaid immediately, plus interest built up over years, and court costs.”

My Comment

I’ve been interested in these lucrative public-private philanthropic ventures for some time. “Doing good” has become the avenue for “doing well.” This is touted by some people as the “markets working for people.” But the markets work for…and against..people all on their own. They don’t need the bells and whistles of public philanthropy added.

And when philanthropy been added, as my earlier post on Jeffrey Levitt indicates, it’s usually been added for an ulterior motive. Thus Hari’s activism against vulture funds.

Having made that point, I have a few problems of my own with Hari’s post that I’ll come back later.

First, here’s a response from the object of Hari’s criticism –  one Michael Sheehan, the founder of Debt Advisory International (DAI) (which manages several vulture funds) and a Republican donor to George Bush’s campaigns.  Sheehan’s letter is cited by Felix Salmon at his Reuter’s blog. The crux is at the end:

“At the end of the day, then, the anti-vulture legislation will accomplish exactly the opposite of what it set out to do. It will have increased the debt burden of all HIPC countries, increased the cost of credit for all HIPC countries, increased the barriers to foreign direct investment for all HIPC countries and increased the amount that will be demanded from the OECD countries in support of aid budgets for all HIPC countries. There won’t be any savings. The costs will be in the billions and will be annual costs you won’t get rid of.
You will, of course, in the process have increased the power and leverage of the development set, but then that was the intention all along, wasn’t it.”

There’s more on Sheehan and the creator of the concept – Paul Singer – in this piece, which also sheds some light on just how influential vulture funds are:

“Debt Advisory International are very generous to their lobbyists in Washington. They have been paying $240,000 a year to the lobby firm Greenberg Traurig – although recently they jumped ship to another firm after Greenberg Traurig’s top lobbyist was put in jail.

Paul Singer has more direct political connections. He was the biggest donor to George Bush and the Republican cause in New York City – giving $1.7m since Bush started his first presidential campaign.”

Many of the debt purchases are also corrupt, as this BBC piece indicates:

“The Zambian deal with Donegal for instance involved an official in former President Frederick Chiluba’s administration who was later found – along with the president – to have stolen £23m from Zambia.”

From Third World Traveler come further details:

“The debt, originally owed to Romania for agricultural machinery and services, was accrued during the cold war. The amount claimed by Donegal was far more than Zambia is due to receive this year in debt relief – as agreed at the G8 meeting in Gleneagles in 2005. It is equivalent to more than six months of Zambia’s health budget.

Since qualifying for debt relief, Zambia has introduced free primary rural healthcare and announced plans to employ 4,500 teachers and hundreds of nurses. But one in three children in Zambia still does not go to primary school, nearly 80% do not receive secondary education and the average income is barely $1 a day. Donegal International’s claim threatens to undermine Zambia’s plans for poverty reduction.”

My Comment:

The vulture funds are, of course, behaving unconscionably. But moral outrage after the fact is less effective in stopping such things as not providing the incentives that entice unscrupulous people in the first place.

And these incentives are usually put in place by the state…in this case, by the global financial organizations, the IMF and World Bank, which were behind the economic policies that turned the once relatively prosperous country of Zambia into a basket-case, where half the population is malnourished.

So yes, the vulture funds are predators – but their predation is secondary and far smaller than the predation of the scavengers of the first order – the global managers whose “aid” has a strange way of devastating its recipients...

Milton Nascimento Sings the Jet Samba

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Brazil’s Milton Nascimento sings Anton Carlos Jobim’s musical celebration of Rio de Janeiro, Samba do Avaio (The Jet Samba) . The lyrics reference the statue of Christ the Redeemer that towers over the city and the Guanabara.

Minha alma canta
(My soul sings)
Vejo o Rio de Janeiro
(Seeing Rio de Janeiro)…..

Cristo Redentor
Braços abertos sobre a Guanabara…

Why More Swine Flu Deaths in Bangalore?

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From Sify.com:

“State health commissioner P.N. Sreenivasachari told IANS: ‘It’s difficult to say why Karnataka, more precisely Bangalore, which is endowed with adequate healthcare facilities, is witnessing large number of swine flu deaths. We too are puzzled.

‘We can say the virus is already in the air and it’s time people became more aware and cautious to stop the spread of the virus. However, from the point of view of the administration, we have provided adequate healthcare facilities to treat swine flu patients,’ added Sreenivasachari.

Principal secretary (Health) I.R. Perumal said people should not get panicky.

‘People with swine flu like symptoms should immediately get themselves checked, as the city is well equipped to deal with the pandemic,’ added Perumal.

On Friday, two deaths were reported from Bangalore, one came from Bijapur.

My Comment

Why? I have no idea. More international travelers is one reason and a plausible one. But I confess  I couldn’t help thinking about this piece I wrote in 2005, “Terror Hits Bangalore.”

One result of swine flu scare-mongering  will be a shift of money to influenza research – hitherto absent in India. That means funding for drug trials. I wonder who the lucky drug companies are that will benefit?

The two states hit hardest are Karnataka (where Bangalore is) and Maharashtra (where Bombay is). Those are also the states that are the destinations of most foreign travelers and where India’s IT business and stock market are located. Bangalore is the home of a booming biotech business. And a locus of the anti-globalization movement as well. Just thinking out a loud…

Deaths so far are a hundred or less. That’s in a country of roughly a billion and a quarter where tens of thousands die from traffic accidents (300 a day or around 100,000 a year) and from water-borne diseases like diarrhea, typhoid, and jaundice. Hundred of farmers are committing suicide. None of that has qualified for the term pandemic….OR for the accompanying switch in research funding..

Here’s some information on malaria in India in 2008:

“While the official figures state that in 2008 India had 1.5 million malaria cases, resulting in 924 deaths, the real number of deaths is higher by several orders of magnitude.

“These numbers are a joke,” said Sunil Kaul, a doctor who works for a volunteer organization called the Ant that treats villagers. “In Assam alone we had at least 1,500 deaths last year.”

The real number of malaria-related deaths in India was closer to 40,000 in 2008, according to various non-governmental sources and some government officials who didn’t want to be named.”

Under-reporting and lack of knowledge about the disease are two of the main obstacles in retarding the spread of malaria. But interestingly, it’s also international organizations like WHO that obstruct progress in many ways:

“These problems are further complicated by foreign agencies such as the World Health Organization (WHO), which — under the influence of global lending agencies like the World Bank and big pharmaceutical companies — have pushed India to adopt prevention methods that don’t suit the local conditions and to initiate huge, ill-considered projects rather than targeted ones. ….”

More here at The Global Post.


What Barack Obama Left Out of His Foreign Policy Speeches

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From Bill Blum’s Anti-Empire Report:

I’ve compiled a list of CIA assassination attempts, successful and unsuccessful, against prominent foreign political figures, from 1949 through 2003, which, depending on how you count it, can run into the hundreds (targeting Fidel Castro alone totals 634 according to Cuban intelligence)2; the list can be updated by adding the allegedly al Qaeda leaders among the drone attack victims of recent years. Assassination and torture are the two things governments are most loath to admit to, and try their best to cover up. It’s thus rare to find a government document or recorded statement mentioning a particular plan to assassinate someone. There is, however, an abundance of compelling circumstantial evidence to work with. The list can be found here.

For those of you who collect lists about splendid US foreign policy post-World War II, here are a few more that, lacking anything better to do, I’ve put together: Attempts to overthrow more than 50 foreign governments, most of which had been democratically-elected.

After his June 4 Cairo speech, President Obama was much praised for mentioning the 1953 CIA overthrow of Iranian prime minister Mohammed Mossadegh. But in his talk in Ghana on July 11 he failed to mention the CIA coup that ousted Ghanian president Kwame Nkrumah in 19663, referring to him only as a “giant” among African leaders. The Mossadegh coup is one of the most well-known CIA covert actions. Obama could not easily get away without mentioning it in a talk in the Middle East looking to mend fences. But the Nkrumah ouster is one of the least known; indeed, not a single print or broadcast news report in the American mainstream media saw fit to mention it at the time of the president’s talk. Like it never happened.

And the next time you hear that Africa can’t produce good leaders, people who are committed to the welfare of the masses of their people, think of Nkrumah and his fate. And think of Patrice Lumumba, overthrown in the Congo 1960-61 with the help of the United States; Agostinho Neto of Angola, against whom Washington waged war in the 1970s, making it impossible for him to institute progressive changes; Samora Machel of Mozambique against whom the CIA supported a counter-revolution in the 1970s-80s period; and Nelson Mandela of South Africa (now married to Machel’s widow), who spent 28 years in prison thanks to the CIA.4


My Comment:

The issue here isn’t whether you or I approve of everyone of these leaders…or not (I don’t).

The issue isn’t whether some other country might not have done even worse if it had the power the US had (they might have).

The issue is – is it the business of the US government to interfere in the rule of other countries, foment coups and revolutions, police, bomb, and spy on millions of people?

And how does any of that make us safer, richer, or freer?

Gore Vidal On the Bridge to Fascism

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Gore Vidal on a bridge to somewhere bad :

“I went back to the lecture hall at Duke where I’d been speaking, and I chatted about the woods, about the bridge. Nobody seemed to have noticed it. I asked a politically minded professor, and he said, “Well, it’s a problem.” He said, “The government’s getting ready for something; we don’t know what it is, but something’s obviously on their minds that’s disturbing them.” And I said, “Revolution?” “Oh,” he laughed, “this is North Carolina, don’t bother about that, but whatever it is, they’re putting a lot of money into this bridge.”

A year or two later, I took the same walk again. There was a very large bridge of solid cement, and it looked entirely finished. I found another gentleman of the forest, and I said, “Well, can you find much use for this huge and expensive bridge?” He said, “It certainly was expensive, I can tell you that.” He had the happy look of someone who had benefited from the expense. We chatted about the government and what they were up to, and a certain wariness could be heard in our dialogue. We were puzzled; something unexpected had happened, something really unimaginable—a vast work had been constructed for imminent horrors, it would have seemed. I did ask here and there about it, but I was given no answer….”


Time to Run

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My latest piece, “Time to Run”, at Lew Rockwell:

“Is it time to run?

That’s what I’ve been asking myself for three years now.

Before that, I thought it was simply a matter of finding a better place to live. A place that was quieter and cheaper. Where flippers and developers hadn’t taken over the neighborhood. Somewhere safe I could park my car on the street and not worry about it.

But by the time I found it, I also found that the thieves were inside the house, not on the street. There’s really no hiding from them. And no hiding from what they can do.
Our mene, mene, tekel upharsin is on the wall.

It’s time to run, not hide.
I mean that. We’re in the throes of an economic collapse of a kind last seen in the 1930s. The government is intent on grabbing control of whatever it can. American firms are dropping like flies. Unemployment is soaring. Debt is soaring. The money supply is soaring. Our foreign policy is a wreck – we have more enemies than we can count. We have a drug war on the borders, we have gang war in the ghettos, we have culture wars in the academy and media.

We have criminals in government.
The future isn’t any brighter. Subprime is only the first leg down. We still have a second wave of housing trouble in store, centering around commercial real estate and option ARM loans.

Gerald Celente, the CEO of Trends Research, wrote a piece last year predicting that by 2012 there would be food riots, tax rebellion, and revolution across the country. Celente has a good track record in the forecasting business.

Experts predict a 100% rise in prices across the board. In the best-case scenario, it will happen over ten years. In the worst case, it might happen within months….”

Read the rest at Lew Rockwell