Monday, 19 November 2007

Who Is The Biggest Vulture In The Room?

As investigative reporter Greg Palast (Project Censored #10 for this year) showed in his two-part series for the BBC, vulture funds and the inability of poor governments to properly fund social programs for their citizenry are inextricably linked.

Vulture funds, as Meirion Jones observes, are defined by the IMF as companies which buy up the "debt of poor nations cheaply when it is about to be written off and then sue for the full value of the debt plus interest - which might be ten times what they paid for it". But similar types of predatory practices are not favored only by private companies such as Debt Advisory International (DAI), they have been utilized by the IFIs themselves - the IDB, IMF and World Bank - to destabilize out of power poor governments that engage in economically sovereign policies.

In the case of Haiti we can trace a murky history of IFIs slowing and speeding up financial aid, often dependent on the willingness of the government in place to engage in neo-liberal reforms. Between 2001 and 2004 the government of Haiti was virtually cut off from all of the donor money that the country had depended upon in the preceding years, around what should have been at least half (possibly more) of the Haitian government's national budget for that period.

Following the foreign donor backed 2004 overthrow of Haiti's constitutionally elected government, the floodgates of aid opened. As a Bush Administration backed interim government immediately instituted steps towards privatization, with mass civil sector layoffs and the creation of the donor backed Cadre de Cooperation Interimaire (CCI), hundreds of millions in donor aid came into the country to hold up the unelected regime. If aid had never been cut off in the first place, forcing the Haitian government into a slow paralysis for vultures to feed upon, then the country would undoubtedly be in a much better place today.