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David Bosco recently argued in a provocative piece for FP that "vulture funds"—global investment funds that buy up mostly poor countries' debt on the cheap and then sue the countries to earn it back with interest and penalties—perform a necessary function in the international financial system. Essentially collection agencies for states, they hold "corrupt and irresponsible regimes to account." Some critics of vulture funds, however, counter that these funds actually end up harming the populations of poor countries. And rather than cleaning up corruption, they sometimes even benefit from it.
But Bosco's argument may be bearing out in the Republic of Congo, at least. According to the International Herald Tribune, campaigners for greater government transparency in the Republic of Congo believe that vulture funds are helping the country's fight against corruption. Brice Makosso, one such campaigner, posits:
If it were not for these vulture funds, we would not know any facts about the way our country's wealth is being taken away.... We don't agree with their ultimate aims, but they are the only ones capable of exposing the truth. No one else has the means."
Indeed, countries granted debt relief often do not become more accountable, say groups such as Global Witness and the Publish What You Pay Coalition, and they can end up becoming heavily indebted again. Debt-relief campaigners, on the other hand, contend that debt-relief savings are used by the vast majority of countries to help the poor.
So who's right? It depends on the country in question. As Bosco acknowledges, it's a "spectrum." But when an indebted country's leaders blow $20,000 on room service in only six days at an elite New York hotel—as Republic of Congo's President Denis Sassou Nguesso did—it's only fair to investigate their financial management, and question why they aren't paying up their debts first.
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