Sunday, December 9, 2007

Debt Unreleif

The main teaching hospital here is in such disrepair that many patients have to pay freelance porters for piggyback rides up and down the stairs to get X-rays. It costs $2 a flight, each way.

But why is the hospital, like so much of the Congo Republic, so tattered when the country sells billions of dollars of oil each year?

The government says it is still recovering from a devastating war and faces a new problem: Western investors, sensing a chance to rake in millions, are suing to recover old debts that they bought for pennies on the dollar.

Such investors, running what critics derisively call vulture funds, have been widely denounced by the World Bank and the International Monetary Fund for forcing poor countries to fend off costly lawsuits rather than build classrooms and clinics.

But in the Congo Republic, where a deep-seated culture of graft has squandered so much of the nation’s wealth, those investors have become unexpected allies of anticorruption campaigners, who say such lawsuits may be the only way of holding the country accountable for how it spends its money.

“We ask ourselves, why is our country like this?” said Dr. Bebene Bondzouzi-Ndamba, a neurologist at the hospital. “Why are we so rich and yet so poor?”

Her questions have come into sharp relief in the fight between the Congo Republic and an affiliate of an American hedge fund, Elliott Associates. For an undisclosed price, the company bought about $31 million in debt that the country took on in the 1980s but later defaulted on. Now it is suing in American, European and Asian courts to collect the principal plus interest and penalties — more than $100 million in all. So far, it has collected $39 million.

-Unlikely Ally Against Congo Republic Graft

No comments: