Are investment firms buying out poor countries' debt at a discount, hoping to sue, harass or shame debtors into paying, simply rapacious and predatory? Or, like the birds of prey, they play an important part in maintaining the health of the international financial system?
In Foreign Policy [subscription required] the opponents compare fund managers to traders of human misery:
By depleting the resources of developing countries' governments, these companies reduce the funds available for schooling and hospital treatment.
Elliott Associates – a hedge fund specializing in government debt – claims it provides a "check on the 'moral hazard' of debt default":
Debt relief advocates should recognize that beneficiaries of debt relief are often corrupt or incompetent regimes that squander their nations' assets and then cry poverty to avoid legitimate debts. This cycle must be broken for countries to achieve economic development.
Join the Conversation