Zambia Loses Millions to Company Greed – Act Now!

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Just received this mail from Oxfam:

Sujet: Zambia Loses Millions to Company Greed – Act Now!
De: Oxfam
Ŕ: Heidi Barathieu-Brun
Date: 16/02/2007 16:57:34

Dear Heidi, A predatory commercial company seeking to scavenge a staggering $55 million from Zambia after buying up a ‘bad debt’ of $3.3 million has been reluctantly awarded an estimated $15 million by a British court. That’s rich pickings from a desperately poor country, and ‘vulture fund’ Donegal International should redeem this shameful episode and not claim even the reduced amount.

That’s $15 million too much!

The judge was unable to dismiss the whole claim but it is clear that while the actions of Donegal International were not strictly illegal, they were immoral. When a country is as poor as Zambia, in desperate need of money to pay for basic services like health and education, it is outrageous to pursue an inflated claim for a debt that should have been written off years ago. Donegal should not take the money. Please take this quick action today, join our email action now to get Donegal to do the right thing,

click on the link next: Tell Donegal to stop preying on Zambia!
Thank you, Alison Woodhead, Essential Services campaign manager.

When a country is as poor as Zambia, in desperate need of money to pay for basic services like health and education, it is outrageous to pursue an inflated claim for a debt that should have been written off years ago. Donegal should not take the money. Here’s why Zambia shouldn’t have to pay:

1. Zambia is poor: Zambia needs this money to meet the needs of its own people. Average life expectancy in Zambia is just 38. Average income per person is about 60p a day. Four out of ten women cannot read or write. Zambia desperately needs investment in healthcare, in education and in infrastructure. Its government is trying hard to use the proceeds of debt cancellation in this way, with notable success. The cancellation that Zambia secured in 2005 and 2006 was intended to ease its financial situation and release resources for social spending. Donegal should not be exploiting this situation by making Zambia pay millions of dollars, especially since it is in payment of a debt that cost relatively little.

2. Zambia was eligible for debt relief: The company bought the debt at a highly reduced price in 1999, at a time when Zambia was considered poor and indebted enough to qualify for debt relief, and that it would be obliged to ask all creditors for this relief. Zambia had already been trying to negotiate a deal with Romania, which would have seen it paying only around $3 million, a vast reduction on the original $15 million owed, let alone the $55 million for which Donegal ultimately sued. Yet one month before Zambia was finally granted debt cancellation in April 2005 intended to improve its economy and provide the necessary resources to meet its peoples’ needs. Donegal launched its lawsuit.

3. Other creditors are doing their part and Donegal should not take advantage: Other creditors have, in good faith, cancelled debts that are in some cases much larger. Rich country creditors, including the UK, have agreed to cancel Zambia’s debt to them on the understanding that Zambia should then have extra funds available for poverty reduction, rather than extra funds to repay other creditors in full. For its part, Zambia has an obligation to negotiate comparable levels of debt relief with its other creditors, as it was doing with Romania when Donegal bought up the debt. If Donegal exacts even the reduced payment of around $15 million, Zambia will be forced to compromise these obligations to creditors and the spirit of cooperation and good will on which the existing debt cancellation framework depends. And a large sum of money will go to an offshore company, instead of helping finance Zambia’s poverty reduction efforts.

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