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The quality of mercy – as it applies to Liberia
E. Ablorh-Odjidja, Ghanadot
"These vulture funds would always come for their pound of flesh,"
was my reaction when I read that two collectors had managed to
wring a legal award of $20 million against Liberia from a
British High Court in London.
It makes you wonder what the matter is with justice as practiced
by the law courts in the West. It also makes you question why
a government, like the British, that has always been actively
involved in development policy formulations for the Third Word,
would overlook the fact that its court’s decision would
ultimately be detrimental and cruel to the people of Liberia.
Of course, there would always be an explanation for British
respect for the rule of law. But, under such hard nose law,
Shylock could have had his pound of flesh.
The two funds involved in this “vulture fund adventurism” were
Wall Capital Ltd and Hamsah Investments, both of British Virgin
Islands registry, in a Third World Caribbean country dependent
on the British..
The two companies had purchased the right to collect on a debt
owed Chemical Bank since 1978; an act which Vulture Debt
Campaign, a human rights NGO based in Britain, had described as
“completely outrageous - but ... still perfectly legal.”
It is this “outrageous…but perfectly legal.” aspect of this case
that is troublesome and hence the reference to Shylock and the
"pound of flesh" in Shakespeare’s “The Merchant of Venice.”
Fortunate for the moral compass of literature, Shylock never got
his pound of flesh because his loan contract did not require
payment with blood. Unfortunate for the British justice system,
Wall Capital Ltd and Hamsah Investments, would get their pound
of flesh with blood dripping from it.
The loan, contracted in 1978, for $6.5m from the US-based
Chemical Bank, had ballooned to some $20 million at the time of
the award in November 2009. Not even the “the quality of
mercy,” propounded by countryman Shakespeare, could propel the
British court to look at the grave circumstances surrounding the
case against Liberia.
Liberia, a country that had just ended a war with itself, a war
that spanned over two decades, had long been anxious for succor
from the West. Compared to countries like Iraq and Kosovo in
similar circumstances, it got a pittance of help; considering
that a month cost of British Army bivouac in Iraq would have
paid for the entire $20 million debt.
Organizations like Jubilee Debt Campaign have been calling for a
total cancellation of Liberia's debt because of the destitute
nature of Liberia. Rightly, they had pointed out that much of
Liberia's debt was “odious,” because it was acquired by
oppressive regimes of the past.
The British High court must have been aware of the circumstances
surrounding Liberia’s past. It could also have known that the
debt could be classified as “odious,” yet had gone ahead and
granted the hefty award of $20 million to the two vulture funds.
The presiding judge, Mr. Justice Barton, said “The only issue
raised is plainly a sad one, that Liberia is a poor country, and
cannot afford it,” thus emphasizing the legal correctness of his
ruling while conveniently forgetting the “odious” nature and the
attendant immoral character of the whole exercise.
Meanwhile, Wall Capital Ltd and Hamsah Investments, the vulture
funds, will be smiling all the way to the bank, thanks to the
summary nature of the award.
Earlier, BBC had reported that “In 2002 a New York court ruled
that Liberia owed $18m” in a similar summary judgment. Liberia,
the defendant and current debtor, could not appear in court in
New York because the country “was wracked by civil war and did
not offer a defence.”
Granted that debts must be paid, but why must
vulture funds reap such huge benefits? And if the policy of the
West on debt forgiveness has been sincere, why must it be vulture
funds that drain the benefits?
The interesting part is that many of these vulture companies are
set up for tax reasons; in countries that provide tax havens for
escape from the reach of tax laws in mother countries. Wall
Capital Ltd and Hamsah Investments are located in the British
Virgin Islands, a British dependency, for this reason.
Thus, the British government cannot plead ignorance about the
business practices of Wall Capital Ltd and Hamsah Investment in
the British Virgin Island; just like the Taliban could not plead
ignorance about the behavior of al-Qaeda in Afghanistan.
Yet, this same British government, as well as members of some
developed countries, who take pride in fomenting development
policies for Africa, pretend not to be able to craft a policy
that will put these vulture funds out of business – that of
fleecing poor countries of the little windfalls that come their
way.
It is time we saw the activities of the vulture funds as clever
twists to bring back some of the spoils of “debt forgiveness” to
donor coffers. In the process, we may have to forget that:
"The quality of mercy is not strain'd,
It droppeth as the gentle rain from heaven
Upon the place beneath: it is twice blest;
It blesseth him that gives and him that takes.".. (The Merchant
of Venice)
Because, missing in the decision by the British High court,
regardless of the protestation of Mr. Justice Barton, are the
goodwill and benevolent import of the Shakespeare’s piece.
E. Ablorh-Odjidja,
Publisher
www.ghanadot.com, Washington, DC, December 3, 2009
Permission to publish: Please feel free to publish or
reproduce, with credits, unedited. If posted at a website,
email a copy of the web page to
publisher@ghanadot.com . Or don't publish at all.
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