Do you see anything wrong with this?

Kann

http://news.bbc.co.uk/1/hi/business/6365433.stm

Here's the begining

Zambia loses 'vulture fund' case

"A High Court judge has ruled that Zambia must pay a substantial sum to a so-called "vulture fund".
British Virgin Islands-based Donegal International paid less than $4m (£2m) for a debt the African nation owed, but sued Zambia for a $42m repayment.
It said its bill was the result of interest and costs, but the judge has indicated that Zambia should pay less.
The ruling has angered anti-debt campaigners, who say it will undermine Zambia's plans for poverty reduction.
The judge ruled against Zambia's application to dismiss Donegal's claim, but at the same time proposed to end a freeze of Zambian assets secured by the fund.
Donegal, however, will have a chance to argue the case for a continued freeze of Zambian assets.
According to BBC economics reporter Andrew Walker, people familiar with the case believe that the judge will order Zambia to pay Donegal between $10m and $20m, less than half what Donegal sought."

I know this is an already old article but I learnt only today what a vulture fund is and was looking for an recent example.

A vulture fund is a financial organization that specializes in buying securities in distressed environments, such as high-yield bonds in or near default, or equities that are in or near bankruptcy. [...] Vulture funds focused on debt target not only corporate obligors, but also sovereign debtor states. In the recent case of Argentina, for example, vulture funds bought up a significant portion of the country's external public debt at very low prices (sometimes only 20% of their nominal value), and then attempted to cash them when the Argentine economic crisis exploded in 2002. A single vulture fund run by Kenneth B. Dart, heir to the Dart Container fortune, claimed 700 million USD in a lawsuit against the government of Argentina.

Now I've understood how they work I find this extremely morally wrong. The money that is lent to developping countries must help them develop not be a possible dangerous burden. Am I the only one to find this wrong? And how do you legitimate such an activity?

godpt3

other than the fact that debt reduction is a complete and utter JOKE? Nope. I don't see anything wrong with it at all. Debt reduction is only the first step. You've got to have nations that are sustainable in their economies, their agriculture, their populations and their social policies. Until you've achieved that, nothing else will ever get accomplished.

Kann

godpt3 wrote:

You've got to have nations that are sustainable in their economies, their agriculture, their populations and their social policies. Until you've achieved that, nothing else will ever get accomplished.

That, I agree with. When you loan money to a country the main goal is to achieve this. Not get them in court to cough up as much dollars as they can. This money could be used in much more efficient ways than to feed funds who will start the process later with another country.