A BlackRock Spokesperson has disputed estimates of potential gains by campaigners championing the cancellation of Zambia’s debt.
Activists have claimed BlackRock could make $180 million profit out of its investment in Zambian bonds if the debts are paid in full.
The New York Headquartered firm said in a statement that there had not been any significant increases in its holdings of Zambian debt since September 2020 “other than as required to ensure the funds remain near or at the benchmark”.
They added: “The money invested in bonds by asset managers is predominantly the money of ordinary people saving for retirement. None of the money is the asset manager’s.”
The company said any decision on restructuring these bonds must therefore be balanced against the duty of the asset manager to protect the savings of the millions of people whose money was lent to these countries, while at the same time recognising the difficult circumstances they are facing from the challenges posed by the pandemic.
The spokesperson said the firm had “no discretion” to sell bonds held in index funds, “so it is in our clients’ interests for these countries to thrive and succeed”.
And on Wednesday, protestors staged demonstrations outside of Blackrock’s Edinburgh office to demand that the company cancels Zambia’s debt.
On the day BlackRock announced its annual earnings, campaigners from Global Justice Now and Jubilee Scotland were demonstrating for Blackrock, one of Zambia’s largest known bondholders, to write off the country’s debts as it struggles to recover from the pandemic.
Activists arrived outside of BlackRock’s office in the capital with a large piñata in the shape of a black rock with one campaigner in a suit and a Larry Fink mask – CEO of BlackRock – holding it up for other protestors to hit.
The contents of the piñata were said to symbolise many of the things Zambia will continue to have restricted access to until its debt is cancelled such as money, medical equipment and renewable energy.
Zambia’s debt payments to asset managers such as BlackRock will also render Scotland’s aid funding to the country “virtually insignificant”, campaigners warn.
Zambia is one of the Scottish Government’s international development partner countries but its debt repayments for 2021 were 75 times more than the aid money Zambia received from the Scottish Government in the previous five years combined, according to campaigners.
Liz Murray, head of Scottish campaigns at Global Justice Now, added: “Zambia’s ability to respond to the pandemic and the climate emergency is being massively undermined by the debt repayments that it is having to make to banks right here in Scotland, such as BlackRock.
“While BlackRock is making huge profits, people in Zambia are going without vital medical supplies and access to education. That’s a global scandal that must end.
“We echo the call of our friends in Zambia for BlackRock to cancel Zambia’s debt.”
Line Christensen, campaign director at Jubilee Scotland said: “The aid money given by Scotland to Zambia is being dwarfed by the huge repayments that Zambia is being forced to make to private creditors like BlackRock.
“Big banks often pile crippling interest on low-income countries’ debts, locking them in a never-ending cycle of payments that prevent investment in crucial infrastructure, education, and health services -and they haven’t let up during the pandemic.”