The Indicator from Planet Money The Tuna Bonds Scandal and the fishy business of hidden debt
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Dec 10, 2024 In a shocking tale, Mozambique's hidden debt scandal unveiled over $1 billion in secret borrowing linked to a tuna fishing initiative. Economists delve into the haunting consequences of undisclosed public debt, revealing staggering figures hidden across 150 nations. The discussion highlights how such financial misconduct leads to crises, like those experienced in Greece and Mozambique, plunging individuals into poverty and sparking austerity measures. The alarming revelations shed light on the critical issue of transparency in government borrowing.
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Mozambique's Tuna Bond Scandal
- In 2013, Mozambique's government borrowed $850 million to establish a tuna fishing company.
- The company bought 24 boats, but they were barely used, revealing the true intention was to hide the debt.
Hidden Debt Discovery
- Economist Sebastian Horn discovered discrepancies between reported infrastructure projects and official debt statistics.
- This led to the finding of $1 trillion in hidden debt across various countries.
Pervasive Hidden Debt
- Research revealed $1 trillion of hidden debt, averaging 1% of each country's GDP.
- This hidden debt is a widespread issue across various geographies and time periods.