Ugandan debt campaign condemns 'debt relief hoax'

The Ugandan debt campaign this week denounced the Paris Club of creditors for delaying debt relief to Uganda. Zie Gariyo, co-ordinator of the Uganda Debt Network said that the Cologne Debt Initiative was "becoming one of the scandals of the 21st Century. Debt Relief is a hoax. Out of the over 40 eligible poor countries eligible for debt relief, only five have so far qualified i.e met the stiff conditionalities. And only Uganda is due to receive debt relief in 2000 (although still uncertain)."

The comments came in an open letter addressed to the creditors of the World Bank and Paris Club after 20 creditor nations announced that contrary to earlier plans it would not be considering Uganda at its meeting in Paris this month.

The Paris Club cancelled its meeting with the representatives of the Ugandan government on 16^th May, delaying the implementation of Uganda's debt relief. No reason was given by the secretive club for their decision, but a World Bank official cited concerns about clashes between Ugandan and Rwandan troops. "I have heard the donors expressed concern about the situation between Uganda and Rwanda," said Robert Blake, World Bank representative in Kampala.

Zie Gariyo, condemned the creditors for imposing extra conditions on Uganda: "You have now shifted the goal posts and set new conditionalities for debt relief. We do not accept the new conditionalities being set by the Paris Club Creditors. They are insensitive to the concerns of the poor in Uganda and Sub-Sahara Africa in General. They undermine the global civil society and the Jubilee 2000 campaign."

In the open letter, the Ugandan Debt Network (UDN) outlined the extensive consultation and monitoring that has ensured resources freed by debt relief are channelled into poverty reduction. "UDN is presently in the process of developing a monitoring framework and tools for the purpose of involving the citizens in monitoring the utilisation of savings from debt relief and to ensure that they are not diverted nor embezzled by the implementing officials. Your decision and

attitude will surely reverse this process and undermine the capacity of civil society in establishing accountability and transparency for public resources. At the moment we are not sure that we can maintain the trust and confidence we had in the donors to make concerted efforts to reduce debt relief for poor countries such as Uganda."

Uganda reached completion point in the Cologne Debt Initiative (HIPC II) on May 2^nd which should have made it eligible for $1.3 billion of extra debt relief. This had already been delayed by the failure of the African Development Bank, a key creditor of Uganda, to confirm its participation in the HIPC II initiative. The Paris Club's decision will further delay debt relief.

Even when Uganda receives its full relief, the country will still pay at least $50million each year in debt repayments. This is in a country with one of the highest levels of HIV infection in the world, which has already left one million children orphaned. Uganda has used previous debt relief to help raise primary school enrolment from 54% to 90% and has also managed to bring down the HIV infection rate mainly through community education programs. The Poverty Action Fund, a transparent and accountable mechanism set up to administer the resources gained through debt relief, could use this money to bolster these community programs which are now trying to address the devastating affect of AIDS on family structures.

Table 2: Debt reduction for Uganda in the enhanced HIPC initiative

$ million	Debt 1998	Nominal reduction (HIPC 1 and 2)	Debt service before HIPC	Debt service after HIPC	Reduction in debt service	Education Spending	Health Spending
Uganda	3,935	1,950	155	50	67%	174	126

• Full Letter by Uganda Debt Network to Creditors (19^th May)
• Uganda Country Profile