Nick Davies
The top man at Uganda’s Finance Ministry in Kampala keeps an old greetings card in his office. It shows an employee who has just been given a miserly pay rise and has gone to his boss to show him what he thinks of “trickle down” economics. He is standing on the desk and peeing on the boss’s head.
In a school near Jinja, 80km from the capital, a teacher shows his visitor around. Here is the year six classroom, where pupils outnumber the teacher by 236 to one. They share 40 text books.
A kilometre away, a woman points to four hummocks on a patch of land where she grows the beans on which she lives. This is where she buried her children, all of whom died from measles because she could not pay for a doctor.
Uganda is the great success story of the Third World, one which the World Bank and the International Monetary Fund (IMF) like to hold up as their model of achievement, where the politics are democratic and the economics are conservative, where the old state agencies have been privatised and the free market rules supreme, and to which – at least in theory -the wealth of the rest of the world trickles down.
As a result of its willingness to obey the nostrums of the West, Uganda is also the first African nation to have seen any of its international debt relieved under the Highly Indebted Poor Countries (HIPC) scheme, unveiled by the World Bank in 1996. Three years later, Uganda continues to spend more on repaying its old debts than on its schools and health services combined.
This is the tale of two kinds of arithmetic. The first concerns the statistics of poverty. The Ugandan government has worked assiduously with aid agencies to collect them: 88% of the population live in the bush, most eating only what they can grow; 46,6% consume less than 3 000 calories a day, the World Health Organisation’s measure of absolute poverty; 5,3% of children under four are wasted by malnutrition, and a further 38,3% are stunted.
In the village of Wantai, 15 women describe their lives. They talk about poverty, famine and the shortage of water. They say their greatest dream is to educate their children. Their greatest worry is illness. In both cases their enemy is the shortage of cash.
Official surveys found that 44% of Ugandans were unable to afford health care the last time they were ill. From every 1 000 babies, 97 die at birth and another 147 die before the age of five. About 10% of the population is HIV-positive.
The second kind of arithmetic concerns the economy. When Yoweri Museveni led the guerrillas of his National Resistance Movement to victory in 1986, he inherited a country in shambles – terrorised by Idi Amin, plundered by Milton Obote’s government and wrecked by the civil war that followed.
After 12 months in power, he turned to the World Bank and the IMF for help. He adopted their policies and borrowed their money. By 1995 he had cut inflation to 6,1%, and the gross domestic product was rising by up to 10% each year. With added interest, he owed $3,39-billion.
When HIPC was unveiled, Ugandan officials were ecstatic. They were told that since they had already adopted the required policies and made the approved reforms they would receive their relief by April 1997. It didn’t happen. The World Bank’s shareholders – particularly the governments of the United States, Japan and Germany – threw up obstacles and queried figures. Emmanuel Tumusiime-Mutebile, permanent secretary at the Ministry of Finance, watched in alarm: “They were haggling among themselves about the size and the nature of the relief. They said they wanted to help but they couldn’t afford it.”
The relief arrived a year late. During that year Uganda’s reviving economy had boosted its exports, and since HIPC chose exports as the means of deciding how much relief should be allowed, their benefit to Uganda plummeted by $238-million to $30-million a year. Uganda had previously secured grants from other countries worth $40-million a year to help pay its debt. With HIPC’s arrival these grants stopped. The net effect of the World Bank’s brave new initiative was that Uganda was worse off by about $10-million a year.
Faced with this embarrassing outcome, the bank agreed to “front load” the relief so that it was higher for the first five years. This lifted the annual relief temporarily to a little more than $40-million for each of those years. Uganda was still left to pay a further $120-million a year.
Uganda has continued to play the game. Every cent saved in debt relief has been diverted into a poverty action fund, to which it has added new funds. The government is trying to cut the number of people in poverty by 50% before 2015; it aims to build 26 000 new classrooms; by 2002 it wants no more than two children to share each text book. But the reality of market-led economics is the same in Uganda as it has been in the West: the new wealth has favoured the better-off, while the poorest 20% have become poorer.
Last month the finance minister wrote to his opposite number in each of the G7 countries to advise them that unless the scheme is overhauled their latest claim to be cutting Third World debt is too little and too slow.