In September 2000, Uganda became the first country to receive debt cancellation under a new scheme - the 'Heavily Indebted Poor Countries' (HIPC) debt relief scheme agreed at the G7 Summit in Cologne more than a year ago. But in a country where corruption is commonplace, is this relief (Uganda's been let off 60 per cent of the 120 million dollars it pays to service its foreign debt every year) really going to help the poor? This week Life goes to rural Uganda with the Uganda Debt Network, an NGO working to ensure that this aid reaches the poor and improves their lives.

AIDS orphans

Christine Nantongo of Uganda Debt Network (UDN) says that debt relief really is working, but corruption is still a problem in such a poor country. She campaigns against corruption on many levels, including that where offials are paid for a job they are not actually doing: "They spend all their time doing private work, and yet they occupy a public office. Corruption is a serious problem in Uganda" Christine says.

At Rukingiri Health Centre, a day's drive from the capital Kampala, doctors have had no running water for 20 years. Now they've been able to build a new water tower, paid for with money that had been earmarked to pay interest on international debts, but which can now be saved in the Poverty Action Fund, to fight poverty. In a country where 16 out of a hundred children die under five, clean water is a matter of life or death. Christine says: "Debt relief has really changed the performance of this health centre in terms of the provision of safe water. Now water can run directly into the maternity ward, the washrooms, the consulting rooms." The 30,000 people serviced by this health centre are benefiting directly from this improvement.

Warren Tumutende of the UDN admits that monitoring is not easy because of the lack of transport and escalating cost of fuel. In a nearby primary school, the Poverty Action Fund has built a new two-class building and provided textbooks and medical supplies. But the headmaster says that the money wasn't enough to buy furniture, so the kids have to sit on the floor...

Debt relief has enabled an extra two million students to be enrolled, nationwide. But there's a school of thought which believes that debt relief is a delusion, and that the best thing for the future of countries like Uganda would be for the country to be developing a thriving free market economy, and not to keep relying on aid, or debt relief or any other kind of hand-out from the West.

Prof. Steve Hanke of Johns Hopkins University in the United States is one of the sceptics. "I'm sceptical because debt relief really is nothing more than foreign aid wrapped in a new package. And foreign aid in the past has led to low levels of economic freedom, lots of corruption, no civil liberties, few political liberties." Controls, accountability, conditionality - it's all a farce, he says. "Most of the foreign aid, literally, has gone into Swiss bank accounts or crony bank accounts of one sort or another, or gone to the military to buy more military equipment."

Anne Pettifor of Jubilee 2000, which has been campaigning for debt relief, concedes corruption is a danger - but says it can be overcome. "When we began our campaign, many Africans and many Latin Americans came to us and said, 'Don't write off the debts - we know that our corrupt élites will put them back into British and Swiss banks - they will not go to the people. We therefore want you to impose very tough conditions to ensure this money goes to the poor.' They said it's not possible to sit in Washington and watch whether or not our local élites are spending the money on schools and on sanitation for the elderly. You've got to empower us to do that locally. And we agree with that, we believe local people are the best people to monitor whether or not their local élites are doing the right thing by the money."

But Prof. Hanke doesn't believe in the tooth fairy. "Historically, none of this has ever worked. I think the only thing that can possibly help them over the long run are vibrant economies and the only way you get a vibrant economy is to have a free market economy and have a society where you've got civil liberties and political freedoms."

Christine's friend Alice takes her to see seven AIDS orphans living in abject poverty with their grandmother - there are over 1 million AIDS orphans in the country. Christine says: "They have no safe water near, they have no parenting, they have no adequate education because they spend all their day doing domestic chores, and go to school when they are tired." She believes total debt cancellation is the only measure that can give hope to this generation.

Down the road, a popular drama about a corrupt official gets an enthusiastic audience. Launching a local anti-corruption campaign, Christine tells the people: "The reason why we are now launching the grass roots anti-corruption campaign is so that you, the people of Rukungiri, and all Ugandans, participate in seeing that the resources benefit all the people. You have a role to play in ensuring that you are beneficiaries."

This thriving anti-corruption movement suggests that Uganda's young generation really does want a corruption-free country - and are prepared to ensure that debt relief money doesn't get diverted from the poor who need it most.

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