THE GLOBAL FUND: WEAVING A SAFETY NET

The Economist , UK, September 8, 2005

Tough times ahead for the Global Fund To Fight AIDS, Tuberculosis and Malaria

In a year when rich-country leaders have said so much about the need to help Africa, and to step up the fight against such scourges as AIDS, tuberculosis and malaria, you might think an international body set up to do just that would be overflowing with donations. But you would be wrong. This week, the Global Fund To Fight AIDS, Tuberculosis and Malaria—an organisation established in 2002 to mobilise and disburse international donations for projects to tackle these three afflictions—ended its latest attempt at fund-raising short of its goals.

The Global Fund estimates that it needs $7.1 billion from donors to fund projects in 2006 and 2007. At its “replenishment” conference this week in London, though, it received pledges totalling $3.7 billion. The fund reckons this is just enough cash to fill this year's shortfall of roughly $350m, and to pay for the renewal of projects already under way. What it does not allow, however, are any new projects over the next two years—unless more money is forthcoming.

Many organisations working in international development—more than 500 of which signed an international appeal for more money for the Global Fund—are disappointed with the outcome. But Richard Feachem, the fund's head, is hopeful about the prospects of making up the shortfall. New donors, he says, may be found among oil-rich Arab states and also from the private sector. Indeed, several current donors, for example Canada, have yet to make concrete pledges for the coming two years.

Mind the gap

All eyes are now on America which, in the past, has contributed one-third of the Global Fund's money and has exhorted other donor nations to give more. In the next few weeks, Congress is due to sort out exactly how much America will give the fund for 2006. This is likely to be a sum between the $300m requested by George Bush and the $600m proposed by the Senate—all a far cry from the $1.2 billion that the AIDS lobby believes America should be giving next year to pull its weight. Bernard Rivers, who runs Aidspan, a Global Fund watchdog, reckons the fund will be hard pressed to get more than $5 billion for the coming two years.

The Global Fund is certainly not the only vehicle for financing poor-world health care: it accounts for only a quarter of donor spending on AIDS. But it also accounts for more than half of donor spending on malaria (on such things as insecticide-treated bed nets) and two-thirds of that on tuberculosis. And it is one of the more innovative efforts. By pooling money from different donors, it attempts to cut aid free from at least some of the strings associated with individual donors' bilateral assistance. Its approach to proposals submitted by recipient countries allows those countries a strong role in their own development, rather than merely telling them how the money should be spent. The results, so far, are promising. To date, the fund has pushed $1.5 billion out into the field, enabling 220,000 people with AIDS to start treatment, as well as 600,000 with tuberculosis and 1.1m with malaria.

Devolving responsibility in this way has its risks, of course. Last month, the Global Fund temporarily suspended grants to Uganda, after a whistleblower raised questions about how some local agencies were handling the money. The fund has committed more than $200m-worth of grants to Uganda, $45m of which has already been disbursed. But an investigation by PricewaterhouseCoopers, its auditors in Uganda, found numerous examples of improper accounting and inadequate management. The fund is now working with the Ugandan government to sort out the mess, in the hope of restarting the grants (see article).

Within the fund there are further challenges. Relations between its secretariat, the 150-odd staff who actually run the organisation out of Geneva, and its board, which oversees the organisation and has a say in the approval of grants, are not always easy. The two groups are now wrangling over whether to renew a particular grant to South Africa which the secretariat feels has not performed well enough to warrant more money, but which the board, which includes representatives from charities, recipient countries and those with AIDS, is reluctant to cut off. The fund has also asked the World Health Organisation's Office of Internal Oversight Services to look into several allegations of internal mismanagement.

Such problems are not unique to the fund, of course. What is unusual is the extent to which it deals with some of its thornier issues in public. Indeed, according to Hilary Benn, Britain's secretary of state for international development, the open and transparent way in which it behaves has increased donor confidence.

For all its teething troubles, the fund has proved a good way for world leaders to honour their pledges to do more for international public health. But to do even better, it needs to professionalise its operations and bring in more people with strong experience in business and finance to manage the billions of dollars it seeks to attract in future.

http://www.economist.com/science/displayStory.cfm?Story_id=4370120