Filling the Funding Gap to Save Lives

Transcription

1 Filling the Funding Gap to Save Lives A Proposal for an Equitable Contributions Framework for the Global Fund 1 October 9, 2002, Global Day of Action on the Global Fund "To succeed, the amount of money spent must be dramatically increased Many billions more will be required quickly to implement the high-quality proposals that we anticipate receiving during the next twelve months." Richard Feachem, Executive Director, Global Fund to Fight AIDS, TB, and Malaria, July 2002 Without treatment, the 28 million people living with HIV/AIDS (PLWAs) on our continent today will die predictable and avoidable deaths over the next decade. More than 2 million have died of HIV/AIDS in Africa just this year. This constitutes a crime against humanity.we demand that Donor Countries (members of the Organization of Economic Development and Cooperation or OECD and middle-income countries): Fulfill existing commitments to adequately fund the Global Fund to Fight AIDS, Tuberculosis and Malaria and other HIV/AIDS financing mechanisms with at least $10 billion of new funding annually as a proportion of GDP Pan-African HIV/AIDS Treatment Access Movement, Declaration Of Action, Cape Town, South Africa, 25 August This report was primarily drafted for the Global AIDS Alliance by Bernard Rivers of Aidspan, a nonprofit organization that conducts economic analysis regarding AIDS and that provides grant-writing assistance to developing-country AIDS projects. A downloadable version of the report is available at and at Comments were provided by Joanne Carter of RESULTS and David Bryden and Paul Zeitz of the Global AIDS Alliance. Global AIDS Alliance, PO Box 820, Bethesda, MD Tel

2 Introduction Three months ago, a sobering report by UNAIDS warned that contrary to earlier expectations, the incidence of AIDS is still climbing even in the worst affected countries. Nearly 70 million people will die because of AIDS in the 45 most affected countries over the next 20 years, more than five times the number claimed by AIDS in those same countries during the past 20 years. In some countries, AIDS will kill half the women who became mothers in recent years, thereby creating countless more orphans. Then just a few days ago, the National Intelligence Council predicted that by 2010 there will be 50 to 75 million cases of HIV infection in just five nations which it deemed of strategic importance to the US, none of them in Southern Africa India, China, Ethiopia, Nigeria and Russia. That is double or triple the estimate of 25 million cases an international team of experts projected for those countries as part of a study published last summer. The new intelligence estimate states Nigeria and Ethiopia will be worst affected, because AIDS will take a heavy economic toll and discourage foreign investment. Treatment methods for AIDS are available, but do not reach the people who need them. In high-income countries, 500,000 people received antiretroviral treatment in 2001, which made it possible to keep deaths down to 25,000. But in Africa, a mere 30,000 people received such treatment, dooming a staggering 2,200,000 to die of AIDS in 2001 alone. The contrast between these two situations can only be described as obscene. The two other leading infectious diseases are tuberculosis and malaria. TB kills two million people a year. One-third of the world s population is infected with the organism that causes TB. While TB is completely curable with drugs to treat standard TB costing just $10 for a full sixmonth course only one quarter of those with active TB have access to effective treatment. Incorrect or partial treatment leads to the development of dangerous multi-drug-resistant tuberculosis. Malaria kills nearly a million people each year, most of them children, primarily in Africa. Some 300 million people are made sick by malaria each year. The great majority of the deaths could be prevented with drugs costing a few pennies. Insecticide-treated bednets costing around $4 can prevent infection. Filling the Funding Gap to Save Lives 1

3 The Importance of the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM) Effective bilateral support by high-income countries for programs to tackle these three diseases will always be needed. But a new and potentially highly effective channel was put in place at the start of this year, and this needs to be much more firmly supported than it has been thus far. That channel is the Global Fund to Fight AIDS, Tuberculosis and Malaria (GFATM). The GFATM is not a UN agency. It is controlled by an innovative board made up of donor countries, recipient countries, and representatives of civil society, foundations and corporations. For the fight against AIDS to succeed, the GFATM must be fully supported. As a result of its creative design, the Fund is uniquely positioned: to galvanize much greater contributions from the world community for the fight against AIDS, TB and malaria; to handle in a streamlined way the substantial amounts of money needed to finance effective programs, thereby leading to efficiencies and economies of scale; to be far more transparent and accountable than most bilateral aid is, thereby reducing the risk of inappropriate donor agendas, and of graft and corruption anywhere along the giving chain; to provide multi-year grants that make grantees willing to commence antiretroviral treatment and other programs without fear of termination of funding after a year or two; to bring together governments, non-governmental groups and the private sector within affected countries, and to require them to work together to develop and implement effective proposals; to track the outcomes achieved by funded programs, and to make the receipt of payment for the later years of programs be dependent upon evidence that the planned outcomes are being achieved and that numerous people are obtaining access to treatment and prevention. How Much Money Should be Spent by the World Community on AIDS, TB and Malaria? The World Health Organization s Commission on Macroeconomics and Health (CMH), chaired by Prof. Jeffrey Sachs, estimated late last year as follows: Expenditure on health in 85 low- and middle-income countries needs to increase from about $106 billion in 2002 to $168 billion in This increase in expenditure will save some 8 million lives per annum, and will lead to economic returns significantly greater than the health expenditure required. Of the required $168 billion health expenditure in 2007, $141 billion could be covered from the domestic resources of the affected countries. Filling the Funding Gap to Save Lives 2

4 Thus, the financing gap that needs to be covered through additional donor aid comes to $27 billion in Of this, some $15-17 billion needs to be applied to HIV/AIDS, TB and malaria in Necessary Funding of the Global Fund to Fight AIDS, TB, and Malaria The above calculations were made before the GFATM began its work at the start of this year. In January, the GFATM invited governments and civil society in affected countries to create joint committees called Country Coordination Mechanisms (CCMs) to formulate and submit grant proposals to the GFATM, and to administer the grants received in those cases where the proposals were approved. In April of this year, the GFATM announced Round 1 of its grants. Fifty-eight of the 331 proposals received were approved. These approved proposals had funding requirements of $283 million in the first year, building up to a total of $616 over the first two years and $1,613 million over five years. On October 10-11, the GFATM board will vote on whether to approve and release a Financial Prospectus that spells out the Fund s forthcoming financial needs. The Global AIDS Alliance has obtained a copy of this document. As summarized in Table 1, below, the Financial Prospectus shows that: In 2003, the GFATM will need to receive $4,250 m., of which only $650 m. has been pledged thus far. (The $4,250 m. will be to cover anticipated commitments regarding Years 1 and 2 of grants in Rounds 2, 3 and 4.) In 2004, the GFATM will need to receive a further $4,600 m., of which only $300 m. has been pledged thus far. (This will be to cover anticipated commitments regarding Years 3 to 5 of Round 1, plus Years 1 and 2 of grants in Rounds 5 and 6.) This data makes clear that the Fund faces a severe financial shortfall. If this shortfall is not rectified, there will be a failure of many programs that depend upon regular replenishment, including programs that provide medication for sustaining life and preventing HIV transmission. Table 1: Contributions Needed by the GFATM, and Pledges Received Thus Far Year Cash that the GFATM says it needs to receive from donors during the years shown Total needed Pledged thus far 2 Thus, new pledges needed 2003 $4,250 m. $650 m. $3,600 m $4,600 m. $300 m. $4,300 m. 2 Numbers rounded to nearest $10 m. Pledge data, which is as of 1 October 2002, assumes that $318 m. in pledges where the payment year was not specified by the donor is spread evenly over 2002 to Filling the Funding Gap to Save Lives 3

5 A Proposed New Approach: The Equitable Contributions Framework Thus far, efforts have been made to raise the money needed by the GFATM through ad hoc voluntary donations. These efforts have been a complete and unconscionable failure. Governments have pledged a mere $2.1 billion spread over the years 2001 through (Contributions from the private sector have been even more disappointing, with not a single meaningful pledge since the Bill & Melinda Gates Foundation offered $100 million over a year ago.) Based upon these initial pledges, the GFATM will be unable to make the commitments it needs to when it approves Round 2 of grants in January It s time for a new approach. The only way in which the GFATM can raise billions of dollars every year is if contributions to the GFATM are equitably shared among the countries whose citizens live the most comfortable and unthreatened lives. This means that the wealthiest countries particularly the G7 countries need to contribute considerably more than they currently do. But it also means that contributions should come from other relatively wealthy countries, such as Australia, that have as yet contributed nothing. The Global AIDS Alliance therefore proposes that contributions to the GFATM should be computed according to an Equitable Contributions Framework, leading to complete clarity regarding how much each country should contribute now that the total amount that needs to be raised has been determined by the GFATM. The Equitable Contributions Framework is as follows: Ninety percent of the contributions required by the GFATM should be provided by the 47 countries that have a high Human Development Index, or HDI. (The HDI measures the overall quality of life based on standard of living, life expectancy, and literacy plus school-enrolment.) The contributions to be paid by these 47 countries should be in proportion to their respective GDPs. The remaining 10% of the GFATM s needs should be contributed by the private sector (foundations, corporations, wealthy individuals, and members of the public), thereby making the GFATM a true public/private partnership at the donor end, not just at the recipient end. Filling the Funding Gap to Save Lives 4

6 Application of the Equitable Contributions Framework to the GFATM requirements specified in Table 1 leads to the following: Donors Table 2: An Equitable Contributions Framework for the GFATM % of total obligation to GFATM that we propose be payable by each donor (proportionate to GDP) Thus, money that needs to be RECEIVED by the GFATM from each donor during: Pledged Percent of thus far by GDP that each donor this 2003 for pledge payment in represents The G7 high Human Development Index 73.5% $3,145 m. $3,404 m. $447 m % countries: United States 34.8% $1,488 m. $1,610 m. $200 m % Japan 16.5% $704 m. $762 m. $0 m. 0% Germany 6.6% $282 m. $305 m. $34 m % United Kingdom 5.0% $213 m. $230 m. $39 m % France 4.5% $194 m. $210 m. $49 m % Italy 3.8% $161 m. $174 m. $100 m % Canada 2.4% $104 m. $112 m. $25 m % The 40 non-g7 high Human Development Index countries (See Appendix): 16.5% $680 m. $736 m. $84 m % Total for all 47 high HDI countries: 90.0% $3,825 m. $4,140 m. $531 m % Other: $69 m. 4 Private sector 10.0% $425 m. $460 m. $50 m. Total (equal to GFATM s requirements): 100.0% $4,250 m. $4,600 m. $650 m. Implications for the United States The amount that the United States has pledged to the GFATM thus far for 2003 at % of GDP is significantly less than the percentages pledged by G7 countries Italy (0.0047%), France (0.0019%), Canada (0.0018%), and UK (0.0014%). In recent weeks, Committees of the US House and Senate approved increasing the US pledge to the Fund for fiscal year 2003 from $200 million to $250 million (House version) or $300 million (Senate version). With the United States appropriations process currently stalled, these amounts have not yet received full approval from either legislative body, and further increases, absent Presidential leadership, remain unlikely. 3 Pledge data is as of 1 October Russia ($4 m.), Thailand ($1 m.), plus one fifth of the $318 m. in pledges that was not assigned by donors to a specific year. Filling the Funding Gap to Save Lives 5

7 To be a global leader in combating this epidemic, it s high time the US paid its fair share. This requires it to increase its contribution to the GFATM from $200 m. to $1,488 m. for 2003, and to contribute a further $1,610 m. during President Bush should use the opportunity of his upcoming trip to Africa, in January 2003, to make providing such contributions a key part of a broad initiative on global AIDS. Implications for the Rest of the G7 Based on this analysis, other G7 countries should also immediately pledge and provide a much higher level of contributions to the Global Fund in order to forestall a shortfall in Fund resources. After the US, Japan is the furthest away from paying at a level corresponding to what this analysis shows would be an equitable contribution; it should dramatically increase its contributions for 2003, to $704 million. Germany, the United Kingdom, France, and Canada should also each immediately increase their contributions, by $248, $174, $145, and $79 million, respectively. Italy is the closest to having made an equitable pledge for 2003, having pledged $100 million toward what would be an appropriate level of $161 million, but it must also increase its donations. Filling the Funding Gap to Save Lives 6

8 Appendix: Details for Table 2 regarding the 40 non-g7 high Human Development Index countries Donors % of total obligation to GFATM that we propose be payable by each donor Thus, money that needs to be RECEIVED by the GFATM from each donor during: (proportionate to GDP) Pledged thus far by each donor for payment in 2003 Percent of GDP that this 2003 pledge represents The 40 non-g7 high Human Development Index countries: 16.5% $680 m. $736 m. $84 m % Spain 1.97% $84 m. $90 m. South Korea 1.62% $69 m. $75 m. Australia 1.40% $59 m. $64 m. Netherlands 1.29% $55 m. $59 m. $44 m % Argentina 1.01% $43 m. $47 m. Switzerland 0.85% $36 m. $39 m. $5 m % Belgium 0.82% $35 m. $38 m. $6 m % Sweden 0.81% $34 m. $37 m. $29 m % Austria 0.68% $29 m. $31 m. Denmark 0.57% $24 m. $26 m. Poland 0.56% $24 m. $26 m. Norway 0.53% $22 m. $24 m. Finland 0.42% $18 m. $20 m. Greece 0.40% $17 m. $18 m. Israel 0.39% $17 m. $18 m. Portugal 0.37% $16 m. $17 m. Ireland 0.33% $14 m. $15 m. Singapore 0.33% $14 m. $15 m. Chile 0.25% $11 m. $12 m. New Zealand 0.18% $8 m. $8 m. Czech Republic 0.18% $7 m. $8 m. United Arab Emirates 0.16% $7 m. $8 m. Hungary 0.16% $7 m. $7 m. Kuwait 0.11% $4 m. $5 m. Uruguay 0.07% $3 m. $3 m. Slovakia 0.07% $3 m. $3 m. Croatia 0.07% $3 m. $3 m. Luxembourg 0.07% $3 m. $3 m. $1 m % Slovenia 0.06% $3 m. $3 m. Costa Rica 0.06% $2 m. $3 m. Qatar 0.04% $2 m. $2 m. Lithuania 0.04% $2 m. $2 m. Cyprus 0.03% $1 m. $1 m. Iceland 0.03% $1 m. $1 m. Bahrain 0.02% $1 m. $1 m. Estonia 0.02% $1 m. $1 m. Brunei 0.02% $1 m. $1 m. Bahamas 0.02% $1 m. $1 m. Malta 0.01% $1 m. $1 m. Barbados 0.01% $1 m. $1 m. Filling the Funding Gap to Save Lives 7