UNAIDS - June 21, 2001

Even the worst affected countries could be able to regain the ground lost in their fight against poverty and inequality.

* There is growing evidence that good health and economic growth are profoundly linked. Alert to this, leaders of developing countries have called for a significant increase in resources from all quarters to combat the development, economic and human security challenges created by HIV/AIDS, tuberculosis and malaria.

* Mobilizing the billions of dollars needed to fight these diseases will require the creation of a broad coalition of partners-comprising national governments, bilateral agencies, multilateral development banks, foundations, private corporations, nongovernmental organizations and other civil society groups.

* HIV/AIDS, tuberculosis and malaria cause millions of deaths worldwide each year.

By 2005, through a series of incremental steps, an overall annual expenditure target of US$7-10 billion in low- and middle-income countries must be reached to mount a comprehensive and successful response to HIV/AIDS. The shortage of resources to fight tuberculosis and malaria stands at about US$2 billion a year.

* These funds are needed from all sources-domestic budgets, private out-of- pocket expenditure and international development assistance.

The new fund is an additional mechanism intended to complement existing flows of finance, and is not intended to supplant existing bilateral and international assistance flows.

* Following commitments made at the Okinawa summit of G8 countries in July 2000 and a subsequent health experts meeting in December 2000 in Okinawa, work began in earnest to devise new financial mechanisms for increasing the flow of resources to developing countries. Consensus gradually emerged that a single fund-with an initial focus on HIV/AIDS, tuberculosis and malaria-would be the best starting point.

* Such a fund promises to help leverage additional political engagement and financial commitment, ease the procurement of commodities and draw new partners into struggles to bring the diseases under control.

* The efforts to create the fund received a huge boost when UN Secretary- General Kofi Annan called for the establishment of a global fund on AIDS and health at the Organization of African Unity summit in Abuja in April 2001.

* In response, the United States made a first contribution of US$200 million, while France donated 150 million euros.

* Weeks later, in early June 2001, representatives from more than 50 countries, multilateral and nongovernmental organizations, private foundations and other stakeholders met for the first major consultation on the fund.

* The meeting achieved a high degree of consensus that the new fund would focus on HIV/AIDS, tuberculosis and malaria, would promote an integrated approach to the three diseases, and would be geared at strengthening and expanding existing development processes rather than designing new projects.

* As an innovative partnership between developing countries, donors and the multilateral system, the fund will have an independent governing body. Arrangements for the secretariat, technical advice and membership of the governing body are all to be decided. The United Nations, including UNAIDS and WHO, are expected to play supportive roles at all levels.

The fiduciary responsibility will probably rest with the World Bank.

* The fund is intended to serve as a means for collecting, managing and disbursing new and additional resources. Exact financial targets for the fund have not been fixed.

There is agreement, though, that it will not replace existing channels for financing programmes aimed against HIV/AIDS, tuberculosis and malaria. Nor is it intended to supplant developing countries' own investments to control these diseases.

* In early discussions there has been agreement that the fund would be underpinned by a set of principles-including the need to achieve better coordination of battles against the diseases, to improve the transparency and flexibility of those efforts, and to support national-level decision-making and leadership.

Equally important is the opportunity to lower transaction costs for national governments and donors, to achieve more equitable allocation of resources and to enable a clearer focus on results.

* It is planned that the fund will be operating by the end of 2001.
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