Important note: Information in this article was accurate in 2004. The state of the art may have changed since the publication date.
Wall Street Journal - November 17, 2004
Marilyn Chase at marilyn.chase@wsj.com
Exerting its influence as the fund's largest donor, the Bush administration says a cash crunch plus a need to tighten the fund's management and oversight of grant programs call for a delay in new grant commitments. Critics charge such a move will jeopardize the health of millions of poor people with AIDS and stall the fund's growth.
Working through American embassies, U.S. health officials have lobbied the fund's board and delegations from donor and recipient countries around the world in recent days, urging that the Global Fund's desire to open a new round of grants now for 2005 be voted down. The U.S. favors a delay of six to 12 months.
This sets the stage for confrontation when the Global Fund's 19-member board gathers in Arusha, Tanzania, today to meet with six African heads of state and debate whether to invite bids for a fifth round of grants.
The main reason for the administration's lobbying against new Global Fund grants is what the Department of Health and Human Services says is a $285 million shortfall in what is needed to cover the fund's administrative expenses, continuing grants and enlarged staff needed to beef up portfolio management.
While finance and management issues are the ostensible reasons for this week's debate, many political tensions roil beneath the surface. The U.S. sponsors a rival program, the President's Emergency Program for AIDS Relief, or Pepfar, which operates in 15 countries. Unlike Pepfar, the Global Fund offers AIDS grants in countries out of favor with Washington, such as Myanmar (formerly known as Burma) and Cuba. Pepfar programs also promote sexual abstinence and buy brand-name drugs, while Global Fund grants don't dictate program content and offer less expensive generic drugs.
U.S. administration officials declined to comment on the lobbying effort, but in a series of interviews highly placed health officials in Washington confirmed the administration's stand.
Before HHS Secretary Tommy Thompson left on Sunday for Arusha, where he will be chairman of the Global Fund board meeting, he issued a statement saying, "The U.S. is enthusiastic to work with the Global Fund board on the next round of grants." He added that adequate funding and management first be put in place to keep the fund "viable and sustainable...for years to come."
Stephen H. Lewis, Canada's U.N. special envoy for HIV and AIDS in Africa, called the U.S. opposition to a new round of grants a move to "sabotage" the fund and "an ill-concealed attack" on a group with broad, multinational support.
Richard Feachem, executive director of the Global Fund, insists funding at least one new round of grants each year is crucial to building momentum. Even though the fund's income hasn't met expectations, Dr. Feachem says the U.S. estimate for a $285 million shortfall is at odds with the Global Fund's internal projections. He says the fund could afford to offer a modest portfolio of $400 million in new grants in 2005.
In recent days the U.S. has opposed Dr. Feachem's timetable for new grants. In Amsterdam, Stu Flavell, an American activist who is chairman of a committee to mobilize resources for the fund, said he was summoned to the U.S. Embassy in the Hague on Nov. 3, where an economic officer suggested there be no new rounds in 2005. "That's unacceptable from the community's perspective," Mr. Flavell said.
"I've been called by several board members" who had been contacted by U.S. embassies lobbying against offering Round 5 grants, said H l ne Rossert Blavier, a French physician who serves as a Global Fund board member. She insisted "it's vital" that the Global Fund offer the new grants.
The Global Fund was created in 2002 to lead a coordinated world-wide effort against AIDS, TB and malaria. AIDS afflicts 38 million people world-wide, and kills three million people a year. TB kills two million, and malaria one million to 2.7 million a year.
Recently, the cash stream from donor nations and others has waned. The fund originally hoped for 2005 donations of $2.5 billion, but it now is conservatively projecting $1.6 billion. In August, the U.S. withheld $120 million of its 2004 pledge of $547 million to the Geneva fund, citing the failure of other donors to pay their share of pledges. Congress earlier capped the U.S. contribution at one-third of total funds. The other two-thirds lagged behind, in part as a result of different fiscal years.
After U.S. Global AIDS Coordinator Randall Tobias gave other countries a Sept. 30 deadline to catch up, Sweden gave $2.2 million, England $5.4 million and the Netherlands $6 million. Individual donors gave $300,000. Those payments totaling $13.9 million, if postmarked in time, could free up at best a little less than $7 million of the withheld U.S. pledge. It isn't known how much the U.S. might release in Arusha this week.
Dr. Feachem told the Global Fund board he is making improvements in the way the fund is run: speeding private-sector involvement in Africa and India; enlisting companies to help countries retool grant programs that are tough to implement; and beefing up health-care capacity in poor countries with help from drug companies and management-consulting firms.
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