Health GAP
www.healthgap.org

July 4, 2004
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The Global Fund Board Takes a Resource Mobilization Vacation

Next Round Would be Dominated by HIV Treatment Scale-Up Proposals but is a Fantasy Unless Donors Pay

Outcomes from the 8th Board Meeting of the Global Fund in Preparation for the Partnership Forum and the XVth International AIDS Conference

At the 8th Board Meeting of the Global Fund to Fight AIDS, Tuberculosis and Malaria June 28-30 in Geneva, donor countries who sit on the Board prevented the timely, fully financed launch of the next "Call for Proposals" for Global Fund financing--the 5th Round of grants. This means the Global Fund has closed its doors indefinitely to the business of attracting, approving, and funding new quality, country-driven proposals.

Round 4 was approved at the 8th Board Meeting. This was the largest Round ($968 million), with the largest commitment to antiretroviral treatment scale up (the total number of people on antiretroviral treatment from rounds 1-4 is 1.6 million over 5 years). For the first time applicants submitted substantial antiretroviral treatment scale up proposals. And large, expensive applications from several countries--Cote D'Ivoire, Ghana, Kenya, Burkina Faso, Viet Nam and others--that also contained substantial HIV treatment scale up components were rejected in Round 4 and are being encouraged to resubmit for Round 5. This handful of proposals represents hundreds of millions of dollars in grants and millions of HIV positive people on treatment. (*Note: historically the approval rate of the Technical Review Panel, the independent expert panel that evaluates Fund proposals and makes recommendations to the Board for funding, has jumped from 40% to 60% for applications from Low Income Countries that are encouraged to re-submit in a subsequent Round, after rejection.)

But the 5th Round is just a fantasy--despite the fact that countries desperately need the Global Fund to grow, expand, and fulfill its promise as the premiere independent, multilateral funding mechanism in the fight against AIDS, tuberculosis and malaria.

Round 5 will remain a fantasy--as long as donor countries refuse to commit their fair share of the money needed to pay both for the ongoing funding of existing approved grants and for the continued growth of the Global Fund. (The Global Fund typically launched one Round of Calls for Proposals approximately every 8 months.)

Of the $3.3 billion needed to finance grant renewals from rounds 1-3, and to pay for the launch of Rounds 5 and 6, the Global Fund has so far raised less than $900 million. A major task of the Global Fund Board, and its Chair, U.S. Secretary of Health and Human Services Tommy Thompson in particular, is to raise money. The Board has failed miserably--it has not done its job, and is refusing to address the Global Fund's fundraising problems as a crisis.

Instead, donors who sit at the Global Fund Board are rewarding their own funding negligence--they are refusing to give the billions in new pledges that are needed now, while making policy decisions that provide cover for their own stinginess.

The Secretariat, for its part, is responding to donor intransigence by reducing its financial goals. When, despite the objection of the delegations to the Board of NGOs from Developed and Developing Countries and the delegation to the Board of Communities Living with the Three Diseases, it became clear that the Board would not launch Round 5 on time, ahead of its November 2004 Board meeting in Arusha, Tanzania, the Secretariat's own resource mobilization documents were given a downward adjustment--a reduction of $1.2 billion.

France, the European Commission and the USA (three of the nine donor constituencies who have seats at the Board) objected merely to directing the Global Fund Secretariat to begin preparations for Round 5--without a binding target timeline. France and the EC actually voted no, and the USA abstained. The Secretariat will nevertheless prepare for Round 5--two no votes and one abstention are not enough to stop that--but with no binding deadline for launching Round 5.

Because the Global Fund's Financial Policy prioritizes the renewals of existing grants over the financing of new rounds, Round 5 will be delayed indefinitely--unless donors are forced to keep their funding promises, such as the UNGASS pledge to spend $10 billion annually on AIDS by 2005, made in June 2001.

In 2005 the Bush Administration is set to pledge $200 million to the Global Fund in 2005--a 64% reduction in funding from 2004--and a number of other major donor countries have refused to pledge any new money for 2005. Without a massive infusion of new funding, the meager resources available for 2005 will be spent funding renewals of grants from Rounds 1-3 that are reaching their 2 year grant signing anniversary in 2005. And in 2006 the Fund will need $2.5 billion to finance more grant renewals from Round 1-3, and the beginnings of Round 4.

The vision that created the Global Fund was one of tremendous hope--to create and sustain a country driven, multilateral funding mechanism. But the Global Fund has already strayed far from that vision. Instead the Global Fund is becoming a place where donors can avoid accountability for their own broken funding promises, and where the Secretariat appears prepared to give donors the political cover they require.

The international community should focus on the Fund's financing crisis as one of three major messages at the Partnership Forum and the XV International AIDS Crisis. These two important gatherings are a critical time for advocates to raise their voices and reject the cynical manipulation of the Global Fund by donor countries.

Other key messages:

1. CCM Functioning The functioning of Country Coordinating Mechanisms (CCMs) will not improve unless people living with HIV/AIDS and their allies in civil society are given a seat at the table as full participants--not as tokens, without support, power, voice, or allies. Furthermore, the Global Fund must respond rapidly to the problems created by CCMs that are too bureaucratic, and are moving too slowly in completing the life and death work of grant implementation.

At the 8th Board meeting Board Members for the second time in the history of the Global Fund rejected recommendations from the Global Fund's Governance and Partnership Committee (GPC) that would have required CCMs to implement minimum standards for civil society participation in CCMs, transparency, the effective management of conflicts of interest, and CCM technical assistance. The USA, the NGO Delegations and the Delegation of Communities living with the three diseases were the four Board Members to voice solid support for the recommendations, which were triggered by a number of independent studies and analyses that showed that many CCMs are not functioning well, and that CCMs that are functioning well share a number of key characteristics.

Instead of minimum standards, the Board Meeting changed the requirements to recommendations. The Global Fund will not discuss implementation of a plan for auditing the implementation of these diluted recommendations until the 9th Board Meeting in Arusha, Tanzania.

Ironically, the Board Meeting where the Communities Delegation finally secured voting rights--they had been non-voting observers up until then--was the same Board Meeting where reasonable standards to support full civil society participation at country level was rejected by the Board. This hypocrisy will continue to undermine the strength of the Fund and its ability to finance accountable, fully-functioning, high performing grants.

Recommendation: Partnership Forum participants should:

• criticize the decision of donor and recipient country governments to reject standards for CCMs at the 8th Board Meeting;
• call for the immediate implementation of a system for auditing even the diluted standards that were accepted by the Board; and
• demand the Board endorse the original CCM standards, as recommended by the GPC, at the upcoming Arusha, Tanzania Board Meeting in November 2004.