[e-drug] Global Fund stalls

[Beverley Snell <bev@burnet.edu.au>]

E-drug: Global Fund stalls
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[crossposted from Afronets with thanks BS]

Politics and Policy;
Infectious-Disease Fund Stalls Amid U.S. Rules for Disbursal

Wall Street Journal 5 August, 2002
By MICHAEL M. PHILLIPS, Staff Reporter of THE WALL STREET JOURNAL

A highly publicized fund set up at the behest of the United Nations has
raised $2.1 billion to fight AIDS and other infectious diseases in the
developing world. It has announced $1.6 billion in grants aimed at
life-saving projects in 40 countries. But it has yet to give away a single
penny.

That is largely because of demands led by the Bush administration that the
new fund set up a world-wide aid-delivery system from scratch -- instead of
relying on established agencies the administration distrusts, such as the
U.N. and World Bank.

The Global Fund to Fight AIDS, Tuberculosis & Malaria was created in January
in response to U.N. Secretary-General Kofi Annan's call. Its establishment
stirred great hope that rich countries would finally spend enough money to
defeat diseases that together kill six million people a year, mostly in
developing countries in Africa and elsewhere. Now, however, it is caught in
a dilemma between poor nations' need for immediate help and donors'
antipathy toward agencies set up to provide it the fastest.

Tanzania, for example, was promised $25 million for AIDS and malaria
projects in April when the first round of grants was announced. "We're now
awaiting a reply from them as to when we can have these funds," says Maj.
Gen. Herman Lupogo, head of the Tanzanian Commission for AIDS. "We needed
them yesterday."

It is a quandary that exemplifies the pros and cons of the Bush
administration's war on what it considers wasteful foreign aid. The
administration is openly dubious that past aid funneled through established
agencies has had any positive effect -- a topic Treasury Secretary Paul
O'Neill has repeatedly stressed, including during his much-ballyhooed
African jaunt with Bono, the rock star.

The administration vows to resist any efforts to increase foreign assistance
unless it can deliver quick, measurable improvements in the lives of the
poor and sick, and it repeatedly has placed conditions on U.S. largess
toward that end. The Treasury Department promised $300 million in extra
funds for the World Bank's loan program for the poorest nations, but only if
it can demonstrate results. President Bush proposed a $5 billion-a-year aid
fund aimed strictly at countries that can meet objective standards for
economic and political reforms.

And the U.S. pledged $500 million to the global AIDS fund. But the
administration insisted -- joined by Britain and some other donors -- that
the fund shun existing aid agencies and build its own system. That means it
has to line up  its own procurement, administrative, auditing and other
services in each country for each grant.

"I can't tell you how much resistance we've had to this" from some
global-fund recipients and donors, said one senior U.S. official. "We're
anxious for quick victories, [but] better that it be done right and later,
than early and wrong." The fund and its backers face mounting pressure to
get the money flowing. Some 40 million people world-wide carry the virus
that causes AIDS; an additional 20 million have died of the disease since it
first surfaced in the 1980s, and a quarter-million more are dying each
month. The spread of the AIDS virus has made vast numbers of people in the
developing world and former East Bloc nations more vulnerable to TB, which
claims two million lives a year. And as many as 500 million people contract
malaria annually.

The fund approved 58 project applications in its first round. Among the
winners are a Nigerian campaign to widen access to AIDS drug cocktails and a
Tanzanian project to increase the use of bed nets impregnated with
insecticide to combat malaria. Another approved project is an effort in
Madagascar to promote the use of condoms, mosquito nets and other
health-related items by using marketing techniques and local retailers such
as street vendors and market stalls.

Although the fund has a new executive director, Richard Feachem, it is still
advertising for many senior positions -- another holdup in distributing
funds.

"Of course the recipients are impatient -- they want to get started," says
Dr. Feachem, on leave from his post as director of the Institute for Global
Health at the University of California. "Equally, the countries are
understanding that we have to put new arrangements in place."

Dr. Feachem hopes to get money to a handful of projects by the time his
board next meets in October. But even that  gal remains up in the air. And
the vast majority of grant winners probably won't see any funds until the
end of the year, if not later.

"I don't see any justification for that kind of excess precaution," says
Milly Katana, a Ugandan AIDS activist who represents private charities on
the fund's board. "Personally I don't want to just light the money on fire
and burn it, but at the same time lives are being lost."

Dr. Feachem and U.S., British and many other donors say the fund is making
quick progress for a brand-new aid program. Nonetheless, tension has emerged
among donors and recipients over how fast to go, versus how careful to be.
"There's simply a higher level of attention being paid, and it's [angering
people] who are used to having large amounts of money given to them," said
the U.S. official. "Some of the Europeans don't feel as strongly about
that -- they just dish the money out."

The fund was set up as a Swiss foundation after a spat among donors early
on; Italy and others were aligned against the U.S. and those who didn't want
it run by either the U.N. or World Bank. "We would have favored a stronger
role for the World Bank in the whole disbursement procedure," says Claudio
Spinedi, a senior aid official in the Italian Ministry of Foreign Affairs.

Initially, despite the U.S.'s discomfort, the fund tried to negotiate with
the World Bank, the world's largest economic-development lender, to take
responsibility for the money and its use.

Bank officials, however, refused to accept that role unless they also had
input into how the projects were selected and implemented -- a condition
unacceptable to the fund and the U.S. The issue is still in limbo, but for
the moment the bank has agreed only to hold the fund's money and wire grants
to the recipients the fund designates.

The fund quickly set up a panel of technical experts who reviewed 300-plus
applications and chose the first recipients. But the fund still has only a
vague outline of how it will distribute money, monitor its use, and judge
its effectiveness. Dr. Feachem promises that the fund's staff will number no
more than 50, meaning it likely will have to hire outsiders to monitor
projects in what could ultimately be 100 or more countries.

According to the current plan, each project will involve:

* A principal recipient -- perhaps a foreign health ministry, local
government, company or private charity -- that will implement the project,
assess its success and report its conclusions to the fund.

* A local fund agent -- such as an accounting firm, bank, or charity -- that
will audit the money's use. The agent won't examine whether the project
succeeds.

* A third independent agent that will periodically verify the principal
recipient's assessment of the project's impact on public health.

U.S. officials acknowledge that their approach means somewhat slower
delivery of the aid, and risks a crescendo of criticism. But, they say, if
the fund doesn't prove its merits by financing effective health projects,
the donors won't refill the kitty when it runs dry.

Write to Michael M. Phillips at <michael.phillips@wsj.com3>
--

Beverley Snell
Centre for International Health
Macfarlane Burnet Institute for Medical Research & Public Health
GPO Box 2284, Melbourne 3001 Australia

Telephone 613 9282 2115 / 9282 2275
Fax 61 3 9282 2144  or  9282 2100
Time zone: 10 hours ahead of GMT.
email <bev@burnet.edu.au>

Site: Alfred Medical Research & Education Precinct (AMREP),
corner Punt & Commercial Roads, Prahran 3181

Time zone: 10 hours ahead of GMT.


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