PHA-Exchange> Global Fund stalls

[Aviva]

> 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 goal 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:
> 
> o 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.
> 
> o 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.
> 
> o 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 at wsj.com3