PHA-Exchange> Foreign aid not reaching HIV/AIDS programmes

[Claudio]

From: "Leela McCullough" <leela at healthnet.org>

> Foreign aid not reaching HIV/AIDS programmes
> --------------------------------------------
> World Bank and IMF Preventing Transfer of Foreign Aid to
> HIV/AIDS Programmes
> The Lancet, 20 May 2005
> 
> Multilateral financial organisations that aim to reduce poverty
> are preventing foreign aid from reaching HIV/AIDS programs in
> developing countries, states an article in this week's issue of
> The Lancet.
> 
> Ted Schrecker (University of Ottawa, Ontario, Canada) and Gorik
> Ooms (Medecins Sans Frontiers, Brussels, Belgium), state that
> expenditure ceilings for public health, created by the World
> Bank and the International Monetary Fund (IMF), stop countries
> from benefiting from outside investment in their health pro-
> grammes. To receive debt relief countries must provide the IMF
> and World Bank with a poverty reduction strategy. Most strate-
> gies include spending targets or ceilings for various sectors of
> government activity. These ceilings exist because of concerns
> that rapid inflows of foreign exchange associated with increased
> aid can drive up the value of the recipient country's currency.
> 
> The result would be to increase the price of exports, thereby
> undermining competitiveness. However, ceilings create a clear
> disincentive for external donors to offer desperately needed fi-
> nancing, state the authors. This is because the IMF requires
> that countries include the value of all new donor funding re-
> ceived for initiatives, such as scaling up antiretroviral treat-
> ment, in their health budgets. If a sector receives any new
> funds that were not initially budgeted for, a comparable amount
> must be cut from the budget.
> 
> The authors use the situation in Uganda as an example of the ef-
> fect of expenditure ceilings. In September 2004, the IMF claimed
> no funds for HIV/AIDS projects had been rejected by Uganda be-
> cause of expenditure limitations, while conceding that only US$
> 186 million of the $201 million approved for Uganda by the
> Global Fund to Fight AIDS, Tuberculosis and Malaria had been
> disbursed.
> 
> The authors comment: [The existence of public health expenditure
> ceilings] reveals the dark underside of the industrialised
> world's grand rhetoric about improving the health of the poor.
> At the very least, the World Bank and the IMF owe the developing
> world an unequivocal commitment that they will be part of a so-
> lution to the health funding problem, instead of perpetuating
> it.