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Q&A: Money Woes Force Global Fund to Refocus on Essential Programs

HIV testing. Photo by UNICEF.

It’s been a difficult year for the Global Fund to Fight AIDS, Tuberculosis and Malaria, the largest funding mechanism for programs providing prevention and treatment for the diseases around the world.

Several big donors temporarily suspended funding earlier this year following press reports of funds lost to corruption and mismanagement in recipient countries. Then, last week, the Global Fund announced it will be unable to give new grants through 2014 because of the impact of the global economy on donor governments.

So what does the announcement mean for existing programs and the future of the Global Fund’s work?

Marcela Rojo, spokesperson for the Global Fund, answered our questions via email:

NewsHour: How did the Global Fund arrive at the decision to halt new grants?

Marcela Rojo: A combination of significant budget challenges in some donor countries, uncertainties in the global economy, and low interest rates have significantly impacted the resources available for new grant funding. As a result, the Global Fund needs to find savings in the existing grant portfolio in order to be able to finance essential services [such as HIV treatment] for those programs that come to a conclusion before 2014.

Can you give some examples of projects that may not receive the funding they need as a result of this decision?

We believe that some countries are now able to fund their own programs, for example, higher middle-income countries like China, Mexico, Russia, Brazil and Argentina. Current grants in these countries (if any) will remain active but they will not be able to apply for new funds, including Phase 2 of their existing grants.

What does this news mean for programs already in place through Global Fund support? Will treatment programs be able to expand to include new patients?

The Global Fund will fund all of its grants until completion. No patients who are on ARV treatment will stop receiving it. The Global Fund has US $4 billion held at its trustee account to ensure disbursements on all existing grants. Based on pledges from donors, the Fund has or expects to receive resources enabling the institution to sign grants for existing approved programs with a value of more than US$10 billion for the period 2011 to 2013.

Current grants that included scaling-up to include new patients in their programs are still being funded as such.

Is there any plan at this point to continue essential services, like treatment, after the 2014 mark?

Yes, there will be a new application for funding opportunity at the end of 2013 so that countries start receiving new funding in 2014.

What is the Fund prioritizing now and in the next few years?

The Board in Ghana adopted a new five-year strategy and transformation plan that commits the Global Fund to shift to a new funding model that focuses on investing strategically in countries, populations and interventions with high potential for impact and strong value for money. The idea is to provide funding in a more proactive, flexible and predictable way.

In terms of programs the Global Fund will focus on essential services ensuring that it continues to provide treatment to those in need.

In terms of funding the Global Fund will continue to work with donors, partners and seek new sources of funding to ensure that it can continue to contribute substantially to international goals by saving lives and preventing new infections.

Have the findings of the independent panel formed to look at misuse of funds been raised as a concern by any donors?

The panel was established by the Board last March after the Global Fund’s office of the Inspector General reported misuse of Global Fund grant money in some countries. The panel assessed the Global Fund’s current practices in financial oversight and implementation and recommended a number of significant reforms to the board. The Global Fund’s board welcomed the findings and has recently approved a package of reforms to transform the Global Fund so that it moves towards a sustainable approach to fighting the three diseases from an emergency response. Some donors which withheld their contributions to the Global Fund subject to the adoption of reforms have now resumed funding.

How do you hope the global community will respond to the Global Fund’s current situation?

The Board urgently requested donors to consider measures to increase and accelerate funding, and called for implementing country governments, especially those from middle-income countries, to increase funding for the three diseases and related health investments. The Global Fund now has a strategy, a transformation plan and a clear direction for how it needs to deal with the uncertain resource scenarios of the coming two years. Several countries have already reaffirmed their commitment to the Global Fund, including Germany which on November 23, 2011 announced it will pay in its second tranche for 2011 and confirmed its full 2012 pledge.

Read more on our Global Health page.

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