GLOBAL: Global Fund facing shortfall
The Fund is now supporting ARV treatment for two million people with HIV around the world
JOHANNESBURG, 6 February 2009 (IRIN) - The Global Fund to Fight AIDS, Tuberculosis and Malaria, which supplies one-quarter of all AIDS funding, is facing a funding gap of US$5 billion.
Unless donors step up their commitments to the multilateral fund, grant amounts will be reduced by 25 percent during the second half of their five-year duration.
The Global Fund's Head of Communications, Jon Lidén, emphasised that the shortfall was not related to the global economic downturn but was part of a demand for assistance to combat AIDS, tuberculosis (TB) and malaria that was increasing every year. "We're a victim of our own success," he said.
The approval of new grants, combined with the renewal of existing grants that have performed well, has seen the Global Fund's budget more than double from just under $2 billion in 2007 to $5.1 billion in 2008.
"This is a trend that will continue," Lidén told IRIN/PlusNews. "The new size of the [Global] Fund is around $8 billion a year." However, for the period 2008 to 2010, donors have so far only committed $10 billion.
At least a portion of the shortfall is expected to be made up by the United States, which has yet to finalise its 2009 budget. Incoming President Barack Obama has promised to honour and even increase commitments to development aid.
Lidén said the Global Fund had requested $2.7 billion from the US for 2010 - about a third of the Fund's budget. Given the current economic crisis in the country, he said they were "realistic, but hopeful" that the request would be met.
"We think we have a very strong case in a situation where the US is strapped for money because we can show efficiency and measure the effectiveness of each dollar," he said. "This is aid that works."
The Global Fund was founded in 2001 with the goal of streamlining funding to combat AIDS, tuberculosis (TB) and malaria in developing countries, and is now supporting antiretroviral treatment for two million people with HIV around the world. It also provides two-thirds of all tuberculosis funding and three-fourths of malaria funding.
In November 2008, the Global Fund's board imposed a 10 percent "efficiency gain" on all new grants. Grantees were encouraged to look for ways to maximise efficiency, for example, by negotiating better prices for drugs and mosquito nets, and reducing non-essential expenses. The Board also introduced a cap on the amount that grants could be increased upon renewal.
Lidén said the 25 percent reduction of grant amounts in the final three years of their funding cycle would immediately be lifted if donors increased their commitments and eliminated the funding shortfall.
Despite the global financial crisis, with the exception of Italy, no countries were considering reducing their contributions, he added. "There's a strong commitment to maintaining development assistance, and a few countries are indicating they will increase their commitments."