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GLOBAL: New ways to bridge the AIDS funding gap

Johannesburg, 30 September 2010 (IRIN) - Money, or the lack of it, is likely to be the deciding factor in meeting global health targets. This was one of the main messages to emerge from both the recent Millennium Development Goals (MDG) summit in New York, and the latest report by UNAIDS on progress towards achieving universal access to HIV prevention, treatment and care.

After years of steady increases in funding for the HIV/AIDS response, the global economic downturn of the last two years has seen most donor countries cut or flat-line their contributions.

The Global Fund to Fight AIDS, Tuberculosis and Malaria, which provides a fifth of all financing for AIDS, is hosting a donor meeting in New York on 4 and 5 October. The aim is to raise US$13 to $20 billion to fund existing programmes for the next three years and support new ones, but activists warn that even the minimal amount needed to fund existing programmes may be unattainable if the Global Fund remains largely dependant on contributions from recession-hit developed countries.

Innovative financing mechanisms are attracting growing support from NGOs and some governments as alternative ways to bridge the funding gap. IRIN/PlusNews has compiled a list of six such initiatives, the first four of which are already being implemented, while the last two are still on the drawing board.

1. Air TaxUNITAID, a pioneer in innovative health financing, has raised nearly one and a half billion US dollars since 2006, mainly from a small levy on air tickets bought in 34 participating countries, mostly in Africa. The levy ranges from $1 to $2 on economy-class tickets, and up to $40 on business- and first-class fares.

In partnership with organizations like the Clinton HIV/AIDS Initiative (CHAI) and the UN Children's Fund (UNICEF), UNITAID negotiates price reductions on second-line and paediatric antiretroviral (ARV) drugs and other medicines, ensuring that the money goes further.

2. MASSIVEGOOD – Started by the non-profit Millennium Foundation for Innovative Finance in March 2010, the project takes the air tax a step further by inviting travellers to make a voluntary "micro" contribution of $2 towards global health, including HIV/AIDS, when booking a plane ticket, hotel room or rental car through participating travel agencies and travel websites.

The aim is to raise one billion dollars over the next four years, most of which will be disbursed through UNITAID.

3. Debt2Health initiative – Begun by the Global Fund in 2007 to divert the large amounts of domestic resources developing countries spend on repaying debt to fighting disease. The Global Fund brokers agreements in which "creditor" countries forgo repayment of a portion of their loans on condition that recipients invest an agreed-upon amount in Global Fund-approved programmes.

Germany agreed to allow Indonesia and Pakistan to convert millions of dollars of debt into investments in HIV-services and public health interventions, and Australia cancelled $71 million owed by Indonesia on condition that it pay half that amount to the Global Fund for tuberculosis programmes. Other countries have yet to follow suit.

4. (RED) – Launched in 2006 by Irish singer and musician Bono, (RED) partners with major brands like American Express, Apple, Gap and Starbucks to design and market special (RED) products. Half the profits from (RED) sales go to the Global Fund to finance HIV/AIDS projects in Africa. The initiative has raised US$150 million so far, and is the Global Fund's largest private sector contributor.

5. Currency transaction levy (CTL) or "Global Solidarity Levy" – A number of countries and civil society organizations have been advocating the introduction of a small levy on all currency transactions to help finance global health.

Supporters argue that financial institutions make quick profits from buying and selling huge amounts of world currencies, and a tiny tax on these transactions could make a big difference to funding for health and other development priorities. 

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The intergovernmental Leading Group on Innovative Financing for Development, estimates that a transaction tax of 0.005 percent on the four largest currencies – the US dollar, yen, euro and sterling – could generate $33 billion a year. The International Monetary Fund recently said such a tax was feasible.

6. Financial transaction tax (FTT) – A proposed levy of 0.05 percent on all financial transactions, not only currency transactions. It would take universal participation to work, but could generate much larger sums than the CTL – about $600-$700 billion a year - if implemented globally.

French President Nicolas Sarkozy and Spanish Prime Minister Jose Luis Rodriguez Zapatero backed the proposal at the recent MDG summit. Supporters of the FTT argue that it would produce revenue to help the world's poor, and stabilize the financial market by discouraging speculative trading; opponents say it would slow global economic development.

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Theme (s): Aid Policy, HIV/AIDS (PlusNews),

[This report does not necessarily reflect the views of the United Nations]

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