Bush Administration Proposes Global Fund Delay Distribution of New Grants Because of Funding Shortages

Health officials in the Bush administration are urging board members of the Global Fund to Fight AIDS, Tuberculosis and Malaria to delay the distribution of a fifth round of grants because of funding shortages, the New York Times reports (Lacey, New York Times, 11/17). However, people attending the Global Fund's board meeting in Arusha, Tanzania, this week said on Tuesday that the fund "appears likely" to go ahead with a new round of grants, according to the Financial Times (Williams, Financial Times, 11/17). Board members will have to "balance the clear need for increased funding" for programs against the fund's "current resource constraints," according to a Global Fund release (Global Fund release, 11/17). Global Fund Executive Director Richard Feachem in October said that the fund faces a "critical year" in 2005 because of funding shortfalls and might not be able to award new grants. In order to carry out its work for 2005, the Global Fund needs at least $2.5 billion in funding, but it so far has secured only $1.6 billion from donors. Approximately $200 million in 2004 funding likely will carry over to 2005, but financial commitments for existing programs will consume $1.3 billion next year, leaving only $500 million available for new grants in 2005. However, because twice that amount of funding was available for grants during previous rounds, it is unclear whether a new round of funding will be approved (Kaiser Daily HIV/AIDS Report, 11/12).

U.S. Lobbying
U.S. health officials recently have been lobbying the fund's board and representatives from donor and recipient countries, urging that the Global Fund's desire to call for a new round of grant applications be voted down and delayed for six to 12 months, according to the Wall Street Journal. U.S. officials are lobbying for the delay primarily because of what HHS estimates as a $285 million shortfall in needed funding for grants, as well as administrative, staffing and portfolio management expenses. Although Bush administration officials would not comment on the lobbying efforts, "highly placed" health officials have "confirmed the administration's stand" in a series of interviews, the Journal reports. Before he left for the meeting in Tanzania, HHS Secretary Tommy Thompson, who also chairs the Global Fund board, issued a statement, saying, "The U.S. is enthusiastic to work with the Global Fund board on the next round of grants." The statement also said that the fund needs increased funding and management to remain "viable and sustainable ... for years to come" (Chase, Wall Street Journal, 11/17). U.S. officials also say that countries such as Kenya, which as been "slow to spend" Global Fund money, are "good example[s] of why another round of financing is not merited right now," according to the Times (New York Times, 11/17). The AP/Las Vegas Sun reports that French and Japanese board members "appear to support" the U.S.-proposed delay (Tomlinson, AP/Las Vegas Sun, 11/16). However, Helene Rossert Blavier, a French physician who serves as a Global Fund board member, said, "I've been called by several board members" who said U.S. embassies had contacted them to lobby against a fifth round of grants. Rossert Blavier added that it is "vital" that the Global Fund offer the new grants, according to the Journal (Wall Street Journal, 11/17).

'Political Tensions'
Although concerns over financial and managerial aspects of the Global Fund are the "ostensible reasons" for the U.S.-proposed delay, many "political tensions roil beneath the surface," the Journal reports (Wall Street Journal, 11/17). Critics say that the Bush administration's "real motive" behind lobbying for a delay in funding is to promote its bilateral AIDS program, the Financial Times reports (Financial Times, 11/17). Programs funded through the President's Emergency Plan for AIDS Relief "promote sexual abstinence and buy brand-name drugs," according to the Journal. However, the Global Fund does not "dictate program content" and allows grant recipient programs to purchase generic drugs, the Journal reports. The fund also offers grants to programs in countries that are "out of favor" with the U.S. government, according to the Journal (Wall Street Journal, 11/17). In addition, while the Bush administration "criticizes other countries for not doling out enough" to the Global Fund, it has "disappointed many in its own financing levels," according to the Times (New York Times, 11/17). In January, Bush released his fiscal year 2005 budget, which includes a lower-than-expected contribution to the Global Fund. Under the proposed budget, the U.S. contribution to the Global Fund would be reduced from $550 million in FY 2004 to $200 million in FY 2005 (Kaiser Daily HIV/AIDS Report, 1/29).

Reaction
Feachem has said that the HHS estimate of a $285 million shortfall is "at odds" with the fund's internal projections and that the organization will be able to offer a "modest portfolio" in new grants for 2005, the Journal reports (Wall Street Journal, 11/17). Some HIV/AIDS advocates have said that the U.S. position "will cost lives" and a delay will "take pressure off" wealthy nations to increase their donations to the Global Fund, according to the Times (New York Times, 11/17). A consortium of 435 organizations promoting improved health care in Africa has called on donor nations to increase financial commitments to the Global Fund and for the fund to distribute grants to new programs. "We cannot afford to have the Global Fund dry up," Sharonann Lynch of Health GAP said, adding, "These donors are basically saying to the world ... that what we have is good enough. But 400,000 people on treatment out of six million that face imminent death without access to AIDS treatment is not good enough" (AP/Las Vegas Sun, 11/16). HIV/AIDS advocacy groups also are planning to protest outside the board meeting -- which is expected to begin Wednesday -- in order to "drive home the point" that "people will suffer unless donors begin doling out more funds," the Times reports. "If [funding] is delayed, I'm not sure if my clients will still be there to get any help," Patricia Asero Ochieng, an HIV/AIDS counselor at Mbagathi District Hospital in Kenya, said (New York Times, 11/17). Paul Zeitz, executive director of the Global AIDS Alliance, said, "The president is undermining the positive legacy he hopes to leave on AIDS. Far from beginning a fresh start in his second term, President Bush still pursues his ill-informed vendetta against the fund" (GAA release, 11/16).

NPR's "Morning Edition" on Wednesday reported on the Global Fund meeting. The segment includes comments from GAA Communications Director David Bryden and Jack Valenti, president of Friends of the Global Fight -- a Washington, D.C.-based, not-for-profit group aimed at increasing U.S. support for the Global Fund (Wilson, "Morning Edition," NPR, 11/17). The complete segment is available online in RealPlayer.