The challenge of financing the global response to HIV/AIDS was front and center at last week’s International AIDS Conference in Washington. In the run-up to the gathering, the Joint U.N. Program on HIV/AIDS announced a staggering $7 billion shortfall in global financing for HIV/AIDS. Even as more low- and middle-income countries, including the BRICs, assume the financial burden for their domestic HIV responses, the U.N. agency revealed that HIV/AIDS funding from the international community had largely fallen flat between 2008 and 2011.
According to a recently released UNAIDS and Kaiser Family Foundationreport, in 2011, the five leading donor governments for global AIDS relief collectively contributed $6.5 billion, or nearly 86 percent of all international HIV/AIDS assistance that year. Here is the Devex assessment of these five donors’ HIV/AIDS relief initiatives and funding commitments. (See chart below.)
Since 2003, the President’s Emergency Plan for AIDS Relief, or PEPFAR, has supported prevention, treatment and care programming in over 80 countries. A victim of belt-tightening in Washington, U.S. spending on global HIV/AIDS is expected to fall for the third year in a row in fiscal 2013. While a number of global health advocates have cast doubt on the sustainability of the U.S. AIDS relief program in the wake of these budget cuts, PEPFAR’s efforts to harness innovation and partnership towards more cost-effective interventions are beginning to chart a more viable course for the nearly decade-long initiative. (See last week’s Devex analysis here.)
In line with Washington’s longstanding preference for bilateral aid channels, the U.S. courses only about 12 percent of its HIV/AIDS assistance through the Global Fund to Fight AIDS, Tuberculosis and Malaria. Nonetheless, under President Barack Obama, even amid a decline in bilateral aid for HIV/AIDS, U.S. contributions to the Global Fund have continued to grow each year. For 2011 to 2013, the Obama administration is likely to fall slightly short of fulfilling its $4 billion Global Fund pledge. The U.S., which helped structure the Global Fund back in the early 2000s, is the organization’s leading donor.
Not long after taking office in 2010, the Conservative-led coalition government exempted the U.K. Department for International Development from austerity measures implemented across the U.K. public sector. Amid a drive to achieve more value for money, DfID is focusing its HIV/AIDS assistance on a fewer number of countries where its programming is not only most needed, but also delivers the greatest impact. Through 2015, DfID’s HIV/AIDS country-level programming will continue in nine Sub-Saharan Africa countries and five countries in Asia. Looking ahead, DfID identifies the following priorities for its HIV/AIDS programming: (1) significantly reducing infections, (2) increasing access to HIV and tuberculosis diagnosis, treatment and care, and (3) tackling stigma and investing in research.
DfID’s broader effort to refocus its health spending on strengthening health systems has raised questions among some quarters over the commitment of the coalition government to the U.K’s global HIV/AIDS program. In fact, DfID’s spending on HIV/AIDS is projected to decrease by 32 percent between 2011 and 2015, from 59.9 million pounds ($94 million) to 41 million pounds ($64 million). Over the same period, U.K. bilateral assistance for global health is expected to nearly double to 723 million pounds ($1.1 billion). In May of this year, the House of Commons’ International Development Committee also urged DfID to meet its long-delayed commitment to increase its contributions to the Global Fund.
Under the administration of recently elected President Francois Hollande, the French government has continued to stress the role of international organizations as vehicles for mobilizing and coordinating development financing. France’s contributions to international financing facilities for global health accounted for four-fifths of its global HIV/AIDS spending in 2011 – a share which surpasses every other donor from the Organization for Economic Cooperation and Development’s Development Assistance Committee. UNITAID, an HIV/AIDS, tuberculosis and malaria drug purchase facility supported by member-levied airline taxes, relies on co-founder France for 60 percent of its budget. France is also the leading European donor to the Global Fund.
Just last week, echoing similar pledges by his predecessor Nicolas Sarkozy, Hollande championed additional innovative financing mechanisms for global health. In a recorded video presentation at the 2012 International AIDS Conference, Hollande announced that his administration would allocate a share of revenues from an impending tax on financial transactions to global AIDS relief. When the tax takes effect on Wednesday, France will become the first European country to impose a levy on share purchases. While Hollande’s pioneering commitment was generally welcomed by delegates, UNITAID Executive Director Denis Broun cautioned that HIV/AIDS will likely have to compete against a host of development challenges for a share of revenues from financial transaction taxes.
A donor that has historically punched above its weight, the Netherlands is among a handful of European countries that spend 0.7 percent of their gross national income on official development assistance. A total of 15 European Union member states have pledged to meet this target by 2015. While aid levels to both the health and education sectors have ebbed in recent years, HIV/AIDS prevention continues to be a priority for Dutch cooperation. The Netherlands’ HIV/AIDS prevention programming – widely regarded as an area of excellence for Dutch aid – focuses on providing HIV/AIDS education and expanding the availability of condoms in mostly Sub-Saharan African countries.
Yet, ever since failed austerity talks toppled center-right Prime Minister Mark Rutte and his cabinet in April, the Netherlands’ aid program continues to be mired in uncertainty. Prior to pulling the plug on Rutte’s minority government, the far-right Freedom Party had reportedly won a concession from the now caretaker prime minister to cut Dutch aid spending by 20 percent, which would bring the country’s ODA to GNI ratio to just below 0.6 percent. Early elections have been scheduled for September.
HIV/AIDS prevention and treatment as well as sexual and reproductive health are both focus areas for Germany’s global health programming. In 2010, the German government pledged €400 million ($492 million) to the Muskoka Initiative on Maternal, Newborn and Child Health, which supports a variety of HIV/AIDS-related interventions including the prevention of mother-to-child transmission of HIV. A leader in HIV mainstreaming, since 2001, the German government has required all its implementing organizations to design aid programming in the context of the AIDS epidemic.
In 2011, Germany joined Denmark and the European Commission in suspending payments to the Global Fund, following allegations that some $34 million in funds had been misused. While Germany would later resume its contributions to the Global Fund after the organization strengthened its financial oversight procedures, the months-long controversy had threatened to sour an otherwise uniquely, synergistic relationship. Not only does Germany channel half of its global HIV/AIDS assistance through the Global Fund – a share above most OECD-DAC donors – but it is also one of only two creditor countries participating in the Global Fund’s Debt2Health initiative. The other is Australia. Under a Debt2Health agreement, creditors write off part of a country’s debt on the condition that the beneficiary government invests an agreed-upon amount in the health sector through a Global Fund-approved program. In September 2010, Germany signed a Debt2Health agreement with Cote D’Ivoire to support Global Fund-approved HIV/AIDS programming in the West African country.
Lorenzo is a Devex senior analyst based in Manila. Our resident budget cruncher, Lorenzo spearheads Devex's in-depth reporting and analysis on global development finance and policy. He attended Wesleyan University in Connecticut on the Freeman Asian Scholarship, earning degrees in Government and Social Studies.