GLOBAL FUND OBSERVER (GFO), an independent newsletter about the Global Fund provided by Aidspan to nearly 10,000 subscribers in 170 countries.
Issue 188: 19 June2012. (For formatted web, Word and PDF versions of this and other issues, see
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CONTENTS
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1. NEWS: CSOs Win Court Battle in Kyrgyzstan
Earlier this year, a District Court in Kyrgyzstan ordered the Government to provide civil society organisations copies of all documents pertaining to the purchase of antiretroviral medicines between 2009 and 2011. The court case emerged from a project by three CSOs in Kyrgyzstan to monitor and analyse the procurement and distribution of medicines purchased with Global Fund grants. The Ministry of Healthhad refused to let the CSOs have copies of tender agreements and related documents.
2. NEWS: Civil Society Groups Intensify Campaign for Financial Transaction Tax
Civil society organisations staged coordinated events around the world to mark the Robin Hood Tax Global Week of Action from 15–22 May. The CSOs are pressuring rich countries to adopt the Robin Hood tax, also known as the financial transaction tax, which, they say, will raise billions of dollars to address global health issues and help end poverty in developing countries.
3. ANALYSIS: Restrictions on Access to Funding by Middle-Income Countries
The debate concerning what proportion of Global Fund money should go to low-income countries has been going on for years. This article provides some background information and describes the arguments being advanced by civil society organisations opposed to placing too many restrictions on the ability of middle-income countries to access funding.
4. COMMENTARY: Remembering Nadia Fuleihan
Bernard Rivers pays tribute to Nadia Fuleihan, who was killed in a car accident on 5June. Nadia worked for many years on Global Fund issues for the United Nations Development Programme.
5. NEWS: Call for a New Mechanism to Finance a New International Health Strategy
In an article in the journal Policy Review, three prominent academics call for a new international health strategy that focuses on the health of people and communities. The authors argue that the current focus on specific diseases has exposed fault lines in delivering services in places where people suffer from multiple health issues.
6. NEWS: Programme-Related Findings in the OIG Audit Report on an HIV Grant in Uzbekistan
Our coverage of audit reports issued by the Office of the Inspector General usually focuses on the financial, management and procurement systems of principal recipients and sub-recipients. In this article, we report on the OIG’s findings concerning the programmatic aspects of an HIV grant in Uzbekistan.
7. ANNOUNCEMENT: Global Fund Releases Governance Handbook
The Global Fund has issued a Governance Handbook for members of the Board and their delegations.
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1. NEWS: CSOs Win Court Battle in Kyrgyzstan
Government ordered to provide documents related to procurement of ARVs
Earlier this year, civil society organisations (CSOs) in Kyrgyzstan succeeded in their legal challenge against the Ministry of Health, which had refused to grant access to copies of tender agreements and other documents related to the procurement and distribution of antiretroviral medicines (ARVs). On 26 January 2012, the Bishkek District Court ruled that the government’s actions were a violation of the right to access information, and ordered the government to turn over copies of all documents pertaining to the purchase of ARVs between 2009 and 2011.
The court case emerged from a project launched in 2010 by three CSOs in Kyrgyzstan to monitor and analyse the procurement and distribution of medicines purchased with Global Fund grants. The impetus for the project was the fact that even though Kyrgyzstan has received considerable international funding for health, many people are still unable to access lifesaving medicines.
The CSOs are the Harm Reduction Network, the Partnership Network, and Unity of People Living with HIV. The CSOs hope that the monitoring effort will increase the efficiency and transparency of projects that are implemented by the government’s AIDS centre, the principal recipient (PR) for Global Fund grants.
The project involves tracking the procurement and distribution of ARVs and of medicines to treat opportunistic infections, as well as supplies that help reduce HIV infection, such as safe injection equipment for people who use drugs. As part of the project, the CSOs are analysing whether the procurement and distribution processes are transparent, are in accordance with Kyrgyz law on public procurement, and are in line with Global Fund procedures.
According to Madina Tokombaeva, director of the Harm Reduction Network (HRN) in Kyrgyzstan, and Maryam Beishenova, programme coordinator at HRN, the CSOs met with resistance from the Ministry of Health, which refused to release copies of tender agreements and other financial documents pertaining to the AIDS centre. They said that the government claimed that these records are not available to third parties. This is what led to the legal challenge.
Ms Tokombaeva and Ms Beishenova said that the court decision is “a clear victory for transparency and access to information in Kyrgyzstan. Civil society organizations have been energized and we are committed to ensure that government agencies and donors are transparent and efficient.”
The monitoring project continues.
Information for this article was taken from a blog on the website of Open Society Foundations.
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2. NEWS: Civil Society Groups Intensify Campaign
for Financial Transaction Tax
The UK is still firmly opposed
Civil society organisations (CSOs) are continuing to pile pressure on rich countries to adopt the financial transaction tax (FTT), also called the Robin Hood tax, which they say will raise billions of dollars to address global health issues and help end poverty in developing countries. CSOs are hoping that some of the proceeds of an FTT will flow to the Global Fund.
The FTT would apply to transactions such as the purchase and sale of stocks, bonds, options and futures contracts. Proponents of the FTT say that the tax would be extremely small (e.g., 0.005% of the value of futures contracts linked to equities).
CSOs staged coordinated events around the world to mark the Robin Hood Tax Global Week of Action from 15–22 May. The Week of Action was organised to coincide with two major meetings; the G8 Summit on 18–19 May at Camp David, Maryland, US; and the European Finance Ministers Meetings on 15 May and 22 June. The FTT was on the agenda of the European meetings.
As part of the week of action, a huge rally of nurses dressed in Robin Hood hats marched on the streets of Chicago, while others gathered on Mount Fuji in Japan. There were also demonstrations in Britain, Italy, Germany, India, Brazil, Zambia, Malawi and Belgium. In addition, hundreds of European CSOs wrote to European governments to urge them to ensure that proceeds from the tax are used to address global health, poverty and climate change.
During the Week of Action, a group of UN experts called for acceptance of the tax. In a statement, the Special Rapporteur on extreme poverty and human rights, Magdalena Sepúlveda, said:
“Where the world financial crisis has brought about the loss of millions of jobs, socialized private debt burdens and now risks causing significant human rights regressions through wide-ranging austerity packages, a financial transaction tax is a pragmatic tool for providing the means for governments to protect and fulfill the human rights of their people.”
According to the UN office of the High Commissioner of Human Rights (OHCHR), estimates suggest that the FTT would yield at least $48 billion, and perhaps as much as $250 billion, every year, across the world’s largest economies, the Group of 20.
In a symbolic move during the Week of Action, the European Parliament approved the idea of an FTT, and said that the tax should go ahead even if only some European Union (EU) member states opt for it. (The European Parliament does not have the power to impose the tax on EU member countries.)
In March 2012, Aidspan published an article on the FTT in GFO 178. As reported in that article, opinion among European governments is divided. France and Germany are in favour of the FTT, but the UK is opposed.
"A financial transaction tax (FTT) is a bad idea," British Prime Minister David Camerontold reporters as he left an EU summit meeting in Brussels in May. "It will put up the cost of people's insurance, put up the cost of people's pensions, it would cost many, many jobs, and it would make Europe less competitive and I'll fight it all the way."
Newly elected French President, Francois Hollande, supports the FTT, and promoted the idea at the G8 Summit. The latest “Eurobarometer” survey shows that 66 percent of Europeans favour such a tax.
Information for this article was taken from various sources including The Telegraph and the International HIV/AIDS Alliance.
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3. ANALYSIS: Restrictions on Access to Funding
by Middle-Income Countries
The debate concerning what proportion of Global Fund money should go to low-income countries (LICs) has been going on for years. Some of the donors to the Global Fund feel very strongly that the bulk of the Fund’s money should go to the poorest countries. They are particularly concerned that as more and more countries increase their gross national income and transition from low-income to middle-income, the proportion of Global Fund money that goes to LICs will steadily go down, whereas they want it to go up.
Over the years, these donors have managed to convince the Global Fund Board to impose both minimum floors concerning how much money should go to LICs, and restrictions on the ability of middle of middle-income countries (MICs) to access money. The most recent example of this was the 55% rule, adopted in November 2011. This rule says that each year, 55% of all funding must go to low income countries.
In February 2012, a few months after the Board adopted the 55% rule, the Board Chair announced that for countries classified as lower-middle-income and above, funding for each grant renewal would be limited to 75% of what had originally been approved, as one means of achieving the 55% objective.
The 55% rule has been strongly opposed, not only by MICs but also by many civil society organisations (CSOs), including those represented on Board delegations. They point out that more than half of the world’s poor now live in MICs.
Although the focus recently has been on the 55% rule, the debate is really about the broader issue of what restrictions (if any) ought to be placed on MICs.
At its meeting in May 2012, the Global Fund Board discussed concerns about the impact of the “55% rule.” As we reported in GFO 184, the Board determined that further analysis of the 55% rule was required. It also decided to freeze implementation of the 75% ceiling. Further discussions on the 55% rule are expected to occur at a Board meeting in September 2012. The decision to freeze the ceiling effectively kills the 55% rule for 2012 because that rule cannot be implemented without the ceiling (or without similar measures).
This article provides some background information, and summarises some of the arguments that have been advanced recently by CSOs.
Restrictions on MICs
The Global Fund has had restrictions on access to funding by MICs for many years.
(The World Bank classifies countries by income level based on gross national income per capita. The Bank uses the following categories: low income, lower-middle income, upper-middle income, and high income. The classifications are updated annually on 1 July. High-income countries have never been eligible to apply for Global Fund money.)
In November 2007, the Board adopted a cap of 10% on funding to upper-middle-income countries (UMICs) in any given round of funding.
In May 2011, the Global Fund decided that rounds of funding would have both a general pool and a targeted pool; the latter was intended for proposals targeting most-at-risk populations. Funding for the targeted pool was to be limited to 10% of a given round of funding. Ceilings were imposed on funding for Individual proposals in the targeted pool. UMICs with a disease burden of high or above could apply only under the targeted pool.
That same month, changes were made to the Fund’s eligibility and counterpart financing requirements. Some of the new rules placed additional restrictions on MICs. For example, proposals in the general pool from lower-middle income countries (LMICs) must focus at least 50% on most-at-risk populations or high impact interventions; for UMICs, the figure is 100%.
In November 2011, the Board adopted new policies for grant renewals that further restricted access to funding for MICs (including the 55% rule).
Rationale for the latest restrictions
The Global Fund Secretariat argued that without any changes to the rules, renewals in 2011–2013 would be heavily skewed towards MICs. The Secretariat said that between 2011 and 2013, the share of renewals represented by LICs would decline from 54% to 43%; and the share represented by lower LMICs would decline from 34% to 21% – whereas the share represented by UMICs would increase from 8% to 20%. The main reason for this trend is that a number of countries have transitioned to a higher income level.
With respect to funding for new proposals, the report of the Technical Review Panel (TRP) and the Secretariat on Round 10 showed that compared to Round 9, there was a marked decrease in the share of recommended funding for LICs – from 71% to 55% – and a corresponding increase for MICs. The report said that the UMIC share of recommended funding had gone from less than 1% in Round 8 to 4% in Round 9, and to 12% in Round 10 (above the limit set by the Board in 2007).
Concerns expressed recently by CSOs
CSOs have argued that the 55% rule goes too far. They have also questioned the use of country income levels to determine access to funding for key populations. Many of the concerns are described in a policy brief prepared by the Developed Country NGO Delegation in May 2012, a version of which was provided to all Board members.
The delegation paper said that “using country income categories as the main guidance for deciding whether or not to allocate resources to specific vulnerable populations may ultimately be counterproductive as income alone is not indicative of countries’ ability to pay for the cost of their disease responses.” The delegation said that, historically, decisions about who is eligible for funding and how funding should be prioritised considered both disease burden and country income; and that before the changes in 2011, the Global Fund’s eligibility requirements led to a high correlation between grant size and disease burden (0.84). Given the changes placing greater emphasis on country income category, the delegation said, it is doubtful that the current requirements will lead to nearly such an effective funding distribution.
In fact, the delegation said, the 55% rule may inadvertently prevent the Global Fund from investing adequately in countries with the highest disease burdens and greatest need. The paper explained this as follows:
“Many countries are transitioning from low to middle income, but poverty in middle income countries remains high.... Middle-income countries have higher burdens of HIV and TB than low-income countries....The capacity of middle-income countries to pay for health and their disease responses varies…. The Global Fund will only achieve its targets if investment is proportionate to disease burden.”
The delegation argued that many bilateral funders, including the UK, have focused their funding on low-income countries because they believed that their obligations towards MICs were being met through their contributions to the Global Fund.
The delegation called for a more nuanced approach to funding that takes into account disease burden, income levels, thedistribution of wealth within countries, ability to pay and the sustainability of the interventions. However, although the delegation paper argued for the removal of the 55% rule, it did not question other restrictions on access to funding by MICs. In fact, it stated that the existing policies (e.g. eligibility, prioritisation, counterpart financing and the targeted pool) already shape the Global Fund portfolio appropriately “by directing resources and requiring middle-income implementing countries to contribute financial resources to the response.”
(Proponents of maintaining or even increasing restrictions on access to Global Fund money by MICs say that, yes, many of the world’s poor live in MICs, but the governments of those countries have a responsibility for taking care of their poor. One person we talked to cited the case of Guatemala, He said that the middle class has forced the government to keep income tax at a low level; that this prevented the government from increasingcare for the poor; and that this, in turn, has resulted in taxpayers in the West paying, through aid, for services to the poor of Guatemala that taxpayers of Guatemala are not willing to pay for.)