Wednesday, March 12, 2008

Q & A with Michel Kazatchkine of The Global Fund

from the International Herald Tribune

Posted by Daniel Altman

As I’ve written in today’s column, improvements in public health are often the first step towards higher living standards in poor countries. Among the poorest communities, the evidence in favor of health interventions is stronger than for any other kind, even education. That is why the mission of The Global Fund to Fight AIDS, Tuberculosis and Malaria is so important.

Here are answers to your questions for Michel Kazatchkine, the executive director of the Global Fund. He has a pragmatic but optimistic attitude that I think you’ll appreciate. As always, please feel free to keep the discussion going with your comments.

Q. Why did you deny funding to Zimbabwe, when it is so affected by AIDS and tuberculosis yet making progress under difficult conditions? Doesn’t Zimbabwe qualify for funding on humanitarian grounds?

Masimba Biriwasha
Thailand

A. The Global Fund feels a strong and heavy responsibility for the welfare of the many people in Zimbabwe affected and infected by the three diseases and continues to support the country’s fight against them. Paradoxically, given all the media criticizing us for not supporting Zimbabwe, the Global Fund is the largest – and almost only remaining – funder for health programs To date, the Global Fund has approved six grants to support the country’s fight against AIDS, tuberculosis and malaria worth almost $90 million.

Zimbabwe’s proposals to the Global Fund in the last two funding rounds have not been approved because the independent panel of experts who review proposals was not satisfied with the technical and scientific merit of the country’s proposals (soundness of approach, feasibility and potential for sustainability).

The Global Fund is, however, in no way reducing its support to the country. The Global Fund strongly encourages Zimbabwe to use the feedback provided by the independent panel of experts from the previous two years and apply again for this year’s funding round which opened on March 1. We are also pleased that the existing grants so far have shown good performance, thanks to the tremendous effort of thousands of dedicated health and community workers in the country.

Q. I am intrigued by this statement in your website that says,

“The Global Fund is structured so that no donor resources are spent on overhead, securing that 100 cents out of every dollar reaches people in need in developing countries.”

This is wonderful, so I am asking, how this is possible? A big portion of health budgets in many governments including poor countries is spent on salaries, travel, etc. of government health personnel. Aside from salaries and overhead, health bureaucracies in many poor governments are involved in stealing many foreign aid medicines and selling them in private drugstores.

Nonoy Oplas
The Philippines

A. The statement you found on our website actually refers to the fact that no donor resources are spent on overhead costs for the Global Fund Secretariat and staff based in Geneva, Switzerland. These costs are so low that they are completely covered by the investment income on our funds held in trust.

The Global Fund transfers and invests donors’ money into countries’ programs. Our basic principle is country ownership – we have no in-country staff and there are no “Global Fund programs”, only “Global Fund-supported programs”. That means each country must design and implement its own programs and decide how they will spend the resources. This is done with the assistance of partners such as WHO (World Health Organization), UNAIDS (the Joint United Nations Programme on HIV/AIDS), UNICEF (United Nations Children’s Fund), the World Bank and many others.

Of the total resources the Global Fund provides to a country, the largest amount goes to commodities, such as drugs, bed nets and medical equipment. To tackle disease in an effective way, however, it is also important to spend money on human resources, health infrastructures, administration and monitoring and evaluation. A substantial part of the money therefore also goes on training and other investments in human resources.

It is my strong belief that we need to invest in whole health systems if we are to achieve sustainable results and ultimately save more lives.

Q. Given that the health concerns of developing countries are deeply rooted in poverty, can you comment on the extent to which efforts such as the Global Fund can be successful? You are collecting billions of dollars from governments but these are the same governments that are strictly enforcing exploitative economic and trade policies that continue to undermine development in much of the world. As an aspiring physician, I wonder if focusing on health concerns without addressing overarching power imbalances in the world is sufficient to bring about change.

Sam Jameson
United States

A. I wouldn’t disagree with your argument that exploitative economic and trade policies are undermining economic and social development in many countries. However, focusing on health is an effective and measurable way to fight poverty and ease the burden countries are facing.

HIV/AIDS, tuberculosis and malaria cause more than 300 million incidents of illness and more than 6 million deaths each year. Moreover, these diseases penalize poor communities, as they perpetuate poverty through work loss, school drop-out, decreased financial investment and increased social instability. For example, according to calculations made by the economist Jeffrey Sachs and colleagues, Africa’s GDP would be up to $100 billion higher between 1970 and 2000 without malaria. Other studies estimate that a nation can expect a decline in GDP of 1 percent per year when more than 20 percent of the adult population is infected with HIV.

Investing in health does contribute to stronger economies. A study by Yale University’s Economic Growth Center showed a 20 percent increase in labor-force participation and a 35 percent increase in hours worked among AIDS patients in Western Kenya within six months of starting treatment with antiretroviral drugs. With access to effective treatment, people can regain their health and are able to care for their children again, return to work and lead meaningful, productive lives. Eventually, societies hobbled by severe declines in human capital due to illness and death will be able to translate gains in health into economic growth.

Fighting disease to address poverty is not the only solution but unless you invest in people’s health, significant progress in reducing poverty is elusive.

Q. In the website of the Global Fund it is stated that this organization pursues a new approach to international health financing. Concretely, how does it differ from the other numerous organizations which deal with health financing?

Federica Volpe
Italy

A. Firstly, the Global Fund is based on country ownership. The countries themselves set their priorities, design programs, implement them and are accountable for what is being achieved.

Secondly, the Global Fund bases its funding solely on performance. All funds are released incrementally based on demonstrated results against targets we have jointly agreed with the countries. While judgment, of course always has to play some role, the system is designed to prevent political or any other considerations to influence decisions on funding.

The Global Fund has also gone further then any other large international institution to unite governments, the private sector, NGOs and communities in its governance. Be it at our board or at the country level, the governance of the Global Fund includes all sectors: public and private, institutional and civil society, north and south. Donors and beneficiaries are equally represented on our board, contrasting with most financing institutions for development. Moreover, almost 40 percent of our funding is channeled through non-government recipients.

Finally, the Global Fund is trying to set a new standard for transparency. All financial transactions with our supported programs and the performance of these programs are available on our web site. Whenever we discover any wrongdoing in the programs we support that risk misuse of our funding, we discontinue or temporarily suspend funding and we announce such decisions publicly.

In addition to this, I would like to know how the organization’s independence is guaranteed in relation to the governments and the other institutions which provide funds.

The Global Fund’s board is responsible for all policy and funding decisions. The board is constituted of representatives from donor countries, beneficiary countries, non-governmental organizations (NGOs), private foundations, the private sector, and people living with AIDS, tuberculosis and malaria. These representatives are divided into two groups of ten voting members each; donors in one, and beneficiaries in the other. This structure ensures that no single group or country can influence decisions based on its own interests. Moreover, donor countries cannot earmark their contributions to the Global Fund.

The only option countries who disagree with funding decisions of the Global Fund have is to withhold any amount of their contributions that equals funding to countries they do not support. So far, this option is only applied by the United States for funding that goes to governments it deems supporters of terrorism.

The World Bank is the custodian for Global Fund resources and has a non-voting seat on the Global Fund’s Board but it does not get involved in any funding decisions.

Q. How would you deal with the high price of the drugs for HIV? How do you persuade the CEOs of the pharmaceutical companies to provide medicines for the poor in the developing countries who cannot afford them? What should or can we do about HIV?

Toni Nathan
Japan

Since 2000, prices for antiretroviral treatment have been reduced from $15,000-20,000 per patient/per year to less than $100 per patient/per year in some countries. This incredible reduction is the result of the tireless work of AIDS activists and pressure groups combined with the competitive market pressure by generic drugs manufacturers. Also, the buying power of resources provided by organizations like the Global Fund has created a mass market.

In terms of what we can do about HIV, I believe we are on the right track. Investments are having an impact, ensuring that millions of people around the world now have access to effective prevention, treatment and care. Results show that it is possible to roll out antiretroviral treatment on a large scale, even in the poorest countries; and it is possible to protect people from getting infected through effective prevention and counseling activities, by training health workers in skills that will extend treatment, care and information to millions more in years to come.

The results so far are encouraging and they should spur us further. They are the testimony that necessary resources combined with evidence-based strategies for action are having an impact on the burden of the disease in many countries. I feel confident that through a concentrated global approach we can eventually win the fight against AIDS, but that is a goal which will take decades – not years – to achieve.

Q. In the context of the persistent difficulty the Global Fund has faced obtaining funds from donor nations, and the uncertainty of future funding streams, to what extent does Global Fund management consider the long-term sustainability of the initiatives it funds in recipient countries?

Should the criteria for decisions about what to activities to fund, how to structure grants, or what conditions to attach to grants place a greater priority on sustainability, versus emergency response (i.e. maximizing short-term impact)? Or would a shift away from getting medications and bed nets to as many people as possible in the short term, towards more funding of infrastructure, human resource capacity building, and sector-wide coordination undermine the already weak motivation of donor countries to participate in the Global Fund?

Volatility and uncertainty in resource inflows from donors compromises the ability of health ministries to plan and operate health programs efficiently. Would it make sense for Global Fund to commit less money per year over longer time horizons? In other words, if Global Fund has $100 million to grant to a particular country, instead of granting that money to be spent over five years, would it be better to extend the time horizon to 10 years? Might this change in time horizon change the way recipient countries plan and invest in positive ways?

Stephen Resch
United States

A. I agree with you that funding must be secure and predictable over the long term. It is only in this way that can we plan ahead and ensure a stable future for treatment programs, prevention strategies and other long-term services and investments.

To date, the Global Fund has received $18.5 billion in pledges and contributions. Some of this funding stretches as far in the future as to 2013, and we encourage such long-term commitments. Although much more can and should be donated, I believe many donors already see the Global Fund as a very effective vehicle in the fight against the three diseases.

Over the past seven years, there has been an unprecedented investment in the fight against infectious diseases. The creation of the Global Fund and the results it can show to date have contributed to this drastic global increase.

Although I share your concern about sustainability, we need to do our utmost to fill current and existing needs in order to continue and assure donor streams and because of the moral imperative we have to provide access to treatment for all who need it. Only by showing the effectiveness of existing programs and stress the needs can we convince donors that the fight against infectious diseases can eventually be won and that it will eventually provide a tremendous return on investments both in humanitarian and economic terms.

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