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Refueling the Global Fund

December 11, 2013

In Washington, D.C., in the opening days of December, President Obama hosted an

international gathering to rally resources for the Global Fund to Fight AIDS, TB and Malaria.
e results were simultaneously remarkable, encouraging, and sobering.

J. Stephen Morrison e Fund walked away with hard and fast commitments of $12 billion in new pledges to
Senior Vice President and support the public-private partnership’s work over the next 3 years: from donor
Director, Global Health Policy
Center governments, foundations, and the private sector. Final numbers are still being tallied. e
$12 billion figure assumes a $4 billion U.S. contribution, matched by $8 billion from others.
e hope is that the fifth $1 billion U.S. investment will eventually become possible as
another $2 billion in other donor contributions materialize.

is success marks an impressive return by the Fund to operational and fiscal feasibility,
following its near crash in late 2011 and its recovery 2012-2013, built on extensive
managerial reforms, the appointment of a respected new Executive Director, former U.S.
Global AIDS Coordinator Mark Dybul, and a new funding model that tightens the focus
upon priority needs in the most deserving countries. One clear conclusion emerged:
Katherine E. Bliss international confidence in the Fund has been restored. U.S. Secretary of State John Kerry,
Senior Fellow, Global Health offering the keynote at a Partnership Forum held December 2, emphasized, “Now, it’s
Policy Center
important to underscore that the reforms are not cosmetic. ey’re real. ey’re tangible.
And they are going to help save more lives, there’s no question.”
MEDIA QUERIES
Contact H. Andrew Schwartz e Obama administration pulled out all the stops at the pledging conference,
Chief Communications Officer enthusiastically joining hands with Bill Gates, Republican and Democratic leaders from
Tel: 202.775.3242
both chambers, and others. It was a remarkable display of unity and good feeling, and
Contact Paige Montfort testimony to the months of painstaking preparatory work undertaken by Eric Goosby,
Media Relations Coordinator, External former Global AIDS Coordinator, Gayle Smith at the White House, John Monahan at the
Relations
State Department, and others. e resulting exuberance is even more remarkable, given
Tel: 202.775.3173
that President Obama did not commit to preside until just a few days prior, and given
RELATED Washington's otherwise desolate environment of partisan spite, broken budgets, and bitter
Asia, China, Global Health, Global Health
Policy Center, HIV/AIDS, Infectious Disease, polarization over U.S. health reform.
Multilateral Institutions, Russia, South
America, Tuberculosis
An array of key personalities from the administration and Congress were vociferous in
their support of the United States' impressive pledge to provide up to $5 billion over three
years, providing it is matched 2:1 through $10 billion in others' contributions. Most
prominent were Secretaries John Kerry and Kathleen Sebelius, National Security Adviser
Susan Rice, House Democratic leader Nancy Pelosi (D-CA), House Foreign Affairs Chair Ed
Royce (R-CA), Senate appropriators Lindsey Graham (R-SC) and Patrick Leahy (D-VT), and
others.

e 2:1 matching requirement has thus far been a powerful tool in persuading members of
Congress to provide funding to fulfill the President’s substantial, multi-year commitment.
Another important factor is the personal commitment of the President's senior foreign
policy team . In his keynote address on Monday, Secretary Kerry spoke proudly of having
served as co-chair of the CSIS HIV/AIDS Task Force, launched in 2000, while he was
Senator from Massachusetts, noting that his experience working with co-chair Senator Bill
Frist of Tennessee led to the formulation and passage of the original PEPFAR legislation. In
remarks to a Global Fund Congressional breakfast on December 4, National Security
Advisor Susan Rice recalled witnessing the suffering of AIDS patients who had no hope for
treatment in the late 1990s, during her tenure as the very activist Assistant Secretary for
African Affairs during the Bill Clinton Administration. During an address at the
replenishment meeting itself, Samantha Power, U.S. Permanent Representative to the
United Nations, spoke of her admiration for the late AIDS researcher and human rights
champion, Jonathan Mann, when they coincided at Harvard University more than 15 years
ago.

Paradoxically, it seems, the more dysfunctional American politics become, the greater is the
opportunity for an engaged White House to secure robust bipartisan support to battle three
deadly infectious diseases in poor countries through a multilateral financing institution.
Indeed, shortly after his address, the President signed e PEPFAR Stewardship and
Oversight Act of 2013, reauthorizing support for another five years, after it had passed the
Senate 100 to 0 and the House of Representatives by a voice vote. It was yet another sign
that global health, if carefully managed, can be a political oasis in Washington, D.C.

Beneath the bonhomie however were signals of tough challenges that persist.

First, it would be imprudent to assume deep, long-term bipartisan support within Congress
for the Fund. It will also be no easy task to rejuvenate the established G-8 donors, many of
whom are flagging under austere budgets, and to enlist new donors into the core circle,
when China and other wealthy emerging powers have up to now turned back repeated
overtures. e Bill and Melinda Gates Foundation remains a stalwart supporter, and there is
some interesting movement among other private donors. But nonetheless, it remains an
open question whether it is realistic to answer President Obama's dramatic challenge to
other donors: to reach the target of $15 billion, and not leave $1 billion of the U.S. pledge
unmatched by $2 billion of additional pledges. As Obama himself emphasized at the White
House, “So today I want to urge all those who are attending the Global Fund’s
replenishment meetings both today and tomorrow to take up this commitment. Don’t
leave our money on the table.”

Since its inception, the Fund has relied primarily on contributions from a core group of G-8
member states: Canada, France, Germany, Japan, and the United Kingdom, along with the
United States, have over the past decade contributed the greatest percentage of the Fund’s
budget. Final numbers have not yet been announced but much is known. is year the UK
raised its contribution, announcing a pledge of up to £1 billion or $1.6 billion depending on
the total amount of pledges generated, as UK contributions are limited to 10% of the fund
total. Nordic countries Sweden, Norway, Finland, Denmark and Iceland also increased their
contribution, announcing a $750 million pledge, up $150 million from the previous round.
Canada increased its contribution to $612 million. But the pledges from France, Germany,
and Japan remained flat. France, which holds the vice chair of the Global Fund Board,
announced a commitment of €1.08 billion or $1.5 billion, and Germany remained steady at
€600 million. Despite considerable economic turmoil at home, Japan maintained its
commitment at $800 million. Among the G20, newer donors such as South Korea
announced an increase in airplane exit fees to support Global Fund contributions, and
Australia’s $200 million commitment was unchanged from 2010. e BRICs and other
emerging economies, many of which are maintaining their own overseas health programs,
were conspicuously absent.

ere are some signs that the Fund can expect greater private sector engagement. In recent
years some Fund watchers had expressed concern that the constellation of private sector
contributors was not as widespread or robust as originally envisioned. But this may be
changing. e Bill and Melinda Gates Foundation continues to be the largest private donor
to the Fund, with Bill Gates announcing up to $500 million in pledges over the next three
years -- $300 million in direct contributions and $200 million to be made available as
matching funds. e Indonesia-based philanthropy, the Tahir Foundation, announced a $65
million contribution. ere are also signs that the corporate sector partners are
diversifying. Unlike government donors, corporate partners may earmark contributions for
work on specific projects in specific countries. Chevron, a long-time supporter of the Fund,
has announced a pledge of $5 million to support the Fund’s work on preventing mother-to-
child transmission of HIV in Nigeria, while BHP Billiton Petroleum announced a
contribution of $10 million to focus on the elimination of malaria in Mozambique. RED, the
program started by Bono and Bobby Shriver to promote private-sector giving to the Global
Fund, announced a two-year commitment of $40 million.

Second, achieving substantial 'country ownership' by recipient countries, most notably

higher budgetary commitments by African countries themselves, is essential to sustaining
U.S. and other donors’ support over the long term. ere has been some recent progress –
but not nearly enough. No African head of state appeared at the Washington pledging
conference, an unsettling and embarrassing gap. Globally, spending on AIDS, TB and
malaria among developing countries doubled over the five years between 2006 and 2011,
however it was concentrated among lower-middle-income countries. At the Washington
gathering, Nigeria’s Minister of Health, Professor C.O. Onyebuchi Chukwu, announced that
the government is now committing $1 billion of its own funds to health services, including
HIV/AIDS, TB, and malaria services. Final details of this commitment are expected shortly.

Lastly, it is unclear what the U.S. pledge to the Fund implies for the future of the U.S.
bilateral AIDS program, the President's Emergency Plan for AIDS Relief (PEPFAR), launched
under President Bush. Its budget has been steadily declining in recent years, and may need
to decline at an even faster rate, to accommodate the U.S. $5 billion three year
commitment to the Fund, especially if there are, as expected, continued overall cuts to U.S.
foreign assistance. As donors gathered in Washington to pledge, PEPFAR continued to
operate without a Global AIDS Coordinator, and no senior PEPFAR personality spoke at any
of the major events at the pledging conference. Whether deliberate or not, this awkward
situation has the effect of weakening the Coordinator and the PEPFAR program, as the
White House redirects attention to the Fund.

J. Stephen Morrison is senior vice president and director of the Global Health Policy Center at the
Center for Strategic and International Studies (CSIS) in Washington, D.C. Katherine Bliss is a
senior associate at the Global Health Policy Center, CSIS.

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