WSJ: U.S. Urges Delay in Health Grants from Global Fund

[Guest guest]

The Wall Street Journal

November 17, 2004

U.S.

Urges Delay in Health Grants from Global Fund

By Marilyn Chase

The U.S. is lobbying to

block the proposed launch this week of a new round of grants by the Global Fund

to Fight AIDS, Tuberculosis and Malaria, a United Nations-backed international

health group that has funded $8 billion of projects in 130 countries through

pledges from wealthy countries and foundations.

Exerting its influence as the fund's largest donor, the Bush

administration says a cash crunch plus a need to tighten the fund's management

and oversight of grant programs call for a delay in new grant commitments.

Critics charge such a move will jeopardize the health of millions of poor

people with AIDS and stall the fund's growth.

Working through American embassies, U.S. health

officials have lobbied the fund's board and delegations from donor and

recipient countries around the world in recent days, urging that the Global

Fund's desire to open a new round of grants now for 2005 be voted down. The U.S. favors a

delay of six to 12 months.

This sets the stage for confrontation when the Global Fund's

19-member board gathers in Arusha, Tanzania, today to

meet with six African heads of state and debate whether to invite bids for a

fifth round of grants.

The main reason for the administration's lobbying against

new Global Fund grants is what the Department of Health and Human Services says

is a $285 million shortfall in what is needed to cover the fund's

administrative expenses, continuing grants and enlarged staff needed to beef up

portfolio management.

While finance and management issues are the ostensible

reasons for this week's debate, many political tensions roil beneath the

surface. The U.S. sponsors a rival program, the

President's Emergency Program for AIDS Relief, or Pepfar, which operates in 15

countries. Unlike Pepfar, the Global Fund offers AIDS grants in countries out

of favor with Washington, such as Myanmar (formerly

known as Burma) and Cuba. Pepfar

programs also promote sexual abstinence and buy brand-name drugs, while Global

Fund grants don't dictate program content and offer less expensive generic

drugs.

U.S. administration officials declined

to comment on the lobbying effort, but in a series of interviews highly placed

health officials in Washington confirmed

the administration's stand.

Before HHS Secretary Tommy left on Sunday for Arusha,

where he will be chairman of the Global Fund board meeting, he issued a

statement saying, " The U.S. is enthusiastic to work with the Global Fund

board on the next round of grants. " He added that adequate funding and

management first be put in place to keep the fund " viable and

sustainable...for years to come. "

H. , Canada's U.N. special

envoy for HIV and AIDS in Africa, called the U.S. opposition

to a new round of grants a move to " sabotage " the fund and " an

ill-concealed attack " on a group with broad, multinational support.

Feachem, executive director of the Global

Fund, insists funding at least one new round of grants each year is crucial to

building momentum. Even though the fund's income hasn't met expectations, Dr.

Feachem says the U.S. estimate for a $285 million

shortfall is at odds with the Global Fund's internal projections. He says the

fund could afford to offer a modest portfolio of $400,000 in new grants in

2005.

In recent days the U.S. has opposed Dr. Feachem's

timetable for new grants. In Amsterdam, Stu Flavell,

an American activist who is chairman of a committee to mobilize resources for

the fund, said he was summoned to the U.S. Embassy in the Hague on Nov. 3,

where an economic officer suggested there be no new rounds in 2005.

" That's unacceptable from the community's perspective, " Mr. Flavell

said.

" I've been called by several board members " who

had been contacted by U.S. embassies lobbying

against offering Round 5 grants, said Hélène Rossert Blavier, a French

physician who serves as a Global Fund board member. She insisted " it's

vital " that the Global Fund offer the new grants.

The Global Fund was created in 2002 to lead a coordinated

world-wide effort against AIDS, TB and malaria. AIDS afflicts 38 million people

world-wide, and kills three million people a year. TB kills two million, and

malaria one million to 2.7 million a year.

Recently, the cash stream from donor nations and others has

waned. The fund originally hoped for 2005 donations of $2.5 billion, but it now

is conservatively projecting $1.6 billion. In August, the U.S. withheld

$120 million of its 2004 pledge of $547 million to the Geneva fund,

citing the failure of other donors to pay their share of pledges. Congress

earlier capped the U.S. contribution at

one-third of total funds. The other two-thirds lagged behind, in part as a

result of different fiscal years.

After U.S. Global AIDS Coordinator Randall Tobias gave other

countries a Sept. 30 deadline to catch up, Sweden gave $2.2

million, England $5.4 million and the Netherlands $6 million.

Individual donors gave $300,000. Those payments totaling $13.9 million, if

postmarked in time, could free up at best a little less than $7 million of the

withheld U.S. pledge. It isn't known how much the

U.S. might release in Arusha this week.

Dr. Feachem told the Global Fund board he is making

improvements in the way the fund is run: speeding private-sector involvement in

Africa and India; enlisting

companies to help countries retool grant programs that are tough to implement;

and beefing up health-care capacity in poor countries with help from drug

companies and management-consulting firms.