ADVOCACY BRIEF: Call for German-French-Anglo Alliance to End AIDS Holocaust

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ADVOCACY BRIEF: Call for German-French-Anglo Alliance to End AIDS Holocaust

To Meet the Urgent Resource Needs of the Global Fund to Fight AIDS, TB, and Malaria and the Education For All-Fast Track Initiative

Click here to download a PDF file of GAA's advocacy brief, issued February 7, 2006.

Click here for GAA's press release on the need for an Anglo-French alliance to fight AIDS and poverty.

Executive Summary:

Three years ago, the United Kingdom proposed the International Finance Facility (IFF) as a new way of generating funding for international development. By borrowing funds from the international capital markets on the basis of an agreed-upon stream of long-term donor payments, the IFF would be able to direct as much as $50 billion a year to development programs in its first ten to fifteen years.

Given the tremendous shortfall in resources for health and education programs, this proposal seemed both timely and innovative. It promised a predictable and reliable stream of funding over a long period of time, making possible better development planning. Yet, since its launch, the proposal has resulted only in a smaller-scale, pilot program to generate funds for childhood immunization, albeit one that it is estimated to save five million lives by 2015.

This briefing argues that momentum for the launch of the full IFF can and must be recovered, and that 2006 will present unique opportunities to do so. We argue that the two most promising proposals for innovative development financing, the IFF and the Airline Solidarity Contribution, should be integrated. The UK and France, in particular, must overcome their rivalry and publicly commit, at the upcoming meeting of the G7 Finance Ministers (Feb. 10-11), to providing a significant portion of proceeds from airline ticket taxation to the full IFF. An German-Anglo-French Alliance, which can inspire participation from additional countries, is essential for global development and security.

The global community has made new and important promises to increase aid levels and reach certain key benchmarks in the areas of AIDS treatment and prevention, as well as in access to basic education. Putting the full IFF in motion is the best way to carry on the spirit of the Gleneagles Summit, where key promises for aid for development were made, and to show that the world is serious about reaching the Millennium Development Goals (MDGs). Because of pressing domestic needs and fiscal difficulties, wealthy governments are not likely to keep these promises through regular means alone. Only with the launch of the IFF will there be any real prospect of securing the scale of funding needed to jumpstart progress.

Global anti-poverty advocates have been hesitant to give the IFF their full support. This hesitancy arises from a number of concerns regarding the cost and appropriateness of borrowing funds for development aid, the conditions attached to aid from the IFF, and the potential impact on future aid flows. We believe each of these concerns can be addressed.

We argue that the best way to recover momentum is to direct IFF resources to health and education programs that are run in a cost-effective, accountable, and transparent manner, that do not impose inappropriate conditions, and whose estimate of financial need is well-documented. The Global Fund to Fight AIDS, TB and Malaria and the Education for All-Fast Track Initiative meet these criteria and are facing this year a massive shortfall in resources.

By investing in these successful programs, in which there is clear capacity to absorb and utilize more resources, the IFF will be able to achieve impressive success in saving lives and helping countries build better futures. The IFF will also be able to clearly demonstrate that a program that borrows funds from capital markets can generate the levels of development gains—or in economic terms the "rate of return"—that justify borrowing to frontload aid.

We also argue that it is the self-interest of wealthy countries, including that of such cash-strapped countries as Germany, to fully participate in the IFF, because of the tremendous damage HIV/AIDS is expected to cause to the global economy. If Germany breaks its word to increase aid it will lose its best chance to show leadership in global affairs.