EUROPEAN COUNTRIES RENEGE ON COMMITMENTS TO THE GLOBAL FUND

PREAMBLE:
The track record of developed countries honoring their aid commitments is not impressive (especially the G8 nations)[1]. However, until recently, there was optimism that most would honor their commitments to support the Millennium Development Goals (MDGs).

To briefly revisit the MDGs for those readers who may not recall what they were about, here is a thumbnail sketch: at a United Nations conference in 2000, governments around the world pronounced the MDGs, to be achieved by 2015. Eight goals were constructed (listed below), reflecting the world's main development challenges and responding to the calls of civil society.[2] Within these goals there are 18 targets, complemented by 48 measurable indicators to measure progress towards the MDGs.

Goal 1: Halve Proportion of People in Extreme Poverty and Hunger
Goal 2: Achieve Universal Primary Education
Goal 3: Promote Gender Equality and Empower Women
Goal 4: Reduce Child Mortality by 2/3
Goal 5: Reduce Maternal Mortality by 3/4
Goal 6: Combat HIV/AIDS, Malaria and other diseases
Goal 7: Ensure Environmental Sustainability
Goal 8: Develop a Global Partnership of Development

Last year’s UN Special Session on MDG outcomes provided an important reminder: in relation to Goal 8 (Develop a Global Partnership of Development) there was a message for all donor countries, namely that, without more reliable support from developed countries, several Goals are likely to be missed in many developing ones.[3]

However there is now serious concern regarding the 6th goal, which comes within the remit of a “Global Fund to fight AIDS, Tuberculosis and Malaria”. Tragically, in November 2011, several European entities (Germany, Ireland, Sweden and the European Commission itself), ostensibly in response to fraud in a small number of developing nations (4 out of >120 recipient countries), have frozen or drastically cut back on their funding support to the Global Fund as a whole with the effect that it will not be able to take on any new commitments for a 3 year period.

Although it is understood around the world that the entire European Union is now under existential threat, and therefore unable to make good on their commitments, in our view it is a “bit rich” (to use the vernacular, no pun intended) that these rich nations, whose own financial mismanagement and fraud in some instances led to their own current morass, feel free to tar recipient countries with the same brush.

The documented fraud amounts to $34 million, which represents 0.03% of the Fund’s whole portfolio, and all of the evidence of fraud that was cited in the press was uncovered by the Fund itself after it undertook investigations. Furthermore, the Fund had publicly announced these findings as they were uncovered. There was never any duplicity or attempts to cover up the losses. It would be interesting indeed to see how this compares with the extent and impact of fraud in the European Community itself, especially on the heels of various banking collapses, and national defaults. Pot calls kettle black?

For this issue of PacificSci Global Perspectives, we extract from an objectively critical situation analysis as presented by Results UK, an NGO registered in England, Wales and Scotland.[4]

NOTE: This is our last issue for 2011. Our Year in Review will appear as the first issue for 2012.

References:
1. White F. Development assistance for health – donor commitment as a critical success factor. Can J Public Health (2011)102,6:421-3
2. United Nations Development Programme. About the MDGs: Basics - What are the Millennium Development Goals? http://www.undp.org/mdg/basics.shtml Accessed December 15, 2011.
3. UN General Assembly. 65th Session Agenda Items 115. Special Session on the MDGs. Outcome Document: New York. September, 2010.
4. Supporting the Global Fund – making the case for immediate intervention. Background Sheet 1: RESULTS – the power to end poverty. December 11, 2011. http://results.org.uk/sites/default/files/December%202011%20Background%20Sheet%201%20Supporting%20the%20Global%20Fund.pdf Accessed December 15, 2011.

THE GLOBAL FUND TO FIGHT AIDS, TB AND MALARIA (GF)
Note: This report is extracted verbatim from the work of Results-UK (citation #4 above). While we fully endorse what they have stated, the originality of this analysis belongs entirely to them. We recognize that it was written for a primarily UK audience, but we feel that it deserves global recognition and readership.

The GF is a multilateral agency founded in 2002 and is the world’s largest financer of anti-AIDS, TB and Malaria programs. It operates as a partnership between governments, civil society, the private sector and affected communities. It draws its funding from donor governments, trusts and foundations and distributes that money to implementing agencies. To ensure that GF money goes to where it is needed most, it prioritises countries with low incomes and high disease burdens. Importantly the GF is guided by the principles of accountability and transparency. It focuses explicitly on results and has an outstanding track record for delivering real impacts on the ground.

At the end of 2010 the GF has approved funding of $22 billion for more than 600 programs in 150 countries. Because it has such clear monitoring mechanisms the Fund states that it has distributed 190 million insecticide treated nets to treat malaria, provided TB treatment for 8.2 million people and provided antiretroviral drugs and holistic care for some 3.2 million people, saving 7.7 million lives.

How funding works: the replenishment process
The fund is predominantly bankrolled by contributions from the governments of developed nations. Since it was created in 2002, 95% of pledges have been from these governments (totalling $28.3bn), with the other 5% coming from private sector and philanthropic givers like the Gates Foundation. From 2001-2010 by far the largest contributor to the fund has been the USA, followed by France, Japan, Germany and the UK. In terms of giving as per cent of GNI, Sweden gives the largest proportion, followed by France, Norway, Holland and Spain.

After the initial funding it received for 2002-2004 the GF has gone through a replenishment cycle every three years, with the last of these events taking place in 2010 in New York. The GF went into the New York conference seeking $20 billion to fully fund the fight against the three diseases. Whilst this represented a doubling of contributions from the 2007 replenishment, it was considered as absolutely vital to avoid losing ground to the diseases. Unfortunately, pledges and projections at the conference only ended up totalling $11.68 billion. The result was that the GF needed to seek new funding, could not fund certain high cost programs and had to slow the pace of scale up.

The UK contribution
The UK government has been a strong historic supporter of the Fund. In 2001 the Labour government made a pledge to give £1.36 billion between 2001-2015 and has delivered £1.06bn thus far. After coming to power the new coalition undertook a review of all UK giving to multilaterals and the Fund came out very well, rated in the highest category as providing ‘Very Good’ value for money, which was only given to 9 organisations. In giving the Global Fund a top score, the Multilateral Aid Review (MAR) found its “quality and depth of reporting” were very high, and reported that “standards for financial management and audit” were very high as well. Overall it found the Global Fund to be critically important in the delivery of the MDGs.

As such, the new government has committed to continued giving to the fund at the same levels as the previous administration. The UK has not made a new pledge recently, however, our historically strong stance puts us ahead of many European countries. Civil society organisations across the UK and Europe have been calling on the UK to make a contribution of £840 million between 2011-2013, a figure that would represent a ‘fair share’ of the $20 billion that the GF requested to fill financing needs of partner countries.

What went wrong?
There have been several competing factors that have led to countries withdrawing or withholding their payments to the Global Fund.

1. The financial crisis: The global economic downturn of 2008 has severely hit the GF. With aid budgets being squeezed more tightly than ever before, many countries have chosen to hold back or renege on their commitments to the Fund, citing a variety of causes. As the crisis has continued the ratio of pledges to money actually delivered has steadily worsened, with countries including Spain, Holland, Denmark, Italy, Belgium and the US seriously behind on their commitments. Countries are finding the crisis a convenient excuse not to meet their commitments.

2. Global Fund Corruption: In January this year, corruption in GF programmes was inaccurately and sensationally reported by the Associated Press. Citing losses of $34 million dollars across several countries, the media created a situation in which Germany, Ireland, the European Commission and Sweden all announced that they were withholding funding until investigations into the causes of the losses and how they occurred were carried out.

3. A victim of its own success: Ironically, the Fund’s success up until 2010 has partly led to these problems. The Fund introduced new paradigms in the global health and international development arenas. It established a mechanism which channels resources to fund demand through the submission of evidence based, technically sound TB/Malaria/HIV proposals, and as a result has regularly met and exceeded its targets. As such, scale up in demand has been steep, leaving the Fund needing increasingly more and more funding. When global economics were good, this was a curve that could continue. Now this is clearly no longer the case.

The issue of corruption
Stories began to circulate in January 2011 about money going missing from GF supported programs in nine different countries. The total sums that were misappropriated or unaccounted for totalled around $34 million dollars. As a reaction, Germany, Ireland, Sweden and the E.C all stated that they were withholding money to support pledges. They all cited slightly different reasons – and had slightly different motivations – but all called for the Fund to conduct an investigation into its activities.

The media reports of corruption have been very damaging to the Fund, but it’s important to look at this in detail and put the figures into perspective. All of the evidence of fraud that was cited in the press was uncovered by the Fund itself after it undertook investigations. Corruption was found in 9 out of 33 investigated programs (of 145 the fund administers). In Mali, the country with the greatest losses, the Fund has reclaimed a large amount of that money and secured the convictions of nine civil servants involved in its theft. The Office of the Inspectorate General (OIG) is a completely independent body within the Fund that carries out these investigations. What’s more, the Fund had publicly announced these findings as they were uncovered. There was never any duplicity or attempts to cover up the losses. Joe Liden, a spokesman for the Fund stated that they felt they had been “treated very badly by the media.”

Within the whole of the Fund’s portfolio, the $34 million represents 0.03% of the Fund’s whole portfolio (although only 33 countries were investigated). However, these 9 programs were investigated for the very reason that they were some of the riskiest grants the Global Fund provided. Looking at the most recent set of reviews from the OIG, which analysed over $1b of grants, indicates that across the whole portfolio, no more than 1% of funds have been lost to fraud. This is substantially less than is lost by the UK’s DWP every year.2 However, the sensationalist language used by the media has stuck and the Fund’s reputation as been damaged. The Fund has been through a process of self-evaluation and produced a High Level panel report discussing the problems it faced around fiscal accountability, auditing and investigation practices and has addressed many of the criticisms made by concerned donors.

OUR COMMENT: The ethics of the European Community need to be called into question. It appears that they have held the Global Fund to a higher standard than they themselves could meet, especially given the evidence of everything from bank fraud to gross mismanagement of national finances in several of their own members (Ireland is one of the countries that have reneged on their GF commitments, but isnt this also one of the so-called “PIGS” that have exhibited financial mismanagement?), leading to the current crisis in the Euro. At least one should expect Europe to be honest about this and not play “bully in the pulpit”. Why not lay the blame for reneging on commitments on their own mismanagement, and by extension accept responsibility for any reversals that will result from funding shortfalls in global efforts to combat these diseases over the next 3 years?

We wish all readers the very best for the Holiday Season, and a Happy New Year.

IS CLIMATE CHANGE AN ACT OF AGRESSION?

PREAMBLE: In this issue we abstract an article carried by The Economist (on-line edition Sept 24th, 2007). The article reported on Ugandan President, Yoweri Museveni's declaration that climate change is an act of aggression by the rich world against the world’s poor. We also note, on the same topic, the following statement from the Church World Service (CWS): "The issue for CWS is how climate change frames development and justice", said Rajyashri Waghray, who directs education and advocacy for the CWS.

For stark contrast we note Canada’s uncertain posture, now quoted from a Globe and Mail Editorial of September 26: “Prime Minister Stephen Harper’s progress from a climate-change skeptic to an environmental convert has been a perplexing odyssey. After a half-hearted attempt to tackle greenhouse-gas emissions late last year, his Conservative government hurriedly introduced new regulations and incentives, which made a good start in fostering reductions. Earlier…(in September), in Australia, he even announced his personal commitment to ‘careful environmental stewardship’. That seemed heartfelt. Now it is fair to question the sincerity of that conversion. On… (Sept 24), at a UN climate change conference aimed at saving the Kyoto Protocol, Mr Harper announced that Canada had asked to join a rival climate-change pact, the Asia-Pacific Partnership. The six members of that pact include nations that have refused to ratify the protocol, such as the United States, and others among the world’s worst polluters, such as India and China. Together they account for nearly half of all greenhouse gas emissions”.

And now The Economist’s discussion of the Ugandan Prime Minister’s proposition, and their assessment of the situation and implications in Africa...

CLIMATE CHANGE AS AN ACT OF AGGRESSION
At a recent African Union summit, Uganda's president, Yoweri Museveni, declared climate change an act of aggression by the rich world against the world’s poor. Indeed, if predictions of the UN's Intergovernmental Panel on Climate Change (IPCC) hold true, climate change may have a graver effect on Africa than on any other continent. One may well ask…Why should the poorest die for the continued excesses of the richest?

According to The Economist, the IPCC's most recent regional report raises the spectre of rising mortality. It predicts a minimum 2.5°C increase in temperature in Africa by 2030; drylands bordering deserts may get drier, wetlands bordering rainforests may get wetter. The panel suggests the supply of food in Africa will be “severely compromised” by climate change, with crop yields in danger of collapsing in some countries.

In the drylands, water may become a critical issue. Soaring temperatures and erratic rainfall may dry up surface water. Between 75m and 250m Africans, out of the 800m or so now living in sub-Saharan Africa, may be short of water. The soil will hold less moisture, bore-holes will become contaminated, and women and girls will have to walk ever greater distances to fetch water. Vegetative cover will recede. The IPCC guesses that 600,000 square kilometres (232,000 square miles) of cultivable land may be ruined.

Warming may also hurt animal habitats and biodiversity. More algae in freshwater lakes will hit fishing. The glaciers of Uganda's Rwenzori mountains, of Tanzania's Kilimanjaro and of Kenya's eponymous mountain may disappear; only 7 of the 18 glaciers recorded on Mount Kenya in 1900 still remain. At the same time, a likely rise in sea levels may threaten the coastal infrastructure of northern Egypt, the Gambia, the Gulf of Guinea and Senegal.

There are two caveats to this gloomy scenario: 1) some parts of Africa may benefit from climate change. Increased rainfall in highland areas in eastern Africa could, for example, be beneficial. 2) though climate-change models have improved, they have been unreliable in Africa; the detail is guesswork.

Still, states The Economist, some scientists think that climate change may be even crueler to parts of Africa than the IPCC predicts. The important point, they say, is not the degree of warming but the continent's vulnerability to it. A University of Pretoria study estimates that Africa might lose $25 billion in crop failure due to rising temperatures and another $4 billion from less rain. The already impoverished drylands would suffer most. Some cite the war in Sudan's Darfur region as proof of the damage done by climate change, soil erosion and overpopulation.

Unfortunately, in the opinion of The Economist, few African leaders have grasped the scale of the challenge... Most oil-producers have squandered their bonanza. Nigeria has failed to plan for how to stem the dreadful pollution in its oil-producing Delta region or to prevent desertification tearing at the fabric of its dry Muslim north. South Africa is only just beginning to own up to its coal addiction. Uganda's Mr Museveni is fighting off a rare insurrection from his supporters against plans to turn a piece of Ugandan rainforest over to farming. The World Meteorological Organisation says that weather-data collection in Africa has recently got worse, just as the need for accurate figures has grown; many of the automatic weather stations it helped set up have fallen into disrepair. The African Union has done little to sound the climate-change alarm.

Kenya's president, Mwai Kibaki, says that Africa should “join hands” with its friends in the rich world over climate change. He wants more carbon-trading projects to come to Africa; so far, most have gone to Asia. His advisers admit that Mr Kibaki's ambitious plan to turn Kenya into an industrial country by 2020 worries environmentalists, but say that reforestation, thermal power and better management of water and grazing would, if they materialized, offset the damage.

Africa emits far less carbon than other continents, so its recently faster-growing economies do not gravely menace its environment. Some rich-country consumers, however, want to punish African countries for air freighting northwards some of their produce, from flowers to wine.
Hardier new varieties of staple crops, drip irrigation schemes and technologies such as solar power should help Africa adapt to climate change. But so can simple shifts in policy. For instance, a government decision in Burkina Faso to let farmers own the trees on their land has increased the country's tree cover.

The Economist’s conclusion: As the G8 rich countries are failing so far to fulfill the promises they made in 2005 to boost aid to Africa, the continent should not expect much new money to protect the environment. In the short run, Africa's own politicians need to take a lead, even if the people most culpable for the damage done by climate change live elsewhere.

Sources:
. Church World Service and partners prepare to act on climate change. May 2, 2007. http://www.churchworldservice.org/Educ_Advo/news/2007/climatechange.html
. Globe and Mail. Lead Editorial. Sept 26, 2007.
. Economist.com. Global Warming in Africa – drying up and flooding out. Sept 24, 2007. http://www.economist.com/world/africa/displaystory.cfm?story_id=9163426

COMMENT: What is important about the contrasting viewpoints presented, from those of President Museveni, to the Church World Service, The Economist, to the anti-Kyoto stance of Prime Minister Harper and the Asian-Pacific partnership, is that ultimately they highlight climate change as an ethical issue that almost inevitably will come up as a focus for discussion at the UN negotiations on climate change scheduled for Bali in December.