GLOBAL FUND OBSERVER (GFO), an independent newsletter about the Global Fund provided by Aidspan to nearly 10,000 subscribers in 170 countries.

Issue 188: 19 June 2012. (For formatted web, Word and PDF versions of this and other issues, see www.aidspan.org/gfo.)

+ + + + + + + + + + + + + + + + + + +
CONTENTS
+ + + + + + + + + + + + + + + + + + +

1. NEWS: CSOs Win Court Battle in Kyrgyzstan

Earlier this year, a District Court in Kyrgyzstan ordered the Government to provide civil society organisations copies of all documents pertaining to the purchase of antiretroviral medicines between 2009 and 2011. The court case emerged from a project by three CSOs in Kyrgyzstan to monitor and analyse the procurement and distribution of medicines purchased with Global Fund grants. The Ministry of Health had refused to let the CSOs have copies of tender agreements and related documents.

2. NEWS: Civil Society Groups Intensify Campaign for Financial Transaction Tax

Civil society organisations staged coordinated events around the world to mark the Robin Hood Tax Global Week of Action from 15-22 May. The CSOs are pressuring rich countries to adopt the Robin Hood tax, also known as the financial transaction tax, which, they say, will raise billions of dollars to address global health issues and help end poverty in developing countries.

3. ANALYSIS: Restrictions on Access to Funding by Middle-Income Countries

The debate concerning what proportion of Global Fund money should go to low-income countries has been going on for years. This article provides some background information and describes the arguments being advanced by civil society organisations opposed to placing too many restrictions on the ability of middle-income countries to access funding.

4. COMMENTARY: Remembering Nadia Fuleihan

Bernard Rivers pays tribute to Nadia Fuleihan, who was killed in a car accident on 5 June. Nadia worked for many years on Global Fund issues for the United Nations Development Programme.

5. NEWS: Call for a New Mechanism to Finance a New International Health Strategy

In an article in the journal Policy Review, three prominent academics call for a new international health strategy that focuses on the health of people and communities. The authors argue that the current focus on specific diseases has exposed fault lines in delivering services in places where people suffer from multiple health issues.

6. NEWS: Programme-Related Findings in the OIG Audit Report on an HIV Grant in Uzbekistan

Our coverage of audit reports issued by the Office of the Inspector General usually focuses on the financial, management and procurement systems of principal recipients and sub-recipients. In this article, we report on the OIG's findings concerning the programmatic aspects of an HIV grant in Uzbekistan.

7. ANNOUNCEMENT: Global Fund Releases Governance Handbook

The Global Fund has issued a Governance Handbook for members of the Board and their delegations.

+ + + + + + + + + + + + + + + + + + +

1. NEWS: CSOs Win Court Battle in Kyrgyzstan

Government ordered to provide documents related to procurement of ARVs

Earlier this year, civil society organisations (CSOs) in Kyrgyzstan succeeded in their legal challenge against the Ministry of Health, which had refused to grant access to copies of tender agreements and other documents related to the procurement and distribution of antiretroviral medicines (ARVs). On 26 January 2012, the Bishkek District Court ruled that the government's actions were a violation of the right to access information, and ordered the government to turn over copies of all documents pertaining to the purchase of ARVs between 2009 and 2011.

The court case emerged from a project launched in 2010 by three CSOs in Kyrgyzstan to monitor and analyse the procurement and distribution of medicines purchased with Global Fund grants. The impetus for the project was the fact that even though Kyrgyzstan has received considerable international funding for health, many people are still unable to access lifesaving medicines.

The CSOs are the Harm Reduction Network, the Partnership Network, and Unity of People Living with HIV. The CSOs hope that the monitoring effort will increase the efficiency and transparency of projects that are implemented by the government's AIDS centre, the principal recipient (PR) for Global Fund grants.

The project involves tracking the procurement and distribution of ARVs and of medicines to treat opportunistic infections, as well as supplies that help reduce HIV infection, such as safe injection equipment for people who use drugs. As part of the project, the CSOs are analysing whether the procurement and distribution processes are transparent, are in accordance with Kyrgyz law on public procurement, and are in line with Global Fund procedures.

According to Madina Tokombaeva, director of the Harm Reduction Network (HRN) in Kyrgyzstan, and Maryam Beishenova, programme coordinator at HRN, the CSOs met with resistance from the Ministry of Health, which refused to release copies of tender agreements and other financial documents pertaining to the AIDS centre. They said that the government claimed that these records are not available to third parties. This is what led to the legal challenge.

Ms Tokombaeva and Ms Beishenova said that the court decision is "a clear victory for transparency and access to information in Kyrgyzstan. Civil society organizations have been energized and we are committed to ensure that government agencies and donors are transparent and efficient."

The monitoring project continues.

Information for this article was taken from a blog on the website of Open Society Foundations.

+ + + + + + + + + + + + + + + + + + +

2. NEWS: Civil Society Groups Intensify Campaign for Financial Transaction Tax

The UK is still firmly opposed

Civil society organisations (CSOs) are continuing to pile pressure on rich countries to adopt the financial transaction tax (FTT), also called the Robin Hood tax, which they say will raise billions of dollars to address global health issues and help end poverty in developing countries. CSOs are hoping that some of the proceeds of an FTT will flow to the Global Fund.

The FTT would apply to transactions such as the purchase and sale of stocks, bonds, options and futures contracts. Proponents of the FTT say that the tax would be extremely small (e.g., 0.005% of the value of futures contracts linked to equities).

CSOs staged coordinated events around the world to mark the Robin Hood Tax Global Week of Action from 15-22 May. The Week of Action was organised to coincide with two major meetings; the G8 Summit on 18-19 May at Camp David, Maryland, US; and the European Finance Ministers Meetings on 15 May and 22 June. The FTT was on the agenda of the European meetings.

As part of the week of action, a huge rally of nurses dressed in Robin Hood hats marched on the streets of Chicago, while others gathered on Mount Fuji in Japan. There were also demonstrations in Britain, Italy, Germany, India, Brazil, Zambia, Malawi and Belgium. In addition, hundreds of European CSOs wrote to European governments to urge them to ensure that proceeds from the tax are used to address global health, poverty and climate change.

During the Week of Action, a group of UN experts called for acceptance of the tax. In a statement, the Special Rapporteur on extreme poverty and human rights, Magdalena Sepúlveda, said:

"Where the world financial crisis has brought about the loss of millions of jobs, socialized private debt burdens and now risks causing significant human rights regressions through wide-ranging austerity packages, a financial transaction tax is a pragmatic tool for providing the means for governments to protect and fulfill the human rights of their people."

According to the UN office of the High Commissioner of Human Rights (OHCHR), estimates suggest that the FTT would yield at least $48 billion, and perhaps as much as $250 billion, every year, across the world's largest economies, the Group of 20.

In a symbolic move during the Week of Action, the European Parliament approved the idea of an FTT, and said that the tax should go ahead even if only some European Union (EU) member states opt for it. (The European Parliament does not have the power to impose the tax on EU member countries.)

In March 2012, Aidspan published an article on the FTT in GFO 178. As reported in that article, opinion among European governments is divided. France and Germany are in favour of the FTT, but the UK is opposed.

"A financial transaction tax (FTT) is a bad idea," British Prime Minister David Cameron told reporters as he left an EU summit meeting in Brussels in May. "It will put up the cost of people's insurance, put up the cost of people's pensions, it would cost many, many jobs, and it would make Europe less competitive and I'll fight it all the way."

Newly elected French President, Francois Hollande, supports the FTT, and promoted the idea at the G8 Summit. The latest "Eurobarometer" survey shows that 66 percent of Europeans favour such a tax.

Information for this article was taken from various sources including The Telegraph and the International HIV/AIDS Alliance.

+ + + + + + + + + + + + + + + + + + +

3. ANALYSIS: Restrictions on Access to Funding by Middle-Income Countries

The debate concerning what proportion of Global Fund money should go to low-income countries (LICs) has been going on for years. Some of the donors to the Global Fund feel very strongly that the bulk of the Fund's money should go to the poorest countries. They are particularly concerned that as more and more countries increase their gross national income and transition from low-income to middle-income, the proportion of Global Fund money that goes to LICs will steadily go down, whereas they want it to go up.

Over the years, these donors have managed to convince the Global Fund Board to impose both minimum floors concerning how much money should go to LICs, and restrictions on the ability of middle of middle-income countries (MICs) to access money. The most recent example of this was the 55% rule, adopted in November 2011. This rule says that each year, 55% of all funding must go to low income countries.

In February 2012, a few months after the Board adopted the 55% rule, the Board Chair announced that for countries classified as lower-middle-income and above, funding for each grant renewal would be limited to 75% of what had originally been approved, as one means of achieving the 55% objective.

The 55% rule has been strongly opposed, not only by MICs but also by many civil society organisations (CSOs), including those represented on Board delegations. They point out that more than half of the world's poor now live in MICs.

Although the focus recently has been on the 55% rule, the debate is really about the broader issue of what restrictions (if any) ought to be placed on MICs.

At its meeting in May 2012, the Global Fund Board discussed concerns about the impact of the "55% rule." As we reported in GFO 184, the Board determined that further analysis of the 55% rule was required. It also decided to freeze implementation of the 75% ceiling. Further discussions on the 55% rule are expected to occur at a Board meeting in September 2012. The decision to freeze the ceiling effectively kills the 55% rule for 2012 because that rule cannot be implemented without the ceiling (or without similar measures).

This article provides some background information, and summarises some of the arguments that have been advanced recently by CSOs.

Restrictions on MICs

The Global Fund has had restrictions on access to funding by MICs for many years.

(The World Bank classifies countries by income level based on gross national income per capita. The Bank uses the following categories: low income, lower-middle income, upper-middle income, and high income. The classifications are updated annually on 1 July. High-income countries have never been eligible to apply for Global Fund money.)

In November 2007, the Board adopted a cap of 10% on funding to upper-middle-income countries (UMICs) in any given round of funding.

In May 2011, the Global Fund decided that rounds of funding would have both a general pool and a targeted pool; the latter was intended for proposals targeting most-at-risk populations. Funding for the targeted pool was to be limited to 10% of a given round of funding. Ceilings were imposed on funding for Individual proposals in the targeted pool. UMICs with a disease burden of high or above could apply only under the targeted pool.

That same month, changes were made to the Fund's eligibility and counterpart financing requirements. Some of the new rules placed additional restrictions on MICs. For example, proposals in the general pool from lower-middle income countries (LMICs) must focus at least 50% on most-at-risk populations or high impact interventions; for UMICs, the figure is 100%.

In November 2011, the Board adopted new policies for grant renewals that further restricted access to funding for MICs (including the 55% rule).

Rationale for the latest restrictions

The Global Fund Secretariat argued that without any changes to the rules, renewals in 2011-2013 would be heavily skewed towards MICs. The Secretariat said that between 2011 and 2013, the share of renewals represented by LICs would decline from 54% to 43%; and the share represented by lower LMICs would decline from 34% to 21% - whereas the share represented by UMICs would increase from 8% to 20%. The main reason for this trend is that a number of countries have transitioned to a higher income level.

With respect to funding for new proposals, the report of the Technical Review Panel (TRP) and the Secretariat on Round 10 showed that compared to Round 9, there was a marked decrease in the share of recommended funding for LICs - from 71% to 55% - and a corresponding increase for MICs. The report said that the UMIC share of recommended funding had gone from less than 1% in Round 8 to 4% in Round 9, and to 12% in Round 10 (above the limit set by the Board in 2007).

Concerns expressed recently by CSOs

CSOs have argued that the 55% rule goes too far. They have also questioned the use of country income levels to determine access to funding for key populations. Many of the concerns are described in a policy brief prepared by the Developed Country NGO Delegation in May 2012, a version of which was provided to all Board members.

The delegation paper said that "using country income categories as the main guidance for deciding whether or not to allocate resources to specific vulnerable populations may ultimately be counterproductive as income alone is not indicative of countries' ability to pay for the cost of their disease responses." The delegation said that, historically, decisions about who is eligible for funding and how funding should be prioritised considered both disease burden and country income; and that before the changes in 2011, the Global Fund's eligibility requirements led to a high correlation between grant size and disease burden (0.84). Given the changes placing greater emphasis on country income category, the delegation said, it is doubtful that the current requirements will lead to nearly such an effective funding distribution.

In fact, the delegation said, the 55% rule may inadvertently prevent the Global Fund from investing adequately in countries with the highest disease burdens and greatest need. The paper explained this as follows:

"Many countries are transitioning from low to middle income, but poverty in middle income countries remains high.... Middle-income countries have higher burdens of HIV and TB than low-income countries....The capacity of middle-income countries to pay for health and their disease responses varies... The Global Fund will only achieve its targets if investment is proportionate to disease burden."

The delegation argued that many bilateral funders, including the UK, have focused their funding on low-income countries because they believed that their obligations towards MICs were being met through their contributions to the Global Fund.

The delegation called for a more nuanced approach to funding that takes into account disease burden, income levels, the distribution of wealth within countries, ability to pay and the sustainability of the interventions. However, although the delegation paper argued for the removal of the 55% rule, it did not question other restrictions on access to funding by MICs. In fact, it stated that the existing policies (e.g. eligibility, prioritisation, counterpart financing and the targeted pool) already shape the Global Fund portfolio appropriately "by directing resources and requiring middle-income implementing countries to contribute financial resources to the response."

(Proponents of maintaining or even increasing restrictions on access to Global Fund money by MICs say that, yes, many of the world's poor live in MICs, but the governments of those countries have a responsibility for taking care of their poor. One person we talked to cited the case of Guatemala, He said that the middle class has forced the government to keep income tax at a low level; that this prevented the government from increasing care for the poor; and that this, in turn, has resulted in taxpayers in the West paying, through aid, for services to the poor of Guatemala that taxpayers of Guatemala are not willing to pay for.)

In a study on resource allocation conducted for Aidspan and published in the journal PLoS ONE, Dr David McCoy and Kelvin Kinyua also argued for a different approach to resource allocation. The authors pointed out that there is currently a poor correlation between (a) the global distribution of people living in poverty and suffering from the three diseases and (b) the income status of countries. The authors added that not only is the average income status a poor marker of the burden of need, it can also be a poor indicator of the ability of a country to finance an adequate response to the three diseases. "A more sophisticated approach is required, combining an assessment of the financial need of a country and its burden of disease," they concluded.

The debate will continue. It is noteworthy that while the Board froze implementation of the 75% ceiling, it did not revoke the 55% rule per se. At it meeting in September 2012, the Board could decide to "resurrect" the 55% rule for 2013 and beyond, perhaps with a different number or in some other form.

The Global Fund is working now, in consultation with stakeholders, to design new funding models for a September 2012 launch. The new models are intended to be quite different from the rounds of funding that were used in the past. At least one of the existing rules affecting eligibility - funding for UMICs capped at 10% in any given round of funding - will probably not make any sense under the new models. It is difficult to see, therefore, how the Fund can design these models without reviewing existing rules on eligibility, prioritisation and counterpart financing. Trying to do both - i.e., design new models and review the eligibility criteria - by September will be very challenging.

The policy brief prepared by the Developed Country NGO Delegation is available for direct download here. The report on the study of resource allocations is available here.

+ + + + + + + + + + + + + + + + + + +

4. COMMENTARY: Remembering Nadia Fuleihan

by Bernard Rivers

I've been working on Global Fund issues since the Fund started ten years ago. A key factor that has kept me going is the stimulus I get from the remarkable people I meet in the course of my work.

Recently, however, I received some very sad news about one of those people. Nadia Fuleihan was killed in a car accident on 5 June in South Africa.

Nadia was special. She was someone who, through commitment and forcefulness, single-handedly made the world a better place.

Nadia was a Lebanese national who worked for the United Nations Development Programme (UNDP) on Global Fund issues since shortly after the Fund was established. UNDP is the principal recipient for many Global Fund grants, and Nadia was involved in almost all aspects of these grants - negotiating agreements, providing technical support, networking at Global Fund Board meetings, partnering with others around policy issues, pushing for a stronger focus on issues of gender and human rights, and more. This breadth of responsibilities over time gave Nadia an impressive network and an unparalleled insight into Global Fund operations and policy.

Nadia was widely respected and loved. According to Jeff O'Malley, Director of the HIV/AIDS Group at UNDP, this was not because of the scope of her responsibilities and her network. It was because of "Nadia's immense commitment to the causes of better health, human rights and empowerment of the marginalized," O'Malley told me. "These shone through constantly. Nadia had a remarkable ability to connect with people on a human level and as friends, while working together and even while working on opposite sides of any given issue."

Nadia had a big, booming voice and a personality to match. Her cheerful face would light up a room, and her laugh was unique and frequent. When I think of her, I smile.

Bernard Rivers (bernard.rivers@aidspan.org) is Executive Director of Aidspan.

+ + + + + + + + + + + + + + + + + + +

5. NEWS: Call for a New Mechanism to Finance a New International Health Strategy

Three prominent academics have called for a new international health strategy that focuses on the health of people and communities.

In an article that appeared on 1 June 2012 in the journal Policy Review, Mark Dybul, Peter Piot and Julio Frenk argue that the current focus on specific diseases has exposed fault lines in delivering services in places where people suffer from multiple health issues. Disease-specific programmes, they state, have revealed disparities and inadequacies in health systems. They have also highlighted the crucial role non-health sectors play in health.

The authors note that global health is at a significant crossroads, with the World Health Organization facing a major budgetary shortfall and many multilateral and bilateral programmes bracing for either limited growth or significant cuts.

The authors call for the establishment of a new mechanism to finance integrated national health strategies. This could involve creating something new or transforming current institutions. The authors state that candidates in the latter category include the World Bank and the Global Fund. "Recent changes in leadership at both institutions, and reforms that began with the former executive director of the Global Fund, could provide an opportunity for the Bank and Fund to develop their own, or collaborative, institutional change to maximize financing for integrated health delivery," the authors said.

The authors state that what is needed is a Bretton Woods-style agreement to guide a new international health strategy and rationalise its structure. (In 1944, at a high-level meeting held in a hotel in Bretton Woods, New Hampshire, the International Monetary Fund and the International Bank for Reconstruction and Development [later re-named the World Bank] were created to rationalise global economic policy as World War II was coming to an end.)

Mark Dybul is co-director of the Global Health Law Program at Georgetown University. Peter Piot directs the London School of Hygiene and Tropical Medicine. Julio Frenk is the dean of the Harvard School of Public Health. Their full article is available here.

+ + + + + + + + + + + + + + + + + + +

6. NEWS: Programme-Related Findings in the OIG Audit Report on an HIV Grant in Uzbekistan

Editor's Note: In its audit reports, the Office of the Inspector General (OIG) comments on the performance of the programmes being implemented through Global Fund grants as well as on the systems in place for programme management, financial management and procurement. In the past, coverage of the OIG audit reports in GFO has focussed primarily on the systems. In this article, we report on the OIG's findings with respect to the HIV programmes covered by the Global Fund's grant in Uzbekistan.

At the end of April 2012, the Global Fund's Office of the Inspector General (OIG) released the final report of an audit on three grants in Uzbekistan, administered by three principal recipients (PRs), including the Republican AIDS Center (RAC), PR for the Round 3 HIV grant. The RAC is part of the Ministry of Health (MOH).

The audit was conducted between 17 August and 17 September 2009, and a further financial audit was conducted in the first quarter of 2010. The value of the HIV grant was $21 million, of which $15 million (71%) had been disbursed at the time of the audit.

In this article, we report on some of the OIG's findings with respect to the HIV programmes covered by the grant. In its comments, the OIG dealt with both the national HIV programme and the grant from the Global Fund.

The OIG said that, overall, the RAC had successfully carried out work plans of the Round 3 grant, but that some planned activities have not been implemented. The OIG cited several examples:

• the substitution treatment component of the programme was terminated;
• a reproductive health curriculum for schools was not developed;
• teachers were not trained in reproductive health issues;
• palliative care was not provided to PLWHA; and
• protocols for palliative care were not developed.

According to the OIG, there is very low coverage of most-at-risk populations (MARPs) by trust points. (Trust points are service delivery units, usually located in public health facilities, and usually targeting MARPs.) The OIG said that of the people registered at these trust points, very few are tested for HIV (including zero coverage of men who have sex with men). The OIG said that according to trust point providers interviewed, the reason that MARPs are not tested for HIV is fear of stigma related to HIV status. The OIG said that the RAC should consider moving the trust points out of government health facilities. The OIG also recommended using rapid testing in the trust points.

The OIG said that a significant proportion of people living with HIV do not seek care to initiate treatment with antiretrovirals (ARVs), and that the reasons include fear of stigma as well as difficulty travelling to the capital to begin treatment. The OIG said that the RAC and the MOH should give consideration to decentralising initiation of ARVs and clinical follow-up of patients to the regional level.

The audit found that medicines for the treatment of opportunistic infections are not provided free of charge although they were meant to be under the Global Fund grant. The OIG said that people living with HIV have to buy these drugs at their own expense, which some of them cannot afford.

The OIG said that there were stockouts of antibiotics and medicines for the treatment of sexually transmitted infections at the regional AIDS centres in Fergana and Andijan, as well as at the central level. There were also shortages of medical supplies such as gloves, syringes, intravenous sets and catheters which, the OIG said, has serious implications for people living with HIV.

Other findings by the OIG include the following:

• pre-test counselling is not routinely done at all service delivery points;
• most infectious disease doctors, who are supposed to provide clinical oversight to patients on ARVs, have not had adequate in-service training; and
• there is poor coordination between HIV and TB programmes.

Response from the PR

The audit report contained a section providing responses to the OIG's recommendations from PRs and the other entities covered by the audit.

With respect to the OIG's recommendation that trust points be moved outside government health facilities, the RAC said that opening trust points elsewhere is not possible due to lack of funds. However, the RAC said, measures are being taken to strengthen the services provided at the trust points. The RAC also said that rapid tests would be used for MARPs, on a pilot basis, starting in 2012, if funding is obtained.

Concerning the OIG's recommendation that initiation of ARVs and clinical follow-up be decentralised, the RAC and the MOH said that this is now happening and that training programmes will be implemented for medical specialists in regional centres.

With respect to the OIG's findings that there were shortages of medicines and medical supplies, the RAC said that this is being addressed in a new single-stream-of-funding (SSF) grant. (The SSF grant consolidated the Round 3 HIV grant with activities in an approved Round 10 HIV proposal.)

The RAC indicated that measures were being taken to address the other findings in the audit report.

All of the OIG reports released in April 2012 are available on the Global Fund website here.

+ + + + + + + + + + + + + + + + + + +

7. ANNOUNCEMENT: Global Fund Releases Governance Handbook

A new Governance Handbook issued by the Global Fund describes the Fund's various structures and governance processes. The handbook was conceived primarily as an operations guide for members of the Global Fund Board and their delegations, but it has also been made public.

Separate sections of the handbook are devoted to topics such as the history of the Global Fund, the roles of the Board and its committees, and the current funding model and how it may evolve.

The handbook is available on the Global Fund website here.

+ + + + + + + + + + + + + + + + + + +
END OF NEWSLETTER
+ + + + + + + + + + + + + + + + + + +