Funding the Fight against AIDS

HIV and AIDS have swept across the world over the past two decades, killing millions and bringing about untold suffering. Although much has been done to slow the spread of HIV, the virus continues to cause increasing numbers of deaths and its advance shows no sign of slowing. The world is finally coming to realise the extent to which HIV devastates families, communities and countries, and now, at last, political will is building to tackle the epidemic, perhaps because it is becoming apparent that HIV is a threat not only to low-income countries. People are realising that they must back this willingness with money, and that cash must be spent if there is to be any change. Governments, organisations and individuals have promised large sums, and more funding than ever before is being directed at the fight against AIDS.

In spite of this, around 8,000 people with AIDS are dying every day,¹ and these deaths occur despite the fact that the disease can be treated cheaply. Millions continue to become infected when they might otherwise not have been, and to die when drugs might have helped them to live. So is the money not enough? Is it being misspent, or not spent rapidly enough? Or is the money not really there at all?

Overview of global money for HIV/AIDS

Total funding for the response to AIDS in low- and middle-income countries has risen from US$300 million in 1996 to US$8.3 billion in 2005, but this amount remains inadequate.² Spending per person living with HIV in the United States exceeds that in the Latin America and Caribbean region by a factor of 35, and is 1,000 times higher than in Africa.³

The Joint United Nations Programme on HIV/AIDS (UNAIDS) estimates that US$18.1 billion will be needed to effectively respond to AIDS in low- and middle-income countries in 2007, rising to US$22.1 billion in 2008, most of which will come from the international community. Around half of this money is required for HIV prevention, a quarter is for treatment and care, and the rest is for support of orphans and vulnerable children, programme costs and human resources.⁴ The worst-affected and poorest countries will depend on foreign funding for 80% of their HIV and AIDS resources. Other countries, less badly affected or economically challenged, have their AIDS work paid for through different funding streams.

HIV-related funding to low- and middle-income countries usually reaches the projects that spend it via one (or more) of four main funding streams:

Donations from national governments – Bilateral donations from governments (donations straight from one government to another) are often targeted at specific projects and programmes. The best-known example of a bilateral donation is the USA’s PEPFAR, which is a five-year $15 billion global initiative to combat the HIV/AIDS epidemic.
Major multilateral funding organisations – There are 29 United Nations bodies – such as the World Food Programme and the United Nations Development Programme - engaged in the global response to HIV. Among UN funding sources, the largest is the World Bank, which issues grants and loans. The largest multilateral donor is the Global Fund, which distributes money given to it by national governments, foundations and the public.
The Private Sector - There are a wide variety of organisations and individuals that fall under the private sector umbrella. Foundations, international non-governmental organisations (NGOs) and charities, and individual philanthropists all give away varying amounts of money to projects in low- and middle-income countries. The money is often given in the form of grants to specific projects or programmes. These grants can focus on small-scale and community-based projects that, individually, might be overlooked by larger donors.
Domestic spending - This is another significant source of HIV funding, and one that has been increasing in recent years as economic growth, good governance and debt relief contribute to the budgets of national governments. Even in severely affected countries, the amount available in the national budget for spending on HIV and AIDS has increased. Domestic spending also includes the money spent by individuals on such things as their own AIDS medication.

When looking at global spending totals via different funding streams, the figures can be confusing, as some amounts may be counted more than once - for example, a sum given by a donor government via a multilateral organsation will be mentioned by both. This can lead to a misleading impression of the scale of the global response to HIV.

This page takes a look at the different funding streams and focuses on some of the largest donors and organisations involved. It also takes a look at the issues surrounding another method of increasing the funds available for HIV spending in poor countries - debt relief.

Donations from national governments

A very large proportion of all foreign aid money involved in the fight against HIV comes from donor governments, and much of the cash given by national governments takes the form of bilateral donations. Among donor governments, the majority of spending comes from the G7 countries (The G8, minus Russia) who provided 72% of all Overseas Development Assistance in 2004.⁵ The same nations, with the addition of most of the European Union, provide the great majority of donor government funding for HIV.

Bilateral donations have been increasing every year, and the donors who are responsible for the largest sums are the USA and the UK, followed by the European Community, Canada, Germany and Japan.

The United States

One of the main providers of global funding in the fight against AIDS is the United States government. In his State of the Union address in January 2003, President Bush promised the world the President's Emergency Plan For AIDS Relief (PEPFAR), a commitment to significantly increase US spending on HIV around the world. Planned to run for five years, the plan was intended to direct $15 billion to places where it was most needed. PEPFAR became an umbrella for all the existing work being done by the United States, and for all the HIV-related funding that was already going out through the Agency for International Development (USAID) and other government agencies.

While this is a huge sum, it pales in comparison to the amounts spent on wars in Iraq and Afghanistan, and only $10 billion of this total was new money, $1 billion of which is provided to the Global Fund (see below); $5 billion was money that had been previously allocated, meaning that it would have to come from existing programmes.

PEPFAR funding is disbursed in accordance with the political views of the United States Government – meaning that 33% of the prevention funds are directed towards giving abstinence-only prevention messages. It has been suggested that the choice of countries that PEPFAR focuses on is politically motivated.

PEPFAR also refuses to fund projects and organisations that do not explicitly oppose prostitution, and allows faith-based organisations to refuse to provide information about proven methods of protection against HIV/AIDS (condoms) or to refuse to make referrals to clinics or organisations that offer critical prevention services and information.

The President's plan has a goal of having 2 million people on antiretroviral AIDS medicines (ARVs) by 2008, preventing seven million new infections, and caring for 10 million people infected with HIV or children who have been orphaned by AIDS. More information can be found about PEPFAR including its methods, main beneficiaries and successes in our page on the President's Emergency Plan For AIDS Relief.

The United Kingdom

DFID stands for the Department of International Development, and is the UK government's department for managing Britain's distribution of foreign aid. Though it provides funding for a large range of projects, addressing HIV/AIDS is among its principal goals. DFID is a major donor to the Global Fund, and is the world's second biggest bilateral donor on HIV and AIDS - spending more than £270 million in 2002/03. In 2004, DFID said that over the next 3 years the UK would spend at least £1.5 billion on AIDS-related work.⁶ DFID debt relief through all channels amounted to £70m in 2004/05. The UK also helps to fund UNAIDS.

Multilateral funding organisations

Substantial funding for AIDS spending in low- and middle-income countries comes through multilateral organisations who gain their funding mainly from a number of different national governments. One such example is the Global Fund, which had received a total of around US$4.7 billion by the end of 2005, and had distributed around US$1.9 billion, mostly to HIV-related projects, including many grassroots organisations. A number of UN programmes and funds are also involved, including the World Bank, which distributes substantial loans and grants for HIV/AIDS work.

These large organisations are able to make their decisions – some more than others – fairly independently of the countries who provide their funds. This means that they can direct funding to countries and projects that might otherwise be ignored by national government or private funders for political reasons or other prejudices. For example, PEPFAR is reluctant to direct AIDS funding to any government that the USA sees as connected to terrorism – although some countries that are so labelled would benefit from HIV-specific donations.

The World Bank

The World Bank is the second largest multilateral donor to the HIV/AIDS response in developing countries. It is one of eight co-sponsors of UNAIDS, the organisation created to advocate for accelerated, comprehensive and coordinated global action on the HIV epidemic.

By its nature, the World Bank tends to look at the economic aspects of the epidemic, as well as the human ones. It recognises that AIDS has negative effects on a country’s economy, and that a sound economy is an important weapon in the fight against AIDS. It says that, 'HIV/AIDS can have a devastating economic impact on countries with severe infection rates. Estimates suggest when the prevalence of HIV/AIDS reaches 8 percent - about where it is today for 13 African countries - the cost in terms of economic growth is estimated at about 1 percent a year.'

By the end of 2005, the World Bank had committed more than US$2.5 billion in credits, grants and loans to more than sixty low- and middle-income countries for projects to prevent, treat and reduce the impact of HIV and AIDS. As of December 2005, the World Bank had 79 active projects, which had disbursed US$893 million.⁷ Historically, the World Bank's HIV work has mainly focused primarily on HIV prevention and education. More recently, however, the Bank has worked to expand access to antiretroviral medication and to build and strengthen national health care delivery systems.

In addition to providing grants, the World Bank can provide interest-free loans to low-income countries to set up HIV related projects or to provide AIDS treatment. For the poorest nations, World Bank support for HIV/AIDS projects can be up to 100% grant financed. In allocating both its loans and its grants, the World Bank tries to emphasise support for community-level projects and to avoid bureaucracy as much as possible.

The Global Fund to Fight AIDS, Tuberculosis and Malaria

Often simply referred to as 'the Global Fund', this organisation was intended to be the biggest global health initiative in history. Created at the urging of UN Secretary General Kofi Annan and many national leaders, the aim of the Global Fund is to raise funds and pool money from governments, businesses and individuals around the world, and channel it into programmes to fight AIDS, tuberculosis and malaria. The concept of a Global Fund was unanimously endorsed in June 2001 at the first UN General Assembly Special Session to focus on HIV/AIDS. In July 2001 at its meeting in Genoa, G8 leaders committed US$1.3 billion to the Fund, and it was formally set up in January 2003.

The purpose of the Global Fund is primarily to dramatically increase resources to fight three of the world's most devastating diseases, and to direct those resources to areas of greatest need. It is a partnership between governments, civil society, the private sector and affected communities. The Global Fund attaches no conditions to any of its grants, and there are no political eligibility criteria.

In the past, there have been concerns voiced about the length of time taken for Global Fund money to actually reach the people it is intended to benefit. People are also beginning to be concerned about a funding gap between the amount of money pledged to the Fund and the (greater) amount that it has pledged to needy countries and organisations. AVERT.org has more information on these issues and an in-depth report on the Global Fund.

Between them, the Global Fund and PEPFAR are, in terms of funds disbursed, the largest funders in the fight against AIDS, but they are by no means the only organisations involved in the fight.

The Private Sector

There are a number of private sector organisations involved in the response to AIDS, including corporate donors, individual philanthropists, religious groups, charities and NGOs. These organisations vary in size, from small groups such as local churches, through to medium sized groups like AVERT, and large contributors such as Bill Gates and corporate donors. When such private organisations are referred to in terms of size, this refers to their expenditure, not their staff-numbers. Overall, the private sector is by far the smallest of the four main sources of funding for the global AIDS response, accounting for around 4% of spending.⁸

The Bill and Melinda Gates Foundation

While the sizes of its disbursements make it small in comparison to multilateral organisations, the Bill and Melinda Gates Foundation has nonetheless given very large sums of money and support to the global fight against AIDS. Bill Gates is the world's biggest single philanthropist and his Foundation gives money to a variety of other causes besides HIV/AIDS. Bill Gates has a high media profile as the founder of Microsoft and his Foundation's philanthropy in the AIDS field generally attracts media attention, which can help to highlight important issues.

Bill Clinton and Bill Gates at the International AIDS Conference in Toronto, 2006

The Foundation has projects in Botswana where, alongside the Merck Pharmaceuticals Company Foundation and the Ministry of Health, they developed Africa's first national antiretroviral treatment programme. The Foundation has pledged US$150 million to the Global Fund and has spent US$200 million establishing an initiative to prevent HIV transmission in India. The Foundation has also made large contributions to vaccine and microbicide research.

In June 2006, the billionaire Warren Buffet promised $31 billion to the Gates Foundation, to be given in installments over ten years. This donation roughly equalled the Foundation's assets at the time, enabling it to substantially increase spending on AIDS-related projects.

Domestic Spending

Domestic spending by people and their governments accounts for a significant part of the global response to HIV, and a growing one. UNAIDS estimates that such spending in low- and middle-income countries amounted to around US$2.6 billion in 2005.

Government spending on HIV and AIDS can be self-serving, to some extent, as it helps to alleviate the negative impact that HIV has upon a country’s economy – most countries are keen to maximise their health expenditure. Domestic spending on HIV usually increases as a country’s national budget increases, as a result of improved trade, greater productivity, or debt relief. There has been concern voiced that money raised for national governments to disburse as they will - through debt relief, for example - will be lost to corruption or the arms trade. This, fortunately, does not seem to be happening, and severely affected countries tend to spend as much of their national budget as they are able on helping their own citizens.

Domestic spending represents a particularly valuable source of funding for the global fight against HIV, in that cash from domestic sources tends to be much more sustainable than donations, either from national governments or multilateral organisations. The US$15 billion US spending plan, for example, is scheduled to end in 2008, and it is not clear how much will be spent after that date – although it will be difficult to cut spending on which organisations around the world are dependant. PEPFAR intends to have 2 million people receiving antiretroviral medication by the time its funding ceases in 2008, but if the flow of drugs to those 2 million people also stops, they will die within months. This illustrates exactly why sustainable resources are preferable, and domestic funding is ideal.

Increasing the funds available to the governments of highly-affected countries encourages sustainable, domestic spending on health. For many years now, the poorest countries in the world have been paying huge amounts in interest to developed-world creditors – payments on debt so old that the interest repaid is greater than the amount originally borrowed. Some countries pay back much larger amounts in interest than they receive in aid. In recent years, many people have been calling for these countries to receive debt relief on humanitarian grounds, something that is now economically feasible.

Debt Relief

Over the past few decades, loans have been made from richer nations to poorer ones – loans that were made with the intention of helping poor countries to increase their productivity and their own levels of wealth. Unfortunately, many of the loans were made to corrupt regimes that wasted and stole the money, knowing that they would be unable to make repayments, and not caring. All too often, the lenders didn't care either - the conditions of the loans allowed them to asset-strip the indebted countries natural resources instead of payment, something which was often much more lucrative.

Although it seems that progress is finally being made, words must be turned into action, and there is still much to be done.

Many of the countries worst affected by debt are also those with the most severe HIV epidemics. A country that is crippled by debt can't afford to provide its people with medical services or schools, leaving its population vulnerable to the unhindered spread of HIV. In some of the poorest countries, every $1 given in aid is repaid many times over or deducted at source to service foreign debt. Debt repayments take a much larger slice of their budgets than public health.

Negotiating debt reductions

The largest debts are owed to individual countries and to organisations within those countries – commercial banks, for example - and to international bodies, such as the World Bank. Any of these creditors is in the position to write off debts. Individual countries can put pressure on organisations within them, and can lobby larger, global organisations like the IMF and the World Bank. A country can negotiate the cancellation of a debt with a creditor country or with an organisation within that country.

The Heavily Indebted Poor Countries Initiative

Debts owed to large multinational organisations such as the IMF and the World Bank must be dealt with in another way. To manage the reduction or cancellation of these debts for appropriate countries, a scheme has been set up called the Heavily Indebted Poor Countries initiative (HIPC).

To qualify for debt relief under the HIPC, poor countries must open up their economies to 'free trade' - something which sounds fair, but which in fact brings about increased poverty and suffering in many poor, agricultural communities. They must remove any restrictions or tariffs on imports, allowing foreign companies access to their markets, and, in the unlikely event that any subsidies are given to their farmers they must be restricted or removed. Wealthy nations, however, are not required to do the same, giving their industries an additional advantage over those of poor countries. The economic reforms also include strict limits on public spending, and, although these try to take account of the need for AIDS-related spending, they often inhibit governments' attempts to respond effectively and rapidly to the crisis. Debt relief is still provided within a set of demands which allow the creditors to impose their one-sided and flawed economic demands on those countries who are indebted.

The G8 meeting in 2005 led to the endorsement of a proposal by the G8 countries to cancel debts of the HIPC countries to the IMF, the International Development Association (IDA), the World Bank, and the African Development Fund. When finalised, the deal should be worth about US$55 billion in debt-cancellations to the 38 HIPCs.⁹ This doesn’t, however, mean that all debt has been cancelled – there still exist many debts to other national governments, private banks, and other organisations. Furthermore, whilst the 38 HIPC countries represent the poorest and most indebted, there are many others in almost as dire a situation. Debt relief is certainly still a major factor in determining the efforts that poor countries are able to put into the fight against AIDS in future years.

Is money enough?

The answer to the funding problems in global HIV spending does not necessarily lie in increasing spending and donations - some aspects of HIV work are already adequately funded. Others, however, lack funding that remains desperately needed.

Inequalities in the need for funding can occur based on the following factors:

HIV prevalence – This can be related to inequalities in spending, as those people in charge of disbursement of grants and aid moneys are drawn to those areas which have the highest prevalence of people infected with HIV. Whilst those areas in which the greatest number are infected certainly have the greatest need, this does not mean that other areas in which HIV prevalence is lower do not have the same needs – to a lesser extent. Often, HIV spending is not proportional, and areas with a higher prevalence will receive the greater share of funding, whilst those where the problem is not quite as bad go without. This is extremely dangerous, those areas with a lower prevalence, if ignored in favour of areas with a higher prevalence, will become increasingly subject to a growing HIV infection rate and may soon catch up with the areas where the work is concentrated. It can be as valuable – or more so – to work in areas where the impact of HIV is not yet as cruel as elsewhere.
Geography – Staff-members of NGOs and of government organisations charged with disbursing funding in other countries may favour certain geographical areas. This may be because these areas have a higher media-coverage than others, because these areas are safer than others for staff to visit, or it may simply be because these areas have better amenities for NGO staff who prefer to travel in comfort. Whatever the reason, there are geographical inequalities in spending, with some regions having sufficient funds and others almost none.
Type of HIV work – Different types of HIV work attract differing levels of funding. Sometimes, funding will be made available for AIDS treatment, for example, but not for staff training. In some areas, amounts made available for spending on AIDS medication and treatment are not being fully spent, as the infrastructure is not yet available to ensure that treatment can be correctly provided to those who need it. Additional funds are needed to address a number of related issues, such as AIDS orphans, educational deficits, and increased poverty. Funding may be tied to a type of HIV work – money that has been made available for the purpose of helping children, for example, may be tied in such a way that it can be spent only on orphans, whereas a child might best be helped by providing medication for his mother, and thus preventing his becoming an orphan. Some donors, including many national governments, are reluctant to give significant assistance to marginalised groups such as sex workers and injecting drug users, even if these are the people most affected by HIV.
Perceptions of good governance – This, too, can affect the distribution of funding. If an area is perceived to have problems with corruption, then funding organisations tend to avoid it.

Some aspects of HIV work are politically favoured by those who provide the funds – for example, abstinence-based HIV prevention work is preferred by many American organisations distributing PEPFAR money. There have been claims that those who receive this funding are discovering that it is tied to their accepting the abstinence-based HIV prevention work in their country – something that is sometimes unpopular due to the debate over its effectiveness. As another example, Brazil recently refused US$40 million in US funding because of the US administration requirement that HIV/AIDS organisations seeking funding to provide services in other countries must pledge to oppose commercial sex.

Certainly, the HIV epidemic is not the same everywhere, and funding decisions must take this into account. Similarly, however, funding must be adaptable and be able to fit into the needs of the areas on which it is to be spent. Funders must not allow political and ethical considerations to sway their decisions over what activities to fund – HIV does not respect geographical or ethical divides. Those who decide how money is to be spent must remember that it isn’t realistic only to give money for those activities and services that suit their ethical agenda, that look good to donors, or that get media attention.

Important progress has been made in raising additional funds to respond to the global AIDS epidemic. The world's richer countries are generally those that have not been hit so hard by the impact of AIDS and, in recent years, they have begun to acknowledge that they have a moral obligation to support those countries that have been more grievously affected. HIV has become more of a priority.

Huge global inequalities still remain. Health care spending per person in rich countries is at least US$2,000 each year, compared with as little as US$10 in the poorest parts of the world. Although much is being done, as of December 2006, UNAIDS/WHO estimated that 7.1 million people in developing countries needed immediate antiretroviral treatment, and of these, only 28% were receiving it. The work that has been done thus far to provide medication is only the beginning of the task ahead – much more must be done.

It is time for the richer countries of the world to make a heartfelt and significant contribution, in terms of appropriate financial commitment and political leadership, and millions of lives might yet be saved. It is already too late for millions more.