Feature Global Health

Make or break for the Global Fund?

BMJ 2012; 345 doi: http://dx.doi.org/10.1136/bmj.e7561 (Published 12 November 2012) Cite this as: BMJ 2012;345:e7561

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  1. Sophie Arie, freelance journalist
  1. 1London, UK
  1. mail{at}sophiearie.com

After a crisis of confidence, the Global Fund to Fight Aids, Tuberculosis, and Malaria is making big changes. Sophie Arie reports on the organisation’s problems

The Global Fund to Fight Aids, Tuberculosis, and Malaria is about to appoint a new director. Although this is still a top job in global health, it is no longer quite as enviable a role as it was a decade ago. After a glorious early period experimenting with a bold new model for distributing over $20bn in aid (£12.5bn; €16bn), the Global Fund hit a crisis over fraud a few years ago and its reputation was deeply damaged. The new leader, and a new funding model, to be announced on November 15, are supposed to get things back on track.

Despite an attempt to keep the names of shortlisted candidates secret, it has emerged that all four are from major donor countries. They are reported to be Mark Dybul, former head of the US President's Emergency Plan for AIDS Relief (PEPFAR), Canadian Robert Greenhill, head of the World Economic Forum, Monique Barbut, the French outgoing chief of the UN’s Global Environment Facility, and the UK’s Dame Barbara Stocking, outgoing head of Oxfam. Dybul, who is politically independent and openly gay, is known for favouring sexual abstinence programmes in the fight against AIDS.

A new funding model, expected to be announced along with the appointment, has been heavily influenced by Republican health experts in the US. If Dybul gets the job the US, the fund’s biggest donor, contributing $7bn (£12.5bn; €16bn), will be seen to be taking control.

The fund says a new strategy introduced this year has already restored faith and that the imminent changes will make the organisation work better for countries in need. But observers and non-govermental organisations fear that in a bid to please its biggest donors, the organisation is about to lose the unique approach that once made it the golden child of the development world.

What went wrong?

When it was created under President George W Bush in 2002, the Global Fund was hailed as an exciting experiment in doing development aid differently.

Unlike every other international aid organisation it was “country led” not “donor driven”; countries would submit proposals for programmes to tackle the three diseases, and as long as the proposals were technically sound the fund would provide the cash to match. The financing model was refreshingly light on bureaucracy compared with that for United Nations’ organisations, and this meant that the fund could get money relatively quickly to health programmes run by governments or non-governmental organisations. Both aid recipients and donors were represented on the board. By the end of 2010, the Global Fund had spent $13bn and saved 6.5 million lives by treating people with HIV/AIDS and tuberculosis and distributing insecticide treated bed nets against malaria.

“Things were going pretty well. Funds were flowing, extraordinary results were being achieved. I was sensing a feeling of trust among stakeholders despite the difficult economic environment at the time,” says Michel Kazatchkine, the French HIV/AIDS expert who was the fund’s director at the time.

But one day in early 2011, everything changed. A report by Associated Press claimed that “as much as two-thirds of some grants” were being “eaten up by corruption.”1 An audit of the Global Fund was in the early stages but already things were not looking good, the report said. Over $10m had been misspent or was not properly documented in four countries in Africa—Mali, Mauritania, Zambia, and Djibouti. The report was based on figures the fund had published some time earlier in its effort to be transparent (another way it distinguished itself from other major organisations). Bill Gates, who had donated $650m to the fund, said he was not concerned at the levels of fraud because it was to be expected when working with very poor countries.

But major donors, including Germany and Sweden, suspended funding and in the US, where Republicans and Democrats had originally achieved a consensus on America’s support for the fund (commitments of $7bn, a third of the total commitment from all donors) there was deep concern.

“We entered a sort of spiral of ‘we need change; we can’t go on like this,’” Kazatchkine told the BMJ. “There was a lot of anxiety. We had donors withholding funds, others expressing concern about whether they would be able to deliver on their pledges, raising grant management issues as a key reason for that.”

An independent review panel was created and late last year recommended radical tightening up of the way the fund worked to avoid future losses and maximise impact. To adapt to changing times, the fund needs to focus more on risk management and on getting better value for money, the panel advised. A new general manager, former banker Gabriel Jaramillo, was brought in and Kazatchkine stepped down in March this year. Jaramillo immediately made changes to staffing and advocated a more businesslike approach.

But the fund had to cancel its scheduled round of funding for new projects in 2012 because donor jitters were predicted to create cash shortages. And the jury is still out on whether the fund will fully regain the confidence of its donors, many of whom are now under extreme pressure to reduce foreign aid spending.

“People died and became sick because of this,” says Jonathan Brown, who was acting director of country programmes at the Global Fund from May 2011 to May 2012.

“Instead of saying look, there’s no problem really, like Gates did, the US government decided something radical had to be done not to lose the bipartisan support for the Fund,” says Brown.

Several leading Republican health policy experts have been involved in defining the changes at the fund. Michael Leavitt, a former Republican health secretary, was co-chair of the panel who advised on the new strategy and Bill Steiger, director of global health affairs under George W Bush and godson of George Bush senior—is a consultant. Charlie Johnson, another Republican who was US health secretary briefly in 2009, was involved in defining the changes needed and is now chief financial officer at the fund.

Although the fund has had the backing of both sides in the US political arena, many Republicans are against America channelling so much into international aid and the reports of fraud fuelled that agenda. The head of the board, Simon Bland, says that the review panel’s recommendations were carefully assessed and embraced by the board and not overly influenced by the Americans involved. But some supporters of the fund see the direct involvement of Republicans in the reform process as a kind of compromise—the best chance of ensuring support for America’s ongoing contribution.

The reforms include tighter systems for managing procurement and supply chains (which account for 40% of the fund’s spending) and more active management and tracking of grants. The fund would change the way it gives grants to focus on getting results in core “high impact” countries (often the poorest countries) where the disease burden is highest. And it would buy drugs in bulk, giving as much consideration to quality as to price.

Most observers agree that after a honeymoon first decade, the Global Fund had grown so big, and the economic climate and attitudes to diseases such as AIDS have changed so dramatically, that more rigour and efficiency was needed, fraud or no fraud.

“It is a very good thing they’ve had to tackle this,” says Bernard Rivers, who had independent observer status at Global Fund board meetings as head of Aidspan, an independent organisation that has monitored the Global Fund since it was created (he has now stepped down).

But he warns of the difficulty of finding a new funding model while keeping the whole concept of the Global Fund alive.

“The Global Fund always said that it wants its grants to be country led. But this means that the fund has to give up a lot of control regarding precisely how the money is used. The simple alternative is to have the Global Fund be a traditional top-down donor that controls exactly how each country spends the money. But that was never part of the original model. And anything between these two approaches is likely to be complex and confusing.”

Concerns about new model

While the overall strategy has already been defined, the final details of the new funding model have yet to emerge. But the fund’s communications chief Seth Faison says it will be less bureaucratic than before, not more, and that will mean less time wasted and more predictable outcomes for those applying. Because of increased dialogue at the early stages of grant application, 90% of applications should be accepted rather than 50% previously.

Countries and organisations will still be able to define the programmes they want to roll out, the Global Fund says. But rather than ask for the funds to match, they will bid within a range allocated to each country. “It’s still the countries that are identifying the programmes that need funding,” says Faison.

But many fear that limiting funds available to each country, effectively means that countries can no longer hope to tackle their disease problems fully.

“Countries won’t apply for what they really need anymore, because they’ll know that they can’t get it,” warns Mogha Kamal Yani, senior health and HIV policy adviser for Oxfam UK. “We’re back, effectively, to the donors deciding what’s going to be funded.”

“In Malawi, for example, they will have to choose whether to stick to the drug they have found most effective for HIV, even though it is not the cheapest, and not be able to pay the health workers who deliver it. The health workers will all end up looking for work in countries like the UK. And the idea of putting more people on HIV treatment now will be out of the window.”

Brown is concerned that the changes may ultimately put organisations and countries off applying.

“There were areas that needed improvement, but the kind of light model was perfectly appropriate if implemented properly. The danger is that the new model will become so intrusive that countries will become reluctant to deal with it.”

If the 650 staff at the Global Fund, based in Geneva, are suddenly expected to be much more involved in deciding how country health programmes work they are not qualified for that, says Brown. But Bland believes that staff have the right skills and will adapt and evolve with the changes.

In an atmosphere of intense pressure on governments over international aid, the Global Fund has in some ways been a victim of its own policy of high transparency. When the full audit was completed and figures were published this summer, it turned out that the fraud problems were far less extensive than media reports had suggested they might be. The problems were limited to only a few country programmes and represented, as a proportion of the total spent by the fund, less than 1%. The irony is that other international aid organisations may be dealing with equally big or bigger losses from fraud. But they do not publish their figures.

Notes

Cite this as: BMJ 2012;345:e7561

Footnotes

  • Competing interests: The author has completed the ICMJE unified disclosure form at www.icmje.org/coi_disclosure.pdf (available on request from the corresponding author) and declares no support from any organisation for the submitted work; no financial relationships with any organisation that might have an interest in the submitted work in the previous three years; and no other relationships or activities that could appear to have influenced the submitted work.

  • Provenance and peer review: Commissioned; not externally peer reviewed.

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