It seems that every day another area of the economy is depressed because of the global financial crisis in the banks and governments around the world. This time it's The Global Fund to Fight Aids, TB and Malaria, which has announced it will make no new grants until 2014; and there is a possibility of some existing projects being cut. The fund, which is based in Geneva, said that only "essential" programs in low or middle-income countries would receive more funding to keep them going until 2014 and hopes that new management can improve efficiency.
It seems ironic that the two sectors of the economy: banking and government, which add little to the world in terms of technology or innovation, the real drivers of economic growth, have been able to stymie and depress almost all areas of activity. The fund is asking international donors for $20BN, but has received little more than half that, which misses even their baseline target of $13BN.
The problem is compounded by the historically low interest rate scenario which has chopped a valuable source of income. In addition, some smaller countries that would normally contribute are facing their own budgetary battles and simply don't have available funds. The cash is obviously not flowing the way it did before the crisis.
The HIV/Aids Alliance, whose member organizations draw on The Global Fund for many projects across the world, said that it was the worst possible time for money to be withdrawn. It has wide ranging plans to tackle high rates of HIV in areas of China and South Sudan which might well be affected by the funding cut.
Alvaro Bermejo, Director of The Global Fund, said:
"These should be exciting times - the latest scientific developments are showing us that HIV treatment can have a powerful HIV prevention effect ... Never again must we reach a position where life-saving programs are cancelled or delayed."
Médecins Sans Frontières, another charity relying on funding, described the financial situation as "dire". Dr Tido von Schoen-Angerer, one of its executive directors, said:
"Donors are really pulling the rug out from under people living with HIV/Aids at precisely the time when we need to move full steam ahead and get life-saving treatment to more people."
There is a call for governments to make up the shortfall, but this may prove unrealistic, since the governments themselves are a large part of the financial slow down, and many simply don't have cash.
The deep pockets of government seem to have shrunk, and it's not surprising really, since governments can only take money through taxes; they don't have too many other ways to raise funds. If their citizens are feeling the pinch, tax revenues will drop in tandem. This time around its been compounded by government cut backs that have slashed thousands of jobs.
The Global Fund is planning a restructuring to make its management more efficient.
Board Chair Simon Bland said :
"The five-year strategy and transformation plan adopted at the meeting together commit the Global Fund to shift to a new funding model that focuses on investing strategically in countries, populations and interventions with high potential for impact and strong value for money ...
It will provide its funding in a more proactive, flexible and predictable way. It will better manage risk and it will work more actively with countries and partners to facilitate grant implementation success. In doing so, I believe the Global Fund will shift from an institution that has successfully provided emergency funding to allow countries to cope with the runaway pandemics, to become a sustainable, efficient funder of the global efforts to control them and eventually win the battle against AIDS, TB and malaria."
Written by Rupert Shepherd