The Global Fund and USAID:
A Fact Sheet

This short paper outlines the differences between the Global Fund to Fight AIDS, TB and Malaria (The Fund) and the United States Agency for International Development (USAID) in the ability of each to provide prevention and treatment to countries affected by the AIDS pandemic. Under the Bush administration’s proposed new global AIDS plan, $10 billion in new funding ($15 billion total) will be disbursed over 5 years through a new bilateral mechanism based on USAID, the Centers for Disease Control and Prevention (CDC), the National Institutes of Health (NIH) and unspecified NGOs. USAID, by far the largest of these programs, will likely be an important model for the Bush plan. Because of this, a comparison between USAID and the Global Fund is useful.

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THE GLOBAL FUND TO FIGHT AIDS, TB AND MALARIA (THE FUND)

The Global Fund to Fight AIDS, TB and Malaria was founded by UN Secretary General Kofi Annan in April, 2001. It is a public-private partnership designed to fund effective programs to stop the epidemics of AIDS, TB and Malaria through prevention, treatment, AIDS vaccine development and orphan care. Countries create Country Coordinating Mechanisms, which are panels of government officials, NGOs, and people with AIDS (PWAs) to develop plans to fight these diseases in their countries. Based on these plans, they apply for grants from the Fund. Since its inception, the Fund has been consistently funded at levels that are only a fraction of the $7-10 billion per year that Kofi Annan requested from donor nations. To date, the Fund has received pledges totaling over $3 billion over several years.

Advantages:

The Global Fund appears to be the best, most expedient way to save a large number of lives in the short term.

The Global Fund is up and running now, while President Bush’s USAID-focused plan may not become operational until at least 2005. In 2003 and 2004, the Fund can treat and save the lives of some of the 6 million people who will otherwise die between now and 2005. It has already encountered and solved many of the problems of an ambitious, international start-up program.

Though imperfect and vulnerable to special interests (it is controlled by donors that would like to limit their spending on global AIDS), the Fund is already supporting important projects, such as an antiretroviral drug distribution program in Haiti. The Fund, currently in its third grant cycle, uses a relatively transparent and accountable process that conserves financial resources, mandates local involvement (including local NGOs and PWAs), and rewards the most effective plans for fighting AIDS.

Additional Important Issues:

Disadvantages:

The Fund’s Executive Director, Richard Feachem, is beholden to his Board of Directors and other pressures to keep the Fund small. He had apparently hoped to make a success of the Fund by keeping expectations low and manageable. This has translated into less pressure and lower overall expectations on donor nations such as the United States, but more pressure on individual developing countries to keep their applications small despite the giant proportions of the AIDS epidemic.

Until recently, grant applicants were apparently encouraged to keep their proposals small, regardless of need. Some applicants are also fearful of proposing ambitious, long-term programs for a Fund that may not last without much larger contributions from the United States and other donor nations.

The Fund’s administration has twice grossly miscalculated and underestimated the amount of money needed even by its own low standards, recently leaving key Congressional decisionmakers with the impression that the Fund does not need more money. It subsequently recalculated its needs. The Fund faces extinction if it does not receive substantially increased contributions this year.

Donor countries that sit on the Global Fund’s Board and various subcommittees, are pressuring it not to demand larger contributions. While the Board also includes representatives from resource-poor nations, they do not have the same power as the United States or Japan, so the overall pressure is downward on contributions.

By all accounts, the Fund does not provide adequate technical assistance to applicants. A few US academic organizations are filling in by assisting countries and NGOs with their Global Fund applications, but this is clearly a central responsibility of the Global Fund. The implications of this are dire. Due to poor technical assistance, many early applications were of poor quality and some applicant countries have not been prepared to utilize the funding optimally. These issues can and must be addressed through well-funded technical assistance.

Two areas of technical assistance are badly needed:

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UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT (USAID)

USAID’s website defines the Agency as “an independent agency that provides economic, development and humanitarian assistance around the world in support of the foreign policy goals of the United States.” Its overall mission is “to contribute to US national interests by supporting the people of developing and transitional countries in their efforts to achieve enduring economic and social progress and to participate more fully in resolving the problems of their countries and the world, including efforts to save lives and reduce suffering.”

Facts about USAID

“We’re a bureaucracy and we have to move slowly.”

– Dr. Anne Peterson, Assistant Administrator, USAID’s Office of Global Health, at the International AIDS Conference in Barcelona, 2002

Structure of USAID

USAID’s headquarters office is in Washington, DC with field offices (i.e. missions) in developing countries. USAID missions are considered understaffed by many, including some of its own employess, and there is little enforcement power from the Washington office to track how program money is spent. Since the missions are understaffed, health officers rarely have time to collect and analyze data on program effectiveness.

USAID was restructured a few years ago after Jesse Helms accused it of being mismanaged. It was reorganized again early last year by USAID Administrator Andrew Natsios. Following the reorganization, a separate Office of Global Health was formed and is headed by Dr. Anne Peterson. The creation of a separate health office within USAID is considered an improvement by many because of its new authority with a direct ear to the Administrator.

Advantages:

Disadvantages:

Although there is little published literature criticizing the agency, development advocates often point to the bureaucracy of USAID and its reputation for slowness, waste and ineffectiveness. According to health advocates, there are few written reports critical of USAID for two reasons:

USAID also requires huge overhead costs of up to 35%, compared to 3% overhead for the Global Fund. On a large scale, this high overhead has enormous negative implications for people with AIDS and those at risk.

USAID generally does not require its programs to report results in quantitative terms. Instead, USAID missions are allowed to select and report on only a few health indicators, enabling it to hide areas that are not meeting expectations. Since it is sometimes unclear when programs fail, programs tend to perpetuate themselves. It is ironic that the White House is waiting to see outcomes from the Global Fund and seeks to replace it with a new bilateral program.
Other Problems with USAID

Reasons USAID Does Not Measure Outcomes Quantitatively:

One can track fairly easily the percentage of USAID health assistance going to different health areas as well as the amount of funding awarded to different US organizations and companies. However, more detailed information about how each US organization or company spends USAID resources and how that links to a decrease in morbidity and mortality rates is nearly impossible to obtain.

Additional Concerns: