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VI. Financing the Response to AIDS

Executive Summary

July 6, 2004

Important progress has been made in raising additional funds to respond to the AIDS epidemic. By 2003, an estimated US$ 5 billion was available, from donors, the UN system, international nongovernmental organizations, country governments and the "out-of-pocket" spending by people living with HIV and their families. Yet this amount is less than half of what is required by 2005.

National governments of developing countries are spending increasing amounts on AIDS programmes -- an estimated US$ 2 billion in 2002, but this only accounts for 6-10% of AIDS expenditure. There are enormous global disparities in AIDS spending. 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 1000 times higher than in Africa.

As of early 2004, national governments, the Global Fund to Fight AIDS, Tuberculosis and Malaria, the United States President's Emergency Plan for AIDS Relief, and other bilateral donors and foundations had pledged just over US$ 2 billion to scale up antiretroviral treatment access in 34 of the hardest-hit countries by the end of 2005. This leaves a shortfall of US$ 3.5 billion. There are huge variations at country level. Some already have the funds to cover their proposed treatment targets while others have large funding gaps.

Even though financial resources are rising, in many heavily affected countries serious bottlenecks prevent effective spending of the money. These blockages include lack of human and institutional capacity, the persistent negative effects of stigma and discrimination, shortfalls in political commitment, slow transfer of funds from national to local and community levels, inadequate accounting and auditing mechanisms, and inconsistent funding processes of the global donor community.

Two-thirds of global funding for 2005 and subsequent years is expected to come from the international community. Most of this money will be spent to meet the needs of the poorest and worst-affected countries of Asia and sub-Saharan Africa; these countries will rely on external donors to meet up to 80% of their needs.

Resources for Vaccine and Microbicide Research and Development

Vaccines and microbicides are global public goods (goods that benefit others beyond those who use them directly); each prevented infection cuts off a potential chain of infections resulting from the primary infection. Both private and public sector investment is needed for vaccines and microbicides. According to the International AIDS Vaccine Initiative, public sector investment in vaccine research looks set to expand but overall funding is not keeping up with the challenges.

Next Agenda

  • Increase the resources committed to the AIDS pandemic from all sources to provide the required US$ 12 billion annually by 2005.
  • Identify and remove potential bottlenecks in funding flows. Radically improve and harmonize mechanisms for delivering funds through all levels -- international, national, regional, community and local.
  • Use resources in a "smarter" way. Build programme capacity to demonstrate results by using funds efficiently and effectively, and monitoring performance and impact.
  • Incorporate the concept of AIDS "exceptionality" into financing the AIDS response in countries in desperate need. Funds for AIDS must not draw away resources from other activities to the detriment of overall development. Action on AIDS should not further increase debt burdens. International financial institutions should think broadly and creatively about mechanisms to place more funds in the hands of countries now facing large debt-service payments.

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This article was provided by UNAIDS. It is a part of the publication 2004 Report on the Global AIDS Epidemic. Visit UNAIDS' website to find out more about their activities, publications and services.