- Global fund to fight AIDS faces crunch

The global AIDS fund could soon face a cash crisis, due in part to the likes of Britain, Germany and Canada failing to contribute their fair share to the U.N.-sponsored programme, its chief says.
The looming funding gap has been compounded by the Bush administration recently proposing to slash the U.S. contribution for 2005 to $200 million, from the current $550 million.

While pledges nearly match the $1.6 billion needed in 2004, resources will have to be massively scaled-up to meet next year's projected budget of nearly $3.6 billion, said Richard Feachem, executive director of the Global Fund to Fight AIDS, Tuberculosis and Malaria.

"Really the transition to 2004 to 2005 is the testing point. It is remarkable where we've got to, but this is crunch time for the Global Fund. It is a huge step up," he told Reuters in an interview at the Geneva-based fund.

The Global Fund was set up in 2002 as a kind of war chest against the three big infectious diseases, which kill nearly six million people each year, mostly in developing countries.
Feachem said donors would need to sharply step up contributions to finance future work and renew programmes already saving lives in countries from Ghana to Haiti.

The United States, the largest donor, as well as France and Italy, currently meet or exceed their "fair share" target, based on gross domestic product, according to Feachem.

"There are three Group of Eight (industrialised) countries whose contributions are well under a fair share computation - Canada, Germany and the U.K. We are discussing the possibility of increasing those contributions," he said.

Feachem said he was hopeful the proposal to more than halve the U.S. contribution would be rejected by Congress, where support for the anti-AIDS fight is strong.

"We would be hoping for a final figure of around $1.2 billion from the U.S. in 2005," he said. "That is one-third of our needs." To date the fund has supported 225 programmes in 121 countries worth $2.1 billion - providing antiretroviral drugs to AIDS victims, insecticide-treated bednets against malaria and education.

Feachem said the fund had several strategies to overcome the looming crunch. These included: finding new donors, squeezing more out of members whose donations are deemed low and getting agreement to use "sleeping" European Union funds.

Another possibility was redirecting funds from the EU's European Development Fund (EDF), which provides grants to poor African, Caribbean and Pacific (ACP) countries.

"It is disbursed very slowly through a system that doesn't work very well. So there is a large backlog, probably about 10 billion unspent euros in the EDF and new allocations of around 13 billion. It doesn't move," Feachem said.

"We are working with a number of partners to secure a proportion of that to be rerouted through the Global Fund."

Paul Zeitz, of the Washington-based Global AIDS Alliance, said that European governments should "unleash" the EDF money. "It is an outrageous situation that money is unspent when millions are dying in the face of the AIDS crisis," he said.