The World's Best Investment: The Global Fund

You may not have heard the siren over the earsplitting clatter of the economic crash in America and the ominous emergence of swine flu, but there's an urgent crisis involving Africa and other parts of the developing world that rely on our donor dollars for public health. The Global Fund to Fight AIDS, Tuberculosis and Malaria, a multi-national organization that's been channeling financial assistance to 136 of the world's poorest countries since 2002, is facing a funding shortfall totaling about $2 billion. It's a shortfall that must be made up. Like many of the pressing hardships Americans now face, this is really about money: a paltry sum in view of US financial bailouts, but resources that, if made available, will save millions of lives.

Here's why: years of dramatic results and sustained due diligence demonstrate the effectiveness of the Global Fund. 2 million people living with HIV have received life-saving, antiretroviral treatment; 4.6 million people stricken by tuberculosis, the leading cause of death among HIV sufferers, have so far been put on effective TB drugs; and in the fight against malaria, 70 million insecticide-treated bed nets have been delivered to families at risk of contracting the disease. I dare you to name a hedge fund, start-up, or mutual fund that has delivered better results in the past 7 years.

Where the Global Fund differs from traditional mechanisms is in its mission to provide financing to organizations and governments to conduct the programs they wish to implement. There are no outsiders foisting their ideologies on resource-needy nations -- just Ministries of Health and active non-governmental organizations working to get the job done. The metrics are clear and funding disappears when corruption or bad management appears.

Presently, the United States contributes nearly half of the Global Fund's budget -- for fiscal 2009, that came to more than $900 million -- and from my ringside seat in Rwanda, I see the tremendously positive effect this has had. I also see the opportunities that could be realized if America builds upon its commitment to fighting crippling global disease. But the fact is, FY 2010's commitment is no greater than this year's, and need has grown, leaving a shortfall of $2 billion.

The Obama administration must now step in and fill the Global Fund's fiscal gap, not only to save lives, but also for the financial leverage such a step would have. In the past, whenever America has raised its level of support to the Global Fund, the rest of the world has followed suit.

This support could be an investment that would yield great returns. Tax dollars spent on global health today will pay dividends for decades to come in more productive populations, increased political and health security, and burgeoning new markets for US goods and services. Conversely, failure to invest would be a disaster. Poor health drags poor people even further down the economic ladder and wreaks havoc on their nations' output. By contrast, healthy people are naturally more productive and capable, and that can go a long way in lessening the impact of the economic crisis all around the world.

The recession may have altered the order of things concerning spending in Washington. Banks, car manufactures and investment firms have jumped to the head of the line, while poor people -- even those in America -- have been pushed even further to the margins. This arrangement clearly needs to change.

Unlike the emergencies of most Federal bailout recipients, the Global Fund's wasn't created from mismanagement, nor is it linked to the worldwide market meltdown. In fact, this deficit is the result of the fund's proven success. Years ago, Global Fund directors pledged that they would provide the financing recipient countries needed to scale up efforts to combat disease if the demand was there. The programs put into place have worked very well, and, ultimately, beneficiary nations outperformed expectations. That success needs to be supported and followed up. Now, however, the fund doesn't have enough dollars in the bank to meet the demand.

Bringing Global Fund reserves up to the needed level must be part of a larger effort. Recent Obama-appointed Global AIDS Coordinator Eric Goosby should help lead a careful evaluation of how the US can bolster the Global Fund. The Fund, after all, has outperformed the global markets since giving its first grant. It has delivered its intended results, avoided corruption, and saved lives.

That's ample and clear evidence that while critiques of development aid abound, there's plenty of good aid worth financing. When you look at the money being thrown around Washington right now for various projects and bailouts, $2 billion to save millions of lives should be an easy choice. Investing that amount in the Global Fund makes a lot more sense -- and brings a higher return -- than using taxpayer dollars to fund bonus checks.

Comments

[William Easterly - Huffpost Blogger]

Josh, Global Fund has hits and misses. It doesn't allocate enough for diseases besides AIDS, and it takes old-fashioned vertical "top-down" approach to one disease at a time rather than confronting dysfunctional health system in many poor countries, which is the big bottleneck. All the top-down disease programs are competing for the same scarce and sometimes unmotivated local health workers.

[Josh Ruxin - Huffpost Blogger]

Thanks for the comment. I think that an analysis of the Global Fund shows that the misses have rested with mismanagement (and at times corruption) at country-level and not with anything fundamentally broken at the Global Fund itself. While the Fund does encourage a level of stove-piping (i.e. treating problems in isolation), they started addressing that in 2005 with their Health Systems Strengthening grants. There have been 3 significant grants in that area which is a great start but not enough. From my vantage point in Rwanda, much of the one-disease funding has in fact resulted in financing that is cross-cutting and systemic. That's not to say that it works that way everywhere, and I agree that there's a lot of money chasing scarce management resources today and resulting in a misallocation of public health financing.
Certainly what the world could use would be a similarly designed Global Fund for Health Systems' Delivery which addressed fundamental management issues while ensuring that neglected issues (family planning, Neglected Tropical Disease, fundamental management breakdowns) were addressed. Unfortunately, as I've learned the hard way, that's just not sexy. For seven years I've led the Access Project (www.theaccessproject.com) which is focused on delivering private sector solutions to public health. Often it's as simple as training staff in Quickbooks and basic accounting principles to achieve increased public and private financing for a health center and ultimately, improved health results. Sadly, while donors were more plentiful for the project when the economy was rolling, they're hard to find these days. Further, USAID's funding for systems' strengthening is overly bureaucratic and beltway-bandit ridden to see any financing from that route.
Looking forward to further discussion!

[Mark Greene]

Obama, supposedly a "multilateralist", just proposed freezing the US contribution to the Global Fund at the current level, despite the deficit Ruxin describes. Another campaign promise down the drain. The Fund is actually doing a lot that serves America's interests and it builds global cooperation. It's also helping countries like Ghana address malaria (where Obama plans to visit next month). If you care about this you should pick up the phone NOW and call Congress. The US contribution will essentially be decided over during June and July. The main decision-makers are Senator Patrick Leahy and Rep. Nita Lowey, so appeals to them and other appropriators are especially important.