Mr. Simon Bland Chair of the Board of the Global Fund to Fight AIDS, Tuberculosis and Malaria Dr.

Mphu Ramatlapeng Vice-Chair of the Board of the Global Fund to Fight AIDS, Tuberculosis and Malaria 13.11.2012 Dear colleagues, In advance of the 28th meeting of the Global Fund Board, which will take place in Geneva on 14-15 November 2012, we, representatives of civil society groups, including communities of people living with HIV, most vulnerable populations, and non-governmental organizations from the Eastern Europe and Central Asia (EECA) and other regions, consider it necessary to inform members of the Board about our position regarding the imperative need to revoke the so-called 55% rule approved by the Board a year ago and formulated in Annex 1 to GF/B25/DP16. We call to eliminate this rule for the following reasons: 1. The 55% rule would have a serious negative impact on the response to concentrated HIV epidemics around the world because such epidemics are ongoing mostly in middle-income countries (MICs) in EECA and other regions including East and South Asia, Latin America and the Caribbean, and the, Middle East and North Africa. The consequences would be especially devastating in EECA, the only region in the world where the HIV epidemic continues to grow, mainly due to limited political will to respond adequately and the reluctance of national governments to make evidencebased HIV services available for the individuals most affected by the epidemic, people who inject drugs. If the Global Fund decreases funding, governments are therefore unlikely to take over funding and fill the gap. This potential impact has already been realized in Russia, where the government refuses to support vital HIV prevention interventions for people who inject drugsand the absence of Global Fund support means there is little or no money to bridge the gap.1 If it is unfrozen and reinstated, the 55% rule would particularly affect the EECA region since more than 95 percent of people living with HIV there live in middle-income countries (only two EECA countries, Kyrgyzstan and Tajikistan, are still classified as low income). 2. The 55% rule would reduce funding available through existing grants in most countries with concentrated HIV epidemics even while limiting their opportunities to obtain new funding. Most countries in the EECA region are now classified as middle income, with several having graduated from lower income status. As a result, the share of funding in the region that went to low-income countries (LICs) was 56 percent in Round 8, but had fallen to 0 percent by Round 10. (Some, but far
1

Stuikite R, Votyagov S, Pinkham S (2012). Quitting while not ahead: the Global Funds retrenchment and the looming crisis for harm reduction in Eastern Europe & Central Asia. Available at www.harm-reduction.org/library (accessed 22 October 2012).

from all, of the shortcoming was covered by single-stream funding, of which LICs had a share of 21 percent of the regions funding in 2011.) Because it penalizes and restricts MICs, regardless of the epidemic-related realities and needs, the 55% rule would force nearly all countries in the EECA to cut 25 percent of already approved budgets when negotiating grant renewals. Such concerns are heightened by worries that the new funding model will place additional challenges on MICs access to funding should it over-prioritize country income levels. The axe from a re-imposed 55% rule would undoubtedly fall on HIV prevention programming targeting most-at-risk populations such as people who inject drugs. That likely impact has already been seen already in Armenia and Belarus, both of which negotiated grant renewals before the 55% rule was frozen. The majority of cuts concerned community systems strengthening activities such as NGO development and building service capacity. Such cuts and others imperil the effectiveness and reach of critical harm reduction interventions that need more, not less, support, including those focused on programme quality, innovation to address changing drug-use practices and the needs of different sub-populations, technical support, drug user participation, community mobilisation, advocacy and legal services. 3. Earmarking of resource allocations solely based on income level contradicts strategic objectives of the Global Fund Strategy 2012-2016: Investing for Impact. The five-year strategy envisages investing more strategically in order to maximize impact, an overarching focus that prioritizes value for money and closer integration with countries national strategies.2 Resource allocation must take into account disease burden, epidemiology patterns and counterpart financing commitments and other criteria of quality (country-level performance, effectiveness and impact). 4. The shift in the Global Funds strategy from emergency to sustainability funding should entail more targeted, focused, cost-effective and epidemiologically sound interventions, and not just focus on the poorest. As the report of Global Funds High-Level Independent Review Panel on Fiduciary Controls and Oversight Mechanisms pointed out in 2011, [T]o be effective, the Global Fund should be more targeted. A one-size-fits-all approach to approving and managing grants is no longer appropriate nor effective [...] It should take a more global look at the disease burden and better determine who needs the money most. 3 Given this recommendation, preferentially allocating resources based on income status alone, without taking into consideration the disease burden and various epidemic patterns, seems inappropriate and simplistic. 5. The new funding model aims to invest the worlds money more strategically and for greater impact; the 55% rule, however, contradicts this goal. Under the new approach, countries will be
2

The Global Fund Strategy 2012-2016: Investing for Impact. Available at www.theglobalfund.org/en/about/strategy/ (accessed 24 October 2012). 3 Report of the High-Level Independent Review Panel on Fiduciary Controls and Oversight Mechanisms of the Global Fund to Fight AIDS, Tuberculosis and Malaria (2011). Available at www.theglobalfund.org/en/highlevelpanel/ (accessed 25 October 2012).

grouped in bands, to ensure focus is placed on countries with the highest disease burden and least ability to pay. The criteria determining the composition of those bandsand the funding allocation formula for themare to be discussed at the November Board meeting, yet it seems that maintaining the 55% rule, which gives more weight to income status than disease burden, contradicts the goal of the new funding model. 6. Middle-income countries have higher absolute burdens of HIV and TB than low-income countries. Three of the top five countries with the highest HIV burdens are middle income and eight of the ten countries with the highest TB burdens are middle income. In fact, only 30 percent of HIV-positive people lived in LICs in 2009.4 7. Resource allocation based on income level fails to acknowledge differences between epidemic patterns and customized epidemic responses. HIV epidemic patterns and disease responses differ between epidemics concentrated among MARPs (in EECA and other regions including East and South Asia, Latin America and the Caribbean, and the Middle East and North Africa) and generalized epidemics (mostly in sub-Saharan Africa). Therefore, conditionalities for counterpart financing should take into account governments commitment in these two different epidemic contexts and impose minimum government thresholds for HIV prevention community-based activitiesrather than restrict eligibility and reduce funding altogether. 8. Poverty is not necessarily related to countries income status. About 60 percent of the worlds poor live in five populous countries currently classified as middle income: Pakistan, India, Nigeria, China and Indonesia. Of the top 10 countries by contribution to global poverty, only four are low income. As of 2011, there were only 35 countries classified as low income that were receiving Global Fund support. The comparable number for middle-income countries was 110, and in them collectively was concentrated the greatest burden by far for all three priority diseases (HIV, TB and malaria).5 Given this situation and ongoing trends, allocating more than half of funds to a decreasing number of LICs, where the disease burden is not necessarily the highest, seems inequitable and inadequate from a disease-response point of view. 9. Resource allocations solely based on country income level is a short-sighted development objective and will not serve LICs best interest. Some 15 of the worlds 20 most aid-dependent countries are on the list of LICs likely to receive even more official development assistance through

Glassman A, Duran D, Sumner A (2011). Global health and the new bottom billion: what do shifts in global poverty and the global disease burden mean for GAVI and the Global Fund? CGD working paper 270. Washington, D.C.: Center for Global Development, p. 2. 5 Developed Country NGO Delegation (May 2012). The Global Fund to Fight AIDS, Tuberculosis and Malaria and support for middle-income countries. Discussion paper, available at www.aidsalliance.org/includes/Document/Uploaded/News%20stories%20links/GF%20support%20for%20MICs%2 0Devd%20C%20NGO%20deln%2023may.pdf (accessed 22 October 2012).

the Global Fund if the 55% rule is implemented.6 Thus, the rule is likely to increase aid dependency among many LICs even as a growing number of observers contend that substantial increases in aid inflows over a sustained period have a harmful effect on institutional development and quality of governance. For all of these reasons, we call you to permanently revoke the 55% rule and to make a relevant decision at the November 2012 Board meeting. There is no reason to postpone the decision until the next meeting, in May 2013, as there is already enough evidence as to the negative impact and potential threat for HIV response effectiveness in middle-income countries. Sincerely yours, Sergey Votyagov Executive Director Eurasian Harm Reduction Network (EHRN) Volodymyr Zhovtyak Head of Coordination Council All-Ukrainian Network of PLWH Anna Dovbakh Associate Director: Policy and Partnership Regional Technical Support Hub Director International HIV/AIDS Alliance in Ukraine Pavel Aksenov Executive Director Russian Harm Reduction Network (ESVERO) Daria Deviakovich Chairperson NGO "Penitentiary Health'' (Belarus) Dr. Eliot Ross Albers, PhD Executive Director International Network of People who Use Drugs Lena Grigoryeva Chair of Steering Committee AIDS Action Europe Koen Block Executive Director European AIDS Treatment Group (EATG) Natalie Ryseva hairperson Belarusian youth women's NGO "'Jana'' Alexandr Khodanovich Chairperson NGO "Belarusian PLHIV Community''

ActionAid (2011). Real aid: ending aid dependency 3. Available at www.un.org/en/ecosoc/newfunct/pdf/luxembourg_real_aid_3.pdf (accessed 24 October 2012).

Ivan Vodnev hairperson International NGO "Social Assistance'' Natalia Vasilieva General Director Open Health Institute Moscow, Russian Federation Anahit Harutyunyan President NGO "Positive People Armenian Network", Armenia

Anna Liubinskaya Chair Person BPA "Positive Movement" (Belarus) Anya Sarang President Andrey Rylkov Foundation for Health and Social Justice, Russia Lasha Zaalishvili Executive Director Georgian Harm Reduction Network