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HIV/AIDS: Global Fund Shake-Up Signals New Direction

Nairobi/Johannesburg, 2 February 2012 (PLUSNEWS) – The appointment of a new general manager, Gabriel Jaramillo, at the Global Fund to fight AIDS, Malaria and Tuberculosis could be a “turning point” for the troubled organization, which has suffered from a funding crisis and allegations of corruption.

Jaramillo, a former CEO of Spain’s Sovereign Bank and special adviser to the Office of the Special Envoy for Malaria of the UN Secretary-General, was a member of an independent panel set up in March 2011 [ http://www.theglobalfund.org/en/highlevelpanel/compositon ] to investigate the Global Fund’s fiduciary controls and oversight mechanisms after allegations of grant fraud in several recipient countries.

Among other things, the panel recommended [ http://www.theglobalfund.org/documents/highlevelpanel/HighLevelPanel_IndependentReviewPanelOnFiduciaryControlsAndOversightMechanisms_Report_en ] the Fund strengthen its internal governance, improve its risk management and “get serious about results”.

The appointment of Jamarillo was quickly followed by an announcement by Global Fund executive director Michel Kazatchkine that he could not continue under “these circumstances” and that he planned to resign in mid-March.

Kazatchkine, who has been with the Fund for 10 years, was reappointed as executive director for a second three-year term in January 2011.

But soon after, the Fund’s Office of the Inspector General began uncovering fraud among recipients in countries such as Mali, Mauritania and Zambia. As a consequence of this and negative reports by international media, donors, including Germany, Ireland and Sweden, suspended funding.

Faced with declining donor support and a credibility crisis, the board endorsed a new strategy and announced the cancellation of its 11th round of grants at a meeting in Accra, Ghana, in November 2011.

The board also reportedly [ http://www.lemonde.fr/planete/article/2012/01/24/demission-de-michel-kazatchkine-patron-du-fonds-mondial-contre-le-sida_1633931_3244.html ] demanded Kazatchkine’s resignation – but he refused. It then decided to appoint a general manager and reduce Kazatchkine’s responsibilities.

“When problems pile up and the buzz and press get so bad, it is inevitable that leadership will be held responsible. I suppose the Global Fund board decided that the costs associated with a leadership transition during a crisis are lower than the benefits from a fresh face and new strategy,” Amanda Glassman, director of global health policy and research at the Centre for Global Development, told IRIN/PlusNews.

Fixing the Fund

“The appointment of the general manager is a turning point for the Global Fund and hopefully in nine to 12 months the Fund will hire a new executive director with experience in managing large complex financial systems, who also completely understands the larger role that the Fund has to play,” said Bernard Rivers, executive director of Aidspan, an independent watchdog of the Global Fund.

Glassman believes that current features of the Global Fund’s structure probably exacerbated the crisis. “The Fund’s performance-based funding model relies on self-reports and a non-transparent decision-making process on disbursements… I am very worried about the current emphasis on audit and fiduciary oversight as the ‘solution’ to the misuse and corruption issues in low-income countries.

“I would rather see the Fund tie money to measurable improvements in performance and forget about checking the receipts for every condom,” she added.

This has been backed up by the High-Level Independent Review Panel, which found that “the culture of the Global Fund has become one driven by the measurement of documentation, and not by health impact”. [ http://www.globalfund.org/en ]

But for Asia Russell, director of international policy for activist group HealthGap, it all comes down to money – or lack of it. “Not because of alleged management issues, or a loss of confidence or any other red herring that has been raised – it was because there was not enough money; and that happened because donors said one thing during the most recent replenishment meeting at the UN in New York, but then did a totally different thing.”

The issue was not the credibility of the Global Fund, which has some of the most open and transparent mechanisms for identifying and responding to corruption and fraud – “much stronger than other bilateral funders, for example”, Russell told IRIN/PlusNews by email.

Funding pledges

The Saudi government announced at end-January that it would provide US$25 million in 2013, while the Bill & Melinda Gates Foundation gave a $750 million promissory note. But this still falls short of what the organization needs to meet its demands.

“The leadership change could lead to increased efficiency and impact if key reform measures are taken and results (not spending) are measured more rigorously,” Glassman suggested.

In his resignation letter, Kazatchkine acknowledged that in the current economic climate, “the emergency approaches of the past decade are giving way to concerns about how to ensure long-term sustainability, while at the same time, efficiency is becoming a dominant measure of success”.

Jamarillo’s first day at the Global Fund is 1 February and he is expected to oversee a process of transformation recommended by the high-level panel that will move the Fund response from an emergency to a sustainable one.

A lot is at stake: by 2010, the Fund was disbursing $3.5 billion annually. It was responsible for supporting about 40 percent of all HIV treatment in developing countries and much of the care in middle-income nations such as China and India. More than two-thirds of all global malaria prevention and treatment and three-quarters of all tuberculosis efforts now depend on it.

Activists have already thrown down a challenge for the former banker. “First on his to-do list should be holding an emergency donor conference so that affected countries can apply for new grants and expand life-saving treatment this year,” said Tido von Schoen-Angerer, executive director of the Médecins Sans Frontières Access Campaign.

“To speak like a doctor, I am cautiously optimistic about the future of the Global Fund. The patient has had severe indigestion but there is a good chance of recovery,” Rivers told IRIN/PlusNews.

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