Money Floods Poor Countries Fighting AIDS

As rich countries ramp up their spending to fight AIDS, some poor countries are finding they can't spend the money fast enough. Critics say lending agencies like the International Monetary Fund are putting limits on how much poor countries can spend to fight epidemics.

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ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel with a story that shows just how hard it is for developing countries to move quickly to fight AIDS. The Global Fund to Fight AIDS, TB and Malaria has been around for three years. In that time it has funneled $1.2 billion to developing countries, and billions more are on the way. It is an unprecedented outpouring of health aid, but some of the countries that receive that money are finding it's not easy to turn it into treatment and prevention programs. NPR's Richard Knox reports.

RICHARD KNOX reporting:

For the world's poorest countries, the new largess from the Global Fund and other sources presents an unaccustomed problem. Maureen Lewis is with the Center for Global Development in Washington.

Ms. MAUREEN LEWIS (Center for Global Development): There's an awful lot of money coming in all at once, and it is swamping the amount that is going to health from the government.

KNOX: Take Uganda, for example. This East African nation has spent less than $4 per capital a year on health. Lewis says Global Fund money is changing that.

Ms. LEWIS: Uganda's health budget is somewhere around $75 million in a year, and the increase is about three times that.

KNOX: But Ted Schrecker of the University of Ottawa says Uganda lags far behind in spending this new money.

Mr. TED SCHRECKER (University of Ottawa): Most of the money that the Global Fund has approved for Uganda hasn't been spent, hasn't been dispersed. As of September of last year, only about $19 million of the $201 million that the Global Fund had approved for Uganda had been spent.

KNOX: Since then Uganda's doing a little better. It's spent about $38 million, but that's still under 20 percent of its grant. Most Global Fund countries are spending at a faster rate, but half their grants are still unused.

There's disagreement over why Uganda and other countries are having trouble spending the money. In the current issue of the British journal The Lancet, Schrecker and a colleague say the World Bank and the International Monetary Fund, or IMF, are largely to blame. These agencies loan money to poor countries for economic development. They keep watch on how debtor nations spend their money, and sometimes they set limits on how much governments spend. Big jumps in government spending can touch off inflation or depress the value of currency. Schrecker says these ceilings are forcing governments to lower spending on existing social programs to offset the gush of new foreign aid.

Mr. SCHRECKER: The evidence shows that on the ground, in the field, these constraints are getting in the way of delivering much needed health care. That may not be the intent. That certainly is the effect.

KNOX: He cites statements by a high-level IMF official five months ago in Abuja, Nigeria, warning that the IMF would find it difficult to support spending that would feed inflation or devalue currencies. Peter Heller is the IMF official who made those statements. He says he was misunderstood.

Mr. PETER HELLER (International Monetary Fund): What I said in Abuja relates to the aggregate macroeconomic framework, but that doesn't say, `Don't spend the money on HIV-AIDS.'

KNOX: In Uganda's case, Heller says the minister of Finance was more worried about the economic dangers of the new Global Fund grants than the IMF was.

Mr. HELLER: We certainly have told the Ugandans that it's OK to spend the money on HIV-AIDS prevention and treatment.

KNOX: Heller says the big new grants to fight AIDS and other diseases aren't big enough to tilt whole economies in dangerous ways. And he says the IMF is working hard to dispel any notions that it's standing in the way of fighting AIDS.

Mr. HELLER: You will not find a single case that we have said, `Do not spend the money on HIV-AIDS.' In fact, we are explicitly putting in clauses in our programs that say, `If you get more grant money for education and health, you can spend it.'

KNOX: Uganda's fears seem to be calmed. It has a new Finance minister, Ezra Suruma. In Washington recently, Suruma left no doubt that he doesn't consider macroeconomics to be an excuse to hold back on AIDS spending.

Mr. EZRA SURUMA (Minister of Finance, Uganda): You see, people are dying. They are on their deathbeds. They need some medicine. You just can't say, `I'm sorry. I can't help you. The macroeconomic framework is too tight.' That's not acceptable.

KNOX: One real constraint on ramping up AIDS programs has nothing to do with economics. It's the developing world's shortage of nurses, doctors, pharmacists, lab technicians and community health workers. And those are hard to create overnight. Richard Knox, NPR News.

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