Financing the response to HIV in low- and middle-income countries: how it is affected by the economic crisis?

Robert Greener

July 20, 2011

Summary of Presentation

• What was the effect of the economic downturn in low and middle-income countries?– On economic growth– On resources available for HIV

• What is the financing challenge?• What are the potential sources for

increased and sustainable investment?

Summary of Presentation

• What was the effect of the economic downturn in low and middle-income countries?– On economic growth– On resources available for HIV

• What is the financing challenge?• What are the potential sources for

increased and sustainable investment?

Typology of Countries

upper-middle incomelower prevalence

38 countries(Russia, Brazil, Mexico)

9% of PLHIV

upper-middle incomehigher prevalence

15 countries(South Africa, Botswana, Ukraine)

21% of PLHIV

30%

lower-middle incomelower prevalence

30 countries(China, Indonesia, Viet Nam)

3% of PLHIV

lower-middle incomehigher prevalence

9 countries(Thailand, Lesotho, Swaziland)

4% of PLHIV

7%

low incomelower prevalence

15 countries(India, Myanmar, Pakistan)

11% of PLHIV

low incomehigher prevalence

27 countries(Nigeria, Kenya, Mozambique)

52% of PLHIV

63%

23% 77%

HIV PrevalenceG

ove

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en

t R

eve

nu

e p

er c

apit

a1%

$1150

$250

HIV Disease Burden - PLHIV

low income higher prevalence

52%

low income lower prevalence

11%

lower-middle income higher prevalence

4%

lower-middle income lower prevalence

3%

upper-middle income higher prevalence

21%

upper-middle income lower prevalence

9%

Economic Downturn in 2009

IMF estimates 2008-9

low income higher prevalence, -9.2%

low income lower prevalence, 4.5%

lower-middle income higher prevalence, -3.6%

lower-middle income lower prevalence, 8.7%

upper-middle income higher prevalence, -13.6%

upper-middle income lower prevalence, -13.1%

-15%

-10%

-5%

0%

5%

10%

GD

P g

row

th r

ate

20

08

-9

Total annual resources available for AIDS in low and middle income countries

Source: UNAIDS analysis based on (1) Kaiser Family Foundation and UNAIDS , financing the Response to AIDS in low and middle income countries from the G8, European Commission and other Donor Governments in 2009, July 2010; (2) UNAIDSOECD/DAC online database (last visited on January 05, 2011); (3) Funders Concerned About AIDS (FCAA), 2010; (4) European HIV/AIDS Funders Group (EFG, 2010; (5) UNAIDS Unified Budget of Work (UBW) for 2010 & 2011); (6) Disbursements reports and pledges and contributions reports from the GFATM (last visited on Jan 06 2011(7) budget review from Donor governments and multilateral organizations.

Total annual resources available for AIDS in low and middle income countries

Source: UNAIDS analysis based on (1) Kaiser Family Foundation and UNAIDS , financing the Response to AIDS in low and middle income countries from the G8, European Commission and other Donor Governments in 2009, July 2010; (2) UNAIDSOECD/DAC online database (last visited on January 05, 2011); (3) Funders Concerned About AIDS (FCAA), 2010; (4) European HIV/AIDS Funders Group (EFG, 2010; (5) UNAIDS Unified Budget of Work (UBW) for 2010 & 2011); (6) Disbursements reports and pledges and contributions reports from the GFATM (last visited on Jan 06 2011(7) budget review from Donor governments and multilateral organizations.

Domestic contribution

Summary of Presentation

• What was the effect of the economic downturn in low and middle-income countries?– On economic growth– On resources available for HIV

• What is the financing challenge?• What are the potential sources for

increased and sustainable investment?

Resource Needs for the Global AIDS Response

0

5

10

15

20

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Glo

bal

Res

ou

rce

Nee

d $

bn upper-middle income

lower prevalence

upper-middle income higher prevalence

lower-middle income lower prevalence

lower-middle income higher prevalence

low income lower prevalence

low income higher prevalence

Summary of Presentation

• What was the effect of the economic downturn in low and middle-income countries?– On economic growth– On resources available for HIV

• What is the financing challenge?• What are the potential sources for

increased and sustainable investment?

Potential Sources of Financing

• Domestic sources in affected countries– Public budgets– Domestic private and philanthropic sources

• External donor contributions– Bilateral aid– Multilateral mechanisms– Global private and philanthropic sources

Economic Growth in Low and Middle-Income Countries

IMF Forecast growth rates 2011-2016

6.2%

7.7%

4.7%

8.8%

4.0% 4.0%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

low income higher prevalence

low income lower prevalence

lower-middle income higher prevalence

lower-middle income lower prevalence

upper-middle income higher prevalence

upper-middle income lower prevalence

GD

P g

row

th r

ate

Domestic HIV Investment and Disease Burden

2.9%

0.4%

2.7%

0.3%

1.1% 0.9%

9.8%

1.1%

15.0%

0.5%

3.9%

1.1%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

low income higher prevalence

low income lower prevalence

lower-middle income higher prevalence

lower-middle income lower prevalence

upper-middle income higher prevalence

upper-middle income lower prevalence

Domestic HIV investment as % Domestic Health budget HIV disease burden as % of total

UNAIDS and WHO investment data for 84 low and middle-income countries

Donor Dependency and Health

52.7%

85.7%

80.6%

10.1%

16.7%

44.7%

24.6%

11.2%

17.8%

6.5%

0.2% 0.5%2.2%

0.3%0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

East & SouthernAfrica

West & CentralAfrica

South Asia Latin America Eastern Europe &Central Asia

South East Asia East Asia

% f

rom

ext

ern

al s

ou

rces

HIV Health

Donor Dependency of Treatment

UNAIDS: NASA and UNGASS Data

Percentage of care and treatment expenditure from international sources

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

AlgeriaSeychelles

EgyptCongo

BotswanaLesotho

MoroccoAngola

ChadGabonBenin

SenegalSwazilandCameroon

UgandaBurundi

GhanaTogo

KenyaBurkina FasoSierra Leone

NigeriaCote d'Ivoire

MaliGuinea

MozambiqueGuinea-Bissau

MalawiEritrea

NigerCentral African Republic

RwandaDemocratic Republic of the Congo

Domestic Financing Scenario

Suppose that by 2020:• Domestic health budgets average at least

15% of government revenue (as in the Abuja Declaration in Africa)

• Domestic allocation to AIDS is in proportion to the AIDS disease burden

Potential Domestic Public Investment

low income

lower-middle income

upper-middle income

0

5

10

15

20

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Glo

ba

l R

es

ou

rce

Ne

ed

s $

bn

Potential Domestic Public Investment

low income

lower-middle income

upper-middle income

Donors and private sources

0

5

10

15

20

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Glo

ba

l R

es

ou

rce

Ne

ed

s $

bn

Remaining Resource Gap

low income

lower-middle income

upper-middle income

0

2

4

6

8

10

12

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Re

so

urc

e G

ap

$b

n

Potential Private SourcesGlobal and Country Level

• Innovative financing mechanisms– Indirect taxation (airline tickets, mobile phone

usage, exchange rate transactions)• Front-loading mechanisms

– E.g. International Financing Facility (IFF-Im)• Advance market commitments• Voluntary solidarity levies• Philanthropic Foundations

Political Declaration on HIV/AIDS: resources for the AIDS response

• Close the global resource gap by 2015– $6 billion annually, overall target between $22 billion and $24

billion

• Support and strengthen existing financial mechanisms– including the Global Fund and relevant UN organizations

• Expand voluntary and additional innovative financing mechanisms

• Break the upward trajectory of costs through the efficient utilization of resources– Simplify treatment regimens and delivery (Treatment 2.0)– Integrate HIV programmes with other areas of the health system