3 questions to Peter Sands, Executive Director of the Global Fund to Fight AIDS, Tuberculosis and Malaria

Interview with Peter Sands, Executive Director of the Global Fund to Fight AIDS, Tuberculosis and Malaria

Written interview received on June 15, 2023.

Focus 2030: Many developing countries are facing a debt crisis, with loan repayment levels reaching record highs due to the combined effects of the Covid-19 pandemic, the aftermaths of the war in Ukraine, and climate change. This reduces their fiscal space and affects their ability to finance public policies to meet the basic needs of their populations. The Global Fund operates in more than 100 countries: to what extent are you observing constrained investments in public health?

Peter Sands: After the initial strong response to the COVID-19 pandemic, government health spending contracted in 2022, down to its pre-pandemic trajectory. Many low- and middle-income countries (LMICs) have seen their fiscal spaces shrinking, resulting in fewer resources to dedicate to their health systems. The World Bank projects that government spending capacity in 18 low- and middle-income countries (LMICs) will lag below pre-COVID-19 levels through to 2027. This dire situation is mostly due to a challenging geo-political context: monetary tightening in advanced economies and — following the Russian invasion of Ukraine — increased sovereign spreads have increased the costs of borrowing across developing countries. New funding from international capital markets and from China has declined steeply. In addition, the war in Ukraine has contributed to a sharp increase in prices of key food and fuel commodities. For low-income countries, which are net importers of these commodities, the cost of living on average increased faster than gross domestic product (GDP) in 2022, leaving the population poorer. These trends are concerning and threaten our progress toward ending AIDS, tuberculosis and malaria.

In these challenging times, a strong partnership between the most impacted countries and the Global Fund is more important than ever. We have identified several ways to help these countries recover their capacity to increase domestic health financing. First, we need speedy deployment of Special Drawing Rights through the IMF’s Resilience and Sustainability Trust to support LMICs to simultaneously reduce their debt burden and release funds for climate change mitigation and adaptation, including for health. We also call for a framework to enable radical streamlining of blended finance transactions between multilateral development banks and grant-making institutions like the Global Fund. Lastly, we need to create more fiscal space by improving tax system design and implementation, including through the provision of technical assistance, greater transparency, and reinforcement of mechanisms to address multinational corporate and high-net-worth individuals’ tax evasion or avoidance.

Focus 2030: Some Global Fund donor countries are raising financial resources through innovative financing mechanisms, such as Debt2Health, financial transaction levies, airline ticket taxes, etc. To what extent do these innovative forms of financing help support the Global Fund and ensure sustainable and predictable resources for an organization like yours?

Peter Sands: Financial innovation is absolutely critical to attract new sources of finance and increase the efficiency of current resources to fulfill our mission of ending AIDS, TB and malaria. One key priority is to catalyze domestic resource mobilization through co-financing requirements: Global Fund grants typically include an obligation on the recipient government to commit additional domestic resources equivalent to 15% to 30% of the allocated grant. This mechanism has proved remarkably successful in incentivizing increased domestic investment in health.

Another mechanism is our debt swap mechanism. To date, 10 countries have benefited from it, generating more than US$232 million for national health programs. In return, Australia, Germany and Spain have canceled debt owed by those countries. We also devise and support blended finance solutions whenever possible. As an example, the Regional Malaria Elimination Initiative was created in partnership with the Inter-American Development Bank, the Bill & Melinda Gates Foundation, Clinton Health Access Initiative and Pan American Health Organization to secure a mix of grants and concessional credit funding for collaborative programs to eliminate malaria across Central America and the Dominican Republic. The Global Fund has also worked with the Lives and Livelihoods Fund, which, through a collaboration between the Bill & Melinda Gates Foundation and the Islamic Development Bank, offers countries an opportunity to access concessionary funding for health and priority areas.

Along governments and global organizations, the private sector also plays a crucial role in pushing forward innovative forms of financing. We’re facilitating consumer-based fundraising initiatives such as (RED), which works with the world’s most iconic brands and organizations to develop (RED)-branded products and experiences that, when purchased, trigger corporate giving to the Global Fund. These contributions are then invested in HIV programs across the globe. Within just 10 years of launching, (RED) generated more private sector funds than any other business initiative among Global Fund contributors. In Asia, the Global Fund has joined forces with the Asia Pacific Leaders Malaria Alliance and private sector partners to support M2030, a consumer-marketing initiative that will raise money from Asian consumers to support malaria elimination efforts in the region.

The solidarity levy on airline tickets and other financial transaction taxes implemented by France are benefiting the Global Fund and its partner Unitaid, allowing both organizations to initiate, pilot and scale up innovations in the fight against HIV, TB and malaria, such as the HIV self-test or new generations of mosquito nets to fight malaria. Those innovative financing mechanisms, launched by France, have inspired other countries to undertake similar initiatives to support global health.

Focus 2030: The Summit for a New Global Financing Pact, that will take place in Paris on June 22-23, aims to identify sources of financing to address both global climate challenges and the critical needs of people in developing countries, including health needs. From the Global Fund’s perspective, how important is it to combine a reform of the international financial architecture with a response to climate change?

Peter Sands: Climate change exacerbates existing health challenges and introduces new ones. Rising global temperatures, changing weather patterns, and extreme weather events directly impact vulnerable communities, leading to increased disease burden, disrupted health systems, and heightened risks of outbreaks. For instance, climate change can expand the range of disease vectors, such as mosquitoes carrying malaria or dengue fever, and facilitate the spread of infectious diseases. Climate change not only affects health outcomes but also undermines socioeconomic progress, fuels inequalities, and threatens human rights.

To effectively address these interconnected challenges, we need to further develop and deploy innovative financing mechanisms to help the most vulnerable countries access the resources they desperately need to tackle health inequities and accelerate the fight to end the epidemics for good. It is also true that the reform of multilateral institutions is needed to reduce fragmentation and enhance efficiency. However, it is better to strengthen already existing mechanisms rather than create new ones, while also clarifying the mandate of each institution and increasing the focus on value for money in the provision of external assistance. We hope the Paris Summit for a New Global Financing Pact will secure a strong commitment from world leaders in this direction.