Order Code RL31712
CRS Report for Congress
Received through the CRS Web
The Global Fund to Fight AIDS, Tuberculosis, and
Malaria: Background and Current Issues
Updated June 26, 2003
Raymond W. Copson and Tiaji Salaam
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

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The Global Fund to Fight AIDS, Tuberculosis, and
Malaria: Background and Current Issues
Summary
The Global Fund to Fight AIDS, Tuberculosis, and Malaria, headquartered in
Geneva, Switzerland, is a public-private partnership intended to attract and rapidly
disburse new resources in developing countries for the struggle against infectious
disease. The Fund is a financing vehicle, not a development agency, and its grants
are intended to complement existing efforts rather than replace them. Approximately
$4.6 billion has been pledged to the Fund, while about $1.5 billion has been received
or was in process as of June 13, 2004.
A May 2003 report by the U.S. General Accounting Office (GAO) praised the
Global Fund for “noteworthy progress in establishing essential governance and other
supporting structures” but noted that the Fund’s ability to finance additional grants
was threatened by a lack of resources. At the June 2003 Global Fund Board meeting,
Executive Director Richard Feachem appealed for $3 billion in additional
contributions through 2004, including $1 billion from the United States, $1 billion
from Europe, and $1 billion from other sources.
The origins of the concept of an independent funding mechanism to fight
infectious disease lie partly in ideas developed in the 106th Congress and in proposals
made by U.N. Secretary General Kofi Annan. The Fund was established in January
2002 following negotiations involving donor and developing country governments,
non-governmental organizations (NGOs), the private sector, and the United Nations.
As a result of two rounds of grant awards, the Global Fund has committed to
disbursing $1.5 billion to 153 programs in 92 countries in 2003 and 2004. Proposals
are submitted to the Global Fund by Country Coordinating Mechanisms (CCMs)
based in the recipient countries and including representatives of government, NGOs,
faith-based groups, and others. Grants are made to Principal Recipients (PRs), which
may be NGOs or government agencies, and their operations must be audited. PRs
are also monitored by Local Funding Agents (LFAs), which may be accounting firms
or other independent organizations and which report to the Global Fund. The GAO
has noted initial difficulties in the operations of CCMs and in the appointment of
LFAs but has also reported that the Global Fund has taken steps to deal with these
problems. The absorptive capacity of recipient countries is a longer term concern.
U.S. contributions to the Global Fund will total $623 million through FY2003.
The Administration has requested $200 million for the Fund in FY2004 and has
pledged the same amount annually through FY2008. However, H.R. 1298/P.L. 108-
25, the major AIDS bill signed into law on May 27, 2003, authorizes up to $1 billion
as a contribution to the Global Fund in FY2004. Appropriators have warned that it
will be difficult to finance this amount in view of competing budgetary demands.
For further information, see U.S. General Accounting Office Report GAO-03-
601, Global Health: Global Fund to Fight AIDS, TB, and Malaria Has Advanced in
Key Areas, but Difficult Challenges Remain; and CRS Report RS21181, HIV/AIDS
International Programs: Appropriations, FY2002-FY2004.

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Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Origins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Process and Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
U.S. Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Absorptive Capacity Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

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The Global Fund to Fight AIDS,
Tuberculosis, and Malaria:
Background and Current Issues
Background
The Global Fund to Fight AIDS, Tuberculosis, and Malaria, was established in
Geneva, Switzerland, in January 2002. The Fund makes grants in developing
countries aimed at reducing the number of HIV, tuberculosis, and malaria infections,
as well as the illness and death that result from such infections. The Fund is a public-
private partnership, and its board of directors consists of representatives of seven
donor countries and seven developing countries, as well as one member each
representing a developed country non-governmental organization (NGO), a
developing country NGO, the private sector, and a contributing private foundation.
Ex officio members include a representative of the community of people living with
HIV/AIDS or of a community living with tuberculosis or malaria. On January 31,
2003, the Global Fund’s Board of Directors chose Tommy Thompson, the U.S.
Secretary of Health and Human Services, as its chair. Thompson is also the U.S.
representative to the board.1 The Executive Director of the Global Fund is Dr.
Richard Feachem, a British physician who has held teaching and administrative
positions in international health in the United States and Britain.
The Global Fund’s efforts are intended to mitigate the impact of infectious
disease on countries in need and thus to contribute to a reduction in poverty. Over
five years, the Fund hopes to achieve an “unprecedented scale-up” in AIDS treatment
by funding anti-retroviral therapy for 500,000 patients over five years. Moreover, the
Fund expects to be supporting programs to provide care for 500,000 children
orphaned by AIDS, to treat two million people for tuberculosis infection, and to
provide 20 million courses of treatment for drug-resistant malaria worldwide.2
Global Fund documents emphasize that it is a financing instrument
complementing existing programs and that it is intended to attract, manage, and
disburse additional resources, rather than re-channel existing resources. The Fund
is a fiduciary agent designed to direct new resources to programs in countries in need,
rather than an agency that implements projects. At the same time, the Fund
coordinates closely with bilateral assistance agencies, including the U.S. Agency for
International Development (USAID) and international organizations engaged in the
1 For a full list of board members and other information on the Global Fund, visit its web
site at [http://www.globalfundatm.org].
2 The Global Fund to Fight AIDS, Tuberculosis, and Malaria: Questions and Answers,
available at the Global Fund website.

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CRS-2
struggle against AIDS, tuberculosis, and malaria. The World Bank serves as the
Global Fund’s trustee, receiving contributions made by donors and disbursing funds
as the Global Fund directs.
Origins
The origins of the concept of an independent funding mechanism to fight
infectious disease lie partly in ideas developed in the 106th Congress. In August
1999, Rep. Barbara Lee introduced the AIDS Marshall Plan Fund for Africa Act
(H.R. 2765). This bill, which did not come to a vote, would have established an
AIDS Marshall Plan Fund for Africa Corporation as an independent U.S. agency able
to receive contributions from foreign governments as well as private sources. In
January 2000, again in the 106th Congress, Rep. James Leach introduced the Global
AIDS and Tuberculosis Relief Act of 2000 (H.R. 3519), which passed both the
House and Senate and was signed into law (P.L. 106-264) in August 2000. H.R.
3519 included provisions supporting the creation of a World Bank AIDS Trust Fund.
Had it been created along the lines indicated in H.R. 3519, this fund would have
made grants to governments and NGOs in order to stem the spread of AIDS and
promote affordable access to treatment. The Foreign Operations Appropriations
legislation for FY2001,3 enacted in late October 2000, provided up to $20 million for
a U.S. contribution to an international HIV/AIDS fund.
U.N. Secretary General Kofi Annan urged the creation of an independent
funding vehicle on April 26, 2001, in a speech to African leaders gathered at a
summit on HIV/AIDS and other infectious diseases in Abuja, Nigeria. Annan
introduced the term “Global Fund” and said there should be a “war chest” of $7
billion to $10 billion per year for the struggle against AIDS. (Subsequently, experts
said that $7 billion to $10 billion was the amount required by 2005 from all sources,
not just the Global Fund.) Annan’s proposal attracted considerable attention, and
on May 11, 2001, Annan came to the White House, with Nigeria’s President
Olusegun Obasanjo, to hear President Bush pledge $200 million as a “founding
contribution” to a global fund. The President added that more would follow “as we
learn where our support can be most effective.”4 Moreover, he emphasized that the
fund should be a public-private partnership, drawing upon the contributions of
private corporations, foundations, faith-based organizations, and NGOs.
The creation of a Global Fund was endorsed by the United Nations General
Assembly Special Session on HIV/AIDS (UNGASS), held in June 2001, and by the
Group of Eight (G-8) summit of industrialized countries plus Russia, meeting in
Genoa, Italy, in July 2001. The G-8 partners affirmed that the Global Fund would
be a public-private partnership, and their final communique stated that “we are
determined to make the fund operational by the end of the year.”5 In October 2001,
a Transitional Working Group (TWG) was convened, which included representatives
of developing and donor countries, NGOs, the private sector, and the United Nations.
3 H.R. 5526, enacted by reference in Sec. 101(a) of P.L. 106-429.
4 Remarks by the President, May 11, 2002.
5 Communique dated July 22, 2001.

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CRS-3
In December, the TWG reached agreement on documents related to Global Fund
governance, accountability, and other issues. The Global Fund held its first board
meeting in January 2002.
Grants
The Global Fund has held two rounds of its grant application and awards
process and has committed itself to disbursing $1.5 billion to 153 programs in 92
countries in 2003 and 2004.6 The programs being supported are typically slated to
last for five years but will be closely assessed after two years before additional funds
are provided. If they are performing satisfactorily, the programs already approved
would be eligible for an additional $2.2 billion after 2004. The third round of grant
applications closed on May 31, 2003, and generated more than 200 proposals from
about 85 countries. The proposals are seeking approximately $2 billion over two
years,7 and the Fund expects to award about half this amount in October 2003, when
the third round evaluation and approval process is completed.8 Of the funds awarded
to date, 60% are to go to Africa, and 60% are for AIDS. The Fund also notes that
“Half of the money will be used by governments; half by NGOs (non-governmental
organizations). Half is for the purchase of drugs and commodities, and half is for
infrastructure and training.”9
Once a proposal has been approved, the Global Fund must enter into an
agreement with the Principle Recipient (PR, see below) on record keeping, financial
accountability, procurement, and other matters.10 Concluding these agreements
initially caused some delay in the disbursement of funds, but Director Feachem
reported in June 2003 that “steady, sustainable progress”was being made. According
to Feachem, agreements have been concluded with 31 of the 36 recipients in the first
round awards, which were announced in April 2002, and with 21 of the 73 recipients
in the second round awards, announced in January 2003.
The Fund’s first disbursements were issued to Ghana in November 2002 and to
Haiti and Tanzania in December 2002. In Ghana, the $4.2 million HIV/AIDS grant
will fund the building of 16 Voluntary Counseling and Testing (VCT) centers,
provide Prevention of Mother to Child Transmission (PMTCT) services to 600
mothers per year, and begin antiretroviral therapy for 2,000 people with AIDS. It
will also strengthen Home Based Care (HBC) and peer education within rural
communities by involving people living with HIV. AIDS kills 40,000 people per
year in Ghana. The second grant signed in Ghana ($2.3 million) will allow Ghana
6 Questions and Answers at the Global Fund website.
7 The Global Fund’s 5th Board Meeting, 5 June 2003: Richard Feachem’s Report to the
Board. Available at the Global Fund’s website.
8 “Global Fund Praises New Funding by G8, Underscores Need for $3 billion by End of
2004,” Global Fund press release, June 5, 2003.
9 Questions and Answers.
10 U.S. General Accounting Office (GAO), Global Health: Global Fund to Fight AIDS, TB,
and Malaria Has Advanced in Key Areas, but Difficult Challenges Remain, GAO Report
GAO-03-601, May 2003, p. 3-4, 21-22.

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CRS-4
to treat an additional 20,000 tuberculosis patients using the Directly Observed
Treatment, Short-course (DOTS) over the next two years. One of the main objectives
of the program is to strengthen partnership between the private and public sectors.11
Haiti will use its $24.7 million grant to scale up its HIV/AIDS treatment and
prevention programs. It is expected that by the end of the year the funds will provide
antiretroviral therapy to more than 1,200 people living with HIV using community
members to promote adherence to treatment. The program will also encourage
behavior change through the social marketing of over 15 million condoms and an
expansion of youth prevention services, targeting 400,000. Last year 30,000 Haitians
died from AIDS; twice the number who succumbed to the disease in the United
States. An estimated 250,000 Haitians are living with HIV/AIDS.12
To try to reduce the incidence of malaria, Tanzania will purchase insecticide-
treated mosquito nets with its $12 million grant. The plan includes a voucher scheme
that will enable pregnant women to purchase treated mosquito nets at a third of their
cost. The program will encourage private sector involvement in the production and
distribution of the nets. Studies conducted in Tanzania have shown that the use of
treated mosquito nets can reduce infant mortality by up to 27% and cut the number
of illnesses from malaria in half. About 80,000 children under five die from malaria
each year in Tanzania.13 Other agreements that have been signed aim at scaling up
the malaria program in Zanzibar, a tropical island that is part of Tanzania;
accelerating the HIV/AIDS program in Ukraine; strengthening HIV/AIDS and
tuberculosis programs in Thailand; and financing the purchase of HIV and AIDS
medications in Kenya.14
Process and Procedure
The Global Fund accepts grant proposals from national Country Coordinating
Mechanisms (CCMs), which the Fund describes as “national consensus groups.”15
According to the Fund, CCMs should be inclusive and seek representation from all
stakeholders, including government; the NGO community; the private sector; people
living with HIV/AIDS, tuberculosis, and/or malaria; religious and faith groups; the
11 “Ghana to Receive $6.5 million for HIV/AIDS and TB Prevention and Treatment,”
Global Fund press release, November 22, 2002.
12 “Global Fund Money to Scale Up AIDS Treatment and Prevention Efforts in Haiti,”
Global Fund press release, December 2, 2002.
13 “Global Fund Money Will Make Mosquito Nets Widely Available in Tanzania,” Global
Fund press release, December 2, 2002.
14 Proposals approved during the first and second rounds, as well as press releases on grants
and agreements, may be viewed at the Global Fund website.
15 The Global Fund to Fight AIDS, Tuberculosis, and Malaria, Guidelines for Proposals,
March 2003, p. 5.

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academic sector; and United Nations agencies represented in the applicant country.16
The Fund views CCMs as essential in assuring true partnerships that involve all
relevant actors in developing a grant proposal, sharing information, and
communicating with one another on Global Fund issues. CCMs can also serve as
forums through which national efforts on AIDS, tuberculosis, and malaria can be
coordinated and strengthened.17 Applications from individual organizations, such
as NGOs, are permitted only from countries without legitimate governments or in
other exceptional circumstances.
A May 2003 report by the U.S. General Accounting Office (GAO), while
praising the Global Fund for “noteworthy progress in establishing essential
governance and other supporting structures” and for “responding to challenges,”
noted several problems with respect to the CCMs.18 These included difficulties in
communication between the CCMs and Global Fund headquarters; misperceptions
within CCMs about the roles and responsibilities of the CCM itself and of CCM
members; and, in some CCMs, a lack of information sharing and infrequent
meetings. However, the GAO report also noted that the Fund was addressing these
problems through enhanced communication, holding workshops, including language
describing the duties of CCMs in grant agreements, and other measures.19 Feachem
told the Fund’s Board on June 5, 2003, that during the third round application
process, he had seen “more inclusive processes in CCMs with greater involvement
of NGOs.”20
The CCM submits a single Country Coordinated Proposal (CCP) to the Global
Fund, where it is reviewed by the 22-member Technical Review Panel (TRP),
consisting of independent experts in the three diseases, as well as others with broader
global health experience. The TRP is tasked with identifying the proposals most
likely to have a “clear and demonstrable impact in the fight against AIDS, TB, and
malaria,”21 and refers those proposals to the Board for discussion and final decisions
on approval. All of the TRPs recommendations for the second round of grant awards
were approved by the Board.22
Within the recipient country, projects are implemented by one or more Principal
Recipients (PRs), which should be agencies or organizations that belong to the
CCM. The PRs are responsible not only for carrying out the project, but also for
managing its finances. Each PR must have an independent auditor acceptable to the
16 Guidelines for Proposals, p. 6.
17 Guidelines for Proposals, p. 5.
18 Global Health: Global Fund to Fight AIDS, TB, and Malaria, p. 3-4, 15-18.
19 Global Health: Global Fund to Fight AIDS, TB, and Malaria, p. 18.
20 Richard Feachem’s Report to the Board.
21 Chrispus Kiyonga, then Board Chairman, quoted in Global Fund press release, March 11,
2002.
22 Technical Review Process at the Global Fund website.

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CRS-6
Fund,23 but the work of the PRs is also monitored by Local Fund Agents (LFAs),
which represent the Global Fund within the recipient country and are regarded as the
Fund’s “eyes and ears.” Each LFA is expected to have an in-country presence,
enabling it to assess the capabilities of the PRs and effectively evaluate their financial
and program reports. The identification and selection of LFAs, which has been
carried out in conjunction with the CCMs, has been a prolonged process, but private
sector accounting firms, a private foundation, and a U.N. agency have been recruited
to fill the LFA role in various countries.24 The LFAs are paid centrally through the
Global Fund, and their fees are not deducted from the grants. The GAO notes that
there are misunderstandings and resentments toward the LFAs in come countries and
that the Global Fund is trying to address these by encouraging local participation in
the work of the LFAs. The GAO is also concerned that it may be difficult to
maintain the independence of the LFAs in poor countries where elites are small. In
such situations, LFAs may have difficulty recruiting experts who are not already
involved in the Global Fund supported program in one way or another.25
Resources
A shortage of resources at the Global Fund for meeting current and future
commitments was a major focus of the May 2003 GAO report. According to the
GAO,26
The Fund’s ability to approve and finance additional grants is threatened by a
lack of sufficient resources. The Fund does not currently have enough pledges
to allow it to approve more than a small number of additional proposals in 2003.
In addition, without significant new pledges, the Fund will be unable to support
all of the already approved grants beyond their initial 2-year agreements.
The GAO cited Global Fund estimates that $1.6 billion in additional pledges was
required in 2003 and $3.3 billion in 2004. In his address to the Board on June 5,
2003, Director Feachem said that the Fund was short $600 million needed to fully
fund anticipated October 2003 third round of awards, and he set a target of $3 billion
to be raised through the end of 2004. He expressed the hope that $1 billion of this
amount would come from the United States, $1 billion from Europe, and $1 billion
from other donors that had already contributed, such as Japan and Canada, as well
as from oil-rich states, foundations, and the private sector.27
Overall, according to the Global Fund, some $4.6 billion has been promised to
date by donors in pledges covering various multi-year time periods. Table 1, based
on data published by the Global Fund and information on U.S. contributions,
23 Global Health: Global Fund to Fight AIDS, TB, and Malaria, p.21.
24 Global Health: Global Fund to Fight AIDS, TB, and Malaria, p.14.
25 Global Health: Global Fund to Fight AIDS, TB, and Malaria, p 24-25.
26 Global Health: Global Fund to Fight AIDS, TB, and Malaria, p 32.
27 Richard Feachem’s Report to the Board.

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summarizes pledges for 2001 through June 13, 2003.28 Of the amounts pledged for
2001-2002, $940 million had been received through the end of May 2003, while $557
million of pledges to date for 2003 has been received or is reported to be “in
process.”
Table 1. Pledges to the Global Fund, 2001-2003
($ millions)
2001-2002
2003
(through June 13)
United States
275.00
347.72
European Union members and European
463.68
409.11
Commission
Other national donors
138.90
142.22
Individuals, groups, and events
1.55
.03
Corporate
1.52
.10
Bill and Melinda Gates Foundation
50.00
50.00
Other foundations, non-profits, and NGOs
.12
.02
Totala
930.78
949.21
a Errors due to rounding.
H.R. 1298/P.L. 108-25, the United States Leadership Against HIV/AIDS,
Tuberculosis, and Malaria Act of 2003, which was signed into law on May 27, 2003,
authorizes “up to” $1 billion as an FY2004 contribution to the Global Fund and
specifies that from 2004 through 2008, the U.S. contribution in each fiscal year not
exceed one-third of contributions from all other sources. As Table 1 indicates, U.S.
pledges in 2001-2002 were less than one third of total pledges, and the Fund needs
less than $200 million in additional pledges for this to be the case in 2003. However,
if the U.S. pledge were to reach $1 billion for 2004, other donors would be
challenged to sharply increase their own contributions before such a pledge could be
fulfilled. President Jacques Chirac of France and Britain’s Prime Minister Tony Blair
are urging the European Union (EU) to boost Europe’s pledge to $1 billion through
2004,29 but have not yet won a commitment from their fellow EU leaders.30 Even if
28 Source: Pledges and Contributions (2001-2003), table at the Global Fund website. Last
updated June 13, 2003.
29 Jacques Chirac press conference (Evian, France), June 1, 2003.
30 Blair and Chirac letter to Greek Prime Minister Costas Simitis, June 14, 2003. Greece
hosted an EU summit that failed to make a specific $1 billion commitment on June 21, 2003.
However, the summit called upon member states to make a “substantial contribution,” and
(continued...)

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CRS-8
the United States and Europe should pledge $1 billion each in 2004, a substantial
gap would have to be filled by other donors before the U.S. pledge could be provided
and Feachem’s $3 billion target reached.
U.S. Contributions
U.S. contributions to the Global Fund are provided through the Department of
Health and Human Services (HHS) appropriations and through the Child Survival
and Health Programs Fund, administered by the U.S. Agency for International
Development (USAID) and funded by the Foreign Operations appropriations. Table
2 shows funding provided by Congress for the Global Fund through these two
appropriations, as well as Administration-requested amounts for FY2003 and
FY2004.31 U.S. Government and Global Fund documents had been reporting the
FY2002 U.S. pledge as $200 million, so that U.S. contributions through FY2003
would total $650 million.32 However, $25 million of the expected $200 million for
FY2002 was to come through USAID and was governed by “up to” language in the
FY2002 appropriations.33 Congressional appropriators have since determined that
this $25 million should be devoted to other priorities, so that the U.S. contribution
for FY2002 is $175 million.
Table 2. U.S. Contributions to the Global Fund
($ millions)
FY2001
FY2002
FY2003
FY2003
FY2004
(Actual)
(Actual)
(Request)
(Actual)
(Request)
Child Survival/USAID
100
50
100
248.375
100
HHS
125
100
99.35
100
Total
100
175
200
347.725
200
30 (...continued)
the issue of a $1 billion commitment remains under discussion. “EU Leaders AIDS Budget
Disappoints AIDS Groups,” Reuters, June 21, 2003.
31 For more detail, see CRS Report RS21181, HIV/AIDS International Programs:
Appropriations, FY2002 - FY2004.
32 See Pledges and Contributions (2001-2003), table at the Global Fund website, last
updated June 13, 2003; and “U.S. Commits $1.65 Billion to the Global Fund: Seven Times
Greater than the Next Largest Donor,” White House, Office of the Press Secretary, May 30,
2003. See also, U.S. Congress, House, Foreign Operations, Export Financing, and Related
Programs Appropriations Bill 2003, Report to Accompany H.R. 5410 (H.Rept. 107-663).
This report stated that the U.S. contribution would total $650 million through 2003, if the
$250 million contribution provided in the bill was approved. This was the same amount
included in the final appropriations measure for FY2003 (P.L. 108-7).
33 P.L. 107-115, Foreign Operations Appropriations for FY2002, Title II.

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The FY2003 Omnibus Appropriations (P.L. 108-7) specified $250 million for
the Global Fund through the Child Survival account and $100 million through the
HHS appropriations, but these amounts were reduced by the .65% recision in Title
VI of the legislation. The Global Fund is still recording the U.S. pledge for 2003 as
$350 million,34 and the Bush Administration continues to “round up” the FY2003
contribution to this amount. A recent Administration document stated that the
cumulative U.S. pledge to the Global Fund, FY2001 through FY2008, is $1.65
billion,35 a number that is based on adding $100 million in FY2001, $200 million in
FY2002, and $350 million in FY2003 to the $1 billion promised by President Bush
through FY2008 as part of his Emergency Plan for AIDS Relief.36 Since the amounts
contributed for FY2002 and FY2003 will now be $175 million and $348 million
respectively, the total U.S. pledge could be re-stated as $1.623 billion.
H.R. 1298/P.L. 108-25, as noted above, authorizes up to $1 billion for the
Global Fund in FY2004. Although President Bush has praised this legislation, the
Administration’s request for the Global Fund in FY2004 remains at $200 million.
The President’s Emergency Plan for AIDS Relief envisages an annual contribution
of $200 million through FY2008.37 This level of proposed funding has drawn
criticism,38 but appropriators have warned that it will be difficult to find funds to
meet the expectations raised by H.R. 1298. During House debate on the bill,
Representative Jim Kolbe, Chairman of the House Appropriations Subcommittee on
Foreign Operations, said that “in all candor, the budget resolution does not permit
fiscal 2004 funding anywhere near the $1 billion authorized by this legislation.”39
Nonetheless, AIDS activists and others continue to press for the $1 billion on
grounds that the Global Fund has performed well to date and in their view continues
to have a key role in scaling up prevention, care, and treatment.40
H.R. 1298/P.L. 108-25 requires the establishment of an interagency U.S.
technical review panel that will periodically review all proposals received by the
Global Fund and provide guidance to U.S. representatives to the Fund. Among other
34 Pledges and Contributions (2001-2003), table at the Global Fund website.
35 “U.S. Commits $1.65 Billion to the Global Fund: Seven Times Greater than the Next
Largest Donor,” White House, Office of the Press Secretary, May 30, 2003.
36 For background on the Emergency Plan, see “Fact Sheet: The President’s Emergency
Plan for AIDS Relief,” White House, Office of the Press Secretary, January 29, 2003.
37 See “U.S. Commits $1.65 Billion to the Global Fund” and “Fact Sheet: U.S. Actions at
G8 Summit, Day One,” White House, Office of the Press Secretary, June 2, 2003.
38 See, for example, “Keeping an AIDS Promise,” Boston Globe, June 10, 2003.
39 Congressional Record, May 1, 2003, p. H3584. See also the remarks of Rep. Nita Lowey,
Ranking Member of the Subcommittee, on the same page. For information on the FY2004
Foreign Operations process, see the CRS web page on Foreign Operations Appropriations,
FY2004 [http://www.congress.gov/brbk/html/apfor1.shtml] and CRS Report RL31811,
Appropriations for FY2004, Foreign Operations, Export Financing, and Related Programs.
40 See, for example, Global AIDS Alliance, Fund the Fund to Save Families and
Communities, May 27, 2003. Available at [http://www.globalaidsalliance.org.]

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Fund-related provisions, the legislation also mandates that the U.S. Comptroller
General monitor and evaluate projects supported by the Global Fund.
Absorptive Capacity Issues
The General Accounting Office and others have raised concerns about whether
poor countries affected by AIDS will have the capacity to absorb the new resources
becoming available through the Global Fund and other sources.41 Facing shortages
of health care workers and an inadequate health infrastructure, such countries could
be hard pressed to make effective use of increased supplies of medicines and other
inputs for preventing and treating AIDS, tuberculosis, and malaria. The long-term
solution to this problem, analysts note, is for the Global Fund and other donors to
support the expansion of health sector capacity in poor countries through training and
investment. In the short term, the GAO points out, the Global Fund is dealing with
the absorptive capacity issue by requiring that applications describe national health
capacity — and that LFAs “preassess” the ability of PRs to handle funds effectively.42
Other concerns are that large inflows from the Global Fund and other sources of
assistance to combat AIDS could distort economic priorities in poor countries and
lead to inflation. Some experts doubt, however, that inflows from the Global Fund
will be large enough to have major economic impacts.43 Some also argue that the
economic dangers posed by HIV, which has infected more than 40 million people
worldwide, and of malaria and tuberculosis, are far greater than the risks of increased
assistance, whether from the Global Fund or from other donors.
41 Global Health: Global Fund to Fight AIDS, TB, and Malaria, p. 41-44.
42 Ibid., p. 41.
43 Ibid., p. 43.

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