Financing the response to AIDS in low- and middle-income countries: International assistance from the G8, European Commission and other donor Governments, 2007

Introduction

Financing a sufficient and sustained response to the HIV/AIDS epidemic in low- and middle- income countries has emerged as one of the world’s greatest challenges, and one that will be with us for the foreseeable future. International assistance from donor governments, through bilateral aid and contributions to the Global Fund to Fight AIDS, Tuberculosis and Malaria (the Global Fund) as well as other financing channels, is a critical part of this response. Other international financing sources include multilateral institutions and the private sector. Domestic spending by many affected-country governments to combat their epidemics, as well as spending by households and individuals within these countries, are also major parts of the response. Funding from all these sources has risen over the past decade. Despite these increases, however, the difference between UNAIDS’ estimates of resource needs compared to resources available in 2007 was at least $8 billion, a difference that could even grow larger over the next few years. Most of this difference will need to be filled by the international community.

This analysis provides the latest available data on international assistance for AIDS in low- and middle-income countries provided by donor governments, including the Group of Eight (G8), the European Commission (EC), Australia, Ireland, The Netherlands, Sweden, and other donor governments who are members of the Organisation for Economic Co-operation and Development (OECD)’s Development Assistance Committee (DAC), and provide international HIV/AIDS assistance. The data were collected and analyzed through a collaborative effort between UNAIDS and the Kaiser Family Foundation. The Henry L. Stimson Center also conducted research for this project.

Key Highlights

In 2007, international AIDS assistance from the G8, EC, and other donor governments reached its highest level ever:

• Commitments totalled US$6.6 billion, of which US$5.4 billion was through bilateral channels (including earmarked multilateral commitments) and US$1.2 billion to the Global Fund (adjusted to represent the AIDS share).
• For every ten dollars committed in 2007, more than seven were disbursed (including disbursements against both current and past commitments), totalling US$4.9 billion in disbursements, or resources made available for AIDS in low- and middle- income countries by donor governments.

Funding from donor governments has risen significantly over the past several years:

• Between 2002 and 2007, commitments and disbursements each increased by at least four-fold, although commitments rose at a faster rate than disbursements.
• In the most recent period, 2006 to 2007, disbursements rose faster than commitments (27% compared to 19%, respectively).

Increases in international AIDS assistance from donor governments have been driven by a subset of G8 Members and, notably, a few non-G8 Members:

• In 2007, the United States was the largest donor in the world, accounting for more than 40% of disbursements by governments. Among resources available in 2007 for the fight against AIDS in low-and middle- income countries from all sources (domestic and international), the U.S. accounted for 20%, the largest share.
• The United Kingdom accounted for the second largest share of disbursements from all donor governments, followed by the Netherlands. Sweden and Ireland each accounted for larger shares than some G8 Members.

Most funding provided by donor governments is channelled bilaterally or earmarked through multilateral instruments (and therefore here considered bilateral), accounting for 75% of disbursements in 2007; the remainder is provided through the Global Fund. Funding channel patterns vary significantly by donor.

UNAIDS estimates that US$18.1 billion was needed to address the epidemic in low- and middle- income countries in 2007:

• Of this, an estimated US$10.0 billion was available from all sources (public and private), with bilateral international assistance accounting for almost 40% (US$3.7 billion in disbursements).
• The U.S., U.K., and the Netherlands accounted for the largest shares of such assistance funding.
• Still, there was a gap of US$8.1 billion between resources available from all sources and resources needed in 2007, as estimated by UNAIDS.

Assessing “fair share” in the context of international assistance is a challenging task and there is no single, agreed upon methodology for doing so. Two different methodologies used in this analysis indicate that, in 2007:

• The U.S. provided one-fifth (20%) of the funding available for AIDS from all sources (donor governments, multilaterals, the private sector, and domestic sources), the largest share of any donor, but less than its share of the world’s economy as measured by gross domestic product or GDP(26% in 2007). The U.K., the Netherlands, Sweden, and Ireland each provided greater shares of all resources for AIDS than their shares of GDP.
• When standardized by GDP per US$1 million, to account for differences in the sizes of government economies, the Netherlands provided the highest amount of resources for AIDS in 2007, followed by Sweden and Ireland. The U.K. was fourth and the U.S., fifth.