Which Countries Should Give How Much to the Global Fund?

Author:

Bernard Rivers

Article Type:

Article Number: 6

ABSTRACT Donor countries will meet in Oslo, Norway, next week for the first of two "Replenishment" meetings to discuss how much they might give to the Global Fund for the three years 2008-2010. They will need to consider not only how much the Fund might need, but also how to divide that need between the various donors. GFO summarizes various possible approaches to this question.

Donor countries will meet in Oslo, Norway, next week for the first of two “Replenishment” meetings to discuss how much they might give to the Global Fund for the three years 2008-2010. (The second meeting will take place in September, in Berlin.)

Over the years, several formulae have been advanced for calculating what might constitute each country’s “fair share” of the Global Fund’s financial needs. The first widely-discussed such formula was the Equitable Contributions Framework, advanced in 2002 within the NGO sector and then further developed by Aidspan, publisher of GFO. The basis of that formula was that countries should contribute in proportion to the size of their respective economies.

In preparation for next week’s Oslo meeting, the Global Fund has prepared a Technical Note in which it outlines five possible formulae, or “contribution scenarios”, for obtaining the money that the Fund needs for 2008-2010. (See “Technical Note 1 – Contribution Scenarios in Selected Replenishments”, at www.theglobalfund.org/en/about/replenishment/oslo.) The scenarios are:

Scenario 1 (the “Pro-Rata” scenario): Each country contributes a share of the need that is equal to its share of all contributions given to the Fund during 2003-2006.

Scenarios 2, 3 and 4 are based on each country’s share of contributions made to other international funds, and are not pursued further here.

Scenario 5 (the “Adjusted GNI” scenario): Each country contributes a share of the need that is equal to its share of global Gross National Income (GNI), adjusted by GNI per capita. (The adjustment is made so that if two countries have the same GNI, but one has a much larger population and hence a lower GNI per capita, the country with the smaller population contributes more, because it has a greater ability to give.) The Adjusted GNI scenario is very similar to the Equitable Contributions Framework.

In an introduction to the Technical Note, the Global Fund says that the scenarios were prepared at the request of donors. However, it also says that the development of the scenarios was a “purely mechanical exercise”, done for “illustrative purposes”, and not done in an “attempt to assign shares to donors”.

To supplement these scenarios developed by the Fund, GFO has developed two “bad scenarios” to illustrate the possible thinking of some donors:

Scenario 0 (the “No Increase” scenario): Each country contributes the same dollar amount per year that it has averaged in recent years, even though the need has increased significantly.

Scenario 6 (the “Minimum of ‘1’ and ‘5’” scenario): Each country contributes the lesser of what it should contribute according to Scenarios 1 and 5. (Some countries will have to contribute more under Scenario 1; others will have to contribute more under Scenario 5. So there is a real possibility that many will choose whichever is the less painful.)

The Technical Note contains a series of tables outlining what the contribution of each donor country would be under each of Scenarios 1 through 5. The tables include contributions from private foundations, the private sector and innovative financing schemes.

To complicate matters somewhat, there is no agreement yet on what the total amount is that has to be given to the Fund each year. As discussed in the previous article, the 2008 need could be as little as $3.4 b., and the 2010 need could be as much at $7.7 b. – or more. In what follows, we show different ways of dividing up the mid-range “Scenario B” need of $5.0 b. per year, or $15 b. over the three years.

As shown in the following table, if all countries follow Scenario 0, the Global Fund will only receive $5.1 billion of the $15 billion three-year need. And if all countries follow Scenario 6, in which each one chooses the less painful of Scenarios 1 and 5, the Fund will only receive $11.7 billion, $3.3 billion less than is necessary.

Table 2: Amounts that Countries Might Contribute to the Fund According to Four Scenarios

Donor	Average Annual Contribution 2003-6, $m.	Total contribution for the three years 2008-2010, $m., based on the mid-range “Scenario B” need in Table 1
		Scenario 0: No Increase	Scenario 1: Pro-Rata	Scenario 5: Adjusted GNI	Scenario 6: Minimum of ‘1’ and ‘5’
Australia	14.6	44	133	196	133
Belgium	8.5	26	77	124	77
Canada	101.6	305	922	319	319
China	2.0	6	18	37	18
Denmark	19.2	58	174	113	113
European Commission	125.4	376	1,137	1,137	1,137
Finland	3.6	11	33	68	33
France	178.5	536	1,619	705	705
Germany	68.6	206	622	917	622
India	2.0	6	18	5	5
Ireland	15.2	46	138	62	62
Italy	129.7	389	1,177	481	481
Japan	99.1	297	899	1,807	899
Luxembourg	2.4	7	22	18	18
Netherlands	57.7	173	523	204	204
Nigeria	10.0	30	91	0	0
Norway	25.6	77	232	152	152
Portugal	1.1	3	10	26	10
Russia	7.3	22	66	26	26
Saudi Arabia	2.5	8	23	32	23
South Africa	2.0	618	10	10
Spain	32.2	97	292	259	259
Gen.Catalunya/ Spain	1.6	5	15	15	15
Sweden	47.8	143	433	141	141
Switzerland	3.9	12	35	209	35
United Kingdom	94.1	282	853	791	791
United States	435.0	1,305	3,946	5,273	3,946
Other countries	4.8	14 44	442	44
Sub-total: Countries	1,496.0	4,488	13,570	13,570	10,278
Private Foundations	66.7	200	605	605	605
Private Sector	3.7	11	450	450	450
Innovative Financing	n/a	375	375	375	375
Total	1,566.3	5,074	15,000	15,000	11,708
Total need (according to Scenario B):	n/a	15,000	15,000	15,000	15,000
Shortfall:	n/a	9,926	0	0	3,292