The Global Fund to Fight AIDS, Tuberculosis and Malaria has frozen payments on hundreds of millions of US dollars in disease-fighting grants to China, one of the charity’s biggest recipients, in a dispute over China’s management of the grants and its hostility toward involving grassroots organizations in public health issues.
The dispute may add to a growing debate among global health experts whether China, which spent an estimated US$46 billion staging the 2008 Olympic Games and last year’s Shanghai Expo and financed a US$586 billion economic stimulus package, should be a recipient of such aid at all.
The fund, which has expanded to 150 countries since it was founded in 2002 as a pool for public and private donations to fight the world’s worst diseases, quietly decided to hold back payments from a major AIDS grant to China in November last year. It froze payments from other grants to China several weeks ago because of fresh concerns over lack of monitoring of funds.
Its decisions appear rooted in a collision between the fund’s conviction that grassroots organizations must be intrinsically involved in the fight to control diseases like AIDS and the Chinese government’s growing suspicion of any civil-society groups that are not directly under its control. They follow complaints by some AIDS activists that Chinese officials have sought to suppress their public health activities, have shunted grant money to groups under government control and have failed to account for how some funds were spent.
At stake are hundreds of millions of US dollars for programs to reduce the incidence of tuberculosis, prevent and treat HIV infections and wipe out malaria. China has received US$539 million from the Global Fund since 2003, according to the fund’s Web site. An additional US$295 million is in the pipeline, making China the fund’s fourth-largest recipient behind Ethiopia, India and Tanzania, one global health expert said.
A decision by the Global Fund to pull out of China would be hugely embarrassing for the Chinese government because it would suggest that China was unable to meet the standards of an international organization that dispersed funds to far less sophisticated governments. The fund can terminate grants that have been mismanaged or short of that, formally suspend them. Suspension is a harsher step than halting payments and sets up a series of major obstacles to the release of additional funds.
Those more punitive measures seemed to have been averted on Friday after two days of tense meetings between officials from the fund and the government. Jon Liden, a spokesman for the Global Fund, said China agreed on Friday to a number of stipulations on how money would be used and monitored.
“We came to a point where we needed to make clear signals to China,” he said. “We seem to share an understanding of the way forward.”
Last week, sources familiar with the negotiations said China pledged to the Global Fund that it would repay any funds that were misspent. However, some fear that the inclusion of civil society groups in the health effort may still be an issue.
The meetings took place against the backdrop of growing questions over whether China should be allowed to benefit from the fund’s largesse. As a middle-income country, China qualifies for grants, as do Thailand, India, the Philippines and a number of Latin American countries. Unlike poorer countries, those nations are expected to contribute a certain percentage of the cost of the programs financed.