HIV and the Financial Crisis

Academic Council Debate on the Financial Crisis and Public Health

Robert Greener, April 30, 2009

Magnitude of the Epidemic

• 33.2 million living with HIV– 67% in sub-Saharan Africa

• 2.5 million new infections per annum

• 2.1 million deaths per annum– number infected still growing

• More than 3 million on ARV treatment

• Most infections are in low and middle-income countries

The World of HIV

© Copyright 2006 SASI Group (University of Sheffield) and Mark Newman (University of Michigan).

The World of Income

© Copyright 2006 SASI Group (University of Sheffield) and Mark Newman (University of Michigan).

Prevalence and Impact – the “long waves” of HIV

T1 T2 Time

Numbers

A1A2

HIV prevalence

B1

A

B

AIDS - cumulative

Impact

T.Barnett, A.Whiteside

The UNAIDS Cosponsors

The Financial Crisis(or is it an economic crisis?)

• There is general consensus within (and beyond) the UN system on the key elements of the crisis– The crisis is affecting both advanced and

developing countries– Financial conditions facing developing countries have

deteriorated sharply, and the crisis will have long-term implications for them

– The challenge is to protect or expand critical expenditures in the social sector – safety nets, human development and infrastructure

– There is a strong need to expand assistance to developing countries to protect these expenditures and prevent the erosion of progress in reducing poverty

Domestic Resources

In low and middle-income countries

Private Sector – and workplace

Individuals – Out of pocket and insurance -Not well known

Domestic Public Sector

Government Budgets in low and middle-income countries

External Resources

From high-income countries

Private Foundations

Direct Bilateral Cooperation

Targeted and Sectoral Aid Budgets

Multilateral Institutions

GFATM, UN, EUGlobal Innovative

Mechanisms

South-South CooperationTriangular Cooperation

Regional Cooperation

Public Sector

Public Sector

Bilateral Donors

Private Sector

Private Sector

What will happen to domestic funding for HIV?

• Most of the domestic funding is within middle-income countries such as Brazil, South Africa and Thailand

• Evidence for the past is that social spending has been reduced during times of economic downturn

• This picture is not uniform, and cannot be used as a guide for the future – social spending is a policy choice.

ODA and GNI in OECD1980-2007

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

1980 1985 1990 1995 2000 2005

OD

A f

rom

OE

CD

Co

un

trie

s

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

GN

I in

OE

CD

Co

un

trie

s

ODA GNI

fall of 4.9% per annum for 5 years during strong GDP growth (3.2% p.a.)

5-8 years to recover

Resource Availability for HIV2005-2008

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2005 2006 2007 2008

US

$ m

illi

on

Domestic (Public and Private)*** Bilateral ODA*Multilateral ODA* Philanthropic sector**

$7,918$8,835

$13,765

$11,322

Source: *OECD/DAC CRS; data extracted on 2009/01/15 13:13 from OECD.Stat** FCAA (2008) and EFG (2008)*** UNADIS, 2008

52%

31%

12%

5%

Estimated Resource Needs2007-15

36.7

25.1

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

2007 2008 2009 2010 2011 2012 2013 2014 2015

Key Issues for UNAIDS

• What are the vulnerability implications of:– Increasing unemployment– Decreasing remittances– Increasing poverty and food insecurity– Possible wider effects, such as deteriorating

governance

• What are the long-term implications of making bad choices now?

The Impact on AIDS

• The global economic crisis threatens to reverse gains in health and poverty alleviation in developing countries

• These effects are likely to be magnified by the impact of the crisis on the HIV epidemic, especially in the high HIV prevalence countries in sub-Saharan Africa

Country Vulnerability

Vulnerability to the Crisis• Undiversified domestic economy• High level of poverty• Low fiscal capacity• Low institutional capacity

– Undeveloped social protection systems

Vulnerability of HIV Programmes• HIV resource needs in relation to GNI

Current Perceptions

• Information collected in late March 2009 from 69 countries (in which 3.4 million people are under treatment) shows that:– In 12% of the surveyed countries, the crisis is

already impacting treatment programmes.– In 32% of the countries—home to 61% of

those under antiretroviral treatment—an impact is expected this year.

The risks of reduced treatment

• Increased mortality and morbidity Unnecessary death and disease (including increased tuberculosis) due to AIDS

• Greater transmission risks as people off treatment become more infectious

• Higher financial costs Interruptions of treatment make treatment failure more likely, requiring use of costly second-line regimen drugs

• Increased burden on health systems. More HIV-related illnesses, and pressure on health services at a time when their budgets are being cut

• Reversal of economic and social gains. Consequences for households, and costs to businesses and public agencies.

The risks for prevention

• If treatment programmes are protected, there is a risk that funding for prevention will be cut

• If this happens, it will lead to more AIDS illness and treatment need in the future– Higher costs of treatment programmes– Welfare impacts for households

Core Challenges

• Universal Access: To maintain and expand HIV programmes

• To increase the effectiveness with which resources are used

• To secure long-term sustainable financing for HIV from both external and domestic sources

Challenge of Universal Access

• Access to prevention, treatment and care has produced measurable results

• Estimated resource needs to continue the scale up to Universal Access will require almost double what is currently available (about $25 bn. per annum)

• Most of these increases will have to be met from international aid funding

The Challenge to Increase Effectiveness

• This challenge is highlighted by the financial crisis

• Money from all sources must be used as effectively as possible for prevention, treatment and impact mitigation

• Programmes must be designed to target the root causes of vulnerability and impact

Challenge of Sustainable Financing

• The AIDS response is a core pre-requisite for the Millennium Development Goals

• Countries will need to reprioritize their spending towards social goals such as health, while also tapping a diverse and innovative mix of financing sources

• The international community will need to maintain resolve and urgency for all of the MDGs