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Date: Wed, 26 May 1999 22:20:38 -0500
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Subject: Africa: Debt/HIV-AIDS Proposal
Africa: Debt/HIV-AIDS Proposal
Date distributed (ymd): 990526
Document reposted by APIC
+++++++++++++++++++++Document Profile+++++++++++++++++++++
Region: Continent-Wide
Issue Areas: +economy/development+ +US policy focus+
Summary Contents:
This posting contains a summary of a new Zambian proposal for
debt reduction, with funds going to support a new national
HIV/AIDS initiative. The summary comes from the AF-AIDS on-
line discussion list. The posting also contains brief excerpts
and a link to a May 24, 1999 San Francisco Chronicle article
reporting the conflict between U.S. trade policy and efforts
to make HIV/AIDS drugs more affordable to African countries.
+++++++++++++++++end profile++++++++++++++++++++++++++++++
***Africa Policy Web Site Announcement***
Coming June 1-15:
Africa Policy West Coast On-line Poll on Economy and
Development. Watch for it on http://www.africapolicy.org and
in your mailbox. This poll will be open to anyone resident in
one of the nine states of Alaska, Arizona, California, Hawaii,
Idaho, Nevada, Oregon, Utah, and Washington, states included
by the National Summit on Africa in planning for the West
Coast Regional Summit in San Francisco on June 4-5, 1999
(www.africasummit.org/west/westhome.htm)
In the meantime check out the new theme pages on
http://www.africapolicy.org:
Economy and Development
(http://www.africapolicy.org/docs99/econ.shtml)
Democracy and Human Rights
(http://www.africapolicy.org/docs99/pol.shtml)
Peace and Security
(http://www.africapolicy.org/docs99/peace.shtml)
Plus
Starting Points for Education in and about Africa
(http://www.africapolicy.org/featdocs/educ.htm), with new
links to resources for K-12 as well as university-level
education
************************************************************
From: AF-AIDS <[log in to unmask]>
To: [log in to unmask] <[log in to unmask]>
Date: Thursday, May 20, 1999 7:12 AM Subject: [200] Zambia :
"Debt for development agreement" to combat HIV-AIDS
Moderator's note : The Zambian Government aims to exchange
international debt servicing costs (i.e., interest on
debts/loans) for funds to support the national HIV/AIDS
response. This is a novel strategy that may also have
implications for other countries of the region.
The following is a summary of the Zambian strategy. A full
description will be made available through the AF-AIDS forum
on 28 May, once it has been presented formally to
international creditors at the Paris Club meeting next week.
If other countries are also considering or discussing such
mechanisms, please let this forum know.
ACCELERATING ACTION to COMBAT the HIV-AIDS EPIDEMIC in ZAMBIA
using a MULTIDONOR 'DEBT for DEVELOPMENT' AGREEMENT
(Briefing Memo as of 16 May 1999)
GOAL
To support an expanded multisectoral response to the Zambia
HIV-AIDS pandemic to scale-up the delivery of effective
interventions by Government, NGOs, and the private sector.
CONTEXT
Devastation of HIV-AIDS in Zambia
Zambia has one of worst HIV-AIDS pandemics in the World, with
an estimated 20% of the adult population HIV-positive.
AIDS-related deaths are rapidly escalating, and expected to
peak in 2005. Life expectancy is plummeting, with the average
Zambian lifespan dropping from 54 years to 37 years. The
pandemic is also leading to an unprecedented AIDS orphan
crisis, with an estimated 1, 000,000 orphans by the year 2000,
representing approximately 10% of the total population of
Zambia. A secondary tuberculosis pandemic is also debilitating
the economically productive work force. Historic improvements
in child survival are also being lost in the specter of
HIV-AIDS. In summary, the Zambia HIV-AIDS pandemic seriously
threatens the country's prospects for sustainable economic
development as it depletes the country's most educated,
energetic, and productive population.
Zambian Response
To combat this crisis, President FJT Chiluba announced in
March 1999, a new commitment to rapidly expand the national
response with a war against AIDS when he said, "We must all
unite in the fight against AIDS." The Government of the
Republic of Zambia (GRZ) is in the final stages of planning
for the implementation of a new National HIV-AIDS Council and
an HIV-AIDS Secretariat which has been designed to support an
expanded multisectoral response.
Debt Burden Hinders Effective Response
A major factor hindering an effective HIV-AIDS response in
Zambia response is the macroeconomic situation and the
unsustainable debt burden. During 1998, the real gross
domestic productivity (GDP) per capita is estimated to have
declined by 5%. Inflation rose from 18.6 percent at the end of
1997 to 30.6 percent at the end of 1998. Interest rates rose
sharply while the Kwacha depreciated rapidly. These factors
led to tight fiscal constraint as revenues were below targets,
while expenditure pressures increased. The 1998 GRZ debt
servicing obligations of $123 million paid to the Paris Club
Members and the multilateral institutions was equivalent to
69% of the amount budgeted by the GRZ from its own resources
for the social sectors. For example, District Health Boards
only received 30% of their expected budget in 1998, therefore
they were unable to effectively implement HIV-AIDS prevention
and control activities, TB control, or control of
sexually-transmitted infections. The GRZ currently has no
formal mechanism for providing financial support to civil
society NGOs that are at the front lines in the battle against
HIV-AIDS. The debt burden severely compromises the ability of
GRZ and the civil NGO sector to effectively respond to the
HIV-AIDS crisis.
DECLARING WAR ON HIV-AIDS BY SCALING-UP RESPONSE
Accelerating Action Through a Multidonor 'Debt for
Development' Agreement
The GRZ is in the final stages of developing a proposal for
"Accelerating Action Against the Zambia HIV-AIDS Pandemic
Using a Multidonor 'Debt for Development' Agreement." This
proposal will be presented to bilateral and multilateral
cooperating partners during the May 26-28, 1999 Consultative
Group Meeting in Paris. To accelerate the Zambia development
process, by accelerating the national response to the HIV-AIDS
pandemic, a multidonor 'Debt for Development' Agreement is
proposed. This agreement is based on the following
implementation steps:
Plans of Action:
Government of the Republic of Zambia (GRZ) and
non-governmental organizations (NGOs) finalize HIV-AIDS
Response Plans of Action (GRZ Ministries and NGO Response
Plans). These plans will include a multiple year strategic
plan, budget, and a monitoring and evaluation framework;
HIV-AIDS Response Fund:
GRZ establishes a "HIV-AIDS Response Fund" to receive agreed
upon resources from creditors. The implementation of this fund
shifts resources towards supplementary domestic investment in
the national HIV-AIDS response. Actual GRZ and NGO
expenditures will serve as the baseline for monitoring
supplementary investments in the HIV-AIDS response;
Performance Milestones:
The "HIV-AIDS 'Debt for Development' Agreement" will be based
on agreed upon performance milestones that support the
implementation of the Zambia HIV-AIDS Plan of Actions.
Performance milestones will be developed to establish targets
for legal, policy, technical performance, and people-level
impact, as well as, the establishment and implementation of
systems of financial accountability;
The development phase of the Zambia HIV-AIDS 'Debt for
Development' is driven by an unprecedented positive response
from the people of Zambia. As the full impact of the AIDS
pandemic is affecting all Zambians, the HIV-AIDS 'Debt for
Development' Agreement is providing a "ray of hope" in an
otherwise desperately fatalistic environment.
Options for Creditors
Bilateral and multilateral cooperating partners will have
different options for channeling resources into the "HIV-AIDS
Response Fund." These include, but are not limited to:
Debt Servicing Swap: so that principle and interest due to
creditor countries would be paid into the HIV-AIDS Response
Fund instead of to creditor countries;
Moratorium of Debt Servicing: creditor have the option of
issuing a moratorium on debt servicing which would defer debt
servicing obligations (principle and interest) into the
HIV-AIDS Response Fund;
Debt for Development Mechanisms: creditor can transfer debt
obligations into the HIV-AIDS Response Fund;
Direct Contributions: creditor countries and multilateral
institutions could provide direct contributions to the
HIV-AIDS Response Fund as part of their overall assistance to
the GRZ.
ORGANIZING FOR ACTION
Task Force for the Multidonor 'Debt for Development' Agreement
to Accelerate Action to Combat the Zambia HIV-AIDS Pandemic
The GRZ has formed an Interagency Task Force to support the
development, implementation, and monitoring of the multidonor
HIV-AIDS 'Debt for Development' Agreement.
GRZ Institutional Oversight
The GRZ is in the final phase of establishing a National
HIV-AIDS Council and a National HIV-AIDS Secretariat which is
charged with the responsibility of coordinating a
multisectoral response to the HIV-AIDS pandemic. The National
HIV-AIDS Council and Secretariat are the proposed GRZ
institutions that will be responsible for the development,
implementation, and monitoring of the proposed HIV-AIDS
Multidonor 'Debt for Development' Agreement. The National
HIV-AIDS Council and Secretariat would make recommendations on
funding priorities to be supported by the HIV-AIDS Response
Fund.
GRZ-Cooperating Partners HIV-AIDS Response Fund Steering
Committee
A joint "GRZ-Cooperating Partners HIV-AIDS Response Fund
Steering Committee" would be formed from various interest
groups, such as Government, Cooperating Partners (including
creditor countries and multilateral agencies, NGOs and other
interest groups. The Steering Committee would make final
decisions on resource allocation disbursements, monitor the
performance of the implementation institutions against the
agreed upon milestones. The National HIV-AIDS Secretariat
would be responsible for managing the proposed
"GRZ-Cooperating Partners HIV-AIDS Response Fund Steering
Committee."
ACTION PLAN
1. GRZ will present initial HIV-AIDS 'Debt for Development'
Proposal to Creditors Target date for Action: May 30, 1999
2. Finalization of "HIV-AIDS 'Debt for Development' Agreement
with Creditors Target date for Action: August 30, 1999
3. GRZ and Participating Creditors Signing Ceremony at the
XIth ICASA Target date for Action: September 12-16, 1999
4. GRZ finalizes negotiations with Participating Creditors
Target date for Action: September -December 1999
5. HIV-AIDS Response Fund Established and Accelerated HIV-AIDS
Response Launched Target date for Action: January 2000
Support for this Initiative is actively under discussion among
UN Agencies, US government officials, and other creditors.
This document was made available to AF-AIDS by:
Dr. Paul Zeitz
Senior Policy and Technical Advisor for
PHN USAID/Zambia and GRZ/Central Board of Health
tel: 260-1-254-303 cell: 260-1-702-042 fax: 260-1-254-532
home: 260-1-264-700 email: [log in to unmask]
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************************************************************
Brief Excerpts from
"New Crusade To Lower AIDS Drug Costs;
Africa's needs at odds with firms' profit motive"
San Francisco Chronicle, May 24, 1999
by Sabin Russell, Chronicle Staff Writer
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/
archive/1999/05/24/MN104738.DTL [type URL on one line]
The problem is this: At Western market prices of $1,000 a
month, the multidrug therapies are hopelessly out of reach in
the very countries hit hardest by the epidemic -- in African
and other developing nations where 90 percent of AIDS cases
occur. ...
But the quest to flood Africa with cheap AIDS drugs has run
headlong into conflict with American trade policy. High level
Clinton administration officials are blocking attempts to
tamper with AIDS drug patents, saying that they undermine the
entire system of intellectual property protection that
encourages businesses to find new drugs.
One of the best examples of this new front in the battle over
AIDS drugs is South Africa, where a recently enacted law would
override pharmaceutical company patents and allow "gray
market" imports of cheap drugs from other countries.
Prescription drug prices vary dramatically from country to
country, based on deals cut by the manufacturer. The
antibiotic Amoxicillin, for example, costs 50 cents a pill in
Johannesburg, 4 cents in Zimbabwe. The South African law would
let the country pursue the lowest cost drugs on the world
market.
But court challenges have delayed the law's being put into
effect. Also, U.S. officials are threatening trade sanctions.
One State Department memo to Congress boasted of a "full court
press" involving the Vice President Al Gore, Commerce
Secretary William Daley and four U.S. agencies to change the
"offending" law. ...
Veteran AIDS activists are angry. The Clinton administration,
they charge, seems content to let multinational drug companies
set American trade policy ...
Drug companies have all but ignored markets in Africa. Less
than 1 percent of AIDS drugs are sold in African nations south
of the Sahara Desert, where 70 percent of new HIV infections
and 90 percent of all AIDS deaths occur. Some 11.5 million
people in sub-Saharan Africa have died of AIDS since the
epidemic began.
Dr. Ian Roberts, special adviser to the South African Health
Ministry, said the United States is showing little
understanding of his country's public health catastrophe.
"Medicines to treat HIV/AIDS are far too highly priced for the
mass of our people," he said. "With up to 16 percent of our
people already HIV positive, this can be seen as a national
disaster."
Despite South Africa's gold and diamond mines, most of its
people remain poor, with an average annual income of $2,600.
"Clearly, we cannot afford retrovirals at a cost of $1,000 per
month," said Roberts.
South Africa has emerged from the shadow of apartheid only to
become a major center of the AIDS epidemic. An estimated 3.2
million South Africans are infected by the virus, including 45
percent of the nation's military personnel. Most of those
infected are poor and black. ...
In a sharply worded letter to Gore, who chairs a commission on
South African trade, [consumer advocate Ralph] Nader accused
the United States of abusing its superpower status: "You have
engaged in an astonishing array of bullying tactics to prevent
South Africa from implementing policies . . . designed to
expand access to HIV/AIDS drugs."
Nader's Consumer Project on Technology advocates two steps --
both of them legal under international law -- by which poor
countries can slash the cost of AIDS drugs.
The first is for poor countries to issue "compulsory
licenses," granting rights to make copies of patented drugs
without the approval of the patent holder. Compulsory licenses
are permitted in health emergencies under international trade
agreements.
The second step is to allow countries to shop around on the
international market for AIDS drugs and import the cheapest
available. Forbidden in the United States, such "parallel
market" or "gray market" purchases are routinely permitted in
Europe. ...
But the pharmaceutical industry and the Clinton administration
take the view that compulsory licenses and gray markets pose
a threat to the entire system of intellectual property
protection. ...
Experts in the international AIDS crisis agree that merely
lowering the price of AIDS drugs will not solve the problem,
and potentially could make the epidemic worse.
"If you spread anti-HIV drugs in a population, but not in
sufficient quantities, you ... could make people sicker,
rather than better, and increase the possibility for
development of drug- resistant HIV strains," said Tom Coates,
executive director of the University of California at San
Francisco AIDS Research Institute.
Coates said the limited money available to fight AIDS in
Africa would save the most lives if it were directed at
prevention first. Most African nations do not even have funds
to pay for testing of the blood supply, and in 1997, only $650
million was spent on all African AIDS programs. "If, as UNAIDS
(the Joint United Nations Programme on HIV/AIDS) has
suggested, we raised spending to $2.5 billion, we could
prevent half the HIV infections from occurring," Coates said.
************************************************************
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