Foreign Affairs Committee on May 11th, 2010

[Francine Lalonde, Bloc, La Pointe-de-l'Île, QC]

Have you had bad experiences, have you been the victim of abuse, of corruption? Trust is your trademark: we can have the assurance that money will go where it is meant to go. How do you achieve that result?

[Dr. Christoph Benn]

Yes, absolutely. It's critical for our model that we can demonstrate results and good use of money. The way we do it is by implementing what we call “performance-based funding”. That means every recipient enters into a contract with the Global Fund. The contract includes the indicators of what they are going to achieve; the indicators are then externally verified by auditors as to whether they achieve or not, and that determines the funding.

You asked if we have had negative experiences. Yes, absolutely, and I can talk about that freely because it's transparent. I'm not mentioning any country that would be secret.

We had a couple of countries in which there was evidence of corruption. We then have different ways to respond. We can stop the funding temporarily, or we can stop the funding for a period of time and ask that the countries completely restructure the way they operate. We have done that in countries such as the Ukraine, which was the first, as well as in Uganda, Mauritania, and recently the Philippines. It's important to note that it's not against the country, of course, but usually against corrupt officials who misuse the money. We demand, then, that they be replaced, that there be consequences, and if we see that they restructure the programs, we're happy to take up the funding again.

It's transparent on our website. We have an inspector general who visits the countries with his auditors, and all these reports are on the website. They are also meant as something of a deterrent for other countries. They know we are watching what is happening.

[The Chair, Conservative, Dean Allison]

Thank you very much.

I think we now have the DVD. Let's do that. We'll then come back and finish with the last two rounds.

[Video Presentation]

[The Chair, Conservative, Dean Allison]

Now we'll continue our questioning.

Go ahead, Mr. Abbott.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Thank you. I'm going to be sharing my time with Mr. Goldring.

Svend, it's good to see you again.

It's a pleasure to meet you, sir, as well.

I need to get into some partisan politics for just half a second, because the difficulty that any government has, and particularly a minority government, is that you can have myths, such as the one that we are cutting aid to Africa, when in fact we are doubling aid to Africa, so I would be interested in any comment that you might choose to make.

Let us take a look at the numbers that our predecessors, in a very good way, contributed. There was over $300 million in global aid. However, we are now at $640 million. As a matter of fact, the total is almost $1 billion. I'm sorry to put you on the spot, but this is a political system. I would appreciate your comments on the commitment and the contribution of the government to your organization.

[Dr. Christoph Benn]

You mentioned all the right numbers. Cumulatively, Canada has contributed close to $1 billion Canadian. Over this three-year replenishment period, Canada contributed $450 million, and as I mentioned, which makes Canada the eighth-largest donor to the Global Fund. I would characterize Canada's contribution to the Global Fund as generous. I regard Canada as a strong supporter.

Fortunately, the Global Fund enjoys fairly strong support from a number of countries. I mentioned the G-8. The largest donor by far is the U.S., followed by France, followed by Germany. The fourth-largest donor is actually Spain at the moment, and then Japan. We have this strong support, and Canada clearly belongs in that category.

The question for this year is whether we can galvanize that support, because all these countries that I mentioned are facing budgetary problems. There is no question about that. We know, therefore, that there will be painful decisions in a number of countries. Nevertheless, we appeal to Canada, as we do to the other countries, to just assess as objectively as you can whether this instrument that you created has worked and whether it's worthwhile to put more money into it.

We have the choice to maintain it and say, “We have a crisis; therefore, unfortunately, we cannot give you more”, but we would slip back a little bit on the results that we just showed, because we are putting people on lifelong treatment. We are in the business of trying to eliminate malaria, and that will require more resources for the future. It's absolutely true that we're applauding Canada for its commitment, but we're appealing to Canada, in a sense, to try--together with the others, and not alone--to say, “Yes, this is something that we've created together; we want to provide more support so that we can achieve our goals”.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Thank you for your very fair comments.

I believe Mr. Goldring has a comment or question.

[Peter Goldring, Conservative, Edmonton East, AB]

Thank you for appearing here. I really appreciated that video too. I think that filled in a lot of the missing comments from your introductory remarks.

I want to make a short comment here for Svend.

We ran into each other at the OSCE some two years ago, and I was impressed with the way you were working the room there. My comment is relative to the 56 countries represented there, and the 300 MPs. I'm sure you had time to meet each and every one of them, and that's a powerful forum for contributing to a global effort like this.

Certainly it is every country's, every person's, responsibility to try to help out where they can. I noted what my colleague was saying about the $20 billion. Canada, as you say, has contributed some $1 billion towards it, which is well above the average in terms of population of countries that have participated in it. I'll also add that when we first entered into this, back down the road, our dollar was probably 80 cents on the dollar. Now it's at par, so that's an additional benefit.

I think the fact that our Prime Minister is going into this combined G-8 and G-20 meeting and putting additional focus and attention on maternal and health care, in addition to what we're already doing, bodes well for the future too.

With reference to your comments in the video here, I think it's very important to emphasize that this not only helps in terms of human needs, but that the improved health of the people also allows human endeavour and human initiative to appreciate as well. Do you have any statistics on how this is manifesting itself? Is there some comment you could make as to how this is improving the lives of people?

[Dr. Christoph Benn]

Do you mean in economic terms?

[Peter Goldring, Conservative, Edmonton East, AB]

Yes.

[Dr. Christoph Benn]

There are numbers. Malaria alone costs the African continent $12 billion per year. That's a significant amount. It is not just the direct cost for the treatment for the disease, but the cost of absenteeism. Frequently people in Africa cannot go to work, cannot care for the community, and so on, because they are sick with malaria. That has been documented.

The same applies to tuberculosis, and even more so to AIDS, because it affects the working-age population. It has a tremendous effect on the economy of many countries, particularly in southern Africa. We have good data to prove that while this is a significant investment, the return is much higher than the investment. We invest, let's say, about $1 billion now per year into malaria control, achieving a 50% reduction. I said it costs $12 billion. That's the cost of the disease, so you see that it's a very good return.

You're right; sometimes we have to argue not just in humanitarian terms, but also in economic terms, that this is an investment that makes sense and helps those countries to develop. The entire issue of The Globe and Mail yesterday was about Africa, the future of Africa and the economic potential of Africa. Africa has been growing economically over the last few years, and I think good health contributes to that. It is one of the foundations for socio-economic development in those countries.

[Peter Goldring, Conservative, Edmonton East, AB]

Is education a component? Can people learn how to better care for themselves and avoid certain things, and are there cultural concerns that education can help for a better understanding?

[Dr. Christoph Benn]

Yes. For all the interventions there are educational components, even for the mosquito nets. We have, for example, radio program advertisements to tell people to sleep under the nets, so that they understand why they are protected by these nets. It's important to understand. The same applies, obviously, to HIV/AIDS in terms of sexual education, social marketing of condoms, and so on, and maternal health as well. We are not only making the services available but also ensuring that people understand that they should use these services. That always goes hand in hand and is part of the financing of these programs.

[The Chair, Conservative, Dean Allison]

Thank you very much.

We're going to move it back over to Mr. Dewar for seven minutes.

[Paul Dewar, NDP, Ottawa Centre, ON]

Thank you, Chair, and thank you to our guests.

I want to start off by saying that I think your timing is important, and not just in terms of the G-8 and G-20: there was a well-orchestrated editorial in The Globe and Mail, and any politician would love to know how that was done. Good luck is better than anything.

I'll put it in medical terms, perhaps. We've had a bit of a political virus here that has many people concerned, and hopefully you're an antidote to it. Most Canadians and those who are involved in the issue of development, certainly with the focus of the G-8 and G-20 on child and maternal health and poverty reduction, want to see us start talking about the solutions. The virus we've had is a political one, and hopefully what you've presented today, what we saw in the video, and what we heard from other voices, including what we saw in The Globe and Mail, will help us rid ourselves of that political virus.

If I may get to the point, what you've pointed out is the success of this fund. If we're going to continue to be successful, you've given us the three options. With Canada's role in heading the G-8 and Canada's record as a good donor, you give us the three options to continue our success. I obviously would like option three.

If we look at the amount of money you're asking for from Canada, would option three be the 50% increase? In other words, if Canada, commensurate with all of the other donors, was able to convince the other donors, would that be a 50% increase over what we're donating now? Would that get us to the third option of $20 billion?

[Dr. Christoph Benn]

No, hopefully that would get us to the second option. The third option would mean a doubling of the contribution by all donors, because currently for this replenishment period we are at $10 billion, and the third option is $20 billion.

We are aiming for $17 billion for the next period, but I am not asking Canada or the other major donors to increase by 70%; I am asking only for a 50% increase, because we are also expecting contributions from countries such as China, Saudi Arabia, and Russia, as I said. They have to cover more of that. However, I am asking Canada, like the other G-8 donors, to consider a 50% increase.

[Paul Dewar, NDP, Ottawa Centre, ON]

We've brought up the transmission of HIV/AIDS from mother to child in the House, and I'm hoping the government is able to push this. There have been some concerns on that issue, but I also note there is some hope there. This is something like malaria; we can lick it with the proper resources.

Can you share with us what we need to do to eradicate mother-to-child transmission of HIV?

[Dr. Christoph Benn]

The situation is that if a woman is infected with HIV, becomes pregnant, and is delivering a baby, and there is no treatment available, no prevention, then the risk that the baby will be infected is about 30% to 40%. However, if we give her the right drugs, the drugs that we also use for treatment, and we also provide her with alternative to breastfeeding, then we can reduce that risk to less than 2%.

That is happening in many countries, and we have indeed seen significant progress. With Global Fund support we have treated, so far, about 800,000 women around the world to prevent this transmission. Madame Bruni-Sarkozy is the special ambassador for the Global Fund on that. She is a global ambassador who is going around the world to argue for that and she has helped us tremendously in getting political attention. Indeed, we believe that with these interventions we can virtually eliminate these transmissions. This means that by 2015 we want to have a world where there should be no babies born with HIV. That's the goal.

[Paul Dewar, NDP, Ottawa Centre, ON]

You need more resources to do that, clearly.

[Dr. Christoph Benn]

We need more resources to do that, in line with the scenarios we just discussed. That would enable us to go beyond what we've done so far. Treating 800,000 women is great, but we need roughly to double that number if we really want to reach all the women.

By the way, that includes not only treatment; they first have to come for testing and counselling. That's the first step. You provide testing and counselling and then, if they are positive, you provide the drugs.

[Paul Dewar, NDP, Ottawa Centre, ON]

I note that when we've asked the question in the House, the government has acknowledged the testing part. I'm just wanting to get involved, and maybe they have this now, which is the other piece of that, because if you test without support, then it's difficult to say we've been successful.

The cost of drugs is an issue. I wonder if you could speak to where the Global Fund gets its access to the lifesaving drugs, the antiretrovirals?

[Dr. Christoph Benn]

These drugs were costing more than $10,000 per patient per year 10 years ago, before the Global Fund started; we are now purchasing these drugs for $150 per patient per year. That's a dramatic decline in terms of cost. We are purchasing more than 90% of these drugs from generic producers, mainly in India, South Africa, and Brazil. They produce these drugs at minimal cost, basically production cost. We've seen a decline of drug costs over the years, and probably now we have more or less reached the cost required to just produce these drugs. More than 90% are bought from generic producers in emerging economies.

[Paul Dewar, NDP, Ottawa Centre, ON]

So the bulk buy is done from India, primarily?

[Dr. Christoph Benn]

Yes, it is primarily India, but we also buy from other emerging economies.

[Paul Dewar, NDP, Ottawa Centre, ON]

That's interesting. We have actually had a debate in our Parliament about that, about Canada being able to do a bit more. Some point to the fact that the Global Fund has been able to buy in bulk and that India has probably been the best market for doing that, but that's for a domestic debate.

Finally, I note the way the Global Fund works. I noted The Globe and Mail article and your reports about the success in terms of looking at results, the accountability, and the way you work with government, with civil society, and with those who are involved. The Global Fund doesn't dictate in terms of how delivery is done. Is that correct?