Changes in the Global Fund: The Challenges Facing China’s AIDS NGOs and How They Should Respond

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Introduction: Jia Ping, founder of the China Global Fund Watch Initiative, discusses the Global Fund’s legacy in China and the unintended consequences that will result from the Global Fund’s pullout.The Global Fund’s withdrawal calls into question the sustainability of the progress made by the Global Fund’s work in China.  One legacy of the Fund is the proliferation of grassroots organizations, as well as infighting among these organizations. The result is a community weakened by internal divisions.  This social legacy shows how an international organization’s decisions can have important long-term consequences for the communities involved.  The author also notes that the Global Fund had benefits that will be missed, in particular the conceptual and management framework that came with the Fund.  Even though China is seen as an increasingly wealthy country by the rest of the world, it still lags behind in terms of the management and technical expertise needed to solve its many social problems.

For China’s AIDS field, the year 2011 flew like a roller coaster.

Just as people took a deep breath when the Global Fund (which stands for the Global Fund to Fight AIDS, Tuberculosis and Malaria”) unfroze its China project in August, on November 22, 2011, the 25th Global Fund Board Meeting held in Ghana made the following resolutions: “those countries in the G-20 which have above average income, and whose burden of disease are not extremely serious, do not meet the qualifications to apply for the second phase of project funds of any existing approved projects.” In other words, Argentina, China, Brazil, Mexico and Russia would no longer meet the qualifications to apply for the second phase of project funds of any existing projects (South Africa is an exception, because its burden of disease is “extremely serious”). As a country having above average income, China will also lose the opportunity to apply for any Global Fund projects after 2013 – which means, the Global Fund has already said farewell to China.

Commentators point out that China has become the greatest victim of this resolution because the second installment of project funds due to China for the post-2013 period is as high as $880 million.

The Global Fund’s new resolution will have impacts on the following aspects of China’s AIDS and public health sector.

First of all, this resolution undoubtedly is a blow to the AIDS NGOs which have already began experiencing financial difficulties. The transparent and systematic management of funds has been brought on the agenda.

Since the AIDS Program of the Global Fund entered China in 2003, a certain proportion of project funds in almost every round has been designated to support NGOs (for example, about 20 percent of the total project funds is designated to support grassroots organizations in the third and fourth rounds of AIDS projects; that proportion has increased to 50 percent in the fifth round of projects; the sixth round of projects is solely for the purpose of building the capacity of NGOs); The integrated AIDS projects approved in 2010 as part of the Rolling Continuation Channel (RCC) require that a minimum of 25 percent to 35 percent of the annual funds goes to the community1.

It should be pointed out that China’s grassroots AIDS organizations have not sufficiently benefited from the huge amount of aid money coming in due to the monopoly and lack of transparency of government departments, and the lack of preparation and ability in the AIDS prevention system which includes grassroots organizations.  Disputes and complaints over these funds have been constant. To take an example, one reason for the freezing of RCC AIDS projects is that grassroots organizations did not receive sufficient funding.  Greed tends to make people forget the meaning of AIDS prevention work itself. The struggle over resources among grassroots organizations intensified internal divisions within that community. The adverse effects resulting from a lack of supervision and transparency in civil society are becoming increasingly evident.

As a small number of grassroots organizations fight over insufficient resources, the Global Fund is quietly withdrawing. What is worrisome is that years of internal division has led to a fragmented community of grassroots organizations in China that cannot respond as a coherent group to the challenges of AIDS and voice their own demands.

Secondly, China now faces a huge challenge in procuring AIDS drugs.  As the burden of disease and the drug-resistant population increases, coupled with the fact that patents of second line and above AIDS drugs mostly lie in the hands of multinational pharmaceutical companies, the bottleneck for drugs will become more serious2.

Although Premier Wen Jiabao said recently that he has instructed the Ministry of Finance to fill the funding gap after the Global Fund’s withdrawal, the problem is that as the burden of disease control grows, the budget for procurement of AIDS drugs alone, especially second-line drugs, will be substantial. Some agencies estimate that annual drug procurement costs will rise up five billion yuan over the next five years, with imports making up more than 90 percent of the total.  A shortage of funds will make it difficult to update first-line therapies.

China’s management model in controlling and preventing AIDS and other diseases is not yet mature. The uneven nature of international aid will directly affect China’s AIDS prevention ability in the future.

The various advanced international concepts that the Global Fund has been actively promoting, such as the participation of marginalized groups and communities, partnership building among various stakeholders, human rights protection of marginalized groups, policies sensitivity to gender and women, creation of cross-sector, transparent decision-making mechanisms to democratize the public health system, a supervision system with the National Coordination Committee as a core governance and conflict resolution mechanism (CCM Oversight), are all valuable concepts for China to borrow and learn from3. Unfortunately, these concepts have not been effectively carried out in China due in large part to the resistance of some officials and agencies, but also to some extent because there was not a strong, capable and relatively rational civil society that could promote these concepts.  In June 2011, the Minister of Health, Chen Zhu, stated openly in his meeting with representatives of grassroots AIDS organizations, that China needs the Global Fund, and in particular needs the advanced management concepts and technical support of the Global Fund.  Absent the Global Fund as a major external driving force, China will face challenges in learning from international management experiences.

The withdrawal of the Global Fund (after 2013) seems to make the plan of using the Global Fund to push through a reform of China’s AIDS sector almost impossible. However, the problem is not so pessimistic as imagined.  Some insightful people in the NGO community reached a consensus early on that if the Global Fund was to exit China, it would likely create more room for the more competitive AIDS NGOs to develop.

However, the collective withdrawal of international assistance, including the Global Fund, has already created enormous pressure on the sustainability of China’s AIDS NGOs.  There is a paradox involved: when the funds come in, NGOs can not benefit from them (some foreign studies suggest that only about five percent of the project funds from U.S. aid flows to NGOs); but if the funds are all withdrawn, will the fragile Chinese NGOs face even more difficulties? How should we deal with this problem?

In fact, all three challenges mentioned above are directly related to the development of AIDS NGOs.  The bottleneck in the development of China’s AIDS NGOs is that the government has not established a good and rational external environment for NGOs to develop. Absent a supportive system, and lacking resources, civil society will struggle in the short run to develop survival and sustainable development mechanisms on its own.  We can conclude from this observation that the key for AIDS NGOs to finding development opportunities in this new environment lies in mutual understanding, accumulation of knowledge and a resetting of development goals between the government and civil society.

To this end, I propose dealing with these challenges in the following ways.

First, actively encourage the government to create a social environment that supports NGOs, thus generating internal incentives to support the survival and sustainable development of NGOs.

Vice Premier Li Keqiang pointed out recently during his inspection of AIDS prevention work that the government should actively guide and support the development of “social organizations” (NGOs or grassroots organizations for the purpose of this article), and provide necessary funding and resources. Guangdong Party Secretary Wang Yang later suggested that as long as the social organizations can “catch the ball,” the government should entrust social organizations to do what it does not have the capacity to handle.  In this year’s World AIDS Day, Premier Wen Jiabao met with social organizations and representatives of AIDS petitioners from Henan province4.

These actions of high-level officials indicate that the Chinese government is determined to depart from the old policy of maintaining stability, and instead trying to promote new social governance models under the rubric of “social management innovation”5. The development of AIDS NGOs is of special significance in testing this new policy.  NGOs should be clear that they can only promote their development by encouraging the government to create a fair, transparent and supportive external environment, including a sound legal system, a system for monitoring and evaluating NGOs, diversified fund raising and management mechanisms, and the normalization of international exchanges. What they should not do is focus selfishly on their own moneymaking or media attention.  This requires NGO leaders to make bold institutional explorations, and, as much as possible to unite forces to make themselves “responsible stakeholders” by establishing active partnerships.

Second, create a learning organization and a healthy industry ecosystem for NGOs, absorb the fruits of social science and medical science, and improve the ability of NGOs to respond to external uncertainties.

AIDS NGO members need to further enhance their own knowledge structures.  In fact, the entire AIDS field needs to update its knowledge and accumulate more of it.  Minister Chen Zhu stated in a meeting with NGO representatives, that public health workers need to make up for previously not appreciating the role that social science plays in disease control and the importance of research.  By the same token, NGOs also need to learn more. China’s civil society is still immature when it comes to understanding issues such as human rights and AIDS, anti-discrimination, homosexuality, drugs and public health, gender equality, sex and the spread of disease, accessibility of drugs, NGO advocacy strategies, and international communication and interaction.  More absurdly, some grassroots leaders blindly claim that these issues are irrelevant to AIDS prevention, using their low educational level or language barriers as an excuse (as if their job is merely to pass around condoms). At the same time, other leaders claim to be “experts” and are invited to show off by government departments who want to show they are carrying out projects but, in the process, exclude true insights and even worse. Even worse is that the hype and politicization of the AIDS campaign deliberately distorts the understanding of human rights, and blindly emphasizes “confrontation using international advertising” or “marketing” of the AIDS campaign, to “oppose” the government on the grounds of protecting human rights, when the real incentive is to use the international media for their own international marketing or hype. Their conduct often sacrifices the interests of grassroots and marginalized groups, without seeking to solve practical problems. They seriously violate the principle of “do no harm” in the process of development and assistance, and increase the tension between the government and NGOs. At times these people even intentionally seek personal gain. In addition, some government officials also tried to protect their own interests in the name of maintaining stability.

Third, re-setting the overall development objectives and making clear “what exactly they seek to achieve” or “what exactly their position should be.”

AIDS NGO leaders also must understand that now is the time to make clear “what exactly we want to do.”  The time has passed for those occasions when two or three people casually got together to make up a name and suddenly transform themselves into an “organization” with fundraising capacity.  The time has also passed for those people who claimed to be “experts” and advocate for the community, yet in reality are working for their own narrow interests. If these people want true respect, they should make an effort to strengthen the NGO’s own governance, and contribute to a more transparent and just environment.

I still believe that if we work hard, we can create miracles.  We are simply trying to change our lives to make it more enjoyable.  If we understand this, the Global Fund’s withdrawal can perhaps truly be the start of a new opportunity.


  1. Editor’s Note: The RCC is a funding mechanism for continuing support of high performing grants for a period of up to six years. 

  2. Editor’s Note: Second-line drugs are those used because of side effects from, or drug resistance, to first-line therapies. 

  3. Editor’s Note: Applications for the Global Fund are made by individual states which form a National Coordinating Committee, referred to as the CCM. In accordance with the requirements of the Global Fund, the CCM acts as a mechanism which considers, approves and coordinates applications made to the Global Fund. In addition, the CCM monitors and guides the projects that have been granted approval by the Global Fund to be implemented within that country. The Global Fund’s CCM calls for NGOs and others from the HIV/AIDS community a seat at the table with government and international organizations in making decisions about the allocation of Global Fund resources. 

  4. Editor’s Note: AIDS petitioners from Henan have been trying for years to pressure the government to compensate people who were infected with HIV through a blood scandal involving local authorities in the province. 

  5. Editor’s Note: On the significance of “social management innovation”, see “How the Official Discourse of “Social Management Innovation” Has Expanded the Space for NGOs.” 

In Brief

Jia Ping, founder of the China Global Fund Watch Initiative, discusses the Global Fund’s legacy in China and the unintended consequences that will result from the Global Fund’s pullout….
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