DEMARCHE REQUEST: U.S. GOALS FOR GLOBAL FUND BOARD

UNCLAS THE HAGUE 002872

SIPDIS

SENSITIVE

STATE FOR S/GAC/PEARSON AND EUR/UBI/HOLLIDAY
HHS FOR OGHA/STEIGER
STATE PASS USAID FOR GH/MILLER

E.O. 12958: N/A
TAGS: KHIV PREL TBIO NL
SUBJECT: DEMARCHE REQUEST: U.S. GOALS FOR GLOBAL FUND BOARD
MEETING IN ARUSHA, TANZANIA

REF: SECSTATE 232461


1. Sensitive but unclassified. Please protect accordingly.


2. Econoff delivered reftel talking points to Stuart
Flavell, Director of the Global Network of Positive People
Living with HIV/AIDS and Dr. Marijke Wijnroks, Health Advisor
in the Ministry of Foreign Affairs.


3. Flavell flatly opposes postponing round five. The Global
Fund is demand driven, he said, and that demand is measured
by annually soliciting grant proposals. To postpone a round
would be to violate a commitment central to the Fund. The
Fund's future effectiveness depends on its commitment to its
founding principals (among them annual rounds) and current
and future principal recipients (PRs) being able to
anticipate yearly rounds with confidence.


4. Econoff used talking points on the lack of grant
reporting and documentation as well as statistics from para
eight to highlight management problems at the secretariat.
Flavell conceded that the secretariat has management
problems, and said that PR performance was also an issue he
took seriously. However, he countered that there were
processes and procedures for managing poorly performing PRs.
If PRs are not meeting their reporting obligations they
should not receive their next drawdown. If fund managers are
not abiding by these processes, then that should be
addressed, rather than postponing round five. To points on
secretariat overwork Flavell responded he thought the

SIPDIS
secretariat could cope with a round launched in the second

SIPDIS
half of 2005. Financing, he thought, would not be a problem.



5. On the issue of phase two renewal decisions, he said he
would support the MEFA proposal, but explained that the crush
of renewal reviews consistently overwhelms his small
delegation.


6. GONL Health Advisor Marijka Wijnroks believes that it is
politically important to launch round five in 2005, unless a
very strong case against it can be made. In her eyes, that
case would hinge on the Fund's financial and budgetary
criteria. Wijnroks agreed that the fund's first priority
should be supporting phase two renewals. It would be hard to
justify launching a new round at the expense of projects
already underway. She conceded the possibility of a funding
shortfall was real and if that were the case, she "wouldn't
want to hurry" launching a fifth round of grants.


7. To talking points on the lack of adequate documentation
and reporting of grant progress, Wijnroks responded that she
had not heard it was an issue. She had heard some complaints
of overwork at the secretariat, but was not aware it could be
causing management problems. Processes are in place to
incent PRs to make regularly scheduled reports. Ironically,
PRs have complained to her that the Fund's required quarterly
reporting was burdensome for them.


8. Wijnroks said she understood the reasoning behind the
proposed process for phase two renewals. She and her
constituency have agreed to support it, and she believed it
would be adopted.


9. Comment: Though both stated they were firmly in favor of
a round five next year, Wijnroks was receptive to financing
shortfalls as a cause for postponing it. Both Flavell and
Wijnroks seemed interested in the more egregious instances of
lackadaisical grant management. Wijnroks said she knew
little more about management problems than what was on the
Fund's website. It has not come up in her meetings with the
Fund's managers. If there is strong evidence of poor
management then it should be presented. Flavel responded
that he wanted portfolio managers to enforce built in
incentives for PRs to achieve results and report them.
Flavell told econoff he suspected there were political
reasons (he cited perceptions the Global Fund is not
sufficiently engaging faith-based PRs) for the "lack of USG
commitment to the Fund." He said he wanted a clear
(monetary) commitment from "the administration" that it was
solidly behind the Global Fund. End Comment.
SOBEL