Emergency to Efficiency

The silver lining of shortfalls in PEPFAR funding
By many accounts, the President’s Emergency Plan for AIDS Relief (PEPFAR) was among the most impressive accomplishments of George W. Bush’s foreign policy. Since 2004, PEPFAR has increased the number of Africans receiving antiretroviral therapy from 50,000 to 2.5 million. Despite the program’s successes, however, PEPFAR’s funding has recently stalled. Campaign promises to increase its appropriations notwithstanding, President Obama’s January 2010 budget flat-lined funding for PEPFAR.  Yet these limitations on PEPFAR funding may nonetheless have some positive effects. In particular, the shortfall has sparked new motivation for developing more cost-effective HIV/AIDS programs, and it also may provide lessons for increasing the sustainability of America’s other foreign aid initiatives.
International Entitlement?
Congress first authorized PEPFAR in 2003 with an appropriation of $15 billion over five years for HIV/AIDS treatment and care in resource-limited countries. The program was reauthorized and expanded in 2008, with $48 billion in funding through 2013. Before the economic downturn, PEPFAR’s extensive financial backing allowed it to emphasize the ‘E’ in its name: emergency. Robert Hecht, the former director of the Joint United Nations Program on HIV/AIDS and current director of the Results for Development Institute, told the HPR, “There was a great rush to get things done with fewer concerns regarding efficiency and cost effectiveness.” Hecht said that PEPFAR sought to provide treatment to the maximum number of people with less concern for cost because, after all, its funding was so generous.
While the program has been successful in scaling up treatment, the demand for medicine nonetheless continues to grow. Richard Joseph, a professor of international history and politics at Northwestern, told the HPR, “There is a widening gap between those that can benefit from drug treatment and those that are receiving it.” If the number of new HIV infections continues to increase at the pace it has, PEPFAR risks turning into a major international entitlement program. Indeed, a 2008 study by the Center for Global Development found that the cost of extending treatment to new patients and sustaining treatment for those already receiving it could rise to $12 billion a year by 2016.
Out of the Hole
Despite increased demand for the program’s aid, PEPFAR’s funding future looks increasingly bleak. As Joseph explained, “PEPFAR is an incredible program that has hit the ceiling and is facing the reality of limited funding increases in the future.” Joseph argued that PEPFAR must therefore try to improve the efficiency of the funds it administers.
Stephen Kosack, a professor of public policy at the Harvard Kennedy School, said that the challenge to PEPFAR’s sustainability is representative of other aid programs which require long-term investments. “With the shift of foreign aid towards human development since the 1990s, sustainability has been a problem with a lot of aid programs which require sustained investment in areas such as education and health care,” said Kosack.
In the case of PEPFAR, the 2.5 million people on antiretroviral therapy will depend on U.S.-funded treatment for the rest of their lives. As such, American officials and aid-receiving countries recognize the need for more cost-effective strategies. In particular, the next few years may see an emphasis on the need for prevention of new infections. According to Joseph, “We have to finds ways to rapidly increase prevention and gain a better understanding of the factors that contribute to the spread of infection.”
Likewise, greater involvement of local and national governments in the aid-receiving countries could produce better results at a lower cost. “Early PEPFAR work was done with the support but not necessarily with the full participation of local governments,” said Hecht. “A key to success in the future will be giving local government officials more ownership and control.” Although strategies for increasing PEPFAR’s sustainability are still a matter of debate, the discussion may provide insight into how to maintain foreign aid efforts during a time of tight budgets.
The Silver Lining
Although the Obama administration’s flat-lining of PEPFAR disappointed many anti-AIDS activists, the administration acted largely because of political reality. As Kosack explained, only a small minority of Americans support increased foreign aid. Still, despite the future shortfalls in PEFPAR funding, Hecht said, “The motivation to make foreign assistance more efficient and economical could turn out to be the silver lining.”
Neil Patel ’13 is the Graphics Editor.