Marika Fahlen
Director UNAIDS

at the International Conference on Financing for Development

Monterrey, Mexico
18th March 2001

Mr. Chairman,
Honourable Ministers, Excellencies, 
Distinguished Delegates, Ladies and Gentlemen,

Thank you for the opportunity to address this Conference on behalf of the Joint United Nations Programme on HIV/AIDS.

It is indeed heartening to note that the proposed Monterrey Consensus is designed to eradicate poverty, achieve sustained economic growth and promote sustainable development as steps towards a fully inclusive and equitable global economic system.

However, none of these goals can be achieved satisfactorily without vigorous measures to combat the HIV/AIDS epidemic. Failing this, the proposed Global Alliance for Development, even with the best laid plans for economic recovery, will falter.

HIV/AIDS has evolved from being an issue of primarily a health concern to one at the core of public policy, sustainable development and human security. It cuts across national frontiers, industrial and service sectors, urban and rural areas, social and gender divides.

It is a burning issue, not just for those already infected, but also for the tens of millions who are exposed to risk because of insufficient funds for HIV education, care and risk prevention.

Epidemics usually arrive, devastate and disappear. But this is an epidemic without a definitive remedy, which has only just begun its catastrophic journey around the planet.

In the Declaration of Commitment on HIV/AIDS, unanimously adopted by the United Nations General Assembly Special Session in June 2001, Member States recognized that "The global HIV/AIDS epidemic, through its devastating scale and impact, constitutes a global emergency... (and) undermines social and economic development throughout the world."

They declared that the continuing spread of HIV/AIDS will constitute a serious obstacle to the realization of the global development goals adopted at the Millennium Summit of the United Nations in 2000.

Let me run through some of the facts. More than 60 million people have been infected with the virus during the 20 years since the first clinical evidence of AIDS was reported. With over 26 million accumulated deaths, HIV/AIDS is the worst epidemic in human history. More than 13 million children have been orphaned by AIDS - and this figure is expected to double in the next ten years. At the end of 2001, about 40 million people were living with HIV. More than one-third of them were just 15-24 years old. The epidemic continues to move rapidly and over five million people, half of them in their prime age, became newly infected with HIV in 2001. In the same year, 3 million people including almost 600,000 children under 15 years died from AIDS.

HIV/AIDS is now the leading cause of death in sub-Saharan Africa, so far the worst affected region, where life expectancy is down to 47 years from 62 years before the onset of the epidemic. Worldwide, it is the fourth-biggest killer.

The central place of the HIV/AIDS epidemic in development has recently put it on the agenda of major international events where HIV/AIDS would not normally be discussed, such as this very important Conference, business coalitions such as the World Economic Forum, the UN Conference on Least Developed Countries, the Summit of the Organization of African Unity, Summits of the Group of Eight, and meetings of the World Bank and World Trade Organization.

The profound impact of AIDS on growth, income and poverty is conformed by estimates that per capita GDP growth may fall by as much as 8 percent in some of the hardest hit countries by 2010. Because of the epidemic, the worst affected countries may lose as much as 20% of their GDP by 2020.

Companies of all types face higher costs in training, insurance, benefits, absenteeism and illness in the worst affected countries. There are also reports of breakdowns in production and of failure to meet quality and delivery targets because of personnel lost to AIDS. Agriculture, which usually provides one-third of GDP in some developing countries, suffers greatly as families stricken by AIDS are unable to work their farms or renew investments.

Education is one of the worst hit sectors. In some countries, it is estimated that one-quarter of today's school teachers will die from AIDS within the coming decade. The crisis may be aggravated by reduced investments in education as many young people stop studying because of shorter life spans. That expectation is not far-fetched. In sub-Saharan Africa as a whole, the life span is already 17 years shorter than 20 years ago.

Innovative responses and financial mechanisms are needed with the engagement of a much broader range of partners than are currently involved in the fight against the epidemic. Well placed action and well spent resources can not only turn the tide of the epidemic, but also enhance the viability of investments in other sectors. Public private partnerships in multiple sectors is needed for this to happen. Let's hope that the outcome of the Monterrey Conference will confirm such a commitment.

We welcome that Monterrey gives international attention to the need for investment in global public goods, such as incentives for research on HIV/AIDS, including vaccine and microbicide development. The transfer of knowledge and technology to developing countries is in the global interest and a sound development investment, as is support for indigenous research capacity.

International financial institutions, including the regional development banks, increasingly include HIV/AIDS in their overall development lending, in addition to AIDS specific programmes. More can be done, for example, ensuring that large infrastructure projects dependant on migrant labour, one of the groups most exposed to HIV infection, have built-in AIDS prevention activities.

The first line of care and support for people living with HIV/AIDS comes from the communities themselves. Out of pocket spending provides the bulk of the costs to address the consequences of the virus. Better mechanisms are required to have affected communities access resources to help revive families who have lost the main bread winner to AIDS. Microfinance partnerships would provide such an opportunity.

The 1999 Heavily Indebted Poor Country (HIPC) Initiative has already released some valuable resources for HIV/AIDS programmes. But, the potential for using debt relief for public social expenditure, notably to combat HIV/AIDS, remains far short of expectations. In view of the need to release additional resources for development, we welcome that the Monterrey Consensus stresses the importance of flexibility with regard to the eligibility criteria for debt relief. On this issue, we would urge particular consideration for countries severely affected by HIV/AIDS.

The importance of Official Development Assistance must be upheld. Spending on HIV/AIDS should come from additional ODA, not a reduction in existing resources committed to other essential development programmes. This epidemic cannot be controlled in isolation from other development factors. Poverty breeds HIV/AIDS and HIV/AIDS deepens poverty. Therefore, both must be handled at the same time in the framework of an integrated programme of poverty reduction. Ideally, overall development cooperation should mainstream HIV/AIDS issues across all sectors.

The downward trend in ODA flow over the past decade has been dramatic. Ten years ago, ODA stood at 0.34 percent of GDP. Maintaining that level today, when aid is down at 0.22 percent, would mean a doubling of the aid volume. But even so, we are very far from the UN target of 0.7 percent. Should donors honour this longstanding commitment, aid would increase by USD 100 billion annually. While the gap between this figure and where we are today in terms of official development assistance is wide, a message from Monterrey, on significant increases in aid engagement would be a powerful sign of solidarity on the part of the proposed Global Alliance for Development.

It should be recognized that the recently established Global Fund to fight HIV/AIDS, tuberculosis and malaria, holds promise of making available new resources for these three diseases. The Fund should generate truly additional resources - and should not be at the expense of other compelling development needs. While the Fund so far has received pledges of close to 2 billion US dollars, the requirements for HIV/AIDS alone have been estimated at 7-10 billion US dollars in domestic and international resources combined.

In conclusion, I would like to remind this distinguished audience that AIDS is on track to single-handedly wipe out 50 years of development gains in some countries. AIDS is currently one of the greatest threats to global development. Countries that fail to bring the epidemic under control risk becoming locked in a vicious circle - as worsening socioeconomic conditions render people, business and communities even more vulnerable to the epidemic and derail efforts to improve treatment, care and support. Development will only become a reality if greater investment is made in HIV/AIDS.

While recently increased financial commitments (e.g. the Global Fund) are an important first step, the fight against AIDS is very far from being won. AIDS requires concerted action by a range of partners to mount an intensive and multi-sectoral response. This will not be possible without the complete engagement of all those present in this room - Ministers of Finance, of Trade, of Planning, of Development Cooperation - and of the Heads of State who will gather here later in the week.

I would like to express the hope that even if the HIV/AIDS epidemic is not referred to in the Monterrey Consensus, it will be a significant element in the discussions here - in plenary, in the roundtables, the business forum and other events. Most importantly, AIDS must figure in financing mechanisms prepared subsequent to the Conference on Financing for Development.

Thank you.

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