Chancellor Brown's statement - in full

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This month’s global demonstration of compassion in action must be, and can be, given enduring purpose with a new deal in 2005 between developed and developing countries.

And one of our central proposals for the G7 Presidency, at the heart of this new deal, is to combat HIV/AIDS – a comprehensive strategy from funding work on the first preventative vaccine to treatment and care to developing health systems and anti poverty programmes.

For I believe that the generation that provided the finance to combat, cure and eradicate the world’s deadliest disease of today – and today the world’s least curable disease – HIV/AIDS – will rightly earn the title ‘the great generation’.

So today – working with Hilary Benn [Secretary of State for International Development] – I am setting out the elements for what would become a comprehensive policy plan underpinned with resources of $10 billion dollars, one of the best investments the world can make:

  • a global HIV/AIDS research platform and increased funding for research;
  • a global advance purchasing scheme for HIV/AIDS vaccines;
  • treatment for all those who need it and the development of effective healthcare systems;
  • underpinned by an global anti poverty strategy.

We all know the current HIV/AIDS pandemic has moved from a crisis to a daily emergency.

75 million people are infected so far – equivalent to more than the entire population of the UK.

25 million are already dead.

Of course, HIV/AIDS is a global problem – the pandemic is raging in India, China and Russia. But it is in Africa where people are suffering the most.

AIDS is the single biggest killer in Africa.

In Sub Saharan Africa alone 25 million are infected with at least 4 million new infections and 2.2 million deaths each and every year.

In Botswana and other parts of southern Africa the infection rate is nearly 40 per cent and rising.

As a result of this disease, life expectancy in Sub Saharan Africa has fallen from 62 to 47 years.

And 11 million children in this region have been left without a parent

99 per cent of Africans with HIV/AIDS still have no access to the treatment and care they need.

And years from now people will ask about AIDS and Africa - how could the world have known and failed to act?

No country, no continent, no family is unaffected.

HIV/AIDS is:

  • reducing primary school attendance and completion – in Swaziland for example school re-enrolment fell by 36 per cent as a result of rising AIDS infections rates;
  • killing teachers faster than they can be trained – with in Zambia teacher deaths caused by AIDS equivalent to about half the total of new teachers trained annually;
  • increasing malnutrition – food production in the nine countries most affected by AIDS has dropped by 15 per cent in the last ten years and in sub Saharan Africa as a whole AIDS has reversed the gains made on nutrition during the 1990s;
  • raising the numbers of people of working age unable to work – it is estimated that by next year 11 countries in Africa will have lost more than 10 per cent of their labour force because of AIDS and that by 2010, without increased treatment, Swaziland, Botswana, Lesotho, Zimbabwe and South Africa will have lost more than 20 per cent;
  • slowing economic growth rates - in the case of a typical sub Saharan African country with an HIV prevalence of 20 per cent, it is estimated that the rate of GDP growth will be 2.6 percentage points less each year because of the disease with, at the end of a 20 year period, national income 67 per cent less than it otherwise would have been;
  • reducing Africa’s attractiveness for foreign private investment – featuring in investor perception surveys as a strong negative factor inhibiting investment.

Together, these make it practically impossible for many African countries to progress towards the 2015 Millennium Development Goals.

And it is clear that the problems of HIV/AIDS are inseparable from the broader problems of poverty. It is in poor countries, especially in sub Saharan Africa, where the AIDS pandemic is wreaking the most havoc. 95 per cent of those infected live in developing countries; 70 per cent live in sub Saharan Africa -- showing that while AIDS is not caused by poverty, in developing countries it is a disease of poverty.

It is poverty that makes people more vulnerable to AIDS. In 25 developing countries – 24 of these in Africa - more than 5 per cent of the population is now infected. Women are especially vulnerable – today there are on average 13 infected women for every 10 infected men, teenage girls in sub Saharan Africa are five times more likely than boys to get HIV.

And it is poverty that worsens the impact of AIDS. Children – especially girls – may be removed from education to care for sick relatives or to take on other family responsibilities, entrenching poverty through generations. With days missed from work, and less income, those living with HIV find it harder to stay healthy. In one consultation run by the charity CAFOD we heard the tragic story of a woman in Nairobi who told us that it would take her five years to succumb to the diseases of AIDS, but only months for her baby to die of starvation. She felt that having unprotected sex for money was the rational thing to do, as it was the only way of keeping her baby alive.

So a way forward cannot involve one initiative in isolation but requires us to focus on prevention, cure, treatment, capacity building and anti-poverty strategies. Investment in all these must move forward together.

And tackling HIV/AIDS in developing countries requires us to bring all our resources to bear. Our determination and political leadership; our compassion and understanding; our technology and innovation; and our finance. Indeed, we estimate that at least $10 billion per annum is needed to address the HIV/AIDS epidemic in low and middle-income countries.

And as many developing countries are already demonstrating, our approach to tackling HIV/AIDS must be comprehensive:

  • starting with treatment and care for those currently infected - keeping people alive with essential medicines and adequate nutrition;
  • then help for extended families so they can cope with their sick relative and support for the orphans left behind when someone dies;
  • alongside the development of healthcare systems that will deliver affordable services to those affected by HIV and AIDS, keeping them fully staffed;
  • whilst simultaneously investing more widely in education - teaching men to respect women’s decisions about safer sex, and empowering women to make those decisions;

and building the sanitation and water systems that are essential to keep those infected healthier for longer, enable poor patients to be cared at home care and give patients dignity.

And to support these country owned strategies for tackling HIV/AIDS, developed countries need to implement a complementary programme of support:

  • providing more finance for drugs like anti-retrovirals and for other treatments;
  • increasing funding in support of plans to build up healthcare, education and infrastructure systems;
  • offering technical assistance to help countries to ‘scale up’ their aids measures effectively – such as under the excellent initiative by the Clinton HIV/AIDS foundation and the World Health Organisation;
  • and to make sure we provide a solution in the long term - investing in HIV/AIDS research and the development of vaccines, microbicides and new and better diagnostics and drugs.

It is clear that this comprehensive approach requires funding for HIV/AIDS that is predictable over many years – providing funding for health systems that need year on year investment; giving practitioners and patients the confidence that the supply of drugs they depend on will be maintained; encouraging private sector operators into the market; increasing competition and lowering prices for medicines like anti-retrovirals; and raising incentives for further research and development.

And it requires us to front load resources – investing now to prevent problems later. Bulk buying drugs; building up healthcare sanitation and education systems; setting up laboratories and trial sites for testing treatments; developing effective vaccines and making them affordable - all require significant up front funding. But the eventual returns from investing in them far outstrip the size of the original investment – saving many millions more lives that would otherwise be needlessly lost.

So today I want to set out proposals for a global HIV/AIDS financing plan - to be underpinned by predictable, long term, front-loaded funding – that would be a priority for an International Finance Facility (IFF).

The International Finance Facility proposed by the UK Government would be founded upon the additional $16 billion in development aid already promised at the UN Financing for Development Conference in Monterrey.

Donors would make this additional funding a long term and binding pledge.

And using these commitments and more as security the IFF would leverage in additional money from the international capital markets to raise the amount of development aid for the years to 2015 by $50 billion a year.

The IFF would provide a predictable flow of aid so developing countries would no longer have to suffer from an up to 40 per cent variance in the amount of aid they receive from year to year. And the IFF would enable us to frontload aid so a critical mass can be deployed as investment now when it will have the most impact.

And with the International Finance Facility in place I believe we could fund a new four point plan for tackling HIV/AIDS.

First, at the heart of our proposal is a new initiative to dramatically increase global research into a preventative vaccine for HIV/AIDS.

Currently only £400 million pounds is being spent on researching and developing an AIDS vaccine every year - despite the disease’s prevalence, less than 10 pence a year per citizen. In the UK we have put in place a new tax credit to stimulate research into the development of vaccines and drugs to combat those strains of AIDS/HIV prevalent in the developing world. But that is not nearly enough faced with complex scientific challenges. It is generally recognised that the sums of money required involve at least a doubling of money for AIDS research.

If we just keep spending at the current level, we could expect to have a partially effective vaccine for the developing world - one that could save 40 million lives and around 900 billion dollars over the subsequent two decades – only by 2015 at best or more likely 2020, 15 years from now.

But if by doubling R&D spending over the next 5 to 10 years we could bring forward the discovery of an AIDS vaccine by three years and we could save six million lives that would otherwise be lost, future HIV/AIDS treatment costs could be reduced by $2 billion a year - money that could then be spent on education, water supplies and other critical needs. And these vaccines would be extremely cost effective compared to other investments in health preventions and treatments – with the incremental benefit-cost ratio at 30 to 1 or higher.

But simply increasing existing programmes is not enough. The challenge is to internationalise research, coordinating it globally, sharing information globally, more widely and more rapidly, with resources directed to the top scientific priorities. So the Italian Finance Minister Domenico Siniscalco and I have agreed to push forward plans for a worldwide infrastructure for sharing and coordinating research in AIDS and then for encouraging the development of viable drugs, vaccines and other technologies such as microbicides, involving both the public and the private sectors. A London seminar will examine detailed proposals.

Second, we need to build from funding development, production and trials to financing systems for advance purchasing.

The challenge is that in an area where there are insufficient purchasers with funds - particularly in developing countries - we need to ensure that when a vaccine is developed is goes into commercial production and is available at affordable prices. So I can announce that the British Government is inviting other countries to join us to explore a jointly agreed advance purchase scheme to make new HIV vaccines accessible to Africa.

If donors committed to buying the first 300 million vaccine courses at $20 dollars per course of vaccinations for example that would translate into a $6 billion dollar guarantee - large enough to induce much stronger interest from both large and small pharmaceutical firms.

Third, we must do more to finance both the treatment and the care of the 40 million people currently living with HIV/AIDS and their families.

The Global Fund to fight AIDS, Tuberculosis and Malaria plays a unique role in tackling HIV/AIDS – financing the rapid scaling up of prevention, testing, treatment, care of orphans and the strengthening of healthcare delivery systems. The Fund was established under Kofi Annan’s leadership less than 3 years ago and is already supporting 300 programmes in 130 countries. Nearly $6 billion has been pledged to the Global Fund so far – $463 million from Britain – and of the $3.1 billion of grants distributed so far nearly half has gone to HIV/AIDS and 60 per cent to Africa. The Global Fund is already supporting four HIV/AIDS programmes in Tanzania with a total value over five years of $389 million dollars. If the current momentum of the Global Health Fund is maintained, by 2008 it will have provided anti-retroviral therapy for over 2 million people, counselling and testing for 100 million people, and education and care to more than 2 million AIDS orphans.

But already within three years of its commencement the Fund faces a set of decisions over its funding gap. Instead of just short term cash it needs stable predictable funding. Instead of minimal funding it needs sufficient funding to meet its goals.

Indeed, to achieve even its current stated aims, the income of the Global Fund has to rise dramatically to $3.4 billion in 2006 and at least double that amount by 2010. Only then can it play its role in providing sufficient finance for the massive scaling up of programmes to prevent and treat HIV/AIDS that is needed

And so we will pledge in our Presidency of the G7/8 to make funding for the Global Fund a priority for the International Finance Facility - ensuring increased and more predictable funding to finance essential medicines, treatment and healthcare in the most affected countries. The Fund needs this to fulfil the mission for which it was created.

As of mid 2004, only 440,000 people with HIV were receiving treatment – 250,000 in sub Saharan Africa - and we have to go much further to meet the World Health Organisation target to get 3 million people on anti retroviral therapy by the end of this year.

In total as much as another 3.4 billion dollars a year is needed to provide anti-retrovirals to the 6 million people who need them and these figures are rising rapidly over time because of the lack of effective prevention programmes in many developing countries. So we welcome the statement made by President Chirac of France last week that more resources should be allocated to the fight against AIDS.

And it is not just about investment in treatments but investment in prevention, testing, counselling and healthcare delivery systems. So we must increase resources to develop the healthcare systems with well trained staff and equipment that are so desperately needed.

I can also confirm that of the £150 million the UK will invest over the next three years to support orphans and vulnerable children, £120 will go to Africa. But we must do more for the children who are left without parents because of AIDS – for example through increased funding for orphanages and direct financial support to relatives who take on caring duties.

Fourth, our HIV/AIDS strategy must be underpinned by an anti-poverty strategy. In sub Saharan Africa where HIV/AIDS infection rates are highest, 14 per cent of children still don’t go to primary school, 42 per cent of the population live without access to clean water and 47 per cent lack access to adequate sanitation. And because we know that education reduces the chance of infection not just by spreading knowledge of prevention techniques but also by improving economic opportunities for poor people, reducing their vulnerability to high risk activities - and that good water supply and sanitation helps infected people stay healthy longer – more funding for investment in education and sanitation is essential to stem the pandemic. And I will talk about these issues in more detail later this week.

So it is clear that not only does effectively tackling HIV/AIDS require a comprehensive approach with the right policy framework but that no matter how much we praise country by country initiatives and announcements, the scale of the funding that is needed up front means that existing financial commitments on their own will not stop the pandemic.

Existing financial mechanisms on their own will not stop the pandemic.

We can see this now.

We need not wait a decade to make this judgment.

And that is why the International Finance Facility is so important.

Adopting the IFF now will give us momentum in tackling HIV/AIDS today instead of putting action off until tomorrow.

Indeed, I believe that the strategy I have put forward today - providing long term, predictable, front-loaded funding through the IFF to finance a comprehensive effort to combat the disease - is not just a better way but perhaps the only way of avoiding an even greater catastrophe.