U.S. Offers Africa Billions to Fight AIDS
New York Times, July 19, 2000
By JOSEPH KAHN
WASHINGTON, July 18 – The United States plans to offer sub-Saharan African nations $1 billion in loans annually to finance the purchase of American AIDS drugs and medical services, a program that greatly increases the money available to combat the disease in a region that has become its epicenter.
The program, which will be announced by the United States Export-Import Bank on Wednesday, comes after five multinational drug companies agreed in May to cut the prices they charge African nations for drugs to combat AIDS. The loans will help poor nations to buy the drugs that fight the complications and transmission of AIDS, and which are expensive even at discounted prices.
It is estimated that Africa already has 50 million people who carry H.I.V., the virus that causes AIDS, far more than any other region, and doing more to fight the disease there has become a central goal of the Clinton administration and several European nations. Despite the severity of the problem, international health officials estimate that only 5 percent of Africans who carry H.I.V. are aware of the fact.
But wealthy nations have only just begun to make money available to match their vocal pledges to address the problem. The United Nations estimated recently that the amount of money devoted to fight the disease in Africa needs to rise 10-fold to $3 billion annually if the nations hardest hit are to make significant progress in education, prevention and care.
"This is at least a first step in showing the world that Africa is important to the United States and that we can make a dent in this terrible problem," said James A. Harmon, president of the Export-Import Bank, which is an independent government agency financed by Congress. "We think that this is the most significant funding commitment by any international institution to date."
Mr. Harmon said he expected that export promotion agencies in Europe and Japan would eventually match the American initiative. He estimated that together wealthy nations could make $3 billion available in annual financing to African governments that want to buy pharmaceuticals, equipment and services.
The loans are not without complications. Several officials said the administration was split about the wisdom of the Export-Import bank's action, with some officials arguing that it does not make sense for the United States to lend African countries billions of dollars in export credits at a time when Congress is being pressed to forgive past loans.
Most of the new loans, which will not require Congressional approval, would be provided at commercial interest rates that now average about 7 percent, though a small percentage might be offered at a lower concessional rate, bank officials said.
Wealthy nations and international lending agencies are seeking to forgive as much as $100 billion in past development loans to the most indebted nations, including many in Africa. Some administration officials had promoted debt relief to a reluctant Republican-led Congress as the best way for the United States to combat AIDS, because it would free up money that African nations would otherwise have to use to service their debts.
The loans are also likely to increase an active debate among groups interested in development over the best way to tackle AIDS. Many of the African nations and private charity groups have argued that AIDS is a huge medical and social crisis that requires more than discounted drugs and new loans.
"I think what the United States is doing is laudable," said Koby Koomson, Ghana's ambassador in Washington, referring to the loans. "But the pharmaceutical companies need to come around and see that the only way to fight this pandemic is to donate whatever is necessary."
The United States loans could help American pharmaceutical companies prevent the spread of generic knock-offs of their profitable AIDS drugs to Africa. Even with heavy discounts of up to 80 or 90 percent – the companies have not made public the prices they will charge -- some drug makers may still hope to sell their product profitably in Africa.
The United Nations has said it is exploring the possibility of helping African nations buy generic AIDS drugs from Brazil and India for less money that even the discounted prices Western drug companies might charge for the original product. The drug companies consider generic alternatives a violation of their intellectual property.
But it seems unlikely that Brazil, India or other nations that produce such drugs for home consumption would have the export financing available to help African nations buy the goods. The American loans, along with a recent commitment by the World Bank to provide at least $500 million to help African nations set up anti-AIDS initiatives, give added incentive to African nations to treat many of their AIDS cases with Western medicine.
Even at 90 percent discounts, a typical cocktail of AIDS-suppressing drugs might cost $2,000 a year for a single patient in Africa, more than four times the average per capita income in many of the worst-afflicted countries.
Jacob Gayle, a senior technical adviser for the United Nations AIDS Program, which is based in Geneva, called the Export-Import Bank action "a major announcement" that takes a big step toward providing the $3 billion in annual fund commitments that his agency considers necessary to fight the disease in Africa.
But he stressed that the problem is much broader than a lack of AIDS drugs. African nations need to set up education and prevention efforts and develop the medical infrastructure to administer drugs effectively before they can make good use of loans to purchase medicine, he said.
The loan program is the first time the Export-Import Bank has offered financing for drug purchases by any nation, Mr. Harmon said. Moreover, the government bank plans to make the financing available to the 24 eligible sub-Saharan nations for five-year terms, an unusually long term for loans that are considered high risk.
He called the loans a pilot program that could be expanded or scaled back depending on how African nations and drug companies respond.
Teaching Troops About AIDS
UNITED NATIONS, July 18 -- At the urging of the United States, the Security Council has adopted a resolution asking for more attention to education about AIDS to be given to peacekeeping troops, who have been carriers of the disease, especially in Africa. The United Nations has been advising peacekeepers on the dangers of AIDS and promoting the use of condoms, and the resolution reinforces those efforts.
In the vote on Monday, however, the American delegation failed to win a stronger resolution. It would have asked for a data base to be kept on peacekeepers to track national efforts to monitor the rate of infection with AIDS and test troops.
Countries supplying troops objected to that proposal as an infringement of their control over military policies.