Global Fund to resume operations with China

The embattled Global Health Fund to Fight AIDS, Tuberculosis and Malaria recently ended a dispute with China and will soon resume its operations there, ending a major source of embarrassment for the government in Beijing.

The Global Fund, which has been under pressure to reform due to revelations of major corruption in some of its programs, froze disbursements of AIDS funding to China in November, and then of all other funding in May, according to the Associated Press.

The fund suspected its money was being misused and was disturbed by Beijing’s reluctance to involve community groups in its projects. The move was seen as a rebuke to the authoritarian government’s general suspicion of non-governmental organizations.

The Global Fund announced that it was lifting the ban in order to be able to resume AIDS work while the dispute was formally resolved with the cooperation of government officials, United Nations’ agencies and private groups.

"During these discussions, the parties agreed to resume funding flows to ensure that the Chinese AIDS program would not be impeded by the ongoing efforts to strengthen fiduciary controls and to ensure sufficient civil society engagement in The Global Fund-supported programs," Jon Liden, a spokesman for the Global Fund said, the AP reports. "China and The Global Fund will continue to work closely together to tighten fiduciary controls and ensure that programs are as effective as possible in combating the three diseases."

The lifting of the ban will be effective immediately.

The fund froze $283 million worth of AIDS funding after discovering that Chinese government agencies had funneled too small a portion of the money to community groups than was agreed upon.

Unless the talks result in a reduction of funding, China will soon continue to receive payments of $300 million over the next couple of years for programs designed to treat HIV and AIDS in prostitutes and intravenous drug users, as well as for malaria and TB programs.

A larger debate has been emerging among international aid donors and other groups about whether China should be receiving foreign aid at all, considering its decades of robust economic growth and its expenditures on major projects like a manned space program and the 2008 Olympics. Proponents of continuing aid note that China still has hundreds of millions living in poverty.

Since 2003, China has received approximately $570 million from the Global Fund. The fund has not provided any details of how China met its demands before the decision to resume the grant was made.