Luận văn thạc sĩ Quản lý công: Alternating the financial resource for the HIV response in Vietnam

In particular, itis to: - Review the available models of financing HIV/AIDS response program in the world - Assess the current status of the financial resource for national response to H

UPPSALA UNIVERSITET &

UNIVERSITY OF ECONOMICS & BUSINESS,VNUH

UNIVERSITET

MASTER THESIS OF MPPM

Authors: Nguyen Thanh Van

Nguyen Thi YenNguyen Thi Kim DungSupervisor: Professor Dr Sven Jungerhem

Local Supervisor: Dr Nguyen Manh Hung.

Class: MPPM INTAKE 4B - Group 4.

Hanoi, March — 2012

First of all, we would like to express our sincere thanks to the University of Economics

-Hanoi National University and Uppsala University, Sweden The Masters Program of PublicManagement organized by the two leading universities of Sweden and Victnam has

provided me with synchronized valuable scientific research methods Especially, theprogram has inspired students of further studying such a valuable area of scientific

knowledge which is highly applicable to our current works now and in the future Theknowledge gained from the program will be along with us during our professional career

Especially, is great honor to express our special thanks and gratitude to Professor Erik Svard, Professor Sven Jungerhem and Dr Nguyen Manh Hung, the supervisors whogreatly supported us during the research It’s so proud for us to have a great chanceworking with such outstanding experienced professors, who are devoting their scientificpassionate for the graduate development of each student The guidance and scientificpassionate found at Professor Sven-Erik Svard, Professor Sven Jungerhem and Dr NguyenManh Hung is an important momentum for us during our research

Sven-More importantly, our warm-hearted thanks would like to be conveyed to our beloved

family, who provided us with great supports, and favorable conditions to complete the

course They are quite a solid rear for us to pursuit the master program for the past year

and to complete the research

Anh finally, we also would like to thank all members of the program management boardwho have strongly supported students during our research; Thanks to my colleagues, and

my MPPM 4B classmates for their valuable encouragement for me during this useful study

program.

EXECUTIVE SUMMARY

Title: Alternating the financial resource for the HIV response in Viet Nam

Level: Final assignment for Master Program in Public Management

Authors: Nguyen Thanh Van, Nguyen Thi yen and Nguyen Thi Kim Dung

Supervisors: Professor Sven-Erik Svard, Professor Sven Jungerhem and Dr Nguyen ManhHung

Date when the thesis is presented 14/3/2012

Ai In Viet Nam, the HIV response relies mainly on the external funding resources, andsmall proportion of state budget This leads to concerns over sustaining prevention and

treatment for people living with HIV when the donors’ policies change, withdrawing theirsupport for Viet Nam in the coming times It is necessary to find an alternative financialresource for sustaining the HIV response in Viet Nam.

This study is to assess the existing financial resources for the national response toHIV/AIDS in Viet Nam and to identify a more sustainable financing approach In particular,

itis to:

- Review the available models of financing HIV/AIDS response program in the world

- Assess the current status of the financial resource for national response to HIV/AIDS inViet Nam

- Review the policy of HIV/AIDS prevention and control in Viet Nam;and

- Explore an alternative model for financing the HIV response in Viet Nam

Study methodology:

The research uses an inductive approach in order to develop an alternative theoreticalmodel for financing the national response to HIV/AIDS in Viet Nam.

The inductive approach requires an examination and evaluation of the existing models for

financing the response to HIV/AIDS in the world and in Viet Nam

The general framework of financing the response to HIV/AIDS has been recommended by

the UN However, the UN model is not an “one-size-fit-all” one and it can be modified to fit

into the local context The Cambodian model for financing the response to HIV/AIDS is an

example.

Before looking at the case of Viet Nam, the research therefore examines both the UN

general model and the Cambodian model for financing the response to HIV/AIDS.

“The research uses a qualitative method to investigate and analyze the current financing

models for the HIV response in Viet Nam It looks at two models: donor-funded and

government- funded

‘The former model is examined in the case study of PEPFAR funded HIV program, whereasthe latter model is examined in the case study of state budget funded HIV program Based

on the analysis of these two models, the research generalizes and develops a new

‘theoretical! financing model

‘The cases are selected because they are specific and contain huge information, but

lunnecessary representing any specific group The researchers use different data collection

ffrom different sources

‘The research also uses the comparative method to compare and contrast the success andffailure of two case studies These case studies bear different characteristics, including

igood and bad ones and analysis of the two cases is expected to provide us with a complexpicture of financing the HIV response, and based on that, to propose a more sustainable

financing model for HIV/AIDS response in Viet Nam

Result and conclusion:

“The research proposed a new financing model for the HIV response in an appropriate andsustainable manner, which is the socialization of the HIV/AIDS response It has beenapplied in many other sectors and services, but the HIV services There are severaliadvantages when applying this approach, apart from few other difficulties that can beiaddressed and overcome The socialization is appropriate in Vietnam's context that thedonors are withdrawing from Viet Nam and the state budget for HIV remains constrained

‘Suggestions for future research

lIn Viet Nam, the financial matter is sensitive and non-transparent in the public sector

‘Though the international organizations and UN agencies in Viet Nam are making great

‘efforts to advocate for a more transparency and accountability in the public sector, more

‘efforts need to be made in the coming years It is one of the barriers that hinder the

research team members from getting access to financial statistics on specific manner but a

published general information.

Anti- retrovirus treatment for HIV infected people in Viet Nam is provided free of chargeand mainly funded by different donors No model of socialization of HIV related treatmenthas been built, which causes difficulties for the authors to make comparison and proposemore practical recommendations

The authors continue to study the socialization model for the HIV response in Viet Nam.Contribution of the thesis:

In the context of global economic crisis and consequently declined funding of the donors,sustainable financing of the HIV response in the world and in Viet Nam in particularly is ofconcern It is imperative to study and propose a new financing model suitable for Viet NamThe research provides the policy makers in the area of HIV and state budgetary andfinancial affairs with a realistic approach to reduce the burden of the HIV response inparticular and social economic sectors on the state budget, promoting the approach of

“state and people work together”

Key words:

Alternating financial resources, sustainable financial resources, domestic financial

resource, external funding sources, socialization

1.1 Overview of the HIV epidemic at global and in Vietnam

1.2 Rationale for the research

1.3 The study objectives and question

1.4 The study structure

2 Study Methodology

3 Literature review

3.1 Researches and studies

3.2 UN documents

3.3 Financing model for HIV response in Cambodia

4 Current situation and policies of financial resources for the national

response to HIV in Viet Nam

4.1 Overview of laws and policies relating to HIV issues in Viet Nam

4.2 Mobilization of financial resources for the national HIV response

4.3 Achievements in mobilizing the financial resources for the HIV

response.

4.4 Shortcomings and difficulties and its causes

4.5 Estimation of financial resources for the HIV response in Viet Nam 3

5 Case studies

5.1 State budget -financed HIV program

5.2 PEPFAR- funded HIV program

5.3 Comparison between the two cases

6 Anew financing model

6.1 Overview of socialization

6.2 Socialization of the HIV/AIDS response in Viet Nam

7 Conclusion and recommendations

Limitation of the study and next steps

REFERENCES

APPENDIX

Asian Development BankAcquired Immune Deficiency SyndromeAnti- Retroviral Therapy

Anti-retrovirusBehavior change communicationCommunity based organizationsCivil society organizations

Female Sex workersGross Development ProductionGlobal Fund for AIDS, Tuberlocoris, MalariaHigh burdened low income countries

Human Insuffisance VirusHealth Policy InitiativeInjecting Drug userInformation, Education and CommunicationLow burdened middle income countriesMost at risk populations

Millenium Development GoalsMen who have sex with menMinistry of Finance

Ministry of Health

MOLISA Ministry of Labor, Invalids and Social Affairs

MOH Ministry of Health

NASA National AIDS Spending Assessment

NGO Non-governmental organization

NSP National Strategic Program

NTP National Target Program

N&S Needle and syringe

PBC Performance based contracting

PEPFAR Preseient’s Emergency Plan for AIDS Relief

PMTCT Prevention of mother to child transmission

PLHIV People living with HIV

THE Total Health Expenditure

UNAIDS United Nations Joint Program on HIV and AIDS

UNGASS United Nations General Assembly Special Session on AIDSUNICEF United Nations Fund for Children

USAID Unites States Agency of international development

VAAC Viet Nam Authority for AIDS control

VCT Voluntary Counselling and Testing

WB World Bank

WHO World Health Organization

6

LIST OF TABLES AND FIGURES

Table:

Table 1 | Projected HIV/AIDS prevalence and expenditures in 2008, Page 32

2015 and 2030- Rapid scale up scenario for Viet Nam

Table 2: | PEPFAR funding for HIV/AIDS response in Viet Nam Page 35

Table-Appendix

Table 1 [Projected HIV/AIDS prevalence and expenditure in 2008, 2015 Page 51

and 2030

Table2 | Total budget of National targeted program on HIV/AIDS | Page 52-54

prevention and control for the 2011-2015 periodsTable 3 Summary of considerable suggestions on the potential Page 55

revenues to the governmentFigure

Figure 1 | Main sources of HIV spending, 2007 Page 25Figure 2 _ | Funding sources for HIV in 2008 Page 26Figure 3 | Projected HIV spending for Viet Nam- $Cost/capita- Rapid Scale Page 33

Up Scenario

Figure 4 | Projection of Funding sources for HIV/AIDS in Viet Nam Page 36

Figure-Appendix

Figure 1 Resource needs for Hard Choice 2 compared to Projected Page 56

Resources available under Moderate Financing Scenarior (USDFigure 2 Resource needs for Hard Choice 2 Compared to projected Page 56

resources available under Optimistics Financing Scenario plusAdditional Government Fiscal Efforts

Figure 3 _ | Spending by AIDS Service Components (ASC) in 2007 Page 57Figure 4 _ | Distribution of AIDS Spending by Resources and ASC 2007 Page 57Figure S [ Total Spending by ASC, 2008 Page 57

[ Figure 6 Total Spending by sources and ASCs, 2008 Page 58

1.1 Overview of the HIV epidemic at global and in Vietnam

HIV/AIDS is a dangerous epidemic, threatening human health and life, triggeringdetoriate damages to cultural, social and economic development, social order and security

of the country HIV/AIDS epidemic is contributing to mortality rate and adverse impacts

on demography of a country HIV is not only hit the adults at reproductive ages but

non-sense children AIDS related mortality affects birth rate and demographic structure Once

women at reproductive ages die of AIDS, fewer babies are born, that causes low birth rate.

Furthermore, children infected with HIV hardly lead a life for longer than the teenage thatbadly affects the working force of the country It is not easy to measure the exact impacts

of HIV/AIDS on the economic development at macro level However, we can see some

negative impacts caused by HIV to the social economic development of the country:

Needs for health care related to HIV is increasing and consequently health systemcapacity is weakened Cost for its prevention and treatment is increasing, therefore it puts

a heavy burdens on the financial resources of a country, especially in such a developingcountry as Viet Nam.

The long-term economic impacts imposed by the epidemic stem from mortalityrate, shortage of human resources and depleted human resources AIDS hit severely theadults, causing a shortage of human resource who engages in production and incomegeneration HIV/AIDS has big impacts on productive capacity due to workers’ illness and

absence for health check-ups Illness and mortality affects national economics by reducedsavings and altered ways of savings and consequently reducing national economic

revenues.

The first HIV case was detected in 1980 in the world, 10 years later Viet Nam wasnot an exceptional country hit by the epidemic Viet Nam has undergone over 20 yearscoping with the HIV/AIDS epidemics As of 31 December 2010, 183.938 alive HIV infected

people were reported, out of them, 44.022 AIDS patients! According to Vietnam HIVestimation and projection to 2015, Viet Nam will have 263.317 people infected with HIV,

' MOH Report of HIV/AIDS prevention and control 2010 at ht: ww vaae.yor.vn/Desktop.aspy Noi-dung/ Linh:

hinh-địch Linh hình nhiệm HIV-AIDS den_het_neay 31-12-2010

9

accounting for 0.29% of the population Patients in need of ARV treatment would be up to

140,000 It is projected that the HIV epidemic is mostly driven by the most at risk

populations in 10 years

AIDS is a long-term epidemic that requires a commitment of resources that is

sustained in the long term, and can be sufficiently predictable to allow the affectedcountries to plan effectively the scaling up of services The underlying challenge forattaining the Millennium Development Goals (MDGs), and for economic development ingeneral, applies also to overcoming the HIV epidemic - insufficient resources have beencommitted towards them, and all of the diverse development and health concerns mustcompete for those same inadequate resources.

The global economic crisis has forced governments, civil society and evenindividuals to re-examine their investments and find innovative and often bold measures

to ameliorate the situation Since 2001, there has been substantial progress in deliveringHIV services to millions of people, especially in low- and middle-income countries Anestimated US$ 13.7 billion was invested in the AIDS response in 2008 So far, 111countries have set targets for achieving universal access Based on the country-definedtargets for 2010, it was estimated that an investment of US$ 25.1 billion (US$ 18.9 billion-US$ 30.5 billion) be required for the global AIDS response in 2010 for low- and middle-income countries Of this total, nearly US$ 11.6 billion are required for HIV prevention and

US$ 7 billion for treatment It is anticipated that domestic public sources will supplyroughly one third of the investments needed globally2 External sources will be required to

cover the remaining two thirds needed, with most assistance focused on low income

countries, especially in sub-Saharan Africa As in the past, upper-middle-income countries,particularly in Asia, Eastern Europe and Latin America, will continue to finance almost thewhole of their national AIDS responses from domestic sources The priority serviceschosen for each country were based on UNAIDS prevention guidelines, which call oncountries to prioritize programmatic interventions according to the type of nationalepidemic For example, countries with generalized epidemics have an urgent need to scale

up prevention services for young people—those engaged in risky behaviours, and address

> What countries need- Invest ent needed for 2010 targets, UNAIDS, 2009,

10

the underlying societal causes that promote risk-taking behaviour Whereas countries

with concentrated epidemics are advised to focus first on providing services andprogrammes to the most-at-risk populations, including sex workers, their clients, injecting

drug users, and men who have x with men Long-term sustainable financing for HIV

must be secured from both external and domestic sources HIV programmes have tobecome more cost effective, unit costs have to be reduced and efficiencies in programmedelivery have to be gained In short, the money has to work better for people

The challenges of efficient mobilization of funds and management of resources areincreasingly prominent There has been dramatic increases in funding, but available

resources are now becoming increasingly tight as the globa! recession adversely impactsboth donor and developing countries, and as other competing priorities (e.g climatechange, swine flu) emerge In this context, there is an urgent need for better and long-termestimates of the cost and financing trajectories for the AIDS pandemic, and a freshperspective on possible policy actions that could improve things in the coming decades

1.2 Rationale for the research

Viet Nam has undergone a 20 year response to the epidemic, achieving major gains,which has been highly appreciated by the international community Reduction of new HIVinfection cases and deaths of AIDS, scaled-up access to HIV prevention, treatment, care andsupport, HIV integration into the poverty reduction, AIDS response into the health careservices and development sectors and effective and efficient use of financial resources aremajor achievements One of the most significant contributors to the successes is financialassistance provided by the international organizations The financing of HIV response inViet Nam comes from two major sources, one from donors (85%) and one from the statebudget (15%) Viet Nam is on the way to reach the middle income country status, whichconsequently causes a massive withdrawal of the donors for the development sectors,

including HIV/AIDS It is forecast that the financial resources for the HIV program will face

a severe shortage, causing difficulties in sustaining the achievements in the HIV response.Despite of achievement of containing the epidemic in the past time, HIV is potentially outbreaking without any further effective and efficient measures to be taken To that end, it isnecessary to secure the financial resource for the HIV program in Viet Nam

According to the first National AIDS spending Assessment (NASA) conducted in VietNam for the period 2008-2009, the volume of financial resources channeled to thenational HIV response is substantial In 2008-09, more than US$ 222 million was spent onHIV-related activities During this period, the per capita annual AIDS expenditure wasUS$1.3 and US$ 469 was spent per each Person Living with HIV (PLHIV) in Viet Nam.Overall, between 2008 and 2009, total actual AIDS expenditure increased by 31% Viet

Nam's HIV response is funded by public, private and international sources International

partners are the cornerstone of Viet Nam's HIV response: they have provided US$ 162million (73% of national expenditures) for HIV-related activities in 2098-09 and directlyadministered US$ 84 million (38% of national expenditures) during this same period In2008-09, 82% of HIV prevention, and 51% of HIV treatment and care, expenditures werecovered by external funds Public source, including the central and provincial budgets,provided 15% of national AIDS expenditures This has led to concerns that the financialneed to maintain prevention efforts and even the existing cohorts of people on anti-

retroviral drugs may be difficult to sustain financially if the policies of bilateral or

multilateral donors change significantly in the medium term Therefore, the authorsconsidered that review of the current financing status and recommendations of new

financing approach in the HIV response in Viet Nam for the coming times is very

important.

1.3 The study objectives and question

a The study objectives:

What is the alternative model for financing the HIV/AIDS response in Viet Nam?

b The study questions:

The purpose of this study is to evaluate the current financial resources for the national

response to HIV/AIDS in Viet Nam and to identify a more sustainable financing approach

In particular, it is:

- To review the available models of financing HIV/AIDS response program in the world

- To assess the current status of the financial resource for national response to HIV/AIDS

in VN

* Viet Nam National AIDS Spending Assessment 2008-2009

- To review the policy of HIV/AIDS prevention and control in VN

And to explore an alternative model for financing the HIV response in Viet Nam

1.4 The study structure

Based on the main purpose of our study, thesis is devided into seven parts Part 1consists of a thesis review, the thesis purpose, the study objectives and question Part 2concentrates on describing and analyzing the study methodology Part 3 presentsoverview of literature review, including the researches on the topic in the world, UN

documents on this issue and Cambodia fiancing model as an example Part 4 describes andanalyzes the current situation of finacial resources mobilization for the national response

to HIV/AIDS in Viet Nam, including overview of policy and laws on the issue It analyzesthe achievements, challenges and its causes of the financial resource mobilization for theHIV response in the past time Part 5 describes and analyzed the two case studies of

financing model for the HIV in Viet Nam, state budget financed HIV program and PEPFARfunded HIV program It explores the weaknesses, the strengths of the two models and thencomes up with a comparision of the two models Part 6 proposes a new financing modelfor the HIV response in Viet Nam, the socialization It describes overview of socialization inViet Nam, different types of socialization for the HIV response Furthermore, it analyzesadvantages and disadvantages when applying the new model, and aslo proposes measures

to overcome the disadvantages Part 7 summarizeds the main analysis of the study, withconclusions drawn from the thesis This part also presents some recommendations tomaintain a sustainable financing for the HIV response in Viet Nam.The thesis ends with alist of reference materials used in the study and followed by the Appendix

neral framework of financing the response to HIV/AIDS has been recommended bythe UN However, the UN model is not a “one-size-fit-all” one and it can be modified to fitinto the local context The Cambodian model for financing the response to HIV/AIDS is anexample

Before looking at the case of Viet Nam, the research therefore examines both the UNgeneral model and the Cambodian model for financing the response to HIV/AIDS

The research uses a qualitative method to investigate and analyze the current financingmodels for the HIV response in Viet Nam It looks at two medels: donor-funded andgovernment: funded.

The former model is examined in the case study of PEPFAR funded HIV program, whereasthe latter model is examined in the case study of state budget funded HIV program Theselection of two cases for study comes from the fact that they are the two main

contributors to the financial resources in Viet Nam Among the external funding resources

for HIV in Vietnam, PEPFAR is the biggest donor at the moment PEPFAR has its typicalfunding characteristics that need to be studied, including its non-flexibility in its funding

policies and its funding and coordination mechanism It is a must to select the state budget

financed HIV program as another case for study The state budget allocated for the HIVprogram in Viet Nam though accounted for a small proportion; it is still a vital financial

resource for the HIV response and would be a significant funding source in the long run

Based on the analysis of these two models, it develops a new theoretical financing modelfor the national response to HIV in Viet Nam applicable for the coming time

The case study method helps the researchers approach the issues from differentperspectives The cases are selected because they are specific and contain huge

information, but unnecessary representing any specific group The case study methodbrings about different information, which is suitable for the question “how” The

researchers use different data collection from different sources

The research also uses the comparative method to compare the success and failure of twocase studies These case studies bear different characteristics, including good and bad onesand analysis of the two cases is expected to provide us with a complex picture of financing

the HIV response, and based on that, to propose a more sustainable financing model for

HIV/AIDS response in Viet Nam

3 Literature review

3.1 Researches and studies

So far, there are few studies on the sustainable financing for HIV response both at

global and country levels In their article “Critical choices in financing the response to theglobal HIV/AIDS pandemic" Robert Hecht et all (2009) presented some findings from theAIDS 2031 Costs and Financing Working Group, which sought to answer key questions,including the following: What are the global resource needs for AIDS through 2031? Whatfactors will be critical in driving costs up or down? What are the long-term sources for thefinancing required? What mix of sources and channels would be most equitable, efficient,and sustainable? The authors presented the results of modeling several scenarios and theepidemiological and financial impacts of various policy options we face today

According to the study results of the aids2031 group, overall spending on HIV/AIDS

in low income and middle income countries increased from around US$164 billion in 2000

to $13+7 billion in 2008 This rapid and unprecedented expansion has led to manyimportant gains More than 4 million people with HIV infection are now receiving life-saving antiretroviral therapy (ART) Globally, the incidence of HIV infection has reduced

30% from a peak in the mid-1990s

Despite these gains, additional large increases in spending for prevention andtreatment of HIV will be needed to control the epidemic in the future Financial needswere projected with four scenarios (current trends, rapid scale-up, hard choices, and

structural change) with various assumptions about future political will, availableresources, and strategic approaches The four scenarios encompass a combination offeasible policy options, but are only a subset of the wide range of possible scenarios,including pessimistic and optimistic ones Resource needs for HIV/AIDS in low-incomeand middle income countries are projected to increase to $18¢5-35¢3 billion per year by

2031, in the absence of a major breakthrough such as a vaccine or cure In 22 years totaloutlays are estimated to amount to $397-722 billion

The rapid scale-up scenario would cost $232 billion more than would current

trends Presently, when countries and donors are coping with the aftermath of globalrecession, rapid scale-up is increasingly improbable, especially as it requires a rise in

HIV/AIDS spending from $15 billion in 2009 to more than $30 billion per year by 2013 If

prevention efforts were concentrated on few interventions that were known to be

cost-effective and were targeted to high-risk populations (the hard choices scenario), totalcosts in the 22 years could be $325 billion less than they would be with rapid scale-up and

$93 billion less than with current trends

The hard choices approach achieves the most cost-effective results for preventionAlthough hard choic s the most economical option for curbing of the epidemic, theyproject that investment in structural change would have the greatest effect for reduction

of future spread of the infection Structural change would require $579 billion by 2031,which is more than would be needed for hard choices but is lower than for rapid scale up

“Financing of HIV/AIDS programme scale up in low income and middle incomecountries, 2009-2031Country projections” by Robert Hecht et all (2010) created projections

for geographically and epidemiologically representative low-income and middle-incomecountries (table 1) They noted two broad groups of countries One group had a highburden of HIV/AIDS (generalized epidemics and adult prevalence >5%) and typically lowincomes (GDP <$800 per head in 2008) The second group had a low burden of HIV/AIDS(typically <1% adult prevalence, occurring in high-risk subpopulations) and mostly middleincomes (mean GDP $2264 per head in 2008) South Africa and several of its neighbors(Botswana, Namibia, and Swaziland) form a small third group, combining high disease

burden with middle income status

HIV/AIDS spending in 2031 is estimated at 1-3% of the GDP of HBLI countries, and23-65% of expected health expenditures, suggesting that these countries will bedependent on outside financing for HIV/AIDS for several decades to come, includinggrants from PEPFAR and the Global Fund to Fight AIDS, Tuberculosis and Malaria

Financial prospects for the low-burden, middle-income (LBMI) countries are very

different from those for HBLIs Many of these countries, including Brazil, Mexico, Thailand,

and Ukraine, have the domestic capacity to cover most, if not all, future HIV/AIDS costs In

16

2008, HIV/AIDS spending requirements in these countries were much less than 1% of

CDPs and generally less than 4% of total health expenditures The low-burden group also

includes some countries with low incomes such as Cambodia and Vietnam For thesecountries, HIV/AIDS spending amounts to a small share of GDP (0s6% in Cambodia) but is

£ significant proportion of total health expenditure (11% in Cambodia) For thesecountries, external funding will be needed to support the national HIV/AIDS effort, at least

in the medium term, but the prospects for domestic financial autonomy are much better

ed aretian they are for HBLI countries In the long term, all LBMI countries we exami

frojected to contain their national epidemics at a prevalence of lower than 2% in adults,

and in most cases, much less than 2% If these countries were to adopt the more selective

tard choices approach to prevention, they could reduce their spending even more thanthey could with the alternative strategies

For the group of middle-income countries in southern African with a high burden ofdisease, HIV/AIDS spending requirements over the next few years will probably rise fastertian domestic resources alone can accommodate, even with strong political commitments

to HIV/AIDS External financing might be needed to help to fill the gap In the long term,however, South Africa, Botswana, Namibia, and Swaziland could move toward financial

self-sufficiency as their domestic economies resume growth

Antonio Izazola-Licea, et all (2009) described levels of national HIV spending and

ecamine programmatic allocations according to the type of epidemic and country income

In cross-sectional analysis of HIV expenditures from 50 low-income and middle-income

countries, the authors found that fifty low-income and middle-income countries spent US $

26 billion (I$ 5.8 billion) on HIV in 2006; 87% of the funding among the 17 low-income

countries came from international donors Average per capita spending was I$ 2.1 andpositively correlated with Gross National Income Per capita spending was $ 1.5 in 9countries with low-level HIV epidemics, $ 1.6 in 27 countries with concentrated HIV

evidemics and I$ 9.5 in 14 countries with generalized HIV epidemics On average,spending on care and treatment represented 50% of AIDS spending across all countries.

Tie treatment-to-prevention spending ratio was 1, 3:1, and 2:1 in countries with

low-level, concentrated and generalized epidemics, respectively Spending on prevention

7

represented 21% of total AIDS spending However, expenditures addressing most-at-riskpopulations represented less than 1% in countries with generalized epidemics and 7% in

those with low-level or concentrated epidemics In conclusion, the paper also urged

countries to rethink national strategies, especially low income countries with high aid

dependency in the context of the current global economic recession The countries need toknow and act on their epidemics and prioritize the most effective programmatic services

Global AIDS Report 2010- The report shows domestic and donor funding sources for

ternationalthe HIV globally The report concluded that domestic investments and

investments in the HIV response are not increasing and the needs not met The reportstressed that investment for the AIDS response must be predictable and sustainable As

resource availability for HIV increased over the last decade, spending on HIV prevention,

treatment, care and support have increased Overall investments for the AIDS responsegrew by 82% between 2006 and 2008 Treatment and care programmes received 56%

and HIV prevention programmes received 20% of the total resources available Nearly 71

countries depend on international sources for funding more than 50% of their preventionactivities In contrast, the cost of treatment and care programmes on average appears to

be shared equally between domestic sources and international sources However, 26countries reported that nearly 77% or more of their treatment and care expenditure relies

on external sources At a time when demand for universal access for prevention andtreatment is growing, lack of additional resources is slowing down the pace of achieving

results for people As countries strive to increase their investments for the AIDS response,attention is needed to make long-term resource availability predictable.

3.2 UN documents

Political Declaration at the UN General Assembly Special Session on HIV/AIDS in 2001

At the Special Session on HIV/AIDS at the UNGASS in 2001, countries unanimouslyendorsed the Declaration of Commitment on HIV/AIDS which set forth time bound targets

to strengthen at global, regional and national levels The declaration reflects both growing

globa! consciousness of dimensions of the epidemic and a new commitment to take

effective action The move toward universal access reflects a commitment to undertake an

accelerated scale up of evidence informed measures in all regions of the world to address

an epidemic that has inflicted history's single greatest reversal in human development

Political Declaration at the UN General Assembly Special Session on HIV/AIDS in

2006

At the meeting, the countries embraced a Political Declaration on HIV/AIDS thatcommitted UN member states to pursuing all necessary efforts to scale up nationallydriven, sustainable and comprehensive responses to achieve broad multi-sectoral

coverage for prevention, treatment, care and support, with full and active participation of

people living with HIV, vulnerable groups, most affected communities, civil society andprivate sector towards achieving the goal of universal access to comprehensive prevention

programs, treatment, care and support by 2010

Political declaration on HIV/AIDS: Intensifying our efforts to eliminate HIV/AIDSadopted at the at the UN General Assembly Special Session on HIV/AIDS in 2011 (Resolution65/277)

The state members stressed grave concern that majority of low and middle incomecountries did not meet their universal access targets to HIV prevention, treatment, careand support They commit to ensure that financial resources for prevention are targeted to

evidence-based prevention measures that reflect the specific nature of each country's

epidemic by focusing on geographic locations, social networks and populations vulnerable

to HIV infection in order to ensure that resources for HIV prevention are spent as cost

effectively as possible

More importantly, they committed to working towards narrowing the resourcesgaps by 2015 projected by UNAIDS to be 6 billion annually through greater strategicinvestment, continued domestic and international funding to enable countries to accesspredictable and sustainable financial resources.

As state's obligation, the countries should turn their commitments into practice

with specific roadmaps At the regional level, a high level intergovernmental meeting inAsia Pacific was convened from 6th to 8th February to review the country’s commitmentand to develop a regional framework to support the implementation of international and

regional specific commitments”

19

UN financial framework for universal access to HIV prevention, treatment, care and

support

In 2007, UNAIDS has launched a framework of financial resources required to

achieve universal access to HIV prevention, treatment, care and support It considered two

scenarios for scale-up Financial requirements for each intervention were estimated bycmputing the number of people in need, the target coverage and the unit cost of theintervention, with amounts expressed as funds needed for each year as cash flows

The universal access by 2019 scale-up scenario envisions significant increases in

available resources and an urgent and dramatic expansion of coverage in all countries,achieving universal access by 2010 in accordance with globally agreed goals andnationally set targets

To meet the goal of global universal access by 2010, available financial resourcesfer HIV must more than quadruple by 2010 compared to 2007 - up to US$ 42.2 billion

(JS$ 31.9 - US$ 51.4) - and continue to rise to US$ 54.0 billion by 2015 (US$ 44.6 - US$63.3) Ensuring universal access by 2010 would demand an urgent worldwidemobilization of technical resources over the next three years to overcome the manyinpediments that have to date slowed programme implementation and scale-up, such asweak procurement and supply management systems and overburdened health deliverysystems Considerable programme costs would also need to be invested in infrastructure

and human resources to ensure the pace of scale-up required, reaching US$ 10.1 billionannually by 2015

Phased Scale-Up to Universal Access

In the process of setting their national targets, many countries have come torecognize specific obstacles to rapidly scale up services The phased scale-up scenarioassumes different rates of scale-up for each country based on current service coverage andcepacity This scenario envisions that each country will reach universal access for specificprogrammatic interventions at different times, with essentially all countries reachinguniversal access by 2015 at the latest Under this scenario, universal access would beachieved in almost all countries by 2015 It would require a total of US$ 28.4 billion in

2010 (US$ 21.5 US$ 34.6) almost triple the amount currently available for HIV/AIDS

-and US$ 49.5 billion in 2015 (US$ 40.9 - US$ 58.1) In computing resource needs, the

UNAIDS analysis relied on universal access targets identified by individual countries.

‘The two universal access scenarios - for universal access by 2010 and for a phased

scale-up towards universal access - likewise enable decision-makers to compare the costs

and public health benefits of adhering to the agreed-on global goal of universal access by

2010 with a somewhat slower approach that achieves universal access for priorityactivities in a phased manner over the next eight years In deciding which of these

informedscenarios to follow in a given country, decision-makers should make an evidenc‹

assessment of existing capacity constraints, the degree to which such constraints might be

overcome with concerted action, and the public health ramifications of each option

3.3 Financing model for HIV response in Cambodia

Cambodia has had major success in terms of reducing the number of new HIVinfections and providing access to treatment for a large percentage of its infectedpopulation Development partners have prioritized Cambodia for their HIV and AIDSfunding, partially because of an initial concern that the country could incur anunprecedented epidemic in this region of the world However, due to the current globalfinancial crisis and a shifting in donor priorities, as well as the donors’ views that anepidemic take-off has now been averted, the levels of financial commitment to Cambodia'sHIV and AIDS program are expected to diminish Total estimated costs of NSP III are US$516.3 million whereas probable resources available are US$ 272.0 million This means thatthe estimated resource gap is US$ 244.3 million, or an average of US$ 48.8 million per yearfor the 5-year period This gap approximates the total of US$ 51.8 million spent forHIV/AIDS related intervention in 2008 as estimated by NASA II This means both domestic

and international resources would need to be twice as high as the total 2008 HIV/ AIDS

related spending level in order to cover all of the strategies described in the NSP III

The financial models presented in the proposal that was developed by a group ofexperts from UN, donors and Cambodian government to explore various assumptionsabout resource requirements and availability Six different scenarios were developedwhich incorporate different assumptions regarding resource requirements and threedifferent scenarios were developed to examine future resource availability at the

assumptions that Cambodia's GDP growth rate will be at 7% and public spending accountsfor 15% GDP and 30% of public spending for HIV and accounting 1.5% of social spending

Regardless of which scenario actually plays out, Cambodia faces some hard choices in

regard to short-term and long-term funding Both the Government of Cambodia and

development partners should fund only those cost effective interventions (Figure 1, 2.Appendices)

Some recommendations proposed to the Cambodia's policy makers included

« First, Cambodia needs to focus investments on HIV/AIDS in those areas that are mostcost-effective This may lead to an approach similar to that of the Hard Choice scenarios,where the country has to carefully evaluate each intervention and reduce or eliminate

those that are not substantially contributing to the overall national program in effective ways

cost-« Second, despite important successes against HIV/AIDS in Cambodia, there remains roomfor improving program efficiency It will be valuable for Cambodia to focus on a number of

efficiency enhancing measures that could include, for example, integrating supervision and

training; improving adherence to drug treatment and the quality of treatment; improvingprocurement and the logistics management of drugs, reagents, and consumables; leasinglaboratory equipment, instead of buying it; and reducing unnecessary spending for

administration and technical assistance The development in partnership with donors of

an annual comprehensive work plan is a step, for example, to improving efficiency byreducing duplication

« Third, on the financing side, Cambodia will need to better manage the flow of external

resources to its HIV/AIDS program; it will also need to significantly increase its ownallocation to HIV/AIDS This will require that the Cambodian government improve itslong-range planning with its development partners, to minimize any impact associatedwith the withdrawal of external funds At the same time, the government will have toincrease its own domestic contributions to the HIV/AIDS program, probably by raising theshare of social spending which is allocated to HIV/AIDS

« Finally, it is critical that Cambodia continues to periodically assess the cost-effectiveness

of different possible interventions in its HIV/AIDS program, so that it can better setpriorities and mobilize resources accordingly

4 Current situation and policies of financial resources for the national

response to HIV in Viet Nam

4.1 Overview of laws and policies relating to HIV issues in Viet Nam

Since the beginning of the HIV epidemic in Viet Nam, the Party and Governmenthave paid attention to its response to HIV via issuing and approving many legal documentsand policies

The development of laws and policies relating to HIV issues can be divided into 3

phases.

Before 1995:

The Law on protection of people's health issued on 11th July 1989 stipulated that SIDA is

one of dangerous contagious disease that needs obligated treatment measures

The Resolution of the government No 20/CP dated 5/5/1993 on intensifying theHIV/AIDS prevention and control as a response to a disaster

Then the Government issued a Circular to provide guideline to implement the Resolution

20, identifying two groups of measures in the fight against SIDA

Though the above mentioned policies did not mention clearly the financial resourceallocated to the HIV program, inclusion of the matter into the government agenda is a goodstarting point for any HIV interventions latter on

The period of 1995 to 2006 earmarked with a robust development of legal framework andpolicies relating to HIV prevention in Viet Nam

In 1995, the Party Secretariat adopted its Directive 52 on strengthening its leadership overthe HIV prevention and control The directive marked officially assignment of tasks to theParty Charters from central down to grassroots levels

In 1995, the Standing Committee of National Assembly issued the Ordinance on HIV/AIDSprevention and control which stipulated more clearly HIV prevention and control

In 1996, the government adopted the Decree 34/CP providing detailed guidelines ofimplementation of the HIV ordinance, including specific tasks assigned to all Ministries

and sectors To realize the Ordinance and Decree, Ministries, including Ministry of Health

and Ministry of Finance has issued some relevant normative documents.

In 2004, the Prime Minister approved the national Strategy for HIV/AIDS prevention andcontrol in Viet Nam toward 2010 and its vision 2020 The strategy is a policy to specify

regulations in the 2004 HIV Ordinance

The period of 2007 onward

One of the critical turning points in the response to HIV in Viet Nam is that the law onHIV/AIDS prevention and control was approved by the National Assembly and official tockeffect from 1 July 2007

After the adoption of the HIV law, the Decree No 108/2007/ND-CP and more than 80 law instruments have been issued by Prime Minister, Minister of Health, Public Security,

sub-Labor-War invalids and social affairs, and Ministry of Finance HIV/AIDS was included inthe national target program of one of the social and dangerous diseases during the period

of 2004-2009 The state budget was allocated to implement the national target program

In 2010, the HIV prevention and control program officially became a national targetprogram The approval of the national target program shows the party and government'sattention to the response to HIV, its commitment to the international and regional

organizations, increasing the domestic investment in the HIV program

More recently, the government issued a Decrees No 122/2011/ND-CP on 27 December

2011 to amend some articles in the Decree 124/2008/ND-CP on guidelines to implementsome articles in the law of enterprises revenue

The National Strategy of HIV/AIDS prevention and control phase 2 to 2015 and its vision

to 2030 is under approval of the Prime Minister

4.2 Mobilization of financial resources for the national HIV response

The majority of spending on AIDS programs in Viet Nam was from internationalsources (multilateral, bilateral, and other international sources) With this extensive

international support, during this reporting period Viet Nam was able to rapidly scale upand improve HIV prevention, treatment, care and support interventions In 2007, at least

USD 66.3 million was spent on HIV in Viet Nam, accounting for 1.5% of total national

health expenditure Compared to the Government's health expenditure, AIDS spendingaccounted for 6.5% or USD 0.78 per capita Incomplete statistics on national AIDSexpenditures show that spending from public sources was approximately USD 8 million5,including USD 6.3 million® (79%) from the central budget and USD 1.7 million? (21%)

from the local (provincial) budget

Figure 1: Main sources of HIV spending, 2007

Vietnam 2007

Source: National AIDS Spending Matrox 2007

The AIDS spending categories of treatment and care (39%) and prevention (37%)

together accounted for 76% of all national AIDS expenditures (figure 3,4 Appendices)

In 2008, total AIDS spending reached USD 108.7 million®, an increase of 64% from 2007.AIDS spending accounted for 10.5% of the Government's health expenditure and 1.8% ofthe total national health expenditures Compared to 2007, AIDS spending per capitaincreased by 62% to USD 1.26 Incomplete statistics show Government spending on AIDSwas approximately USD 8.7 million®, including USD 6.6 million (76%) from the centralbudget and USD 2.1 million (24%) from the provincial budget Similar to 2007, 39% ofresources went to treatment and care and 36% to prevention came from bilateral grants,

* The fourth country report on following up the implementation to the declaration of commitment on HIV and

AIDS 2010 (Viet Nam's UNGASS Country Report 2010)

“Ibid

* Ibid

ˆ Ibid

* The fourth country report on following up the implementation to the declaration of commitment on HIV and

AIDS 2010 (Viet Nam's UNGASS Country Report 2010)

° Ihid

of which PEPFAR accounted for 63% of the total!” (Figure 5, 6 Appendices) Multilateral

donors were the second largest source of funds In this period the Global Fund provided4%, UN agencies 4% and the two development banks, ADB and WB, 11% of total AIDS

spending Based on the available data, non-profit making organizations and foundationsaccounted for approximately 1% of expenditures

In 2008 there were 12 major donors and five UN agencies each running their own HIVprojects demonstrating the fragmentation of this program Donor funding was equivalent

to 80% to 90% ef total HIV spending AIDS spending has increased significantly over thepast years AIDS expenditures doubled from around USD 50 million" in 2006 to USD 108.7

million!? in 2008, an increase of 64% from 2007 and approximately 10.5% of total

government health spending and a per capita amount of about $1.2613

Figure 2: Funding sources for HIV in 2008

Source: National AIDS Spending Matrix, 2008Estimated expenditures in 2009 were over USD 103 million'* Total expenditures frompublic sources (central and local Government only) remained relatively the same as in

2006 - at USD 8 million in 2007 (12% of total AIDS spending) and almost USD 8.7 million

in 2008 (8% of total AIDS spending)

Ibid

"Ibid

" Ibid

"The fourth country report on following up the implementation to the declaration of commitment on HIV and

AIDS 2010 (Viet Nam's UNGASS Country Report 2010)

"Ibid

26

4.3 Achievements in mobilizing the financial resources for the HIV

response

The national response to HIV in Viet Nam has gone through over 20 years andachieved important gains which were highly acknowledged by the international

community The control of new infections and deaths of AIDS is a success There is a

declining rate of HIV incidence, AIDS cases and deaths of AIDS; intensified universal access

to HIV prevention, treatment, care and support; strengthened integration of HIV programinto poverty reduction and into other health care services and effective use and

management of donor funding sources These achievements created a strong foundationtowards realization of the goals of “3 zeros: zero new infection, zero AIDS death and zerostigma and discrimination”

There are many factors contributing to these achievements in the response to HIV.Apart from the due attention and strong involvement of the leadership, the national andinternational organizations, the mobilization and effective use of the financial resources,especially donor funding sources for the HIV program is one of the critical contributors tothe past gains

* Remarkable achievements

There are some achievements of mobilization of financial resources for the

HIV/AIDS programs as follows:

1 State budget has been allocated to the HIV/AIDS program In the past years, an increase

of central state budget allocation to the HIV program has been, so was the provincialbudgets According to the statistics by the Ministry of Health, total investment amount forHIV during 2004-2009 was 3.824 billion dongs, specifically 765 billion dongs in 2009 thatwas 2.7 times more than that of 2004 According to the statistic of Ministry of Finance, thefunding amount for the HIV/AIDS increased continously during the past years In 2006,the fund amount for HIV was 424.536 million dongs, including 329,600 million dongs fromthe international donor funding In 2010, the amount was up to 694,000 million dongs,including 534 million dongs from international donor funding The data showed that thestate budget contributed to the HIV program has been increasing by years The statebudget allocated to the HIV program accounts for 1.7% of the budget for health Theaverage amount of the HIV program is 8,550 dongs per person The state budget allocated

to the national target program of the dangerous contagious diseases and HIV/AIDS for theperiod of 2004-2009 was 640,000 million dongs To realize the importance of the HIVprogram, the municipal cities and provinces actively allocated its local budget of 227billion dongs, equivalent to 36% of the state budget Especially, the local investmentamount during 2008 and 2009 was sharply increasing; it was 9 times more than that in

2004 With an increase of local budget and international funding, the central state budgetallocated to the national target program of social dangerous diseases and HIV/AIDS

reduced in 2008 and 2009 compared to that of 2007.

2 Mobilization and allocation of financial resources for the HIV program in Viet Nam hasreceived due attention from Ministries and sectors, which was shown by issuance andrealization of a series of laws and policies to create a harmonized legal system formobilization, management and use of the national financial resource Viet Nam is one ofthe countries which are realizing the principle of 3 ones initiated by UNAIDS and one pillar

is to have one national strategy of HIV/AID prevention and control to 2010 and its vision

2020 As a national target program, the Program of social dangerous diseases and

HIV/AIDS follows the regulations in the Decision 42/2002/QD-TTg ngay 19/3/2002 by

Prime Minister on management and execution of the national target program Accordingly,decentralization principle should be followed; the provinces and the executing agency ofthe program are responsible for allocating, managing and using the funds towardachieving the set objectives and targets The Central state budget is allocated by Ministry

of Finance to Ministries and additional budget allocated to provinces and cities The

regulations enable localities to have autonomy in integrating the activities under thenational target programs into other activities undertaken in the provinces; creatingflexibility for using the budget allocated from the national target program; and ensuringclose coordination among different sources, policies and measures to achieve the Nationaltarget program objectives; the national target program executing agency is more active in

coordination from the central down to local levels, especially achievement of the goals and

objectives set in the program.

3 The international organizations contributed majority of the financial resources for theHIV program in Viet Nam, meeting largely its needs for financial resources for the

28

response The political commitment and strong leadership of the government of Viet Nam

to the HIV program was highly appreciated by the international community and receivedgreat assistance technically and financially during 2005-2010 The external fundingsources included bilateral, multilateral assistance for the national HIV response Ingeneral, the funding source from the international organizations increased up to 50

million USD/year in 2006, 66 million USD in 2007 and over 100 million USD in 2009 from7-8 million USD during 2003-2004

Majority of the external funding for the HIV program channeled via Ministry of Health,accounting for 65-78% of the total budget for the HIV program The total funding amountfor the HIV/AIDS program in 2004-2009 was 2.129 billion dongs, accounting for 71% ofthe budget for the HIV program The funding sources rapidly increased during 2005 and

2009, highest peak was 542 billion dongs in 2008

* Causes of the successes

First, Viet Nam has strong leadership and political commitment at all level to the response

to HIV with involvement of the entire society

Second, timely development, issuance and implementation of the laws and sub-lawinstruments and professional guidelines enable good coordinated implementation of

different HIV interventions in order to mobilize the financial resources for the HIV

response in Viet Nam

Third, the clear policies and regulation and financial mechanism established in place toensure stable allocation of financial resources from the state budget for the program, andimplementation of the activities as planned, making contributions to a success of the HIVresponse Apart from state budget allocation, the government paid attention to mobilizefinancial resources from the international community With strong political commitment

and leadership, complete legal system and established execution system from the central

to local levels enables mobilization of financial resources from the donors

4.4 Shortcomings and difficulties and its causes

Apart from the gains analyzed above, financial resources for the HIV program in Vietnam

still faces some challenges:

First, the financial resources allocated from the state budget remain pretty modest, did notmeet the needs The fact showed that the financial resources only met half of the demandfor the HIV response in the country Tnough the state budget allocated for the HIVprogram recessively increased by years and so the local budget, it was far from the need.According to the MOH report, in 2006, it needed 706,192 million dongs but the statebudget was allocated only 424,536 million dongs In 2010, the HIV program required1,219,000 million dongs but the state budget available was only 694,000 million dongs Incomparison, the state budget only met.

Responsibility for the delivery of HIV-related services has been delegated to provinces and

large municipalities It is important to understand how HIV/AIDS resources are allocated

from the central to the provincial/municipal level and the composition of those resourcessince much of the HIV/AIDS mortality and morbidity occurs at this level and policy hasdelegated the responsibility to address the HIV epidemic to this level

Based on current policy, HIV financing and service delivery is in competition with otherhealth priorities for funding and system capacity at provincial and municipal level Thedecisions whether to fund and deliver HIV services are made in the context of competingdemands So the real issue is how to provide adequate incentives to local governments tomeet national HIV/AIDS policy objectives and to assure that funds and services aretargeted to the highest risk populations (MARPS and vulnerable populations) and services

as outlined above Since HIV/AIDS requires intensive funding, targeted service delivery,

surveillance and monitoring and a long term commitment, it’s critical that the incentives

from the national level down to the provider are appropriately aligned Even community

based providers have to have strong incentives to deliver services effectively and sustain

those services in the face of competing demands and competing incentives

Second, the sustainability of the program is rather low while 73% financial source iscoming from the donors and only 13% from the state budget In the coming years, whenViet Nam becomes a middle income country, dragging along a withdrawal of the donors, it

is estimated that the financial resources from the international organizations would bedramatically reduced The report of sustainable HIV program in Viet Nam prepared by

Public Health research and development and Abt Associates Inc showed a drastically

30

reduction of donor funding during 2011-2015 The biggest donor for the HIV program in

Viet Nam, PEPFAR planned to cut off its funding by around 10 million USD/year.

Specifically, in 2011, PEPFAR supports Viet Nam over 82 million USD, but in 2015, it will

be down to 40 million USD It is estimated that Viet Nam will face a shortage of fund of 150

million USD/year for the HIV response

Third, Viet Nam lacks of a unified financial coordination mechanism The unclear and transparent mobilization mechanism hindered integration of different financial resourceswith state budget, reducing the effectiveness of the program HIV/AIDS resources aretightly held by the VAAC which does not allocate resources to other departments in the

non-MoH or to NGOs, civil society organizations or other nongovernmental agencies This has

the tendency of making the governmental vertical AIDS system the sole implementer ofthe national AIDS program The vertical and monopolistic nature of this was raised in thethird UNGASS Report with a recommendation that part of government funding for HIVshould be allocated to the civil society organizations But to date this has not occurred and

as a result the VAAC system has little influence over non-governmental and governmentalAIDS institutions.

Most of the major donors for AIDS in Viet Nam reinforce this situation by directing theirfunding through this system PEPFAR is probably the first major donor to distributefunding between different stakeholders, thus mobilizing a large number of institutions,

including international organizations, academia, community-based organizations andNGOs, as well as AIDS and non-AIDS, health and non-health governmental agencies toengage in the response This avoids putting the burden of implementation on the VAACsystem, drawing them back to their position of coordination, and at the same timeincreasing the efficiency of the funding Other smaller funding mechanisms such as theCollaborative Fund or Irish Aid’s Civil Society Facility, which provide small grants to anumber of NGOs and CBOs, have also helped those organizations to grow Without PEPFARand such funding mechanisms, it is unlikely that any resources would be flowing to non-VAAC institutions working on HIV This practice has implications for how preventionactivities can be undertaken in hard to reach geographies.

31

Forth, mobilization of different sources, including from the community and private sector

in the national response to HIV and AIDS in many provinces is very weak They rely onmuch the central state budget

4.5 Estimation of financial resources for the HIV response in Viet Nam

The National Target Program of HIV and AIDS Prevention and Control was recentlyapproved by the Prime Minister at the Decision No 2331/QD-TTg during the period of2011-2015 It estimated that the total expenditure for HIV/AIDS is 1,900,000 million VND,

2,134,510 million VND, 2,416,126 million VND and 2,447,136 million VND in 2012, 2013,

2014 and 2015 respectively The total expenditure for HIV/AIDS estimated for the

duration of 2011 to 2015 is 10,664,971 million VNDs (Table 2 Appendices)

According to aids 2031, for a rapid scale up scenario for Viet Nam, it is projected

that expenditure for HIV/AIDS per capital in 2015 would be at $3.09 and 3.10 in 2030

Table 1: Projected HIV/AIDS prevalence and expenditures in 2008, 2015 and 2030

Rapid scale up scenario for Viet Nam

2008 2015 2030GDP per capital ($) 0.84 3.09 3.10

Figure 3:

Source: : aids2031 Financing of HIV/AIDS programme scale-up in low-income and income countries, 2009-31 The Lancet Vol 376, October 9, 2010

middle-5 Case studies

5.1 State budget -financed HIV program

Resources could not meet demand; many provinces/ cities mainly rely on Statebudget allocations In the next 5 - 10 years, most localities lack the capacity in terms ofbudget allocation, human resources, equipment, drugs, and chemicals in order to maintainproject operations; the network of HIV/AIDS prevention and control in some provinces isnot developed strong enough in order to effectively carry out program activities In 2008,average investment demand for action program amount to approximately 1,840 VNDbillions, but in reality, the National Strategy on HIV/AIDS Prevention and Control has onlybeen allocated 114 VND billions, thus leading to many difficulties in the implementation ofHIV/AIDS prevention and control

Funding resources for investment and development in the period of 2011-2015shall be 1,198,025 million VND to strengthen the capacity of HIV prevention and controlsystem in centrally governed provinces, cities In the period of 2011-2015, the budget shall

focus on investing in constructing headquarters for HIV/AIDS prevention centers,treatment facilities, specialized equipment for HIV/AIDS prevention and care and trainingHIV/AIDS prevention and control staff in provinces and cities

Regarding the national budget planning and transfers, there are several waysprovinces generate resources for health There are normal budget allocations from the

center and a equalization grants to offset the effects of different levels of wealth acro: the provinces Third there are transfers for National Target Programs as mentioned above

and finally there are locally generated resources from taxes and the sale of goods andservices including user fee revenue Generally, formulas for budget transfers from centralgovernment are based on indicators such as provincial population and level ofdevelopment, and also take into account geographic conditions and the organization ofgovernment administration other than the NTP for HIV/AIDS, these criteria are notweighted by the burden of HIV

Not only are provinces (and large municipalities) becoming more financially

independent, along with this has been a significant degree of delegation of authority todetermine spending priorities both across and within sectors including health and todeliver services This allows provinces to set their own priorities for the amount and type

of services they fund and deliver This is less true of the districts and communes which

continue to operate under previous rules.

Two factors ultimately determine how money is allocated and spent First,provinces sell services to generate income so they focus on services and interventions thatcan raise revenue and on the people who can afford the fees This skews services towardssale of medicines, curative care in hospitals, away from preventive services which don't

generate resources and to the non poor Second, it is influenced by the priorities of local

government The poor and disadvantaged, those populations that are stigmatized or

discriminated against and populations that are practicing illegal activities are not high

priority for funding They are also the populations least likely to afford the fees that

generate revenue.

Based on this method of fiscal decentralization and local control over fundingpriorities, it is difficult for the MoH to ensure effective implementation of priorities,including those for HIV/AIDS, set at the top since budget allocation and priorities are notunder MoH control and oversight

What are the implications for the funding of the national HIV/AIDS response?There are several First, the provincial HIV/AIDS program is expensive; costs areescalating and will last many years In the face of limited resources, the provinces have to

34

decide whether AIDS funding is higher priority than funding other things and recognizingthat AIDS services generate little in the way of revenue, they may not choose to spend onAIDS Second, given the AIDASTAR-Two team's analysis, the HIV problem is greater insome provinces/municipalities than others Current resource allocation formulae may nottake HIV burden into account in their allocation formulae across provinces/municipalities.Third, local revenue capacity is limited and so a significant proportion of the funding forHIV must come from national conditional transfers under the National Target Program

and donors, in particular PEPFAR, contribute more to this program than government anddonors, including USAID/PEPFAR, will soon be reducing their support

The above-mentioned analysis showed limitations of the state budget financed HIVprogram This suggested the government to consider different alternative moresustainable finance resources instead for the HIV response in Viet Nam

5.2 PEPFAR- funded HIV program

As a PEPFAR focus country, Viet Nam has received significant resources for thenational HIV response from US Government agencies since 2004 Viet Nam is the only oneAsian country receiving the PEPFAR while almost all of its recipients are from South Africa

which is hard hit by the epidemic

According to statistics uploaded at UNAIDS website, funding from PEPFAR for theHIV/AIDS response accounts a majority of the international organizations However, it hasseen a declining trend

Table 2: PEPFAR funding for HIV/AIDS response in Viet Nam

According, to financial experts on HIV/AIDS, they anticipated some potential funding

FY09 FY10 FY11 FY12 FY13 FY14 FY 15

According to UNGASS report 2010, in 2007, disbursement from PEPFAR was USD38.7 million, equivalent to 86% of bilateral and 58% of national AIDS spending In 2008,PEPFAR funding almost doubled Total disbursement was USD 71.5 million, accounting for89% of bilateral and 66% of national AIDS spending Prevention and treatment and carereceived the majority of funding in 2007 and 2008 Prevention accounted for 37% ofresources in 2007 and around 36% in 2008, and treatment and care received 39% ofresources in both 2007 and 2008 In these two years, 10-15% of resources were spent onprogram management and administration strengthening; the other spending categoriesaccounted for only a small percentage of resources

A breakdown of spending on prevention shows that 18-20% went to behaviorchange communication, 14% to voluntary counseling and testing (VCT) and 11% to theprevention of mother-to-child transmission (PMTCT) Around 50% of prevention activitieswere not disaggregated by intervention In the context of Viet Nam’s epidemic, preventionactivities should focus on key populations at higher risk (injecting drug users (IDU),female sex workers (FSW) and men who have sex with men (MSM)) and PLHIV Whilethere has been no official resource needs estimation study done yet in Viet Nam,expenditure data for 2007- 2009 also does not capture the proportion of funds allocated tokey populations at higher risk Therefore, it is not possible to determine whetherinterventions targeting these subpopulations were funded sufficiently to reach thecoverage needed to impact the epidemic Spending on treatment and care increased

36

substantially from 2007 to 2009 (from USD 26 million to USD 47 million) and was

consistent with the increase in ART coverage during the same period

PEPFAR is probably the first major donor to distribute funding between different

stakeholders, thus mobilizing a large number of institutions, including international

organizations, academia, community-based organizations and NGOs, as well as AIDS and

non-AIDS, health and non-health governmental agencies to engage in the response Thisavoids putting the burden of implementation on the VAAC system, drawing them back totheir position of coordinaticn, and at the same time increasing the efficiency of thefunding Without PEPFAR, it is unlikely that any resources would be flowing to non-VAAC

institutions working on HIV This practice has implications for how prevention activitiescan be undertaken in hard to reach geographies

However, since its inception, many of the requirements of PEPFAR have proved to

be controversial in hindering efforts to combat the spread of HIV/AIDS in Vietnam Giventhe prevalence of HIV in Vietnam among sex workers, a major limit with PEPFAR is therequirement that grantees pledge opposition to prostitution In Vietnam, pledgingopposition to commercial sex exacerbates the already prevalent marginalization of womenand men in prostitution, some of whom have been trafficked The requirement has proved

to be a major obstacle to those groups trying to provide legal, social and health services to

those Vietnamese engaged in commercial sex Whether one supports or opposes thecommercial sex industry, the prostitution pledge requirement has so far underminedservices ranging from aiding Vietnamese to move out of commercial sex altogether, to

inhibiting programs designed to empower sex workers in their demands for universal

condom use Given the pressing need to reach one of the groups must vulnerable to HIVinfection, their marginalization through PEPFAR's prostitution pledge reflects afundamental shortcoming

A second major hinderance with the implementation of PEPFAR in Vietnam hasbeen the classification of "most-at-risk" populations, a classification that has not onlyignored the reproductive health reality facing Vietnamese youth, but also that of women ingeneral One recent study shows that whilst a significant proportion of HIV positiveVietnamese women are infected through sharing needles and syringes with infected drug

users or by having unsafe sex with clients, the majority of new infections result from

pre-marital sex with young male injecting drug users Despite studies like these, a perception

persists that the epidemic predominantly exists amongst young Vietnamese males.

Since the majority of PEPFAR's prevention funding for condom promotion in

Vietnam is reserved for most-at-risk populations, the failure to perceive women whoengage in pre-marital sex in the most-at-risk category reflects misdirected funding In light

of the abstinence-until-marriage focus, if PEPFAR remains narrow-minded and ideological

in its approach, Vietnamese women engaging in pre-marital sex will continue te beignored by awareness-raising efforts and HIV prevention programs Clearly, the very likely

continued support of abstinence-until-marriage spending requirements will continue to

impede access to family planning information and services for these at-risk women andgirls

Obviously, a further failing is the approach of targeting HIV alone, withoutcoordinating with family planning programs, despite the fact that unintended pregnancyand the need for family planning remains high in PEPFAR focus countries In Vietnam,funding for HIV/AIDS from international donors, including PEPFAR, has significantly

exceeded government funding Yet the opposite situation exists for family planning, with

government funding always higher than international funding since the mid-1990s

In short, with its policy and guidance, PEPFAR implementation in Viet Nam as well

as in other countries faced the challenges Though one of the biggest major donors for HIVresponse in Viet Nam, expenditures for care and treatment accounted for a bigger share incomparison with that for prevention According to the UNAIDS guidelines relating toneeded investment toward universal access to the HIV prevention, treatment, care andsupport, the countries with the concentrated epidemics like Viet Nam should prioritize theprevention for MARP as the most cost effective approach in a more sustainable financingmanner Meanwhile, PEPFAR strategies focusing more on care and treatment and less onprevention show its less effectiveness and sustainability for the HIV response in Viet Nam

38

5.3 Comparison between the two cases

Regarding the funding amount: Vietnam is still a developing with many other

concerns of social economic development issues for investment than HIV and AIDS State

budget allocated to HIV and AIDS remains modest

By contrary, PEPFAR funded HIV program has huge amount of funding amount,who is the biggest donor among major donors for the HIV response in Viet Nam ThatPEPFAR is planning to withdraw its support from Viet Nam is going to leave a big hole thatneeds to be narrowed in order to maintain its accomplishment in the HIV response

Regarding the funding scope: The state budgeted financed HIV program is carried

out in all provinces with small amount allocated to each It invested mainly on overheadcosts, infrastructure and IEC and BCC and small amount on treatment

Meanwhile, PEPFAR invested in only 9 focus provinces It prioritizes ARV treatmentfor funding, and recently a certain amount also is invested on prevention Priorities for

performance are decided by Washington health and HIV policies The policies andinflexible application somehow are not suitable for the Viet Nam context

HIV has been detected in all 63 provinces Resources are invested concentrated insome focus provinces and undue attention paid to others, which creates potential danger

of the epidemic outbreak in these provinces It is essential to utilize internal resources,especially local resources in the provinces without projects

Regarding the funding mechanism: State financed HIV program must follow itsgovernment regulation on finances for certain, including cost norms, etc The focal point

agency of coordination is Viet Nam authority for HIV/AIDS control, Ministry of Health

PEPFAR funded HIV program follows its own regulations including cost norms, which aremuch higher than the state budget cost norms PEPFAR is a unique donor in Viet Namwhich has not pool funding via VAAC Its funding mechanism has some strengths,especially promoted principle of multi-sectoral response to HIV to avoid the publicknowledge that it is a business of the health sector However, the independent incoordination and management of funding resources creates barriers for the country fromits management and coordination

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