Report of the Flow of Financial Resources for Assisting in the Implementation of the ICPD PoA

ISSUE 64 - 01 June 2006

Below is a summary of the UN Secretary General's report on funding trends for population activities for the 39th session of the Commission on Population and Development (April 2006, New York), entitled "Flow of financial resources for assisting in the implementation of the Programme of Action of the International Conference on Population and Development (ICPD)."

The report examines the flow of funds from donor countries for population assistance in developing countries and provides estimates of government and non governmental expenditures for population activities in developing countries for 2004. It also includes donor and developing country estimates for 2005 and projections for 2006.

The data-collection activities for both donor and domestic resource flows were undertaken by the Netherlands Interdisciplinary Demographic Institute (NIDI) under a contract with UNFPA and the Joint United Nations Programme on HIV/AIDS (UNAIDS). Evaluation and analysis of data were carried out jointly by NIDI and UNFPA.
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INTRODUCTION
Despite the fact that the international community was far from reaching the ICPD financial targets for 2000, the slow but steady progress since then, thanks in large part to the increase in funding for HIV/AIDS, has ensured the attainment of the 2005 targets for both international donor assistance and domestic expenditures for population activities.

Donor assistance for population, which had stood at $2.6 billion in 2000, was estimated at almost $5.3 billion in 2004, up from $4.7 billion in 2003. Domestic expenditures, which had been estimated at almost $11 billion in 2003, are estimated to have increased to $14.5 billion in 2004.

Together, donor assistance and domestic expenditures for population activities yielded a global estimate of $19.8 billion in 2004. It should be pointed out, however, that even though the targets will be met, they will not come close to addressing current needs because the targets were fixed over 10 years ago, with cost estimates and estimated needs based on experiences as of 1993.

Donor assistance is estimated to have further increased to $6.1 billion in 2005 and is projected to increase to almost $6.4 billion in 2006. A rough estimate of resources mobilized by developing countries, as a group, yielded a figure of almost $14.9 billion for 2005. This number is projected to increase to $15.9 billion in 2006.

The challenge now before the international community is to continue to mobilize the required resources to implement the 1994 Cairo ICPD agenda within the framework of the Millennium Development Goals (MDGs).

Although estimates show that the targets agreed in Cairo have been slightly surpassed, it is noted that the ICPD targets are out of date and may not be sufficient to meet evolving current needs. For example, no one had foreseen the escalation of the AIDS pandemic. In 1994, 14 million people had been said to be living with HIV/AIDS; this number increased 186 per cent to almost 40 million in 2004. UNAIDS estimates that global resource requirements for HIV/AIDS amount to $15 billion in 2006, of which $8.4 billion is required for prevention and $3 billion for treatment and care. The financial targets of the ICPD of $1.4 billion in 2005 and $1.5 billion in 2010 (for prevention activities only) are far below these estimated requirements and should be revised to more accurately address current needs and costs, including those for treatment.

Without a firm commitment to population, reproductive health and gender issues, and adequate allocation of financial resources in all areas, it is unlikely that the goals and targets of the ICPD and the Millennium Summit will be effectively met.

I.    DONOR ASSISTANCE TO POPULATION ACTIVITIES
Population assistance has increased slowly but steadily since the ICPD. Although assistance had peaked at $2.6 billion in 2000, the financial goal of the ICPD of $5.7 billion by the year 2000 was not met; the resources mobilized were roughly 46 per cent of the target agreed upon as the international community?s share in financing the Programme of Action. By 2003, donor assistance was almost $4.7 billion.

The provisional 2004 figure shows an increase to almost $5.3 billion (see table 1). It is estimated that population assistance increased further to $6.1 billion in 2005. If it had, the international community would have reached the 2005 target of the ICPD. However, this would still be significantly below actual needs, which have escalated far above those estimated in 1993, particularly for HIV/AIDS. If donors live up to their expected future commitments, funding is projected to increase to almost $6.4 billion in 2006 (see figure I).

Table 1
International population assistance, by major donor category, 2003-2006
(Millions of United States dollars)

Sources: UNFPA, Financial Resource Flows for Population Activities in 2003 (New York, 2005); and UNFPA/UNAIDS/NIDI Resource Flows Project database.
Note: Totals may not add up due to rounding. Data for 2004 are provisional; data for 2005 are estimates; data for 2006 are projections.
a    Estimated at the 2004 level.

Sources: UNFPA, Financial Resource Flows for Population Activities in 2003 (New York, 2005); and UNFPA/UNAIDS/NIDI Resource Flows Project database.
    Note: Estimated 2005 and projected 2006 assistance is shown by broken line (- - -). Data on actual assistance for 2004 are provisional; data for 2005 are estimates; data for 2006 are projections.

A.    BILATERAL ASSISTANCE TO POPULATION ACTIVITIES
Donor countries provide the largest share of population assistance. Bilateral assistance had stood at $4.3 billion in 2004, up from $3.7 billion in 2003. A number of countries increased funding levels over the past year. Major donors in 2004 included the United States of America, the United Kingdom of Great Britain and Northern Ireland, the Netherlands, Japan, the European Union (EU), Sweden and Canada. According to preliminary estimates, donor countries provided $5.3 billion for population activities in 2005. Projections for 2006 place this number at $5.5 billion.

Population assistance as a proportion of official development assistance (ODA)
According to the latest figures from the Organization for Economic Co-operation and Development (OECD), there is evidence of major scaling up of aid promised by donors at recent international meetings. Official development assistance (ODA) increased to $79.5 billion in 2004. Provisional figures show that donor countries, as a group, contributed 5.08 per cent of their total ODA to population assistance in 2004, about the same proportion as in 2003 (see figure II). Only a handful of countries contribute the suggested 4 per cent or more of their total ODA for population assistance.

Figure II
Population assistance of donor countries as a percentage of ODA, 1994-2004 

Sources: UNFPA. Financial Resource Flows for Population Activities in 2003 (New York, 2005); and UNFPA/UNAIDS/NIDI Resource Flows Project database.
Note: Data for 2004 are provisional.

Population assistance in relation to gross national product (GNP)
In 2004, donor countries contributed, on average, $131 per million dollars of GNP for population assistance, up from $126 per million dollars in 2003. The average dollar amount conceals the large variation between countries, ranging from $12 to $682 per million dollars. The Netherlands led the donor countries, contributing $682 per million dollars of GNP for population assistance. The Netherlands, Norway, Denmark, Luxembourg, Sweden and the United Kingdom each contributed over $200 per million dollars of GNP for population assistance.

B.    MULTILATERAL ASSISTANCE TO POPULATION ACTIVITIES
Grants
Multilateral assistance stood at $60 million in 2004, up from $43 million in 2003. Funding levels are not expected to change significantly in 2005 and 2006. The World Bank reported an expenditure of $223 million in 2004 as compared with $27 million in 2003 to intermediate donors for special grant programmes in the area of population in 2003.

Loans
Most loans for population assistance come from the World Bank, which supports reproductive health and family planning service delivery, population policy development, HIV/AIDS prevention, and fertility and health survey and census work. Provisional figures place World Bank lending for population activities in 2004 at $288 million, down from $501 million in 2003. Of this amount, $75 million was for International Development Association (IDA) loans, made at highly concessional rates, and $213 million for International Bank for Reconstruction and Development loans, made at rates closer to those prevailing in the market.

C.    PRIVATE ASSISTANCE TO POPULATION ACTIVITIES
In 2004, foundations and non-governmental organizations (NGOs) contributed $404 million to population activities, up from $380 million in 2003. This figure is expected to increase as more foundations report their 2004 contributions. Major contributors reporting by the publication deadline included the Bill and Melinda Gates Foundation, the Packard Foundation, the Henry J. Kaiser Family Foundation, the Fund for International Development of the Organization of the Petroleum Exporting Countries (OPEC) and the Rockefeller Foundation. Major NGO contributors included Marie Stopes International, Population Services International, the International Planned Parenthood Federation and the Japanese Organization for International Cooperation in Family Planning. The level of private assistance to population activities is not expected to change significantly in 2005 and 2006.

D.     EXPENDITURES FOR POPULATION ACTIVITIES BY GEOGRAPHICAL REGION
A total of 144 countries and territories benefited from population assistance in 2004, down from 158 countries in 2003. Sub-Saharan Africa, which includes the majority of the least developed countries, continued to be the largest recipient of assistance, receiving more than half of all assistance going to the five geographical regions (see figure III). The other recipients, in descending order of the size of population assistance, were: Asia and the Pacific, Latin America and the Caribbean, Western Asia and Northern Africa, and Eastern and Southern Europe. Global and interregional population activities have been receiving an increasingly larger share of total population assistance over the years. In 2004, 43 per cent of assistance went to global and interregional activities, compared with 40 per cent in 2003. Assistance went to such activities as advocacy; research; reproductive health; support to the Global Fund to Fight AIDS, Tuberculosis and Malaria; HIV/AIDS prevention, care and support; and safe motherhood. 

E.    EXPENDITURES FOR POPULATION ACTIVITIES BY CATEGORY OF ACTIVITY
The largest and increasing proportion of total population assistance is going to fund HIV/AIDS activities (see figure IV). Consistent with the call of the ICPD for integration of services, funding for basic reproductive health services increased slightly, with fluctuations, from 18 per cent in 1995 to 25 per cent in 2004, down from 28 per cent in 2003, while explicit funding for family planning services decreased significantly, with fluctuations, from 55 to 9 per cent during the same period, down from 11 per cent in 2003.

Consistent with the rapid spread of the HIV/AIDS pandemic, funding for HIV/AIDS activities has increased sharply since 1995, from 9 per cent of total population assistance to 56 per cent in 2004, up from 48 per cent in 2003. Funding for basic research activities has decreased with fluctuations since 1995, from 18 to 10 per cent in 2004, down from 13 per cent in 2003. The 2004 percentages may change since a number of organizations did not report their expenditures by the publication deadline.

Funding for family planning services decreased considerably in absolute dollar amounts from 1995 to 2004. Although funding for reproductive health and basic research activities increased slightly during the same period, HIV/AIDS activities received the largest proportion of assistance. Given the increased emphasis on addressing the global AIDS pandemic, including the MDG (Goal 6) of combating HIV/AIDS, malaria and other diseases and the creation of the Global Fund to Fight AIDS, Tuberculosis and Malaria and the United States President?s Emergency Plan for AIDS Relief, estimates for 2005 and projections for 2006 point to a continuation of this trend. In fact, donor countries are expected to continue to spend a large percentage of their population assistance on STDs/HIV/AIDS activities in 2005 and 2006.

Figure IV
Expenditures for population activities as a proportion of total population assistance, 1995-2004

Sources: UNFPA, Financial Resource Flows for Population Activities in 2003 (New York, 2005); and UNFPA/UNAIDS/NIDI Resource Flows Project database.

F.     EXPENDITURE FOR POPULATION ACTIVITIES BY CHANNEL OF DISTRIBUTION
In 2004, 48 per cent of all population assistance went through the non-governmental channel, while 29 per cent went to bilateral programmes and 23 per cent went through multilateral organizations. The 2004 figures are roughly at the same levels as they were in 2003 and the NGOs channel continues to predominate throughout all the world regions. Population assistance is expected to continue to be channelled in large part by NGOs in 2005 and 2006.

II.    DOMESTIC EXPENDITURES FOR POPULATION ACTIVITIES
It is estimated that developing countries spent $14.5 billion for population activities in 2004. The largest amount was mobilized in Asia ($11.4 billion), followed by Latin America and the Caribbean ($1.5 billion), sub-Saharan Africa ($823 million), Western Asia and Northern Africa ($642 million) and Eastern and Southern Europe ($211 million).

Domestic expenditures are estimated to have further increased to $14.9 billion in 2005 and they are projected to increase again, to $15.9 billion in 2006. Increases are expected in almost every region. Asia is expected to continue to mobilize the largest amount of financial resources in both 2005 and 2006. The pattern remains unchanged from 2004-2006. Latin America and the Caribbean is expected to mobilize the second largest amount of funds, followed by sub-Saharan Africa, Western Asia and Northern Africa, and Eastern and Southern Europe.

Approximately 21 per cent of all domestic expenditures for population are spent on STDs/HIV/AIDS, with Latin America and the Caribbean and sub-Saharan Africa spending about three quarters and just over two thirds of their funds, respectively, on AIDS. These figures are expected to remain virtually unchanged during 2004-2006. (see table 2) Figures for Asia are low because data on out-of-pocket spending are not complete.

Table 2
Projection of global domestic expenditures for population activities,
by region, 2004-2006
(Thousands of United States dollars)

Sources: Hendrik P. van Dalen and Mieke Reuser, "Assessing size and structure of worldwide funds for population and AIDS activities"(The Hague, Netherlands Interdisciplinary Demographic Institute, 2004); and Hendrik P. van Dalen and Mieke Reuser, "Projections of funds for population and AIDS activities, 2004-2006" (The Hague, Netherlands Interdisciplinary Demographic Institute, 2005).
    a Covering only out-of-pocket expenditures and based on the average amount per region as measured by the World Health Organization (2004) for health-care spending in general. For each region, the ratio of private out-of-pocket to per capita government expenditures was used to derive consumer expenditures in the case of population activities. Additional information based on existing studies was used to calculate projections of private AIDS expenditures for sub-Saharan Africa and Latin America and the Caribbean.

III.    RESOURCES FOR OTHER POPULATION-RELATED ACTIVITIES
Both donor and developing countries indicate that a significant amount of resource flows go to other population-related activities that address the broader population and development objectives of the agenda of the ICPD, but that have not been costed and are not part of the agreed target of $18.5 billion for 2005. Among the population-related activities that countries have supported are: poverty alleviation, primary health care delivery systems, child health and survival, basic education, including girls' and women's education, empowerment of women, rural development and income-generation. Since they are not part of the costed population package, funding for such activities is not included in the calculations of international population assistance and domestic resources for population. If the amount of the resources spent on these activities was added to expenditures for the costed population package, the overall level of support to the Programme of Action would be considerably higher.

IV.    OVERVIEW OF ISSUES IN RESOURCE MOBILIZATION
The increase in resources is an encouraging sign indeed. However, there are a number of important issues to consider.

• The majority of resources are mobilized by a few major players. Population assistance originates with a few major donors and the majority of domestic resources are mobilized in a few large developing countries. Most developing countries are not in a position to generate sufficient resources to fund their population and AIDS programmes.
• Important role of consumer spending in domestic expenditures. Although not easy to track, the role played by consumers in mobilizing resources is much larger than usually assumed. In many cases, these exceed government and NGOs expenditures for population. Although variations exist between regions and countries, if spending on population and AIDS activities is completely in line with spending on health in general, then it is safe to infer that consumers in developing countries assume more than half of the burden of population expenditures. 
• Shift towards funding for AIDS. There has been a pronounced shift towards funding for STDs/HIV/AIDS at the expense of other population activities. Given the increased emphasis on addressing the global AIDS pandemic, including the MDG on combating HIV/AIDS, malaria and other diseases and the creation of the Global Fund to Fight AIDS, Tuberculosis and Malaria and the United States President?s Emergency Plan for AIDS Relief, the shift towards funding for STDs/HIV/AIDS is expected to continue and to be especially prominent among donor countries. There are fears that the larger share of funding that goes to AIDS activities might distract attention from the necessary funding for the other three elements of the Conference-costed population package. This is especially evident in the case of funding for family planning, where absolute dollar amounts are lower than they were in 1995.  If not reversed, the trend towards less funding for family planning will have serious implications for countries' ability to address unmet needs for such services and could undermine efforts to prevent unintended pregnancies and reduce maternal and infant mortality.
• Escalating current needs and costs as compared with original ICPD estimates. The ICPD financial targets were fixed over 10 years ago, with cost estimates based on experiences as of 1993. Since that time, the population and health situation in the world has changed dramatically. The HIV/AIDS crisis is far worse than anticipated; and infant, child and maternal mortality remains unacceptably high in many parts of the world. In addition, since that time, health-care costs have increased substantially. Furthermore, the value of the dollar in 2005 is far lower than it was in 1993. As a result, the ICPD target of $18.5 billion in 2005 may not be sufficient to meet current developing-country needs in the area of family planning, reproductive health, STDs/HIV/AIDS and basic research, data and population and development policy analysis. 
• Population and reproductive health are central to development and the achievement of the MDGs. Although not explicitly included in the MDGs, reproductive health is an essential element in their achievement. At the 2005 World Summit, world leaders committed themselves to "achieving universal access to reproductive health by 2015, as set out at the ICPD, integrating this goal in strategies to attain the internationally agreed development goals, including those contained in the Millennium Declaration, aimed at reducing maternal mortality, improving maternal health, reducing child mortality, promoting gender equality, combating HIV/AIDS and eradicating poverty" (General Assembly resolution 60/1, para. 57 (g). The international community's commitment to achieving the MDGs needs to incorporate the ICPD's universal reproductive health services target so that funding for family planning and reproductive health services is secured along with increased funding for HIV/AIDS.
• Competing development priorities. Poor countries are faced with many competing development priorities. Many of them simply cannot afford to make the necessary investments in population. As a result, population issues are often excluded from social and health sector programmes because there is not enough funding to go around, or because new priorities are surfacing without safeguards in place to ensure sustainability and expansion of existing programmes. It is essential to mobilize adequate resources to protect investments already made in existing programmes. Meeting reproductive health supply needs is an essential element in the global effort to save the lives of women and men by protecting their reproductive health.
• The changing face of development cooperation. Development is no longer universally viewed as the business of specialized bilateral and multilateral aid agencies. There is an increasing belief that financing for development encompasses much more than aid. It includes mobilizing domestic financial resources, mobilizing international resources, international trade, increasing international financial and technical cooperation for development, addressing international debt, and addressing systemic issues in the international monetary, financial and trading systems. ODA can no longer be relied upon as the key instrument for the promotion of development. Population must be seen as an integral part of development, and population issues must figure prominently in national development plans and poverty reduction strategies.
• Impact and efficiency of resource use. Given limited financial resources, issues of cost-effectiveness and programme efficiency become more salient. It is not sufficient for resources to be mobilized; both donors and recipients must make sure that the resources are used for the benefit of all, but especially the poor. Coordination of donor policies and identification of funding gaps are also essential. Resolving to take far-reaching and monitorable actions to reform the way in which aid is delivered and managed, ministers of both developed and developing countries responsible for promoting development and heads of multilateral and bilateral development institutions committed themselves to the Paris Declaration on Aid Effectiveness (March 2005) to increase the impact of aid on reducing poverty and inequality, increasing growth, building capacity and accelerating the achievement of the MDGs.

V.    CONCLUSION
A. PROGRESS IN RESOURCE MOBILIZATION
Although provisional figures show that both donors and developing countries are on target ($5.3 billion and $14.5 billion, respectively, in 2004) and may indeed have slightly surpassed the 2005 goal of $18.5 billion, this is misleading because the resources mobilized do not adequately address the current needs which have escalated considerably since the ICPD and which now include treatment for HIV/AIDS. Indeed, for many less developed countries which cannot generate sufficient resources, the lack of adequate funding remains the chief constraint on the full implementation of the Programme of Action and on attaining the goals of the ICPD agenda.

The real concern is that the target amount will not be sufficient to address the current global needs in all four ICPD areas. This is true even in the area of HIV/AIDS, where most of the increase in funding has occurred and where, according to the most recent UNAIDS estimates, $15 billion is needed in 2006 for a comprehensive package including prevention, treatment and care, support for orphans and vulnerable children, programme costs and human resources. If not reversed, the trend towards less funding for family planning could undermine efforts to prevent unintended pregnancies and reduce maternal and infant mortality.

B. KEY AREA REQUIRING FURTHER ATTENTION
Continued resource mobilization advocacy efforts on the part of both donors and developing countries are essential to fully implement the ICPD agenda. The population and health situation has changed dramatically since the Cairo Conference, especially in respect of poverty and the magnitude of the spread of the HIV/AIDS pandemic. To accelerate the implementation of the ICPD agenda and to achieve the MDGs, the international community should continue to:

• Ensure that population and reproductive health are seen as an integral part of the achievement of the MDGs and that they figure prominently in national development plans and poverty reduction strategies;
• Mobilize sufficient resources to fully implement the Programme of Action and ensure that family planning and reproductive health issues receive the attention they deserve at a time when the increased focus is on combating HIV/AIDS;
• Establish an effective partnership of donor and recipient countries based on mutual trust, accountability and donor coordination in support of country goals;
• Increase attention to cost-effectiveness and programme efficiency so that resources reach all segments of the population, especially those that are most in need; and
• Enhance the role of the private sector in the mobilization of resources for population and development, in monitoring population expenditures and in ensuring that financial targets and equity objectives are met.

C. CHALLENGES
The challenge before the international community is to continue to mobilize the resources required to implement the ICPD agenda. It is particularly important to reach the ODA target of 0.7 per cent of GNP and to ensure that appropriate resources are allocated to population and reproductive health in funding and programming mechanisms such as sector-wide approaches and poverty reduction strategies. It is also important to ensure that adequate resources are allocated to all areas of the ICPD-costed population package: family planning services, reproductive health services, STDs/HIV/AIDS and basic research, data and population and development policy analysis. The ICPD population and reproductive health agenda is a means to both influence macrodemographic change and reduce poverty at the household level and help achieve the MDGs.

To read the entire report, visit: http://www.un.org/esa/population/cpd/comm2006.htm

All previous issues of the UNFPA Global Population Policy Update can now be found on UNFPA's website at: http://www.unfpa.org/parliamentarians/news/newsletters.htm .

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This newsletter is issued by the United Nations Population Fund (UNFPA) in its capacity as secretariat for the biannual International Parliamentarians' Conference on the Implementation of the ICPD Programme of Action (IPCI/ICPD). The first IPCI/ICPD  was held in November 2002 in Ottawa, Canada and the second in October 2004 in Strasbourg, France. These dispatches are intended to highlight important developments taking place around the world so that parliamentarians can be kept informed of and learn from the successes, setbacks and challenges encountered by their fellow parliamentarians in other countries and regions in their efforts to promote the implementation of the Programme of Action of the International Conference on Population and Development (September 1994, Cairo, Egypt). It should be noted that UNFPA does not necessarily endorse all of the policies described in this newsletter.

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