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

ISSUE 54 - 22 July 2005

Below is a summary of the UN Secretary General's report on funding trends for population activities prepared by UNFPA for the 38th session of the Commission on Population and Development ( April 2005, 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."

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 2003. It also includes donor and developing country estimates for 2004 and projections for 2005.

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.

Please note that the final figures for 2003 are out and will be published in a report later this year. The 2003 figure for population assistance is higher than the provisional figure in the report - it is almost $4.7 billion. 

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INTRODUCTION

Donor assistance for population, which stood at $2.6 billion in 2000, was estimated at $4.2 billion in 2003, up from $3.2 billion in 2002. Domestic expenditures, which hovered between $7 billion and $9 billion during 2000-2002, were estimated at almost $11 billion in 2003. Together, donor assistance and domestic expenditures for population activities yielded a global estimate of just over $15 billion in 2003.

To reach the 2005 target of $18.5 billion, the international community would have to continue to increase levels of assistance and developing countries would have to continue mobilizing additional domestic resources. Estimates for 2004 and projections for 2005 so far are encouraging.

Donor assistance is estimated to have increased to $4.5 billion in 2004 and projected to increase to almost $6.4 billion in 2005. A rough estimate of resources mobilized by developing countries yielded a figure of $12.5 billion for 2004. This number is projected to increase to $12.7 billion in 2005.

The largest share of funding for population activities is currently going to AIDS-related activities. However, the increased resources are still not adequately addressing the growing AIDS pandemic. In addition, funding for family planning and reproductive health, which has been lagging behind, also needs to increase proportionately with current needs in these areas.

The substantial increase in funding for AIDS clearly demonstrates that further resources can still be mustered and that, given the political will to do so, they can be made available for the other equally critical components of the costed population package of the International Conference on Population and Development (ICPD), especially family planning and reproductive health.

The challenge before the international community is to remain on track so as to reach the target for 2005. Without a firm commitment to population, reproductive health and gender issues, and adequate allocation of financial resources in all areas, it is unlikely that any of the goals and targets of the ICPD and the Millennium Summit will be effectively met.

I.    DONOR ASSISTANCE TO POPULATION ACTIVITIES

Although assistance reached $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 2002, donor assistance was $3.2 billion. The 2003 figure shows an increase to $4.2 billion (see table 1). It is estimated that population assistance increased further to $4.5 billion in 2004.

If donors live up to their commitments and continue to increase funding levels as promised, it is projected that the international donor community will have contributed almost $6.4 billion to population assistance by the end of 2005. This means that donors will have not only reached, but even slightly surpassed, the ICPD target for 2005 (see figure I).

Table 1

International population assistance, by major donor category, 2002-2005

(Millions of United States dollars)

Sources: UNFPA, Financial Resource Flows for Population Activities in 2002 ( New York , 2004); and UNFPA/UNAIDS/NIDI Resource Flows Project database . Note: Totals may not add up owing to rounding. Data for 2003 are provisional; data for 2004 are estimates; data for 2005 are projections. a Estimated at the 2003 level.

Figure I

Actual population assistance as compared with targets of the International Conference on Population and Development 

Sources: UNFPA, Financial Resource Flows for Population Activities in 2002 (New York, 2004); and UNFPA/UNAIDS/NIDI Resource Flows Project database. Note: Estimated 2004 and projected 2005 assistance is shown by broken line (- - -).

A.    BILATERAL ASSISTANCE TO POPULATION ACTIVITIES

Bilateral assistance stood at $3.3 billion in 2003, up from $2.3 billion in 2002. The United States (U.S.), whose funding increased by almost 88 per cent compared with that of 2002, continued to be the largest donor, contributing $1.8 billion in population assistance, or 54 per cent of the resources of donor countries. Other major donors in 2003 included the Netherlands, the United Kingdom (U.K.), the European Union (EU), Germany, Norway and Japan, all of which contributed over $100 million each in population assistance. According to preliminary estimates, donor countries provided $3.4 billion for population activities in 2004. Projections for 2005 place this number at $5.2 billion. The projected increase includes two important sources of additional funding: the Global Fund to Fight AIDS, Tuberculosis and Malaria and the U.S. President's Emergency Plan for AIDS Relief.

Seventeen donor countries and EU increased their contributions in 2003. Of the countries that registered increases in funding levels, three countries had actually decreased their contributions in terms of their local currency, but showed an increase in terms of the U.S. dollar.

Population assistance as a proportion of official development assistance

Donor countries contributed 4.54 per cent of their total official development assistance (ODA) to population assistance in 2003, up from 3.65 per cent in 2002 (figure II). This marked the first time that donor countries, as a group, crossed the 4 per cent (of ODA to population activities) threshold. However, it should be pointed out that only a handful of countries contribute the suggested 4 per cent or more of their total ODA for population assistance; in 2003, only five countries did so, compared with eight countries in 2002. Donor countries vary greatly in terms of the proportion of ODA contributed to population assistance: proportions have ranged from 0.04 to 11.45 per cent. The U.S. led the donor countries, earmarking 11.45 per cent of its total ODA for population assistance in 2003. This increase reflects the large increase in funding for HIV/AIDS. Other countries contributing more than 4 per cent of ODA to population assistance were the Netherlands, Norway, Finland and Luxembourg.

Sources: UNFPA. Financial Resource Flows for Population Activities in 2002 (New York, 2004); and UNFPA/UNAIDS/NIDI Resource Flows Project database. Note: Data for 2003 are provisional.

Population assistance in relation to gross national product

In 2003, donor countries contributed, on average, $112 per million dollars of gross national product (GNP) for population assistance, up from $86 per million dollars in 2002. The average dollar amount conceals the large variation between countries, ranging from $1 to $538 per million dollars. Norway led the donor countries, contributing $538 per million dollars of GNP for population assistance. The Netherlands, Luxembourg, Denmark and Sweden each contributed over $200 per million dollars of GNP for population assistance.

B.    MULTILATERAL ASSISTANCE TO POPULATION ACTIVITIES

Grants

Multilateral assistance stood at $41 million in 2003, up from $31 million in 2002. Funding levels are not expected to change significantly in 2004 and 2005. The World Bank reported an expenditure of $27 million in grants for population activities, while the Inter-American Development Bank provided just under $1 million.

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. The World Bank reported having lent $501 million for population activities in 2003, up from $328 million in 2002. Of this amount, just over $239 million represented International Development Association loans, made at highly concessional rates, and $261 million represented International Bank for Reconstruction and Development loans, made at rates closer to those prevailing in the market.

C.     PRIVATE ASSISTANCE TO POPULATION ACTIVITIES

In 2003, foundations and non-governmental organizations (NGOs) contributed $324 million to population activities, down from $530 million in 2002. This figure is expected to increase as more foundations report their 2003 contributions. Major contributors reporting by the publication deadline included the Bill and Melinda Gates Foundation, the William and Flora Hewlett Foundation, the Fund for International Development of the Organization of the Petroleum Exporting Countries (OPEC) and the Henry J. Kaiser Family Foundation. Major NGO contributors included Marie Stopes International, the Population Services International, the International Planned Parenthood Federation and the Japanese Organization for International Cooperation in Family Planning. Private assistance to population activities is expected to move closer to the 2002 level in 2004 and 2005.

D.     EXPENDITURES FOR POPULATION ACTIVITIES BY GEOGRAPHICAL REGION

A total of 158 countries and territories benefited from population assistance in 2003, up from 151 countries in 2002. Sub-Saharan Africa, which includes the majority of the least developed countries, continued to be the largest recipient of assistance, receiving almost half of all assistance going to the five geographical regions (figure III). The next largest recipients 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 2003, as in 2002, 40 per cent of assistance went to global and interregional activities. 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 goes to fund HIV/AIDS activities. In fact, 83 per cent of the increase in donor funding for population activities in the period from 2002 to 2003 was due to AIDS-related funding. Consistent with the call of the ICPD for integration of services, funding for basic reproductive health services increased, with fluctuations, from 18 per cent in 1995 to 25 per cent in 2003, up from 24 per cent in 2002, while explicit funding for family planning services decreased, with fluctuations, from 55 to 13 per cent during the same period, down from 23 per cent in 2002 (figure IV).

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 47 per cent in 2003, up from 43 per cent in 2002. Funding for basic research activities has decreased since 1995, with fluctuations, from 18 per cent to 14 per cent in 2003, up from 10 per cent in 2002.

Funding for family planning services decreased in absolute dollar amounts from $723 million in 1995 to $461 million in 2003, a decrease of 36 per cent. Funding for reproductive health and basic research activities increased 275 per cent and 110 per cent, respectively, between 1995 and 2003; however, it was HIV/AIDS activities that received the largest proportion of assistance, increasing 13-fold in absolute dollar amounts from 1995 to 2003.

Given the increased emphasis on addressing the global AIDS pandemic, including the Millennium Development Goal of combating HIV/AIDS, malaria and other diseases and the creation of the Global Fund to Fight AIDS, Tuberculosis and Malaria and the U.S. President's Emergency Plan for AIDS Relief, estimates for 2004 and projections for 2005 point to a continuation of this trend. In fact, donor countries are expected to spend almost 60 per cent of their population assistance on Sexually Transmitted Diseases/HIV/AIDS activities in 2004; this figure is projected to increase to 66 per cent in 2005.

Figure IV

Expenditures for different categories of population activities as a percentage of total population assistance, 1995-2003

Source:UNFPA Financial Resource Flow for Population Activities for 2002 (New York, 2004); and UNFPA/UNAIDS/NIDI Resource Flow Project database

F.     EXPENDITURE FOR POPULATION ACTIVITIES BY CHANNEL OF DISTRIBUTION

In 2003, 50 per cent of all population assistance went through the non-governmental channel, while 28 per cent went through bilateral programmes and 22 per cent went through multilateral organizations. Although the percentage of population assistance channelled by NGOs has decreased since 2002, the NGO channel continues to predominate throughout all the world regions. Population assistance is expected to continue to be channelled in large part by NGOs in 2004 and 2005.

II.    DOMESTIC EXPENDITURES FOR POPULATION ACTIVITIES

It is estimated that developing countries spent $11 billion for population activities in 2003. The largest amount was mobilized in Asia ($8.1 billion), followed by Latin America and the Caribbean ($1.7 billion), sub-Saharan Africa ($503 million), Western Asia and Northern Africa ($411 million) and Eastern and Southern Europe ($212 million).

Domestic expenditures are estimated to have increased to $12.5 billion in 2004 from $11 billion in 2003 and they are projected to increase again to $12.7 billion in 2005. Increases are expected in every region, except sub-Saharan Africa, which is expected to increase expenditures in 2004, but decrease funding levels slightly in 2005. Asia is expected to continue to mobilize the largest amount of financial resources in both 2004 and 2005. The pattern remains unchanged from 2003 to 2005: 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.

Roughly one fourth of all domestic expenditures for population are spent on STD/HIV/AIDS, with Latin America and sub-Saharan Africa spending about three quarters and just over one half of their funds, respectively, on AIDS. These figures are expected to remain virtually unchanged during 2003-2005. (see table 2)

Table 2

Projection of global domestic expenditures for population activities, by region, 2003-2005

(Thousands of United States dollars)

Source: Hendrik van Dalen and Mieke Reuser, "Assessing size and structure of worldwide funds for population and AIDS activities", The Hague, 2004. a Consumer spending on population activities covers only out-of-pocket expenditures and is based on the average amount per region, as measured by the World Health Organization (WHO) (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.

III.    RESOURCES FOR OTHER POPULATION-RELATED ACTIVITIES

Both donor and developing countries indicate that a significant amount of resource flows goes 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 support include: 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 resources spent on these activities were added to expenditures for the costed population package, the overall level of support to the ICPD Programme of Action would be considerably higher.

IV.    DEVELOPMENTS IN THE MOBILIZATION OF RESOURCES FOR POPULATION ACTIVITIES

Systematic monitoring of the financial resources mobilized for population activities in developing countries points to a number of interesting developments, namely (a) a pronounced shift towards funding for STD/HIV/AIDS at the expense of other population activities; (b) the major funding role of a relatively small number of donors; (c) the mobilization of the majority of global domestic resources by a small number of developing countries; (d) the important role of consumer spending in domestic expenditures; (e) escalating current needs and costs as compared with original 1993 cost estimates; and (f) the challenge of funding for family planning and reproductive health services in the context of the Millennium Development Goals.

Funding for STD/HIV/AIDS as a proportion of total population assistance has increased steadily since 1995, when UNFPA first began to monitor expenditures according to the four population categories of the ICPD Programme of Action, from 9 per cent to 47 per cent in 2003. It is projected to reach well over half of total population assistance by 2005.

It seems that the other three elements of the ICPD costed population package are not getting the attention that they deserve because of the drive to fight AIDS. This is especially evident in the case of funding for family planning, where absolute dollar amounts are lower than they were in 1995. The proportion of total population assistance for family planning services declined from 55 per cent in 1995 to 13 per cent in 2003 and is not expected to increase in 2004 and 2005. If not reversed, the trend towards less funding for family planning will have serious implications for countries' ability to address unmet need for such services and could undermine efforts to prevent unintended pregnancies and reduce maternal and infant mortality.

The shift towards funding for STD/HIV/AIDS is expected to be especially prominent among donor countries. With the U.S. making firm commitments to finance HIV/AIDS projects through the U.S. President's Emergency Plan for AIDS Relief initiative, it is expected that 66 per cent of donor funds will be allocated to STD/HIV/AIDS activities in 2005.

It is interesting to note that the adopted ICPD targets for 2005 were 8 per cent of total population assistance for STD/HIV/AIDS, 62 per cent for family planning services, 29 per cent for basic reproductive health services and 1 per cent for basic research, data and population and development policy analysis. At that time, no one had foreseen the escalation of the AIDS pandemic. In 1994, 14 million people were said to be living with HIV/AIDS; in 2004, according to the latest AIDS epidemic update of UNAIDS (As of December 2004), this number had increased 186 per cent to almost 40 million.

V.    CONCLUSION

A.       PROGRESS IN RESOURCE MOBILIZATION

By 2003, donor funding stood at $4.2 billion and domestic resources were estimated at $11 billion. Although the increase is seen as an encouraging sign indeed, for many less developed countries that 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 Cairo agenda.

The increase in ODA to developing countries following the adoption of the Monterrey Consensus of the International Conference on Financing for Development shows that it is possible to substantially increase resources to meet required targets. A number of countries are already providing 4 per cent of ODA to population assistance, demonstrating that, given the will to do so, this is feasible for all donors.

If donors live up to their stated future commitments, projections for 2005 show that, thanks in large part to the increase in funding for HIV/AIDS of major donors and consumer spending in developing countries, the target of $18.5 billion will be achieved. Indeed, if projections are correct, donors will have contributed $6.4 billion of the targeted $6.1 billion and developing countries will have mobilized $12.7 billion, a figure larger than the target of $12.4 billion. Thus, both donors and developing countries will have surpassed the financial goals of the ICPD for 2005. The real concern is whether these amounts will be sufficient to meet the family planning and reproductive health needs, given that most of the increase would be due to increases in HIV/AIDS funding .

B.     KEY AREA REQUIRING FURTHER ATTENTION
To accelerate the implementation of the Cairo agenda, especially its financial resource targets, and to achieve the Millennium Development Goals, the international community should renew efforts to:

• Strengthen political will and commitment to implementing the Cairo financial targets so as to achieve the Conference goals as an integral part of the implementation of the Millennium Development Goals.
• Continue to mobilize sufficient resources to fully implement the ICPD Programme of Action and ensure that the percentage increase for family planning and reproductive health is in line with agreed percentages.
• Ensure that addressing population and reproductive health issues is seen as an integral part of the achievement of the Millennium Development Goals and that they figure prominently in national development plans and poverty reduction strategies.
• 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.
• 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 remain on track for reaching the 2005 financial targets of the ICPD for donors and developing countries. It is particularly important to reach the ODA target of 0.7 per cent of the GNP and to ensure that appropriate resources are allocated to population and reproductive health in the new funding and programming mechanisms such as sector-wide approaches and poverty reduction strategies. It is also important that adequate resources be allocated to all areas of the costed population package of the ICPD, including family planning and reproductive health services.

To read the entire report, visit: http://www.resourceflows.org/index.php/articles/c87/

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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