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close this bookAIDS, Poverty Reduction and Debt Relief - A Toolkit for Mainstreaming HIV/AIDS Programmes into Development Instruments (UNAIDS, 2001, 48 p.)
close this folder4. Uses of Funds Released Through HIPC - Earmarking, Channeling, and Accountability
View the document(introduction...)
View the document4.1. Earmarking
View the document4.2. Channeling funds to local initiatives
View the document4.3. Accountability

4.2. Channeling funds to local initiatives

In a number of HIPC countries, there is also strong interest in seeing that a major portion of the debt relief savings assigned to AIDS - and indeed, the entire budget to support the national AIDS plan - is channelled rapidly and efficiently to local initiatives. These include local government units, local NGOs, and community organizations that are trying to carry out prevention, care and support activities.

Under these circumstances, the HIPC process can be an opportunity to develop and put in place effective mechanisms for moving financial and technical resources to local groups implementing AIDS control activities. This can be done through a variety of means that might be specified and monitored as part of national compliance with the conditions for debt relief - for example, by setting up a special “Poverty Action Fund” that receives the debt relief savings and uses them exclusively for local initiatives. These Poverty Action Funds are partly an accounting mechanism, but when combined with resource transfer features, such as matching grants for local government bodies and NGOs, they can be a way to get the resources out to the frontlines. In Uganda, the Poverty Action Fund (PAF) includes the highest-priority expenditures from the perspective of poverty eradication. The eligibility of a particular sector or programme for funding from the Uganda PAF is based on high economic and/or social returns to the expenditure, by pro-poor targeting and by the priority accorded such programmes by the poor themselves, as demonstrated by prior participatory work. In collaboration with the UNAIDS Secretariat and the World Bank, managers of the Malawi Social Action Fund (MASAF) are examining options to channel funds to communities for a more rapid implementation of activities to mitigate the impact of AIDS. Direct funding of community-based activities is a key feature of the Africa Multicountry AIDS Programme that was launched by the World Bank in 2000 (World Bank, 2000b).

Similarly, if all or part of the debt relief savings was deposited in a national social development fund or micro-projects fund with an explicit HIV/AIDS component, this could be another way to ensure that the savings reach local public and/or private institutions (e.g. youth clubs, women’s groups, NGOs assisting commercial sex workers, village AIDS committees).

The establishment of these kinds of arrangements for transferring debt relief savings to local groups could be explicitly laid out in the HIPC documents as completion point actions.