UN World Fund: No New MOney$ Including AIDS

Visitors look at a sand sculpture created by sand artist Sudarshan Pattnaik on the eve of World AIDS Day at Puri, Orissa, India Photo: EPA

By Damien McElroy, Foreign Affairs Correspondent    telegraph.co.uk

UN Aids fund frozen

A United Nations fund to fight Aids and other infectious diseases has been forced to freeze its spending for three years because of the economic downturn and widespread corruption claims.

The Global Fund to Fight Aids, Tuberculosis and Malaria said that it could no longer afford to pay for new programmes to meet an international drive to prevent new infections.

The UN-backed fund has been beset by allegations of mismanagement and accusations that it has failed to detect corruption among local officials. An internal investigation found grave misuse of its resources had resulted in $73 million worth of fraud.

That prompted several donor states, including Germany, Sweden and Denmark, as well as the European Union, to suspend their contributions and demand reform of its practices. Meanwhile, other states such as Italy have failed to make payments they had pledged because of their own financial problems.

Now the fund has been forced to announce a freeze in its spending until 2014, meaning no new projects to tackle diseases in the most vulnerable parts of the world will receive funding before then.

Publicly, the fund blamed the economic downturn, rather than corruption, for the freeze. It said it faced a double blow of slower donations and lower interest rates reducing its income from its investments.