Peter Sands was elected the executive director of the financing organisation even though he did not have American support, perhaps indicating the country’s waning importance.
Geneva: The election of Peter Sands, former CEO of Standard Chartered Bank, as the executive director of the Global Fund was interesting not only because of the drama that preceded it, but also in a way that begins to signify a possible reduction in the American influence in global health politics, experts observe.
Geneva-based organisation The Global Fund to Fight AIDS, Malaria and TB is one of the largest and most influential financing facilities in global health, disbursing nearly $4 billion every year to fight these diseases. Since 2002, it has claimed to have saved 22 million lives and had disbursed $32.6 billion at the end of 2016. Overall, there has been a 33% reduction in the number of people dying from HIV, TB and malaria since 2002 in countries where the Global Fund invests. The Global Fund invests in 24 very high-risk countries and 20 high-risk countries, among others.
The Fund conducted elections to appoint a new executive director earlier this month. Much drama unfolded ahead and during these elections that first saw Sands withdrawing from the race and subsequently re-entering it to eventually win it, despite the fact that the US did not vote for him. The US contributes more than 30% of the Fund’s budget.
Though Sands was seen as a front runner in the race, he was also seen as a wild card and an unlikely candidate given that the former banker is not from the global health or the wider international development sphere, experts say. But the global health sector is overrun by doctors and epidemiologists who may not always have the best business acumen. The election of Sands has been welcomed widely and in Geneva, a city that houses nearly 100 global health organisations.
Given the high stakes, the elections at the Fund were observed closely, especially given that one earlier attempt in February this year was already abandoned. And the latest round was far from transparent.
Apart from Sands, there were three other finalists including Frannie Leautier from the African Development Bank and the World Bank, Anil Soni formerly at the Global Fund and Clinton Health Access Initiative, now head of global infectious diseases at pharmaceutical firm Mylan, and Simon Bland, a career development sector bureaucrat from the UK’s Department for International Development and current chief of UNAIDS in New York. The finalists were shortlisted by the board of the Global Fund.
The voting process was reportedly conducted according to a process established by the board at its 36th meeting in November 2016. On election day, November 14, Sands was elected as the next executive director for a period of four years till 2022.
In his interviews following the elections, Sands has said that personal reasons first convinced him to withdraw from the race, only to reconsider later. An email sent by The Wire to Sands did not elicit response as this story went to print.
Officials in Geneva have said that like other candidates in the fray, Sands lobbied the US to support his candidature and was unsuccessful. Seth Faison, head of communications at the Fund told The Wire that the US allegedly did not vote for him. “Each candidate for Executive Director spoke to the Board of the Global Fund, and obviously sought support from each Board member, including the US,” Faison said in an email.
No response was received to an email sent by The Wire to the US’s member on the board, Deborah Birx. (Of the 20 board members with voting rights, eight represent donor government constituencies, according to the Fund.)
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Sands has called his decisions to first withdraw and the re-enter the race for personal reasons “inelegant”, the story did get more curious. (Some sources said that it was Melinda Gates who in fact convinced Sands to consider the race again. The Wire was unable to confirm this. The Gates Foundation is one of the biggest contributors to the Fund.)
Whatever the outcome of the elections, transparency in governance is important, experts believe – particularly when compared to the relatively open and elaborate process of electing the director-general of World Health Organization a few months earlier, a process that had lasted for more than a year.
Women in Global Health (WGH), an organisation that works to promote gender equality in global health, had said, “in contrast to the World Health Organization’s recent attempts at developing a more transparent and open process for the selection of their director general, the Global Fund process has been shrouded in secrecy…” The organisation also pointed out that only one woman was shortlisted for the position ahead of the elections.
While there have been calls to improve transparency in the elections, experts also point out that although WHO elections were more transparent, countries still voted by a secret vote. The eyebrow-raising events around the elections at the Global Fund definitely merit more transparency.
Faison, the spokesperson of the Fund, told The Wire, “One of the Global Fund’s core principles is operating with a high degree of transparency. On selected matters, the Board makes decisions in closed session.”
A waning American influence in global health?
But some experts are viewing these elections beyond the Global Fund alone. Suerie Moon, director of research at the Global Health Centre, Graduate Institute of International and Development Studies, Geneva and adjunct lecturer on global health at the Harvard T.H. Chan School of Public Health, told The Wire that the election of Sands can be interpreted, in some sense, as a reduction in the influence of the US in global health. “The US is one of the most powerful and influential forces in global health – the numbers do not lie. But the fact that Sands got elected without the US vote shows a shift in the dynamics.”
Other countries are willing to take a different route without having the US on board for some of the decisions. There seems to be recognition of the inevitability around the US budget cuts for health. As a result, it seems that regardless of US support on key issues, other countries want to come together to set priorities, Moon said.
“The clearest example of this is the role of the Netherlands in stepping in to fight the Trump-imposed global gag rule. There seems to be an emergence of these ‘middle powers’ as it were,” she said.
(Earlier in the year, the Netherlands announced plans to set up an international safe abortion fund to make good a $600m funding gap as a result of the Donald Trump administration’s decision to reinstate the ‘global gag rule’. In January this year, Trump signed an executive order banning US federal funding for international NGOs from providing abortion services or abortions advocacy.)
The elections at the Fund seem to have echoes of this shift away from a US-driven global health agenda. The influence that comes with financial commitment will likely be impacted with an overall reduction in budgetary support from the US, Moon added.
Other indications of waning US influence include the progress other countries have made on the Trans-Pacific Partnership deal even without the US. Some also point to the desperate, isolated and protectionist stance of the US in attacking the Appellate Body at the World Trade Organization.
Experts also said that an earlier abandoned round of elections at the Global Fund was fraught with reservations about shortlisted candidates. One example, among others, was the candidacy of Muhammad Ali Pate, former minister of health of Nigeria whose tweets against Trump was questioned. “What has changed between February and now? The US was not happy with the candidates back then. This time round, the board went ahead and elected a candidate unacceptable to the US,” one expert noted.
The reasons for the US’s opposition to Sands have not been made clear. According to one speculation, it was pointed out that Sands had presided over as CEO at the bank when Standard Chartered was fined by the state of New York to pay $350 million to settle claims that the bank had laundered money for Iran. But Sands was at the helm of the bank for nearly a decade, from 2006 to 2015, during which he is credited with successfully steering the institution in the midst of the financial crises.
Whatever it is, Sands must find a way to work with the US, experts say, for there is no denying the influence of the US, particularly at the Fund where it accounts for nearly a third of the contribution.
Thiru Balasubramaniam, Geneva representative, Knowledge Ecology International, said, “The most important issues for the Global Fund’s incoming executive director, Peter Sands, other than being a capable manager, are to be to be able to work with the US executive agencies and the US Congress, as well as other donor countries to secure adequate funding.” Sands must also facilitate market shaping for generic drugs, so that whatever funds are available, the Global Fund will save more lives, he added.
Sands’s immediate challenges at the Fund
Sands’s credentials in international banking are widely recognised. In addition, his interest in global health matters since leaving the bank has been impressive. He has been chairman of the World Bank’s International Working Group on Financing Pandemic Preparedness, and has also been a research fellow at the Harvard Global Health Institute and the Mossavar Rahmani Center for Business and Government at Harvard’s Kennedy School, where he has worked on research projects in global health and financial regulation.
In addition, he has also served as chairman of the US National Academy of Medicine’s Commission on a Global Health Risk Framework for the Future, which published the influential report on pandemics titled ‘The Neglected Dimension of Global Security: a Framework to Counter Infectious Disease Outbreaks’. Sands is also serving on the US National Academy of Science’s Forum on Microbial Threats and Committee on Ensuring Access to Affordable Drugs, the Global Fund said in its statement.
A former colleague of Sands’s who worked with him at Standard Chartered told the The Wire, on the condition of anonymity, that he recalled him as someone who read and explored subjects beyond banking and finance. “Peter is a great ‘thinker’, not like the normal banker. He always had great interest in contributing to the communities while at the bank and led some great initiatives on the Millennium Development Goals.”
In a glowing welcome to his appointment, The Lancet has cited his experience as “a thoughtful advocate for greater attention to the economic costs of infectious diseases”. As the agenda on global health security gets increasing traction from the richest countries, Sands’s emphasis on making an investment case to better prepare for pandemics will no doubt be welcome. Using his vast experience in international finance, he is sure to bring cutting-edge thinking into global health, among others pushing for better macroeconomic forecasting to assess infectious disease threats.
Some are, however, less sure about Sands. A senior global health expert in Geneva said, “He might have been the front runner, but he was a non-traditional candidate without substantial experience in either health or international development. He has worked on outbreaks, which is different from the kind of work that Global Fund does.” If people are sceptical, then rightfully so, the source added.
His more immediate challenges will be to deploy aid more effectively at a time when donor funding to global health is subject to shrinking budgets and greater pressures on official development assistance. Ninety-five percent of all Global Fund support comes from donor governments. (The fund explains that according to its policy, public sector monies are not “earmarked” for specific countries or programmes, and that the allocation of funding is the responsibility of the board of the Global Fund.)
In an interview with the Financial Times, Sands said, “A key part of the case to donors is the assurance that the resources they provide will be used to maximum impact. We need to get the economic cost of diseases better embedded into policy making. There is a role for innovative finance but … much is about making donor finance more effective rather than producing more money.”
This is precisely in line with what donors want. UK’s DFID that has ranked the Global Fund as an effective development aid organisation, had said in 2016, “Over the three years of the replenishment we expect to see at least 15% of Global Fund investments in developing countries only being released in proportion to concrete, proven results.”
Last year, the Global Fund Fifth Replenishment Conference secured pledges of financing for the 2017-2019 period. Of the total $12.9 billion raised at the conference, US$12 billion were pledged by donor governments.
In a DFID performance agreement with the Fund, it noted that “Two of the greatest sources of inefficiency in health are inefficient procurement and weak supply chains.” These will some of the more important challenges for Sands to address.
The fund has said that investments in procurement have resulted in saving $650 million. An expanded pooled procurement mechanism now covers 60 percent of procurement supported by the Global Fund, it said. Better procurement and addressing weak supply chains will enable the fund to save more lives.
Overall, there seems to be optimism at this new change of guard at the Fund. Another source familiar with Sands told The Wire, on the condition of anonymity, “He certainly has an uphill learning task and he should be cognisant of it. And he is. He comes across as humble and is a good listener.”
With or without American support, it is expected that he will make health financing more effective.
Priti Patnaik is a Geneva-based journalist and researcher. She has previously worked as a consultant in the UN system including at the WHO. She tweets at @pretpat and can be reached at [email protected]