VZCZCXRO5175
OO RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGO #0419/01 1240438
ZNY CCCCC ZZH
O 040438Z MAY 07
FM AMEMBASSY RANGOON
TO RUEHC/SECSTATE WASHDC IMMEDIATE 6012
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 1413
RUEHBY/AMEMBASSY CANBERRA 0283
RUEHKA/AMEMBASSY DHAKA 4533
RUEHLO/AMEMBASSY LONDON 1936
RUEHNE/AMEMBASSY NEW DELHI 3838
RUEHUL/AMEMBASSY SEOUL 7378
RUEHTC/AMEMBASSY THE HAGUE 0616
RUEHKO/AMEMBASSY TOKYO 4930
RUEHCI/AMCONSUL CALCUTTA 1109
RUEHCN/AMCONSUL CHENGDU 1126
RUDKIA/AMCONSUL CHIANG MAI TH 0969
RUEATRS/DEPT OF TREASURY WASHDC
RUEHGV/USMISSION GENEVA 3120
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHDC
RUCNDT/USMISSION USUN NEW YORK 0761
RUEHBS/USEU BRUSSELS C O N F I D E N T I A L SECTION 01 OF 03 RANGOON 000419 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EAP/MLS; 
PACOM FOR FPA 
 
E.O. 12958: DECL: 09/21/2016 
TAGS:            
SUBJECT: CAUTIOUS OPTIMISM FOR 3D FUND ROLLOUT 
 
REF: RANGOON 099 
 
RANGOON 00000419  001.2 OF 003 
 
 
Classified By: Econoff TLManlowe for Reason 1.4 (b,d) 
 
 1. (SBU) Summary: As manager of the new Three Diseases Fund 
(3DF), on May 1, UNOPS signed the first contracts for 
projects in Burma to address malaria, TB and HIV/AIDS.  UNOPS 
will obligate only funds already received from donors, 
approximately fifty percent of projects approved by the 3DF 
Board.  The European Commission (EC) expects to contribute 
funds by September 1, when 3DF will fund another round of 
projects.  Over half of the approximately $25 million 
approved for the first year will fund HIV/AIDS work.  3DF 
sponsors seek additional funding, understanding that 
international attention will focus on their ability to 
deliver effective services and to maintain transparency and 
accountability.  They acknowledge the potential pitfalls, but 
remain optimistic they will succeed.  End summary. 
 
 2. (SBU) UNOPS has opened its Rangoon office and hired a CEO, 
Mikko Lainejoki, to manage the Three Diseases Fund (3DF) 
focused on the diseases of malaria, TB and HIV/AIDS in Burma. 
 The office is recruiting six expatriate and twenty foreign 
national positions.  At a 3DF Board meeting on March 15-16, 
four donor representatives (from UK, Sweden, and two from EC) 
and three international health experts approved specific 
proposals after receiving the results of a proposal review by 
a larger panel of international experts.  After the meeting, 
UNOPS notified the organizations that were chosen as 
Implementing Partners (IPs) for the first round of projects. 
 These IPs, drawn from UN agencies and INGOs, will work with 
local NGOs, professional associations, the private sector, 
government-sponsored NGOs, and local civilian administrations 
to carry out programs.  3DF's call for expressions of 
interest attracted proposals that totaled "hundreds of 
millions of dollars," according to one donor. 
 
 3. (SBU) The overall total pledged by 3DF donors so far is 
approximately $100 million over 3-5 years.  The 3DF Board 
approved forty projects for the first year, which totaled 
approximately $15 million for HIV/AIDS, $5 million each for 
malaria and TB, and $2 million for "integrated" projects that 
will address more than one disease.  However the EC has not 
yet made its share of this year's funds available, so UNOPS 
only contracted for the amount already collected, 
approximately $10 million.  According to UN and INGO 
contacts, almost all the approved proposals extend existing 
projects.  The initiation of the 3DF was timed to coordinate 
with the ending of the UN's Fund for HIV/AIDS in Myanmar 
(FHAM) funds.  Brian Williams, Country Coordinator for 
UNAIDS, said that UNOPS negotiated with each recipient to 
determine which projects from the approved list should begin 
immediately with funding in hand, and which could wait until 
September to begin when UNOPS expected to have the EC's 
contribution in hand.  Contracts will cover one year and some 
will include a provision for extension.  The 3DF plans to 
announce the next round of proposal solicitations in 
September, with a stronger focus on the inclusion of civil 
society groups and local NGOs. 
 
Potential Hurdles 
--------------------- 
 4. (C)  Rurik Marsden, Director of DFID at the British 
Embassy, outlined three potential hurdles facing 
implementation of 3DF goals: funding shortfalls, external 
politicization, and internal politicization.  The first 
concern is money.  Funding available in 2007 for HIV/AIDS is 
much less than what was available in 2006 from the Fund for 
HIV/AIDS in Myanmar (FHAM) and bridge funding from the Global 
Fund.  HIV/AIDS programs face a $30 million funding gap in 
 
RANGOON 00000419  002.2 OF 003 
 
 
2008, which 3DF cannot entirely fill.  That gap will grow, 
Marsden said, as the number of patients needing 
anti-retroviral therapy (ART) grows.  A WHO mission that 
visited Rangoon in January estimated the funding gap for TB 
will grow to $15 million by early 2009.  WHO specialist 
Leonard Ortega said malaria will require similar support. 
Current donors (the EC, UK, Norway, Sweden, Netherlands and 
Australia) hope to recruit new donors from among European 
nations.  Japan and the U.S. are the only countries funding 
humanitarian programs in Burma that do not already contribute 
to the 3DF, Marsden said. He dismissed Korean aid to Burma as 
strictly business-focused, but said the donors will meet with 
the new Korean Ambassador to solicit his support. 
 
 5. (C) Marsden cited growing opposition, which he said came 
from Burmese exiles in Thailand and England who say the money 
should not be used to support government programs.  Marsden 
said the donors acknowledge the high level of international 
scrutiny focused on the 3DF, and recognize that any failure 
would generate a broader reaction that could threaten the 
program's continued existence.  For that reason, donors 
engaged the Ministries of Health, Home Affairs, Education, 
and National Planning in the preliminary stages of planning, 
and made sure to receive the blessing of the Cabinet and 
Senior General Than Shwe on proposed operating procedures. 
Observers will be especially concerned about transparency, 
access, and accountability issues, he noted, and said that 
donors received official agreement on procedures to address 
these concerns, partially contained in a Memorandum of 
Understanding (MOU). 
 
 6. (SBU) The MOU signed between UNOPS and the Ministry of 
Health (MoH) in October 2006 identifies three goals of the 
3DF: to reduce transmission of HIV/AIDS and enhance treatment 
and care for HIV/AIDS-affected persons; to reduce morbidity, 
mortality and transmission of TB, and prevent further 
emergence of drug resistant forms of TB; and to reduce 
malaria morbidity by at least 50% by 2010.  The MOU covers a 
five-year period and assigns the MoH responsibility for 
timely clearance of equipment imports and visa issuances, as 
well as assistance with authorizations for travel to project 
sites.  UNOPS will manage the program through "transparent 
mechanisms and accountability," and for procurement, 
allocation of grants, audits, and monitoring.  UNOPS must 
prepare an annual report to the donor consortium. 
 
 7. (C) Internal politicization or political interference, 
according to Marsden, could also hinder progress.  Despite 
high-level political support, Marsden feared that local 
leaders, including regional commanders and members of the 
regime's mass member organization, the Union Solidarity and 
Development Association (USDA), may create obstacles or 
interfere with 3DF projects.  Donors and the Board have 
already decided on procedures to handle such cases, Marsden 
said, which includes first trying to resolve problems with 
local authorities at the lowest level, and, if resolution 
isn't possible, halting the program in that area.  The goal 
will be to keep a localized difficulty from contaminating the 
whole program, he said.  Despite these concerns, Marsden 
expressed optimism that the program would operate smoothly. 
Brian Williams at UNAIDS said that, aside from funding 
problems, he also did not anticipate any difficulty with 
actual 3DF implementation. 
 
 8. (SBU) Comment: the Ministry of Health may have the 
responsibility to ensure that projects around the country can 
be implemented, but in the end military commanders down to 
the local level have the final say.  Successful 
implementation of 3DF projects will largely depend on the 
relationships providers have, or develop, with local 
 
RANGOON 00000419  003.2 OF 003 
 
 
authorities who call the shots.  Many UN agencies and INGOs 
have well-established cooperative relationships with local 
authorities, who allow INGOs to address the healthcare needs 
of local residents that the Burmese government does not. 
More aggressive attempts by the USDA to insert themselves 
into the process will bear close attention.  Recent 
high-profile reports that highlight the regime's restrictions 
on INGOs' humanitarian assistance programs in Burma will 
increase pressure on the 3DF to demonstrate quickly full 
transparency, accountability, and performance.  How well the 
3DF manages to navigate around the potential obstacles will 
be watched closely by international donors and humanitarian 
providers.  The needs of the people are real, so 3DF success 
could encourage more assistance, while failure would be 
devastating.  End comment. 
VILLAROSA