VZCZCXYZ0004
RR RUEHWEB

DE RUEHJA #2981/01 3070508
ZNR UUUUU ZZH
R 030508Z NOV 06
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASHDC 1770
RUEAUSA/DEPT OF HHS WASHINGTON DC
RUEHBK/AMEMBASSY BANGKOK 7430

UNCLAS JAKARTA 012981 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR S/OGAC/JKOLKER/NALRUTZ 
DEPT ALSO PASS TO USAID/OHA/YAMASHITA/PICK/MMILLER/JWRIGHT 
DEPT ALSO PASS TO HHS/WSTEIGER/MWYNNE 
BANGKOK FOR USAID/RDM/A 
 
E.O. 12958: N/A 
TAGS: SOCI KHIV TBIO EAID ID
SUBJECT: POST RECOMMENDATIONS ON GLOBAL FUND PHASE 2 
RENEWALS: INDONESIA HIV/AIDS COMPREHENSIVE CARE GRANT 
NUMBER: IND-405-GO4-H 
 
REF. SECSTATE 138078 
 
¶1. (SBU) Summary. Approve Phase 2 funding, at requested 
level of funding, $33,905,951, with conditions.  End 
Summary 
 
Indonesia's Global Fund HIV/AIDS Program Summary 
--------------------------------------------- ---- 
¶2. (U) Indonesia received two Global Fund AIDS grants: 
Round 1 and Round 4, for a total of $72.9 million.  To 
date, absorption capacity by the Principal Recipient (PR), 
Ministry of Health (MOH), is low so disbursements have been 
low.  For Round 1, only 44 percent of the total funds have 
been disbursed and for Round 4, only 25 percent of the 
total funds have been disbursed. 
 
¶3. (U) The PR uses Global Fund monies to scale up 
counseling and testing (CT) services; provide 
antiretroviral therapy (ART); support Injecting Drug Use 
(IDU) programs, including methadone replacement therapy; 
support programs addressing men who have sex with men (MSM) 
and IDU in prisons; and increase HIV awareness and reduce 
stigma associated with HIV/AIDS. 
 
¶4. (U) Indonesia was categorized as conditional go in Round 
1, due to poor program management and performance. 
Additionally, Indonesia also had poor performance in 
quarters 1 to 3, Round 4.  By the end of quarter 5, Round 
4, nearly all of the Q5 prevention targets had been 
achieved.  However, performance levels for treatment 
interventions were not met.  By the end of Q5 the PR met, 
only 61 percent (23,677 people) of the CT target, and 50 
percent (3,438 people) of the ART treatment target. 
However, preliminary results for the first nine weeks of Q6 
show improvement in most treatment indicators. 
 
Country Coordinating Mechanism (CCM) 
---------------------------------------- 
¶5. (SBU) The CCM chaired by the Director General of 
Infectious Diseases Control and Environmental Health, MOH 
and is currently comprised of 42 members.  Usually, less 
than 50 percent of the CCM members attend the meetings and 
the chairperson recuses himself due to conflict of 
interest. The Vice Chairperson does not attend the meetings 
regularly. In the past, the CCM has been weak and non 
functioning.  This has been a major concern to USG and 
other donors who have made concerted efforts to strengthen 
the CCM.  Due to recent changes in CCM representation, 
function and responsibilities, a few CCM members are 
becoming more active and developing strong leadership among 
key stakeholders. The CCM is currently reviewing its 
structure and may revise its membership and elect a new 
chair person.  The CCM has made an additional 
recommendation that an HIV/AIDS sub CCM, chaired by the 
Secretary of the National AIDS Commission (KPA), be 
 
SIPDIS 
established. 
 
¶6. (SBU) We feel that strengthening of the CCM is essential 
and must be completed immediately for the successful 
implementation of phase 2 funding.  Additionally, there 
needs to be better governance by the CCM leadership and 
better communication flow between the PR, CCM Secretariat 
and CCM members.  We feel the establishment of an HIV/AIDS 
sub CCM will strengthen the HIV/AIDS leadership and provide 
better communication with all members and the PR. 
 
USG Technical Assistance Efforts 
-------------------------------- 
¶7. (SBU) USG staff and 4 US based contractors, through the 
Capacity Project, provided extensive technical assistance 
to the PR and Global Fund program in the areas of program 
management, human resources, financial management and 
monitoring and evaluation. The team made recommendations to 
improve both the program management and performance in the 
above mentioned areas.  This assistance has been well 
received and PR has started implementing the TA team's 
recommendations.  Overall, USG was favorably impressed with 
the acceptance and implementation of the recommendations 
and we have seen positive effects from the TA efforts. 
However, there were some minor exceptions to the 
implementation and some recommendations were not 
implemented in a fair and transparent process.  Through all 
of these efforts, improvements in program performance 
results are expected to be achieved by the end of Q7 
 
 
(December 2006). 
 
Phase 2 HIV/AIDS Application 
----------------------------- 
¶8. (U) The phase 2 application was submitted on September 
30, 2006 at the original approved funding level of 
$33,905,951.  The PR requested that unspent money from 
phase 1 be carried over into phase 2.  CCM members were 
very active in the process and approval of the application, 
which helped to strengthen the program and ensure that it 
met the needs of Indonesia and followed the National 
HIV/AIDS Strategy. 
 
¶9. (U) The application prioritizes expanding coverage of 
counseling and testing, ARV treatment (first and second 
level drug therapies), and expanding programs focusing on 
IDU.  The application also proposes a second PR for funding 
to non-governmental organizations (NGO) and local partners. 
 
¶10. (SBU) The current PR has not been able to effectively 
fund or manage NGOs and other local partners, so the CCM 
recommended that a second PR be selected.  A sub committee 
of the CCM has developed selection criteria and identified 
a potential second PR, however we are not convinced the 
identified organization is able to effectively manage the 
NGO program and we have concerns that the selection process 
was not fair and transparent; only one organization was 
identified and asked to submit a proposal.  The CCM should 
widely distribute a solicitation of interested 
organizations to identify potential organizations and 
develop proposal review criteria to select the 
organization.  An option for the Board to consider is to 
recommend that a sub recipient for NGOs be identified 
rather than a second PR. 
 
¶11. (SBU) Due to low absorptive capacity by the PR and 
problems with program management, the Board should not 
approve the request to carry over funds from Round 4, Phase 
¶1. 
 
Donor Coordination 
------------------- 
¶12. USG has had close consultations with other bilateral 
donors, including Government of Australia, and have agreed 
that we need to send strong and consistent messages to the 
GOI and PR regarding management of GFATM funds and program 
implementation.  We agreed that the PR needs to establish, 
and consistently apply, clear and transparent processes. 
Additionally, we are discussing sending a joint letter to 
the MOH stating our concerns, outlined in this cable, and 
requesting that they fully implement all recommendations 
made by the USG TA team as well as develop a system to 
regularly and routinely report on GFATM implementation to 
all CCM members. 
 
Recommendations 
--------------- 
¶13. (SBU) After careful consideration and consultation with 
Mission leadership and other bilateral donors, USG strongly 
believes Phase 2 funding should be approved with 
conditions.  However, the Board should not approve the 
request to carry over funds from Round 4, Phase 1. 
 
¶14. (SBU) The Board may want to consider requiring an 
interim management PR to manage the GFATM program, while 
the current PR establishes fair and transparent processes 
for all recruitment of staff, requests for proposals and 
proposal review processes; and program management, 
reporting and financial management systems. 
 
¶15. (SBU) The Board should consider approving a second PR 
or a sub recipient to manage the NGO funding, however, the 
CCM should develop and document a fair and transparent 
system for identifying and selecting the organization. 
HEFFERN