HIV/AIDS Human immunodeficiency virus infection and acquired immunodeficiency syndrome (HIV/AIDS) is a spectrum of conditions caused by infection with the human immunodeficiency virus (HIV), a retrovirus. Following initial infection an individual ...

affects economic growth by reducing the availability of human capital. Without proper

prevention Prevention may refer to: Health and medicine * Preventive healthcare, measures to prevent diseases or injuries rather than curing them or treating their symptoms General safety * Crime prevention, the attempt to reduce deter crime and crim ...

nutrition Nutrition is the biochemical and physiological process by which an organism uses food to support its life. It provides organisms with nutrients, which can be metabolized to create energy and chemical structures. Failure to obtain sufficient ...

, health care and medicine that is available in

developing countries A developing country is a sovereign state with a lesser developed industrial base and a lower Human Development Index (HDI) relative to other countries. However, this definition is not universally agreed upon. There is also no clear agreem ...

, large numbers of people are developing AIDS. People living with HIV/AIDS will not only be unable to work, but will also require significant medical care. The forecast is that this will probably cause a collapse of babies and societies in countries with a significant AIDS population. In some heavily infected areas, the epidemic has left behind many

orphan An orphan (from the el, ορφανός, orphanós) is a child whose parents have died. In common usage, only a child who has lost both parents due to death is called an orphan. When referring to animals, only the mother's condition is usuall ...

s, who are cared for by elderly grandparents. The increased mortality in this region will result in a smaller skilled population and

labor force The workforce or labour force is a concept referring to the pool of human beings either in employment or in unemployment. It is generally used to describe those working for a single company or industry, but can also apply to a geographic reg ...

. This smaller

will be predominantly young people, with reduced knowledge and

work experience Work may refer to: * Work (human activity), intentional activity people perform to support themselves, others, or the community ** Manual labour, physical work done by humans ** House work, housework, or homemaking ** Working animal, an animal tr ...

leading to reduced productivity. An increase in workers' time off to look after sick family members or for

sick leave Sick leave (or paid sick days or sick pay) is paid time off from work that workers can use to stay home to address their health needs without losing pay. It differs from paid vacation time or time off work to deal with personal matters, because sic ...

will also lower productivity. Increased mortality will also weaken the mechanisms that generate human capital and investment in people, through loss of

income Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. Income is difficult to define conceptually and the definition may be different across fields. Fo ...

and the death of parents. As the epidemic progresses, the age profile of those infected will increase, though the peak is expected to stay within the working age population. HIV disproportionately infects and impacts on women, so those sectors employing large numbers of women e.g. education, may be disproportionately economically impacted by HIV

Effect on taxable population

By killing off mainly young adults, AIDS seriously weakens the

tax A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or n ...

able population, reducing the resources available for

public expenditure Public expenditure is spending made by the government of a country on collective needs and wants, such as pension, provisions, security, infrastructure, etc. Until the 19th century, public expenditure was limited as laissez faire philosophies ...

s such as education and health services not related to AIDS resulting in increasing pressure for the state's finances and slower growth of the economy. This results in a slower growth of the tax base, an effect that will be reinforced if there are growing expenditures on treating the sick, training (to replace sick workers), sick pay and caring for AIDS orphans. This is especially true if the sharp increase in adult mortality shifts the responsibility and blame from the family to the government in caring for these orphans. On the level of the household, AIDS results in both the loss of income and increased spending on healthcare by the household. The income effects of this led to spending reduction as well as a substitution effect away from education and towards healthcare and funeral spending. A study in Côte d'Ivoire showed that households with an HIV/AIDS patient spent twice as much on medical expenses as other households. With economic stimulus from the government, however, HIV/AIDS can be fought through the economy. With some money, HIV/AIDS patients will have to worry less about getting enough food and shelter and more about fighting their disease. However, if economic conditions aren't good, a person with HIV/AIDS may decide to become a sex trade worker to earn more money. As a result, more people become infected with HIV/AIDS.

Relationship to GDP

UNAIDS, WHO and the

United Nations Development Programme The United Nations Development Programme (UNDP)french: Programme des Nations unies pour le développement, PNUD is a United Nations agency tasked with helping countries eliminate poverty and achieve sustainable economic growth and human dev ...

have documented a correlation between the decreasing life expectancies and the lowering of

gross national product The gross national income (GNI), previously known as gross national product (GNP), is the total domestic and foreign output claimed by residents of a country, consisting of gross domestic product (GDP), plus factor incomes earned by foreign ...

in many African countries with prevalence rates of 10% or more. Indeed, since 1992 predictions that AIDS would slow economic growth in these countries have been published. The degree of impact depended on assumptions about the extent to which illness would be funded by savings and who would be infected. Conclusions reached from models of the growth trajectories of 30 sub-Saharan economies over the period 1990–2025 were that the economic growth rates of these countries would be between 0.56 and 1.47% lower. The impact on

gross domestic product Gross domestic product (GDP) is a monetary measure of the market value of all the final goods and services produced and sold (not resold) in a specific time period by countries. Due to its complex and subjective nature this measure is oft ...

(GDP) per capita was less conclusive. However, in 2000, the rate of growth of Africa's per capita GDP was in fact reduced by 0.7% per year from 1990 to 1997 with a further 0.3% per year lower in countries also affected by

malaria Malaria is a mosquito-borne infectious disease that affects humans and other animals. Malaria causes symptoms that typically include fever, tiredness, vomiting, and headaches. In severe cases, it can cause jaundice, seizures, coma, or death. S ...

. The forecast now is that the growth of GDP for these countries will undergo a further reduction of between 0.5 and 2.6% per annum. However, these estimates may be an underestimate, as they do not look at the effects on output

per capita ''Per capita'' is a Latin phrase literally meaning "by heads" or "for each head", and idiomatically used to mean "per person". The term is used in a wide variety of social sciences and statistical research contexts, including government statistic ...

Response in sub-Saharan Africa

Many governments in sub-Saharan Africa denied that there was a problem for years, and are only now starting to work towards solutions. Underfunding is a problem in all areas of HIV prevention when compared to even conservative estimates of the problems. Recent research by the

Overseas Development Institute ODI (formerly the 'Overseas Development Institute') is a global affairs think tank, founded in 1960. Its mission is "to inspire people to act on injustice and inequality through collaborative research and ideas that matter for people and the ...

(ODI) has suggested that the private sector has begun to recognize the impact of HIV/AIDS on the bottom line, both directly and indirectly. It is estimated that a company can generate an average return of US$3 for every US$1 invested in employee health due to a reduced absenteeism, better productivity and reduction in employee turnover. Indirectly there are also important implications on the supply chain. Many multi-national corporations (MNCs) have therefore gotten involved in HIV/AIDS initiatives of three main types: a community-based partnerships, supply chain support, and sector-based initiatives. The launching of the world's first official HIV/AIDS Toolkit in

Zimbabwe Zimbabwe (), officially the Republic of Zimbabwe, is a landlocked country located in Southeast Africa, between the Zambezi and Limpopo Rivers, bordered by South Africa to the south, Botswana to the south-west, Zambia to the north, and ...

on October 3, 2006, is a product of collaborative work between the International Federation of Red Cross and Red Crescent Societies,

World Health Organization The World Health Organization (WHO) is a specialized agency of the United Nations responsible for international public health. The WHO Constitution states its main objective as "the attainment by all peoples of the highest possible level of ...

and the

Southern Africa Southern Africa is the southernmost subregion of the African continent, south of the Congo and Tanzania. The physical location is the large part of Africa to the south of the extensive Congo River basin. Southern Africa is home to a number o ...

HIV/AIDS Information Dissemination Service. It is for the strengthening of people living with HIV/AIDS and nurses by minimal external support. The package, which is in form of eight modules focusing on basic facts about HIV and AIDS, was pre-tested in Zimbabwe in March 2006 to determine its adaptability. It disposes, among other things, categorized guidelines on clinical management, education and counseling of people with AIDS at community level.

Copenhagen Consensus

The

Copenhagen Consensus Copenhagen Consensus is a project that seeks to establish priorities for advancing global welfare using methodologies based on the theory of welfare economics, using cost–benefit analysis. It was conceived and organized around 2004 by Bjørn Lo ...

is a project that seeks to establish priorities for advancing global welfare using methodologies based on the theory of

welfare economics Welfare economics is a branch of economics that uses microeconomic techniques to evaluate well-being (welfare) at the aggregate (economy-wide) level. Attempting to apply the principles of welfare economics gives rise to the field of public ec ...

. The participants are all economists, with the focus of the project a rational prioritization based on economic analysis. The project is based on the contention that, in spite of the billions of dollars spent on global challenges by the United Nations, the governments of wealthy nations, foundations, charities, and non-governmental organizations, the money spent on problems such as malnutrition and climate change is not sufficient to meet many internationally agreed targets. The highest priority was assigned to implementing new measures to prevent the spread of HIV and AIDS. The economists estimated that an investment of $27 billion could avert nearly 30 million new infections by 2010.

References

External links

An early report of the consequences of AIDS

The impact of AIDS in the United States
( PDF) {{DEFAULTSORT:Economic Impact Of Aids Consequences of events Economic problems Health economics HIV/AIDS