Economic impact of Aids huge
2003-09-24 15:01
Special Report
The South African government has announced a joint venture to reduce the cost of anti-retroviral drugs with a Swiss company.
Nairobi - Aids could slash African economic growth by up to half, far more than previously suggested by researchers, the World Bank said Wednesday at an international conference.
Citing a new study, the chief economist of the World Bank's human development network, Shanta Devarajan, said previous economic research has failed to take into account the long-term impact of such factors as reduced spending on education caused by the disease.
"This could be a problem of huge proportions," Devarajan, one of the report's authors, told reporters at the International Conference on Aids and Sexually Transmitted Infections, taking place this week in the Kenyan capital Nairobi.
Previous studies have suggested that Aids would reduce GDP growth in the worst-hit countries by one or two percentage points annually.
But using the example of South Africa as a case study, the authors said Aids could instead cause "economic collapse" in coming generations, slashing family incomes by up to half, unless governments step up their response to the disease.
"It's a disease that kills young adults," said Devarajan. "They are then unable to invest in their children's education and unable to give love and care."
Those less-educated children then become economically less productive as adults, potentially creating a downward economic spiral, the authors argue.
The South African government has criticised the report as making too many assumptions and making projections too far in the future.
But Devarajan defended the study, saying the assumptions are correct and the 80-year economic projections were necessary to show the inter-generational effect.
He also said the study doesn't imply that South Africa is alone in facing such a problem, but that the country had the best economic statistics from which the authors could project.
"The Aids epidemic will peak far in advance of the economic damage it will ultimately cause," says the report.
"By killing mostly young adults, Aids does more than destroy the human capital embodied in them, it also deprives their children of those very things they need to become economically productive adults - their parents' loving care, knowledge and capacity to finance education." - Sapa-DPA
- SAPA