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The economy is not immune to AIDS

Seetha | October 06, 2003

In what should set the alarm bells ringing, a survey commissioned by the Delhi government has estimated the number of people vulnerable to HIV/AIDS in the nation's capital at 12 lakh (1.2 million), a little over 8 per cent of its population.

This should shatter any smugness over the low levels of HIV/AIDS in Delhi.

Right now, Delhi is a low prevalence state, with only 0.25 per cent of pregnant women surveyed in four antenatal clinics (an indication of HIV infection among the general population) and 3.23 per cent of the people surveyed in four sexually transmitted diseases clinics testing positive in 2002.

At the national level, the prevalence rate may be only 0.8 per cent of total population, but this translates into huge numbers -- between 3.82 million and 4.58 million as of 2002, according to National AIDS Control Organisation.

This, worryingly, is a 15 per cent increase over 2001 when the number of HIV infections ranged between 3.31 million and 3.97 million.

So, if there is any complacency on the HIV/AIDS front, it is time to jettison it now. Otherwise, the economy will have to bear a huge cost, as the United Nations Development Programme's Regional Human Development Report, 2003: HIV/AIDS and Development in South Asia and a World Bank research paper The Long-run Economic Costs of AIDS show.

Not taking preventive action in the early stages of the pandemic, before the prevalence rate touches the critical 1 per cent mark, the reports say, would have a debilitating impact on economic and human development.

The UNDP report quotes various studies that have shown that the pandemic would have reduced the worldwide annual growth rate of real GDP per capita by nearly 0.06 percentage points below what it would have been in the absence of AIDS between 1980 and 1998.

In sub-Saharan Africa -- with an 8.8 per cent prevalence rate -- the reduction in annual growth rate is estimated to be 0.15 percentage points.

The impact in south Asia was found to be negligible but that was because of the extremely low prevalence in the region between 1980 and 1998.

The World Bank paper (a study of the impact on South Africa's economy) argues that most current estimates of the economic cost of HIV/AIDS are modest since they are based only on reduction in GDP growth.

These studies assume that while the increase in HIV/AIDS deaths may lead to a fall in savings and investments, it also reduces the pressure of population on land and capital, thereby raising the productivity of labour. This, ultimately, dampens the impact on growth.

The report focuses, instead, on the loss of human capital. AIDS can severely retard economic growth by destroying human capital in three ways:

  • AIDS primarily affects people in their productive years.
  • The death of parents affects the transmission of knowledge and ability across generations. Besides, the loss of income due to disability and early death reduces the resources available for educating children and this, in turn, translates into low productivity of future adults.
  • These adults will be less able to invest in the education of their children.

The inevitable slowing down of the economy will mean poorer exchequers.

Reduced resources for public expenditures and increased spending on medical treatment of HIV-positive people will, both reports point out, crowd out spending on education and health, two crucial inputs for human capital.

The report cites studies that show that the ratio of treatment costs to per capita income (not including the cost of anti-retroviral drugs) in India was 2.2.

Besides, the bank's paper warns, the government may have to shoulder the burden of caring for those affected by HIV as traditional social norms of caring will not be able to cope with the scale of the epidemic.

The epidemic can also push up costs of worker replacement, absenteeism, insurance expenses and health care expenditures for the private sector.

Firms could take up to 24 weeks to replace a deceased professional and some multinational companies in South Africa are reported to hire three workers for each skilled position to ensure that replacements are on hand when trained workers die.

In addition, HIV/AIDS could also shrink the customer base since it mostly affects those in the working age group.

India's health planners, to be fair, are not exactly impervious to the magnitude of the HIV/AIDS epidemic in the country and have responded fairly quickly.

The National AIDS Control Programme was launched in 1987, a year after the first case was detected in Tamil Nadu in 1986. NACO was set up in 1992 and state AIDS Control Societies have also been formed.

The National AIDS Prevention and Control Policy talks about mainstreaming HIV/AIDS control policy within the overall health policy framework.

Universal screening of donated blood for HIV is mandatory and state governments are experimenting with innovative measures, like the Manipur government's Needle and Syringe Exchange programme, covering injecting drug users.

The government's efforts are being supplemented by the NGOs as well, especially in the field of education and counselling.

But responses focussing only on the medical and behavioural aspects of HIV/AIDS and on vulnerable groups, the UNDP's report argues, will not be effective in checking the epidemic's spread.

HIV/AIDS, it asserts, is a larger developmental issue and draws attention to the two-way relationship between low economic and human development and HIV/AIDS.

The epidemic, the report says, is influenced by -- and, in turn, has an impact on -- poverty, poor social and economic infrastructure, low human development and social systems.

"HIV/AIDS arises from developmental failures and can exacerbate those shortcomings, if not addressed in a holistic manner," the report says.

Poverty, for example, limits spending on health and nutrition as well as education. Lack of education will naturally mean lack of awareness about HIV.

It also means fewer choices in the job market and lesser bargaining power to negotiate working conditions. Sex workers, therefore, cannot insist on use of condoms and migrant labourers have to live and work in unhealthy conditions.

Lack of employment opportunities drive women into the sex trade and are factors in increasing migration within the country or across national borders.

Long periods of separation from their families often lead migrant workers to indulge in high risk sexual behaviour or drug use.

Gender discrimination is a major factor in the increase in HIV/AIDS among women, an indication of its spread in the general population.

Women have limited access to reproductive health services and are unable to insist on safer sex options.

Persecution of sexual minorities, drug users and sex workers make them reluctant to avail of health programmes targeted at them. HIV then becomes socially invisible, complicating the task of checking it.

The report's central argument -- that prevention strategies must necessarily deal also with issues relating to the management of the economy in a manner that increases scope for employment and better livelihoods -- seems to be based on sound reason.

Economic development is a necessary condition for all-round development.

But the vexed problem of unequal access to resources cannot be wished away for that will again increase the vulnerability of certain groups. Clearly, a deft balancing act is required to win the battle against HIV/AIDS.

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