2007 Fair Descriptive qualitative (India) Mather et al. 2004a Good Descriptive quantitative (sub-Saharan Africa) Mather et al. 2004b Good Descriptive quantitative (Rwanda, Kenya, Malawi, Mozambique, Zambia) New Era Team 2006 Fair Descriptive qualitative (Nepal) Pradhan et al. 2006 Good Controlled cross-sectional quantitative study (India) Rawlings 2004 Fair Quasi-experimental design (multi-country Latin America) Rawlings & Rubio 2005 Good Indirect non-experimental analysis (Worldwide) Safman 2004 Good Descriptive qualitative (Thailand) SCF/UK 2006a Fair Descriptive qualitative (China) SCF/UK 2006e Fair Descriptive qualitative (multi-country Asia) Sealy-Burke 2005a Fair Descriptive quantitative/qualitative (St.Lucia) UNICEF 2002 Good Descriptive qualitative (Nepal) Webb & D’Allesandro 2004 Good Qualitative study/literature review (Worldwide) Wyss et al. 2004 Good Controlled, cross-sectional quantitative (Chad) About three quarter of these deaths had occurred in sub- Saharan Africa. This had a great impact on economic growth and destruction of human capital (Michael, 2003). The impact of HIV and AIDS on the economy has been of great concern to many people since the pandemic started. Some people have the belief that the HIV/ AIDS is responsible for the slowing rate of growth gross national product. Some studies has shown that GNP could decrease by up to or more than 1% for every 10% HIV prevalence. Most countries that are seriously affected by the epidemic are those ones that are faced with war, drought, famine, among other problems. Estimated Regional HIV Prevalence Trends (Nadi, 2001) Development is a comprehensive social, cultural, economic and political process which aims at the improvement and well being of the population through their active and meaningful participation. Though economic growth is a vital component of the development process, it is not the only factor that contributes to development. Thus, a thorough knowledge and understanding of effects of HIV/AIDS on development requires looking beyond conservative indicators of macroeconomic performance (John, 2000). A number of economic modeling approaches have been used to determine the effects of HIV/AIDS to the economy. Some of these approaches include cross-national data, economic model data. There is also the approach which looks to the impact to those directly affected by the epidemic, excluding the rest of the society. The objective of these approaches is to determine how the economy would have performed in absence of AIDS/HIV and contrast the result with an estimate of how economy could have performed given the projected and estimated number of HIV/AIDS cases.
Most of the studies that have been done concerning impact of HIV/AIDS prevalence and its impact on the economy predominantly cover to a larger extent the African continent. The impact in Africa is much felt because of poor economic conditions, making most of its population to die early when they are affected by HIV/AIDS due to lack of finances to access expensive medical care, food, water and other social amenities (Michael, 2003). Table shows the estimates of the impact of HIV/AIDS steady state output per capita in the “close economy model” in Africa. Change in per capita output (In persent) Due to change in PFT (In persent) Due to change in capita/labour ratio (In persent) Due to change in “experience” (In persent) Botswana Laesotho Malawi Mozambique Narnibia Souht Africa Swaziland Zambia Zimbabwe 2.6 2.7 1.5 1.2 0.3 3.1 1.2 0.9 4.2 -1.8 -1.2 -0.8 -0.7 -1.0 -1.0 -1.3 -1.0 -1.3 9.7 7.6 4.8 3.9 4.3 7.1 6.2 4.9 9.3 -5.4 -3.7 -2.5 -2.1 -3.1 -3.1 -3.8 -3.1 -3.9 Source: Haacker, 2002. Table shows the estimates of the impact of HIV/AIDS on per capita income, “open economy” in Africa. Change in per capita output (In persent) Due to change in PFT (In persent) Due to change in capita/labour ratio (In persent) Due to change in “experience” (In persent) Botswana Laesotho Malawi Mozambique Narnibia Souht Africa Swaziland Zambia Zimbabw -10.2 -6.9 -4.8 -4.0 -5.8 -5.8 -7.2 -5.8 -7.3 -1.8 -1.2 -0.8 -.07 -1.0 -1.0 -1.3 -1.0 -1.3 -3.1 -2.1 -1.4 -1.2 -1.7 -1.8 -2.2 -1.7 -2.2 -5.4 -3.7 -2.5 -2.1 -3.1 -3.1 -3.8 -3.1 -3.9 Source: Haacker, 2002. HIV/AIDS has affected enormously the society, politics and economy of the world at large. The pandemic damages society just as it does to the human body. It is well observed that it starts by affecting and killing the parts responsible in building the society. It undercuts the economy and affects the development both in developed and developing countries. The most adversely affected countries are in southern part of Africa. For example, in Botswana, 15 years olds are currently having a chance of 1 in 2 of dying of HIV/AIDS. From economic perspective, this means the country will spend a lot of money in catering for medical bills for this people who at the end will die before they have started making any great contribution toward development goals to the country. The most apparent impact of HIV/AIDS to the economy is its effect on human labour. The disease affects mostly the active group in production for example the youth. This the group that is very active and the climax period when they are very innovative, energetic, creative among other positive attributes that bring about national development. Labour force is the key input in production. Thus, lower growth in the population will lower the workforce and as a result have a great negative impact on economic growth. When there is a high mortality rate of the children, it means there will be a breakdown of chain continuity. By this I mean the young people who are supposed to replace the old guards who go for retire will no longer be there since majority will have been swept away by HIV/ AIDS pandemic. Also closely related, when this pandemic is in the advanced stages, the victims labour output is negatively affected. This might be due to time spent attending medical care. Most victims are not in apposition to handle stress and stigma associated with pandemic calmly. Most will opt to either resign or remain in their home or continue working despite their reduced productivity level. All this adversely affect the economic situation either directly or indirectly (Bonnel, 2000). HIV/AIDS exposes one to opportunistic diseases. To the family, society, country and the entire world, it means a lot of finances will be directed towards medical care to the victims of this pandemic. The economic impact of HIV/AIDS is too great to an extent of reducing GNP greatly. The cost of treating patients with HIV/AIDS is so high for one has to remain in medication in order to live longer. The cost of Treating HIV patients Costs per patient per year Low-Income Countries Higher Income Countries Palliative care Prevention of opportunistic infections Clinical treatment of opportunistic infections Cost of HAARTs (drugs only) Costs of HARRTs (support) $ 25.80 $ 36 $ 359 $ 1,400 $ 600 $ 25.80 $ 79 $ 698 $ 1,400 $ 1,000 Data sources: Bonnel, Costs of Scaling HIV program activities, 2001. For palliative care, prevention of opportunistic infections, and treatment of opportunistic infections, table report data from a medium cost scenario. For highly active antiretroviral therapy, it reports low cost estimates. The individual, society or the government has to set aside funds to tackle this pandemic. The finances set aside could however been used in other areas of development like infrastructure, schools, investment in income generating activities, advancement of human resource among many others (Quattek, 2006).. Other economic risks associated with HIV/AIDS include a decreased growth in Gross Domestic Product and inflation caused by increased labour costs. It can also result to a decrease in demand to a number of consumers due to tight economic conditions. The change in per capita GDP caused by AIDS in Kenya is shown in the following fig. Nationally, economic risks might be caused by absenteeism, illness, death, higher staff turnover, medical cover, and retirement benefits among other factors. The cost of absenteeism and higher staff turnover will increase the organization expenditure through recruiting new staff and catering for costs for attending funerals or sick colleagues. This means the institutions will incur extra expense in hiring part time employees to do the job. Other impacts will include reduction in staff productivity due to illness, fluctuations in competency levels, higher salaries due to loss of managerial competencies, loss of client relationship and a decline in reputation, to mention but just a few. Situation Challenge Strong Moderate Missing Socioeconomic - Households with HIV-positive adults have lower incomes, and lost productivity contributes to economic decline. - HIV-affected households face increased expenditures, especially for health. - Other economic measures show that HIV-affected households, especially certain subgroups, are worse off than unaffected households - As a consequence of HIV/AIDS, children have increasing socioeconomic responsibilities in the households, but the affect on their lives is mixed. - Families affected by HIV/AIDS express concerns about meeting basic needs. - Socioeconomic support services are inadequate in many cases. - Documenting impact. - Socioeconomic effects at different stages of the disease. - Differences in socioeconomic safety nets. Source: UNICEF, 2008. It is said that life like a coin, has got both two sides. Having some of the negative impacts of HIV/AIDS to the world as a whole, some scholars have a different perspective. They argue that the high prevalence of this pandemic has really lifted life of some people to better living standards. The companies that manufacture drugs related to minimizing the effect of this pandemic are making a good fortune out of it. They have also managed to employ more workers in their companies to cater for the higher demands of these drugs. Closely related to this, is the counseling centers which have also employed a good number of professionals in this field (John, 2000). In conclusion, the impact of HIV/AIDS have been felt world, from the urban to rural, developed to developing countries. The adverse effects will be felt for a prolonged period of time and it therefore calls for strict measures globally to tackle the pandemic. The high prevalence of the disease has greatly delayed / affected implementation of most action and vision plans as most funds are directed towards prevention and treatment of affected victims. It is the high time every one including stake holders understands the long term effect of the pandemic to the economy.