Rampant Economic Losses of AIDS

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The ratios of AIDS infected patients are on the rise in the world. Humankind has been besieged throughout its evolution by micro-organisms that pose a continual challenge to the survival of the species. It is spreading like wildfire in almost all the countries of the world. The spread of HIV/AIDS threatens to reverse a generation of accomplishments in human development and is rapidly becoming a socio-economic crisis on global scale. AIDS has a profound impact on workers and their families, enterprises and national economies.

HIV/AIDS affects all sectors of the economy and the costs that are incurred as a consequence of the disease are not just financial in nature but fundamentally social and psychological. Many countries have shown that the economic costs of HIV are colossal. They come in the form of reduced growth, declines in savings and investment rates, and huge health care costs.

The economic costs of disease are generally estimated in two ways: direct costs, i.e. medical care and indirect costs i.e. loss of labour & productivity, economic recession and potential income. In 1980, the global cost of treatments for AIDS for 200,000-300,000 people was between $2.6-3.5 billion. Only 40% of AIDS cases were in the industrialized world, yet it accounted for 84% of all expenditure. In developing countries, the lifetimes cost for treatment & care estimates at only $230-250 in Uganda, compared to $102,000 in USA. In 1993 UK spent more than £900 million to curb the increasing ratios of HIV/AIDS and £8.2 million was allocated to National AIDS Control Programmes, covering only 15 countries in Africa and the Caribbean. The spending of USA rose from $1.1 billion in 1997 to $3 billion in 2001 in order to reduce the increasing ratios of HIV/AIDS.

The persistent infectious disease burden is likely to aggravate and, in some cases, may even provoke economic decay, social fragmentation, and political destabilization in the hardest hit countries in the developing and former communist worlds. The economic costs of infectious diseases especially HIV/AIDS is already significant, and their increasingly heavy toll on productivity, profitability, and foreign investment will be reflected in growing GDP losses, as well, that could reduce GDP by as much as 20 percent or more by 2010 in some Sub-Saharan African countries.

Provincial Distribution Of HIV/AIDS In Pakistan(2001) In 2001

Sr. No.

Name of the Province

No. Of Infected People

1

Sindh

511

2

Punjab

409

3

NWFP

350

4

Balochistan

185

5

AJK

17

6

FATA

314

 

TOTAL

1786

Source: (The DAWN, 2001)

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The prevalence of the disease in our country is low as compared to many other countries in the world. But due to lack of social awareness and religious taboos, HIV virus is now alleged to be spreading very fast in Pakistan during the last few years. A total of 450 HIV positive and 3500 AIDS registered cases have been found in Pakistan 2004. The government of Pakistan intends to spend Rs2.85 billion to raise general awareness against HIV/AIDS, including launching of “Life Skill Education Programme”[LSEP] in schools, especially in rural areas. This amount will be spent during 2003- 2007. . It is estimated that 40 percent of about 1.5 million annual blood transfusions in Pakistan are not screened for HIV, which are increasing the worries of government and fueling the expenses of medicines and proper medication and increasing the ratios of AIDS in the country.

Regional HIV/AIDS December (2003) (Million)

Region

Adults and Children Living With HIV/AIDS

Adults and Children Newly Infected With HIV

Adult Prevalence (%)

Adult & Child Deaths Due to AIDS

Sub-Saharan
Africa

25.0-28.2

3.0-3.4

7.5-8.5

2.2-2.4

North
Africa & Middle East

0.470-0.730

0.043-0.067

0.2-0.4

0.035-0.050

South
& South East Asia

4.6-8.2

0.610-1.1

0.4-0.8

0.330-0.590

East Asia
& Pacific

0.70-1.3

0.150-0.270

0.1-0.1

0.0320-0.0580

Latin
America

1.3-1.9

0.120-0.180

0.5-07

0.049-0.070

Caribbean

0.350-0.590

0.0450-0.080

1.9-3.1

0.030-0.050

Eastern
Europe & Central Asia

1.2-1.8

0.180-0.028

0.5-0.9

0.023-0.370

Western
Europe

0.520-0.680

0.030-0.040

0.3-0.3

0.0026-0.0034

North
America

0.790-1.2

0.0036-0.054

0.5-0.7

0.0012-0.0018

Australia
& New Zealand

0.0012-0.0018

0.0007-0.0001

0.1-01

<100

Total

40(34-46)

5(4.2-5.8)

1.1% (0.9-1.3%)

3(2.5-3.5)

Source: (WHO, 2003 December)

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Global Economic Costs Of AIDS

– The countries like Malaysia, Thailand or Indonesia may lose a sum worth billions of dollars in the years to come due to HIV/AIDS.

– It is estimated that the average annual health care cost for a person living with HIV/AIDS in the Pacific islands was about US$5,000 in 1996, compared to average spending of between US$20 and US$30 per person on health by Pacific island governments.

– The death and incapacitation of HIV/AIDS infected workers reduce household incomes and leads to reduce spending and lower demand for goods and services. As a consequence, the business sector can suffer decreasing sales, profits and employment. The International Labour Organization reports that by 2020, AIDS will reduce the workforce in 15 countries by 24 million people. In Thailand, for example, found that more than half of the households surveyed had reduced their consumption by more than 50 percent to care for a family member with HIV/AIDS, 60 percent had used all of their savings for medical costs, 19 percent had sold property such as land, animals or vehicles, 15 percent had pulled their children out of school to help at home and 11 percent had borrowed money to pay for medical costs and help maintain household needs. Overall, poor families became even poorer and lower middle- income households became poor ones.

– If AIDS gets out of control, the effects are felt at subnational and even national levels, the Thailand’s working-age population would have been about 10 million smaller by 2015, reducing average GDP per capita growth between 1990 and 2015 by about 0.65 percentage points. That would have meant 2015 per capita GDP would have been US$1,272 lower than the projected $8,500. Losing skilled and experienced workers through HIV/AIDS thus severely cuts into labor productivity and threatens prosperity.

– In sub-Saharan Africa the size of the labour force will be drop by up to 30 per cent by the year 2020. Losing skilled and experienced workers through HIV/AIDS compromises labour productivity and directly threatens the Asian region’s business prosperity.

– In Botswana, death rates among primary school teachers have risen from fewer than seven per thousand to 71 per thousand between 1994 and 1999. In Zambia, the entire current output of teacher training colleges will not be enough to replace teachers lost to AIDS. In many African countries the ratio of infant mortality has increased from 38 to 61 per thousand people.

– The average life expectancy has decreased 10 years due to epidemic of HIV/AIDS.

– In the rural sector, many research studies suggest that there will be impacts on the plantation sector including oil palm and coffee, as the availability of workers declines and their costs increase in many countries of Africa. Projections suggest a decline in income of up to 8 per cent by 2020 in the worst-case scenario. The effects on smallholder agriculture are expected to be more pronounced, with the possibility of declines in output as high as 24 per cent over the same period.

– In urban areas in Côte d’Ivoire, the outlay on school education was halved; food consumption went down by 41% per capita and expenditure on health more than quadrupled. When family members in urban areas fall ill, they often return to their villages to be cared for by their families, thus adding to the pressure on scarce resources and increasing the probability that a spouse or others in the rural community will be affected. Studies in Uganda have shown that following the death of one or both parents, the chance of orphans going to school is halved and those who do go to school spend less time there than they did formerly. Other work from Uganda has suggested that orphans face an increased risk of stunting and malnutrition.

– There is econometric evidence that macroeconomic outcomes are adversely affected by HIV/AIDS. The epidemic affects the quality of regulation and the effectiveness of governments as well as a broad range of institutions. For governments, the impact of HIV/AIDS is felt in numerous ways. At the most basic level, there is pressure for higher health spending to cope with the increased pressure on health resources. Such pressures are likely to draw resources away from other key government investments e.g. education, infrastructure and governance. In addition, governments may well face falling revenues as the changing structure of production changes tax revenues. In South Africa alone, the economic growth rate is projected to decrease by 0.3 to 0.4% annually as a result of AIDS. As a result, by 2010 the GDP will be 17% lower than it would have been without AIDS. In the Caribbean, AIDS is projected to decrease the GDP 5% by 2005 as a result of shrinking work forces and declines in foreign investment and tourism.

– According to a comprehensive study by Essex, (1999) the overall economic growth rate over the next decade is likely to be 0.3 to 0.4 percentage points lower every year than it would have been without AIDS. Cumulating the slower economic growth over time, a further study finds that by 2010, the real gross domestic product [GDP] will be 17% lower than it would have been in the absence of AIDS. In today’s terms, that would wipe US$ 22 billion off South Africa’s economy more than twice the entire national production of any other country in the region except Nigeria.

– Ultimately, countries’ international competitiveness declines, reducing investment and job opportunities. Labour shortages lead to higher wages and increased workforce turnover, resulting in higher domestic production costs. Firms may have to close or they may be unable to attract new investment. Set in the context of the years of social, political and economic struggle which the region has experienced over the past 30 years, the conclusion is stark: unchecked, HIV/AIDS has the potential to wipe out many of these hard-won gains.

– India, and particularly rural India, are inevitably going to be hit hard economically by AIDS.

Conclusion

Socio-economic growth of a country demands proper control on HIV/AIDS. Sincere efforts should be made to free our beautiful planet from all deadly diseases and notions. Concrete efforts should be made to make that planet free from poverty, illiteracy, ignorance, gender disparity and taboos to control the increasing ratios of HIV/AIDS.

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