AIDS - The Economic Impacts of HIV/AIDS

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The Economic Impacts of HIV/AIDS

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The Economic Impacts of HIV/AIDS

By 2005, Latin America and the Caribbean should be spending around 550 million dollars annually to treat people who have HIV/AIDS.

By Stefano Bertozzi, Marjorie Opuni and Juan-Pablo Gutiérrez*

MEXICO CITY - The new millennium has begun and the apocalyptic predictions of 20 years ago, arising from the HIV/AIDS pandemic, did not come true. Nevertheless, the disease has been devastating for many countries where it has led to deepening poverty.

The magnitude of the pandemic in the poorest regions of the world has attracted the attention of the international community because of its potential global effects in a scenario of fragile stability worldwide.

In some of the countries hit hardest by HIV/AIDS, in southern Africa, life expectancy for children born in 2000 was as much as 30 years less than it was before the disease became a pandemic.

It is clear that this factor is going to be reflected in the macroeconomic indicators of those countries. The World Bank estimates that with a prevalence (number of cases in relation to total population) of HIV/AIDS at 20 percent in 1999, South Africa's gross domestic product (GDP) will be 17 percent less in the year 2010 than it would have been without the presence of the deadly virus.

But this grim situation is even worse if we take a look at the individual households affected by the disease.

In Africa alone, more than 12 million children have lost their parents to the pandemic. For millions more families, HIV/AIDS means a dramatic reduction of income because it generally affects the economically active members of the household.

In Latin America, though the disease has not reached the emergency levels seen on the African continent, the number of new cases is growing rapidly, particularly in Central America and the Caribbean.

A study conducted by the University of the West Indies predicts that by the year 2005 the GDP of Jamaica will drop 6.4 percent and that of Trinidad and Tobago will fall 4.2 percent as a consequence of HIV/AIDS. The economic result: a decline in savings and investment, with rising unemployment in key sectors like agriculture and manufacturing.

But even before the impact of the pandemic is felt in national economic indicators, HIV/AIDS represents a heavy burden for public finances, particularly for the health sector.

In some Caribbean countries, HIV/AIDS patients occupy as many as 25 percent of available hospital beds.

In Brazil, with a population of 162 million, the government spent more than 300 million dollars last year on HIV/AIDS drugs alone. Costa Rica designates seven million dollars annually for the same purpose, though the incidence of the virus is relatively low in this country of 3.5 million.

According to a study published recently by the US journal Science, Latin America and the Caribbean should be spending approximately 550 million dollars annually by 2005 to treat people with HIV/AIDS, a sum that assumes the prices of the antiretroviral drugs will remain relatively low. The figure would have to be doubled if prevention efforts aimed at halting the pandemic were included.

As time passes, HIV/AIDS becomes increasingly concentrated among poor populations. While the wealthy countries learn to protect themselves and have the resources to make HIV/AIDS into a chronic, not deadly, disease, the poor remain vulnerable. This is both a result of the characteristics of poverty itself - low education levels, limited access to information or to health services - and the consequence of the lack of finances to fight the disease.

This situation is particularly complicated in Latin America and the Caribbean, the region of the world with greatest disparities in the distribution of wealth. Though the prevalence of the virus varies from country to country, the fact is that HIV/AIDS deepens poverty and exacerbates inequalities.

* Stefano Bertozzi is Director of Economy and Health Policy at the National Institute of Public Health in Mexico. Marjorie Opuni and Juan Pablo Gutiérrez are researchers at the institute.