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HIV/AIDS pandemic will be far more devastating than previously thought
Quentin Wray. 24 July 2003. Business Report. Republished courtesy of Independent Newspapers (Pty) Ltd.
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The economic impact of HIV/AIDS would be far more devastating than previously thought, said a report released yesterday by the World Bank.
The bank says the impact on African gross domestic product will be far more than the previously estimated 0.3 percent to 1.5 percent a year because of the "peculiarly insidious and selective character of the disease".
Previous estimates were based on the underlying assumption that the main effect of increased mortality was to relieve pressure on existing land and physical capital so that output per capita is little affected.
Using an overlapping generations model, the bank argues that by killing mostly young adults, HIV/AIDS does more than destroy the human capital embodied in them, it also deprives their children of the things they need to become economically productive adults: parental loving care, knowledge and ability to finance education.
It says that this weakening of the mechanism through which human capital is transmitted and accumulated across generations only becomes apparent after a long lag and is progressively cumulative in its effects.
The World Bank says that in the absence of HIV/AIDS at least three-quarters of all children in South Africa would have grown up enjoying the care, company and support of both natural parents and that fewer than 2 percent would have been full orphans - lost both parents.
"If the epidemic is left to run unchecked ... it will leave about 20 percent of the generation born from 2010 onwards full orphans." |
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