South Africa: AIDS Could Have Bigger Growth Effect

Christo Luus, chief economist for Absa, South Africa's largest bank, said by 2010 AIDS will cut the country's annual economic growth rate by 1.5 percent. Luus is a member of a financial industry group studying the epidemic's effect on productivity, health care and training costs.

Other analyses have predicted smaller impacts. The Bureau for Economic Research in Stellenbosch concluded last year that AIDS would cut no more than a half-point off annual growth rates. Luus said the earlier studies were less comprehensive, however.

Every day in South Africa, 1,000 more people contract HIV. According to the Actuarial Society of South Africa, total deaths from HIV/AIDS will reach 5.4 million in 2015, compared to 1.8 million at the end of this year.

Although HIV/AIDS affects the workforce by inflating training costs and complicating efforts to improve productivity, business leaders point to the availability of modern drugs and South Africa's labor surplus as factors mitigating the disease's negative effects on the economy. "With the right programs, this is manageable, to use a cold-blooded term," said Michael Spicer, CEO of Business Leadership South Africa.

The mining industry is the segment hit hardest by HIV/AIDS. Traditionally, laborers from remote provinces leave home to live for months in all-male dormitories at the mines, possibly contracting HIV through casual sex with the sex workers who frequent company housing. Returning home, the workers often infect their wives.

Some mining companies have begun offering infected workers antiretrovirals. About 90 percent of those treated can return to work, Spicer said.

Back to other news for October 30, 2006