Why We Should Care: Economic Implications of HIV/AIDS

While AIDS is devastating to individuals and their loved ones, the pandemic also harms economies and societies throughout the world. Because HIV has spread extensively among mobile youths and young adults, the disease has long-term economic implications related to lost productivity.

The International Labour Organization reports that by 2020, AIDS will reduce the workforce in 15 countries by 24 million people. Work force costs will increase because of health-related work absences, higher payments for insurance and medical care, and hiring and retraining costs.

National incomes and growth as measured by the gross domestic product (GDP) will decrease significantly as the number of people with HIV and AIDS increases. 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.

AIDS is reversing decades of gains in developmental achievements and life expectancy in countries that have been the most significantly affected. With every five-year decrease in life expectancy, the annual economic growth of a country may be reduced by as much as .05%.

HIV and AIDS threaten to reduce the economic potential of developing and developed nations alike. If direct foreign investment decreases, developing countries will experience a decreased share of world trade. As a result, fewer developed and developing nations will benefit from integrated trade and the sharing of knowledge.