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FOCUS on economic impact of AIDS

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The devastating impact of HIV/AIDS in Africa is all too evident.

Millions have died, their children orphaned and entire communities destroyed. But it is the crippling effect of AIDS on African economies that is now starting to ring alarm bells.

In Ethiopia, concern is now mounting that AIDS could blow off course the much-heralded poverty reduction strategy on which the future development of the country is pinned. Prime Minister Meles Zenawi has called on the National AIDS Council to put together a team to ensure that the Poverty Reduction Strategy Paper (PRSP) takes this into account.

"HIV/AIDS now poses the foremost threat to Ethiopia’s development," the country’s National AIDS Council says. "AIDS may be costing Ethiopia significantly in its economic growth every year, further reducing the scope for poverty reduction. If it continues unchecked, HIV/AIDS will alter the trajectory of the country’s development by retarding growth."

Economic meltodown

As yet little or no statistics exist on the profound effects of the virus in Ethiopia – making it even harder to establish accurate development strategies. But according to the United Nations Development Programme (UNDP), strategies must address the threat of an economic meltdown caused by AIDS.

UNDP says that little research has been done to study the impact of AIDS on sustainable development plans.

"The consequences of HIV/AIDS do need to be incorporated into economic strategies and particularly poverty reduction strategies," said Barbara Torggler, who is in charge of HIV/AIDS at UNDP Ethiopia. "Discussions on the implications of HIV/AIDS among development experts and policy makers has been extremely limited, and both national and global development targets and goals have been formulated without taking into account the added challenges resulting from sharp increases in AIDS-related adult mortality," she added.

Adult and child mortality across the African continent has soared. AIDS now accounts for one in four deaths in sub-Saharan Africa, and already overstretched health and social services are being pushed to the limit.

Productive generation “destroyed”

Prosper Poukouta from the African Development Bank told IRIN that the virus has destroyed an entire productive generation.

He said that the AIDS pandemic had worsened development both in Ethiopia and across the continent. "AIDS has the potential to create severe economic impacts in many African countries," he said. "It is different from most other diseases, because it strikes people in the most productive age groups and is essentially 100 percent fatal."

"We cannot talk about sustainable development in Africa without talking about the basic issue of a minimum balance between population growth, human capital development and human development," he stated.

"In Ethiopia life expectancy is already falling. Out of every 11 people worldwide living with HIV/AIDS, one will be Ethiopian."

But so far, it is at a microeconomic household level that the impact is most felt at the moment. "The effect of HIV/AIDS on households is profound, but neither appreciated, nor generally measured,” said Torggler. She underlined the lost income, and the diversion of assets to caring for those affected, impoverished families.

"AIDS causes labour to be lost or diverted from production to care. There is evidence of falling production in the agricultural sector," she stated.

Crucial rural sector suffering

It is in this area that Ethiopia – where around 45 percent of the population already live below the poverty line - is being particularly hard hit.

The economy is dominated by agriculture, which accounts for 56 percent of the country’s gross domestic product.

More than 20 million people work in the rural sector – around 88 percent of the labour force.

Families stricken by AIDS in rural areas are effectively spending around 14 hours a week working their land – compared to an average 34 hours. By halving their output they become more dependent on outside help. It means their incomes – around US $100 per year – will plummet, distorting current efforts to alleviate their poverty.

"AIDS generates new poverty as people lose housing tenure and employment," added Torggler. According to UNDP, incomes are set to drop between ten and 15 percent.

Threat to national security

If the AIDS-related economic meltdown is not averted, organisations believe the results could be catastrophic and completely destabilise countries.

The assistant secretary general of the Organisation of African Unity (OAU), Lawrence Agubuzu, has warned of national security issues in countries severely affected by the epidemic. "HIV/AIDS, tuberculosis and related infectious diseases have become a risk to national security and a major threat to socioeconomic development, whereby the survival of some communities in Africa is at stake," he said.

The warning comes after a recent report by the Central Intelligence Agency (CIA) on the threat of HIV/AIDS to national security.

UNDP insists that "urgent" action is needed to address the human development situation now threatened by AIDS. It argues that it is essential to prevent the collapse of key public services, and that poverty reduction efforts must be adapted. Education and the impact on economic productivity also need to be targeted, and the burden on women – who often bear the brunt of extra work – has to be eased. In Ethiopia, the much-awaited Poverty Reduction Strategy Paper is near completion. When it is released, all eyes will focus on how critical a part the "AIDS Factor" has played.

In the words of the country’s National AIDS Council: "Ethiopia’s future depends on addressing the epidemic forcefully and fast."

This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information:

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