Hiv/Aids and Its Effects on Economic Growth

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HIV/AIDS and Its Effects on Economic Growth

Taywanna Drayton

ECO 204

Instructor Stephanie Webb

August 16, 2010

HIV/AIDS and Its Effects on Economic Growth

For most developing countries, the main source of progress is through industry and domestic saving. In order for industry to be a viable source of progress, the country must have a large, productive workforce. Certain elements may stymie growth, leading to a slow down in development and, by proxy, a stalled economy. For developing countries across the globe in 2006 disease was the biggest problem. In some African countries, HIV/AIDS pandemic has infected up to 40 percent of the adult populations. Worldwide, the HIV/AIDS virus affects 40 million people (Case, Fair, Oster, 2009). This has a very dramatic effect on the economies of these countries.

In a country heavily plagued by the HIV/AIDS virus, industry is slowed, reducing the amount of capital available. Adding to that is the loss of capital that is diverted from other aspects of the government to the care and treatment of those infected with the HIV/AIDS virus. According to the United Nations, the HIV/AIDS epidemic can affect the economy in a number of ways:

1. • The AIDS epidemic will slow or reverse growth in the labour supply. The economic impact can vary according to the sector of the economy, the degree to which HIV/AIDS affects hard-to-replace skilled labour and whether or not there is a substantial pool of “surplus labour”. 2. • Savings and investments of families will be reduced owing to the increase in HIV/AIDS-related health expenditures. If children’s education, health and nutrition suffer as a result, prospects for longer-run economic growth and development will decline. 3. • The AIDS epidemic may also divert public spending from investments in physical and human capital to health expenditures, leading over time to slower growth of the gross domestic product. Foreign and domestic private investment might also decline if potential investors become convinced that the epidemic is seriously undermining the rate of return to investment. • The HIV/AIDS epidemic may also deepen the poverty of the most affected countries by decreasing the growth rate of per capita income and by selectively impoverishing the individuals and families that are directly affected (United Nations Department of Economic and Social Affairs/Population Division, n.d.).

HIV/AIDS is a disease that is transported through the exchange of blood or other bodily fluids, such as semen or vaginal fluid. It can be transmitted from sexual contact with someone infected, as well as through coming into contact with infected blood, such as through sharing needles. The HIV/AIDS virus work by slowing destroying the afflicted person’s ability to fight off diseases and bacteria. The immune systems of these people eventually shut down leaving them as easy prey for opportunistic infections. Along with the physical deterioration of the disease are the social ramifications that go along with being afflicted by the virus.

There has long been a stigma about people who have obtained the HIV/AIDS virus. Typically, society views them as being unclean and as a group that should be avoided instead of assisted. Myths that all people who are infected with the HIV/AIDS virus are drug users, sexually promiscuous, or homosexual, and misconceptions about how the disease can be spread has left many of these people ostracized and looked down upon. In an area such as Africa which boasts an extremely high HIV/AIDS population in the group that primarily makes up the workforce, this could make it difficult to keep a productive economy.

As previously mentioned, being infected with the HIV/AIDS virus comes with certain stigmas. People are less willing to work with someone who is infected with this disease. Case in point, during the 1990s, American basketball player Magic Johnson shocked the...
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