To answer this question we have examined the dynamics of the HIV epidemic, the economic and social impact, and the fiscal burden of HIV and AIDS in South Asia. We published the findings in the book “HIV and AIDS in South Asia: An Economic Development Risk,” launched in New Delhi on February 27. At the launch, we discussed the risks to development with Dr. Rangarajan, MP and Chairman of National Institute for Public Finance and Policy, and Sujatha Rao, Secretary and Director General for the National AIDS Control Organization in India. We conclude in our report that the impact of HIV and AIDS in South Asia on the overall economic activity is likely to remain small, while the direct welfare costs of increased mortality and lower life expectancy is more substantial, accounting for 3 percent to 4 percent of GDP in India and Nepal, respectively. The economic impact on individual households affected by the disease is substantial. In addition to shortfalls in income, which in some cases can be very significant, HIV and AIDS are also associated with an increased demand for health services. Dr Rangarajan commented on several adverse consequences, including neglect of health conditions, indebtedness, the additional burden on women and children’s education. The extreme case, he noted, is that of the AIDS orphans, for whom very little has been done until now in Asia.
Many of the adverse development impacts of HIV and AIDS arise from the uneven effect it has on different groups in society. Knowledge about prevention and access to treatment, for example, are strongly linked to socioeconomic factors such as gender, education, and wealth. We find in particular that HIV and AIDS have a disproportionate economic impact on HIV-positive widows who have to face the double burden of living with HIV and AIDS, and the already low socioeconomic status of women. Access to antiretroviral treatment (ART) is low in South Asian countries, even compared to countries in other regions with much higher infection rates. Sujthata Rao commented on the estimates of people needing treatment, the cost of scaling up treatment and its share of the total health budget. There are about 630,000 people in need of treatment in India -- with 15 percent being treated to date. The high fiscal cost of treatment underscores the crucial role of effective prevention. Debrework Zewdie, Director of the Global AIDS program at the World Bank, alerted us to the increased cost and loss of momentum that even the smallest financial gap might cause as a result of the current financial crisis. With the exception of Sri Lanka, three-quarters or more of health expenditures in South Asia are financed privately and little are covered by third-party payers like insurance agencies. With the limited ability of many households to pay catastrophic health expenses associated with HIV and AIDS, we argue for a large and critical role for the public sector in the provision of treatment.
Yes, HIV poses a threat to economic and social development in South Asia, unless prevention programs working with high risk groups in South Asian countries are scaled up. Dr Rangarajan noted that the Report of the Independent Commission on AIDS in Asia which he presented to the UN Secretary General Mr.Ban-ki Moon in New York last March, found that for countries with expanding epidemics like the ones in South Asia, one dollar spent on appropriate prevention could save up to 8 dollars in long-term treatment costs. In his view, the design and implementation of national prevention strategies should be accorded the highest priority as far as HIV and AIDS policy is concerned. With this report we provide the economic rationale - in addition to the strong public health and human rights justifications -- for a rapid increase in prevention, treatment and care of HIV and AIDS in settings with concentrated HIV epidemics. Governments and partners must plan now for sustained and uninterrupted financing of effective prevention services such as comprehensive harm reduction, including clean needle exchange and oral substitution therapy, and condom use and treatment.
For more information on the World Bank's fight against HIV and AIDS, please visit the World Bank HIV and AIDS website.