Economic Consequences of HIV in Russia

The World Bank,
Russia Country Department
May 15, 2002

Slides for presentation of the economic model

The Economic Costs of HIV

Labor

·               Decline in participation rates

·               Decline in productivity

·               Decline in human capital

Investment and Capital

·               Increased consumption expenditures - less funds for investment

·               Lower propensity to safe - less investment

Fiscal Costs

·               Treatment

·               Prevention

HIV/AIDS in Russia

·               Russia is different

·               HIV transmitted through drug use

·               Population declines even without HIV

HIV/AIDS in Russia

Distribution of HIV-infected, registered by Dec.2001 by age
(at the time of registration) and sex

·               December 2000 - 86,000 registered cases

·               December 2001 - 177,000 registered cases

·               May 2002 - 194,000 registered cases

·               Multiplier determines the translation of registered cases into actual ones (based on the sample number of approx. 16.4%).

The Model

17 Input Parameters User Defined

9 Output Parameters

Optimistic Scenario

Pessimistic Scenario

Results

Mortality and HIV Cases

·               High, preventive treatment necessary

Economic Impact

·               Accelerating, increasing output losses with decline in investment and human capital

Budgetary Costs

·               Treatment costs unsustainable at current prices

Policies to Reduce Economic Costs

·               Reducing rates of HIV transmission

·               Improvement in demography

·               Limiting Intravenous Drug Use