AIDS economic hit underestimated

ASHINGTON -- Scholars have seriously underestimated the economic impact of HIV and AIDS, which could cause economies in the worst-hit nations to collapse in two generations unless countries take urgent steps to fight the disease, according to a World Bank study released yesterday.

In a series of earlier studies, economists have generally predicted that AIDS could lead to an annual decline of 1 percent of gross domestic product in nations. But the World Bank report said that data did not include the long-term impact of parents' inabilities to invest in children's education; the loss of transfer of knowledge from one generation to the next; and lower future productivity, due to drops in education levels.

The World Bank study also zeroed in on the economy of South Africa, which accounted for 39 percent of the gross domestic product of sub-Saharan Africa in 2001 and where roughly 25 percent of adults aged 15 to 49 are infected with HIV. The report estimated that if AIDS progressed unchallenged, by the year 2050 -- roughly in two generations -- the per capita income per family would be half of what it was in 1990, dropping to $12,901.

Mudunwazi Baloyi, minister of economics at the South African Embassy in Washington, welcomed the study because it would help ''sensitize policymakers that there are dangers if we don't do anything about this epidemic.'' But, Baloyi said, ''This report is coming at a time when the South African government is taking an active approach to dealing with this epidemic. One of the interventions is the need for us to distribute the anti-retroviral medicines, which will prolong the productive life of individuals.''

South Africa, however, has been a center of controversy for several years on the issue of AIDS, and international activists have criticized President Thabo Mbeki for moving too slowly to combat the epidemic. More than 5 million people are infected with HIV in South Africa, more than any other nation.

Around the world, an estimated 42 million were infected at the end of 2002; a worst-case estimate from the World Health Organization's Commission on Macroeconomics and Health said that by 2015, 169 million people could be infected.

Jeffrey Sachs, who was chairman of that commission and now is a special adviser to UN Secretary General Kofi Annan on reaching goals to reduce global poverty, agreed with the World Bank study's premise that current indicators underestimate AIDS' economic impact.

Sachs said another way of measuring AIDS' impact is through the lens of lifetime earnings. With large numbers of people dying at young ages from AIDS -- more than 3 million worldwide died last year -- many families also suffered from the abrupt loss of wages.

''Since life expectancy has collapsed throughout southern and eastern Africa, what already has happened is that the lifetime earnings also have collapsed,'' Sachs said in a telephone interview from Addis Ababa, Ethiopia. ''You can look at how much someone is earning in a given year, but in a lifetime, the income has already gone down 30 to 40 percent in some places -- in other words, a catastrophe.''

Some global health specialists said the report's conclusions were not novel. Malcolm F. McPherson, a senior fellow in development at Harvard University's John F. Kennedy School of Government, said that the World Bank had belatedly joined others in recognizing that AIDS was affecting economies at a greater rate than 1 percent GDP annual loss.

''They have slowly caught up with what is happening in the field,'' McPherson said. He said the impact can be seen now in some areas of sub-Saharan Africa suffering from famine, in which ''the core producers, the farmers, are dying off from AIDS, and what's happening is that the old and the very young are the ones surviving. In previous periods when famine hit, there was a quick response from people who knew what to do. That isn't happening as much.''

Prabhat Jha, director of the Centre for Global Health Research at the University of Toronto, expressed caution in embracing the findings of the study because it differed greatly from earlier studies, but said his main objection was that the report ''strikes me as missing the point.''

''Say that we found definitively there was no macroeconomic impact of HIV in Africa. Would we act differently?'' he said. ''We need to act because it is killing millions of people. So what is the right question? The right question is, `What are the numbers of people dying needlessly?' ''

John Donnelly can be reached at donnelly@globe.com