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AIDS to slash South Africa's economic growth, reports find |
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April 12, 2000
JOHANNESBURG, APR 11 (AP) - The AIDS crisis will cut South Africa's economic growth, increase inflation and exacerbate the country's shortage of highly skilled labor, according to newspaper reports Tuesday.
A new report from ING Barings concluded that the epidemic will cut South Africa's annual growth rate by .3 to .4 percentage points over the next 15 years, the Business Day daily reported.
Though the infection rate among highly skilled labor is only a third of that among less skilled, it is still enough to cause a shortage of highly skilled people, the Star newspaper said, citing the Barings report. That shortage is likely to increase inflation.
A third of South Africans are unemployed, but most of the jobless lack skills.
Barings criticized public and private policy for not presenting a clear strategy to combat the epidemic. It noted that uncertainty about the epidemic's effects deterred foreign investors.
A paper prepared by the World Bank to be discussed at a meeting next week of the International Monetary Fund and the World Bank in Washington, said "the epidemic poses the foremost challenge to development in sub-Saharan Africa."
Inaction by governments has played a crucial role in the disease's spread, the paper said.
Once the prevalence of AIDS in a population reaches 8 percent, the per capita growth is reduced by .4 percent a year, the paper said. According to the Actuarial Society of South Africa, 12 percent of South Africans are infected with HIV. The society predicts the infection rate will peak at 17 percent in 2006 and AIDS-related deaths will begin to decline about five years later.
In countries such as Zimbabwe, where the infection rate exceeds 25 percent, the annual per capita growth is slashed by at least a full percentage point, the World Bank paper said.
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