ECONOMIC IMPACT OF HIV AIDS IN SOUTH AFRICA

3117 WORDS

South Africa faces one of the world’s most severe HIV/AIDS pandemics according to the Bureau for Economic Research (BER, 2012:19). The disease was initially only regarded as a serious health crisis, but it is now clear that the pandemic also holds economic consequences for South Africa and also have far reaching socio-economic consequences.

It is difficult to overstate the suffering that HIV has caused in South Africa, both socially and economically. With statistics showing that one in five adults are infected, its not surprising to note that a recent survey found South Africans spent more time at funerals than they did having their hair cut, shopping or even having barbecues (Anonymous). In any economic system, human capital is fundamentally the most important resource for utilizing other factors of production effectively.

Thus, a pandemic of this nature is viewed as a direct threat to the productivity and economic efficiency of the country. This shall be portrayed using a framework that describes how the disease affects the individual economic state, and how these effects ripple outwards to businesses and eventually the macro-economy.

The framework will therefore take into account the Impact on the Individual and on Households, the Impact on the Labour Market, the Impact on Firms and General Industry, and the Impact on the Government. These sections will then follow into a discussion of the Summation of the Aforementioned Factors on the Economy, before drawing into a Conclusion.

2. Definition of Concepts

South Africa faces one of the world’s most severe HIV/AIDS pandemics according to the Bureau for Economic Research (BER, 2012:19). The disease was initially only regarded as a serious health crisis, but it is now clear that the pandemic also holds economic consequences for South Africa and also have far reaching socio-economic consequences.

It is difficult to overstate the suffering that HIV has caused in South Africa, both socially and economically. With statistics showing that one in five adults are infected, its not surprising to note that a recent survey found South Africans spent more time at funerals than they did having their hair cut, shopping or even having barbecues (Anonymous). In any economic system, human capital is fundamentally the most important resource for utilizing other factors of production effectively.

Thus, a pandemic of this nature is viewed as a direct threat to the productivity and economic efficiency of the country. This shall be portrayed using a framework that describes how the disease affects the individual economic state, and how these effects ripple outwards to businesses and eventually the macro-economy.

The framework will therefore take into account the Impact on the Individual and on Households, the Impact on the Labour Market, the Impact on Firms and General Industry, and the Impact on the Government. These sections will then follow into a discussion of the Summation of the Aforementioned Factors on the Economy, before drawing into a Conclusion.

2. Definition of Concepts