Social Innovation Trend Canvas

The Economics of HIV

THE International HIV/AIDS Alliance warned on Saturday that the annual cost of tackling the HIV epidemic could balloon to US$35 billion by 2030 if governments fail to invest in efficient, targeted and cost-effective prevention measures. The AIDS virus, which already infects around 33.4 million people across the world, was a ‘costly time-bomb’ for families, governments and donors. ‘For every two people who get treatment, five others get infected. At this rate, spending for HIV will rise from US$13 billion now to between US$19 and US$35 billion in just 20 years time,’ said Alvaro Bermejo, executive director of the Alliance.

It has been identified that poverty is perhaps the most important factor in whether inner-city heterosexuals are infected with the AIDS virus, according to the first government study of its kind in the US. The study suggests that HIV is epidemic in certain poverty-stricken urban neighborhoods. And, more significantly, poor heterosexuals in those neighbourhoods were twice as likely to be infected as heterosexuals who lived in the same community but had more money.

This may present an economic lever to slow down the pace of HIV transmission. The World Bank released two studies linking cash payments to Malawian and Tanzanian youths with ‘significantly lower’ rates of HIV and other sexually transmitted infections. In the first study, a two-year program rewarded young girls in Malawi, rife with poverty and high HIV infection rates, with cash payments for regular school attendance. In Tanzania, the Bank paid young adults in cash to avoid unsafe sex. Both studies showed that payments were successful at reducing transmission rates for HIV among the respondents.