Decline in Working Population Due to HIV/AIDS Presents Challenge to South African Economy, Report Says
The possibility of a declining workforce due to HIV/AIDS presents the "greatest challenge" to South Africa's labor market this year, according to a report by Andrew Levy Employment Publications, Reuters reports. South Africa has an estimated 4.7 million HIV-positive people, the highest number of any country in the world. Over the next four years, the number of HIV-positive South Africans could increase to approximately eight million, with an additional 700,000 "potentially economically active" people between the ages of 20 and 59 becoming infected by 2010, according to the Levy report, Reuters reports. "As a result of the AIDS epidemic, the shrinking of the working age population will translate directly into the shrinkage of available labor resources and a risk of declining productivity," the report states, according to Reuters (Reuters, 4/2). Labor-intensive industries, such as mining, have been particularly hard hit by HIV/AIDS, and service industries such as banking and food products may have to project slower growth in coming years due to a declining consumer base. A number of banks, including Deutsche Bank and Dresdner Bank, have said that HIV/AIDS statistics will have to be included in financial forecasting, stock selection, asset allocation and risk underwriting (Kaiser Daily HIV/AIDS Report, 3/25). According to the Levy report, Gauteng, the South African province that accounts for 35% of the country's gross domestic product, could lose 500,000 adults by 2010, Reuters reports. Due to high HIV prevalence rates in South Africa, businesses may decide to locate elsewhere, which could lead to a decline in direct foreign investment, according to Reuters. Spending patterns could also shift from retail items to medication, care for AIDS orphans and funeral costs. In addition, HIV/AIDS compounds other economic problems facing South Africa, such as high unemployment, poverty, low foreign investment and low savings, according to the report (Reuters, 4/2).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.