Recent press coverage of the World Bank report on the economic costs of HIV/Aids to South Africa has been misleading. It may have led readers to believe that, according to the bank, South Africa will suffer an economic meltdown due to the pandemic.
In fact, the World Bank report does not make this claim. What it says is that in an extreme situation, where South Africa fails to respond to the pandemic in any way, a meltdown will occur.
However, this scenario is impossible — for the simple reason that it is the nature of human beings to intervene in situations where they are under threat.
The prospect of two generations simply watching the HIV/Aids pandemic unfold without making even minor interventions is unlikely.
Yet there are useful insights to be gained from this report, the first to examine the pandemic over three generations. Underlying the furore is serious research, flawed in some places but raising valuable concerns in others.
The notion that the cost of inaction is far higher (both in the short and long term) than the costs of prevention and treatment is clearly argued. The report also starkly spells out the likely social costs of the pandemic to South Africa. But the World Bank was grossly irresponsible in the manner in which it released the report and “spun” its more extreme and sensational aspects in the media.
Not only does it imply that the worst-case scenario is a forecast, it glosses over many assumptions, some of which are glaringly obvious.
Discussion with South African economists could have resulted in a far more valuable document.
For example, the report analyses two forms of family structure —nuclear and “pooling”. South African families are portrayed as nuclear structures, where values and knowledge are transmitted from parents to child. This is not entirely appropriate, as other modes of social communication exist in South Africa.
Furthermore, the report fails to deal adequately with the issue of differ-ential infection rates at different skills levels. On both counts, however, it points to important social consequences that are easily ignored in most other models of this research.
There is no doubt that the long-term social impact of HIV/Aids will have economic implications, but the key question is whether its effect will take the form outlined in the report.
The report’s most serious flaw is to regard complete social inaction as a possibility, and then to turn it not just into a scenario but into a prediction. This deficiency has caused many economists to reject the report in its entirety. The reverse of its doomsday scenario is, in fact, more likely — although the timing of these changes cannot be predicted.
Society will respond to the pandemic, and infections will even-tually be averted due to a change in behaviour patterns — even if it takes many deaths to bring this about. Infected people, especially the skilled, will have access to treatment. These factors suggest the future will be very different to what the report leads one to expect.
The World Bank needs to act to rectify the damage the document may have caused by dispelling the notion that it is a forecast, clarifying that it is only one (the worst) of many scenarios.
Page one of the report indicates that it consists of opinions of individual scholars. The World Bank needs to clarify whether these opinions reflect its official position, or are simply a compilation of diverse scholars’ thoughts.
Perceptions are powerful things. Had the bank made the report’s true import clear when it released it to the media, it might have saved South Africa’s image from what could well be irreversible damage in the eyes of potential investors.
Stephen Kramer is HIV/Aids strategist for Metropolitan.