THE TRUE COST OF AIDS The Macroeconomics of HIV/AIDS Markus Haacker, ed. Washington DC: International Monetary Fund, 2004, 344 pages.

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Like the first quarter of a mystery novel, the International Monetary Fund's The Macroeconomics of HIV/AIDS brings together expert witnesses to produce a composite description of a case that needs to be solved. Much of the investigation, the trapping of the pathogen, and the solution has been left for another volume. Instead, editor Marcus Haacker's new book is an indispensable HIV/AIDS almanac detailing exactly how the pandemic challenges societies and economies and how it stunts financial and health systems. Before international agencies and donors act to achieve the United Nations' Millennium Development Goals (MDGs) for HIV/AIDS, they must discover how to pay for necessary measures. To know the costs and priorities, teams require assessments on the demographic, economic and financial realities in societies affected by HIV/AIDS. This is what the International Monetary Fund (IMF) has provided through this book.

Before detailing Haacker's book and the answers it provides, it will be useful to remember the questions the book means to address. In September 2000, the United Nations convened to announce the MDGs for addressing issues of poverty, education, health and the environment, and declared plans for quantifiable progress in those areas by 2015. The sixth MDG directly calls on international actors, governments, and individuals to cooperate in better preventing and treating HIV/AIDS, malaria, and other diseases. Active response to these diseases is expected to further the other MGDs as well, allowing healthier populations to contribute more to collective development efforts.1

In response to the HIV/AIDS pandemic in particular, the United Nations Development Programme chose several key indicators of progress, including quantifying a stabilized HIV prevalence among pregnant women aged 15 to 24 as a marker for all women and children, increasing contraceptive prevalence and use, raising the percentage of national populations that understand how to prevent infection and enrolling more AIDS orphans in school.2

However, how international agencies and governments will afford these improvements remains the question. In Making Sense of MDG Costing, a FinnishTanzanian collaborative report produced through the Helsinki Process Poverty Group, Jan Vandemoortele and Rathin Roy stress how difficult it is, even with great progress in our methods of quantification, to know how much it will cost to achieve MDGs like the greater prevention and treatment of HIV/AIDS.3 Each health care item, for example, can range in costs based on brand name versus generic drugs, institution-based versus home-based care and so on. Cost estimates often rely on average unit costs when real costs vary enormously between national economies, especially when currency exchanges fluctuate.

The Macroeconomics of HIV/AIDS attempts to respond to these economic concerns, presenting us with an analysis of how governments, companies and families experience economic losses caused by HIV/AIDS. These are vital considerations for actors paying the bill for HIV/AIDS control. In the first chapter, Brynn G. Epstein presents an overview of the demographic impact of the disease. Epstein's research uncovers HIV prevalence rates ranging from 1.1 percent of adults globally to 7.5 percent of adults in Sub-Saharan Africa, with the highest national rate on record being 37.3 percent of adults in Botswana. Worldwide, 2.1 million children continue to live with HIV.4

What Epstein and others have left out is a critical placement of HIV in the context of other challenges that humanity faces. It behooves economists and epidemiologists alike to remember that malaria kills over one million and infects 275 million people per year.5 This mosquito-borne illness has stunted development in the tropics for centuries. While malaria infection maintains extremely high and consistent rates in places like Sub-Saharan Africa, the HIV/AIDS pandemic went from statistical insignificance in 1981 to killing 3.1 million, infecting 5 million and affecting 40 million people in 2003.6 Therefore, malaria may actually have a larger effect on development.

In Markus Haacker's chapter, "HIV/AIDS: The Impact on the Social Fabric and the Economy," the writer-editor tracks increasing rates of mortality and dependency, especially in southern Africa.7 Haacker points to a 2004 study that suggests that the death of a male head of the family is associated with as high as a 68 percent reduction in the family's crop value.8 He notes that incomes fall while demand in the health sector increases. This also results in a steep drop in demand in consumer markets. High funeral costs in many African communities further force survivors to sacrifice essential items, sometimes even food and property.9 Haacker also examines how HIV raises the costs of production for companies and makes it difficult for workers to keep their jobs and reap employee benefits. He suggests that insurance schemes could moderate this economic effect. He does not, however, thoroughly pursue the effect of declining labor on broader food security and the potential for famine in the wake of concentrated AIDS outbreaks in drought-prone areas.

With more incisive writing and some elaborate economic modeling, Bell, Devarajan and Gersbach's chapter on "Thinking About the Long-Run Economic Costs of AIDS" makes the book's first real foray into the realm of solutions. "AIDS does much more," the team writes, "than destroy the existing abilities and capacities-the human capital-embodied in its victims; it also weakens the mechanism through which human capital is formed in the next generation and beyond."10 The authors rely on the "overlapping-generations model" instead of the "Solow model" to predict effects of emotional stress on workers, the shrinking tax base, credit market weakness and social capital decline.11 "It is possible," the authors write, "to avert the downward spiral, but only with an aggressive set of policies aimed at shoring up the faltering mechanism of human capital transmission between generations."12

In another chapter, "An Economic Assessment of Botswana's National Strategic Framework for HIV/AIDS," Iyabo Masha describes the marvel of mineral-rich, income-poor Botswana, which experienced rapid economic growth and development until the 1990s. As HIV/AIDS prevalence in the country grew to 37.3 percent of adults and diamond sales leveled, the rate of growth also declined.13 Masha examines Botswana's National Development Plan 9 (NDP-9), a strategy projecting efforts that include the prevention and treatment of HIV/AIDS to 2006. The NDP-9 sets the critical objective to have an "HIV-free" generation by 2016.14 In particular, the strategy emphasizes counseling, prevention of sexually transmitted and neo-natal disease and provision of anti-retroviral drugs, especially to pregnant women with HIV.15 However, Masha describes Botswana's strategy and the financing of that strategy without deep exploration of how a country with a relatively progressive strategy for the region since the early 1990s continues to have an extremely high infection rate. HIV/AIDS control financiers and policy makers can explore through this chapter, with a bit more economic modeling, what Botswana did, but not necessarily what Botswana should do.

The Macroeconomics of HIV/AIDS is a valuable tool for policy-makers, economists, and epidemiologists involved in efforts to achieve the MDGs, especially those working to finance solutions for HIV/AIDS. Readers will find in this book a veritable world map for HIV/AIDS mortality and money matters. However, it is more successful in describing what the problem is than what should be done to resolve it.

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NOTES

1 Millennium Project, Millennium Indicators (New York: United Nations Statistics Division, 2005), <http://millenniumindicators.un.org/unsd/mi/mi_goals.asp>.

2 Ibid., MDG 6, indicators 18-20.

3 Jan Vandemoortele and Rathin Roy, "Making Sense of MDG Costing," Poverty Group, Bureau for Development Policy, UNDP (New York: August 2004), 1.

4 Markus Haacker, ed., The Macroeconomics of HIV/AIDS (Washington, DC: International Monetary Fund, 2004), 4.

5 World Health Organization, "Removing Obstacles to Healthy Development," WHO Report on Infectious Diseases (Geneva: 1999), <http://www.who.int/infectious-disease-report/pages/textonly.html>.

6 David L. Heymann, MD., Control of Communicable Diseases Manual, 18th ed. (Washington, DC: American Public Health Association, 2004), 3.

7 Haacker, 43-50.

8 Ibid., 48.

9 Ibid., 48.

10 Ibid., 97.

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