HIV, growth, poverty and inequality in sub-Saharan Africa

Robert Greener UNAIDS1

Cape Town, South Africa June 9-11, 2008 HIV, growth, poverty and inequality in sub-

Saharan Africa

DRAFT, April 2008

Robert Greener, UNAIDS1

BACKGROUND

It has often been asserted that AIDS is driving a "vicious circle", caused by the "downstream" impacts of AIDS which increase poverty and social deprivation, and the "upstream" effects of social deprivation which potentially increases the societal vulnerability to HIV infection.

When examining this assertion, it is important to distinguish clearly between the two different potential directions of the effects.

HIV Infection

“Upstream” “Downstream”

Poverty and Social

Deprivation

1 This paper also uses material from Piot, Greener, Russell (2007) and from Gillespie, Kadiyala,

Greener (2007).

1 HIV, growth, poverty and inequality in sub-Saharan Africa

As will be seen, the downstream impacts of AIDS on individuals and households are well understood and documented. The economic impacts of AIDS are proportionately greater for poor households, and AIDS can be expected to increase both poverty and income inequality.

The economic impact at higher levels of aggregation (such as on the gross national income –

GNI) is less well understood, being inferred from modelling work rather than empirical measurement, but is thought to be important in the long run, particularly in high prevalence countries, such as in southern Africa.

Evidence of the upstream effects of poverty and social deprivation on HIV infection is rather mixed. In general, the view that poverty is a principal driving force behind the epidemic is not well supported either at national or at household level, although there is a clear protective role for education.

The implication for economic policy and strategies for economic growth is complex and context specific, but it is clear that the countries with high or growing HIV epidemics need to place HIV at the core of their development strategies.

THE "DOWNSTREAM EFFECTS": THE IMPACT OF AIDS ON POVERTY AND

DEVELOPMENT

Household Impact and Poverty

AIDS kills people in the prime of their working and parenting lives, and has a devastating effect on the lives and livelihoods of affected households (for example, see Jayne et al. 2006), who face reduced incomes when employed household members become sick or die, and increased medical and funeral related costs. The impact on poor households is clearly disproportionate, with many struggling to meet demands for treatment and care.2

2 For a comprehensive survey of literature on HIV impacts see Gillespie and Kadiyala (2005).

2 HIV, growth, poverty and inequality in sub-Saharan Africa

As a result, we can expect that AIDS will impede efforts to reduce poverty – even in countries with relatively low levels of prevalence. In high prevalence countries such as Botswana, estimates have projected an increase of about 5 percent of the number of households living in poverty, compared to the situation without AIDS (Greener 2004). Existing policies and programmes aimed at poverty reduction will need to include specific measures to identify and target the economic and social needs of households who are directly affected by AIDS.

Policies relating to the support, care and education of orphans will need to be able to respond to the orphan crisis. AIDS will dramatically increase the numbers of orphans, particularly in high prevalence countries. More than 15 million children worldwide have been orphaned by

AIDS – over 12 million of them in sub-Saharan Africa, threatening to overwhelm the capacity of social networks and traditional patterns of intergenerational dependency, and creating an under-educated, unsocialized and often uncared for generation (Barnett and Whiteside 2006).

Firms and Enterprises

Companies in high prevalence countries can expect to face increased mortality and illness among the workforce, leading to higher costs of recruitment and training to replace the experienced workers that have been lost. Firms that provide their workers with medical insurance can expect the premiums to rise in order to pay for the increased medical costs.

Pension funds will also need to be adjusted to cope with changes in the age structure of the workforce.

At the same time, increased levels of illness, as well as the loss of skills and experience can be expected to have a negative effect on productivity in the workplace. This translates into decreased profitability, and the risk of declining employment at a national level.

3 HIV, growth, poverty and inequality in sub-Saharan Africa

One study in Africa has found widely varying HIV related costs varying from 0.5-10 percent of the total labour costs – which in some sectors would constitute a very significant proportion of company profit (see the table below).3

Table 1: Estimated costs of AIDS for enterprises in sub-Saharan Africa

Cost per AIDS death Aggregate annual Estimated HIV or retirement Sector Country Size costs prevalence (multiple of annual (% of labor costs) compensation) Retail South Africa 500 10.50% 0.7 0.50% Agribusiness South Africa 7,000 23.70% 1.1 0.70% Uganda 500 5.60% 1.9 1.20% Kenya 22,000 10.00% 1.1 1.00% Zambia 1,200 28.50% 0.9 1.30% Manufacturing South Africa 1,300 14.00% 1.2 1.10% Uganda 300 14.40% 1.2 1.90% Ethiopia 1,500 5.30% 0.9 0.60% Ethiopia 1,300 6.20% 0.8 0.60% Media South Africa 3600 10.20% 1.3 1.30% Utility South Africa >25,000 11.70% 4.7 2.20% Mining South Africa 600 23.60% 1.4 2.40% Botswana 500 29.00% 4.4 8.40% Tourism Zambia 350 36.80% 3.6 10.80%

Government and the Macroeconomy

Government and the public sector are similarly affected by increases in employment costs, but also as a result of a falling revenue base (to the extent that economic growth is affected), and increased demands for health and other public services related to the response to the epidemic.

AIDS can therefore be expected to cause significant challenges for budgeting and economic management as countries try to scale up services to provide universal access to prevention, treatment and care.

Macroeconomic growth is expected to be reduced by the AIDS epidemic, as a result of reduced human resource capacity, and also because of reduced investment that results from lower household savings. At a national level, the macroeconomic impact is expected to be comparatively small when compared to the influence of other factors related to the global

3 Data and table taken from Simon, Rosen, Feeley, and Connelly (2006).

4 HIV, growth, poverty and inequality in sub-Saharan Africa economic environment and the quality of economic management in affected countries. Most estimates making use of standard economic models in high prevalence countries indicate a reduction of about 0.5-1.5 percent4 in the GDP growth rate over a 10-20-year time frame compared to the situation without AIDS5. Although serious, this is within the range that can possibly be dealt with in the medium term through corrective macroeconomic policies.

Impact in lower prevalence countries can be expected to be correspondingly lower.

However, some researchers have pointed out that AIDS is a long wave event, and have speculated that long-run economic impact may be somewhat greater, because of the potential for progressive weakening of human capital, and the lost transmission of knowledge and skills between generations (Bell, Devarajan, Gersbach 2004). If these problems are not addressed or better understood, there may be very severe long-run consequences for the maintenance of social fabric and basic institutions in the high prevalence countries.

THE “UPSTREAM EFFECTS”: POVERTY AND VULNERABILITY TO HIV

In most areas of public health, there is a strong association between poverty and health status

– wealthier countries and wealthier individuals enjoy better health as measured by a variety of indicators such as life expectancy or incidence of waterborne diseases. It has been generally asserted in the past that HIV also follows this pattern, and is primarily a "disease of poverty".6

4 Meaning for example that a growth rate of 6 percent in the absence of AIDS is reduced to a level of

4.5-5.5 percent.

5 For a useful summary, see Haacker (2004).

6 Dr Gro Harlem Bruntland, Director General of the World Health Organization, speech, afrol.com,

4 October 2002 (http://www.afrol.com/Categories/Health/health026_aids_poverty.htm).

5 HIV, growth, poverty and inequality in sub-Saharan Africa

Poverty Measures and HIV

Viewed globally, the highest prevalence of HIV is indeed found in the poorer countries of the world, with more than two thirds of people living with HIV residing in sub Saharan Africa.

Nevertheless, studies during the early stage of the epidemic suggested that HIV incidence initially occurred not amongst the poorest, but among better off members of society in this region. It has been widely assumed that this early association has shifted over time towards greater infection rates among the poorer members of society.

However, when viewed regionally within sub Saharan Africa, the highest rates of HIV prevalence are clearly found in the relatively more wealthy countries, such as Swaziland,

Botswana and South Africa. Cross-country evidence to date at national level shows that higher HIV rates are associated with higher levels of a number of development indicators,7 notably literacy and nutritional status, and with lower levels of poverty (see figures 1 and 2 below).

Figure 1: HIV prevalence, GDP per capita and poverty in sub-Saharan Africa

35% 25% Botswana Swaziland Lesotho

30% Zimbabwe 20% Namibia South Africa 25% Botswana Zambia Lesotho Mozambique e ce c 15% 20%n Zimbabwe Malawi

Namibia en e l

a Zambia v e South Africa eval r r Mozambique Central African Republic P 15%P V V Malawi 10%I HI H

Central African Republic Côte d'Ivoire 10% Tanzania Uganda Gabon Kenya Côte d'Ivoire Tanzania Kenya 5% Cameroon Uganda Nigeria 5% Rwanda Burundi Angola Ghana Ethiopia Gambia Mali Sierra Leone Ethiopia Senegal Burkina Faso Sierra Leone Niger Mauritania Madagascar 0% 0% $100 $1,000 $10,000 0 1020304050607080 GDP per capita (PPP, logarithmic scale) Percentage below $1 per day

7 Meaning that HIV is associated with higher levels of development at aggregate level.

6 HIV, growth, poverty and inequality in sub-Saharan Africa

Figure 2: HIV prevalence, literacy and nutrition in sub-Saharan Africa

35% 35%

30% 30%

25% 25% e c ce

20% 20%n e en l a v eval e r r P 15% 15%P V V I H HI

10% 10%

5% 5%

0% 0% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Literacy Rate % children underweight

Household level evidence that poverty is a major driver of the epidemic is broadly consistent with the country level data. It is important however to note that most studies focus on relative rather than absolute poverty. Comparisons are thus between "wealthier" and "poorer" groups within the study countries. A recent analysis of DHS data from 8 African countries showed that infections are more concentrated among the urban employed and more mobile members of society, and consequently the more wealthy groups, as can be seen in table 2 and figure 3.

Table 2: HIV prevalence by wealth quintile in 8 African countries8 Wealth 12345 Quintile Burkina Men 1.4 2.9 1.3 0.4 2.7 Faso Women 0.9 1.1 1.5 1.7 3.4 Men 1.4 1.5 2.0 1.4 1.1 Ghana Women 1.4 2.7 4.0 3.0 2.4 Men 1.4 2.2 4.7 5.3 5.3 Cameroon Women 3.1 4.1 8.1 9.4 8.0 Men 4.0 4.2 5.1 5.9 5.5 Uganda Women 4.8 6.6 6.7 7.0 11.0 Men 3.4 4.2 2.2 4.3 7.3 Kenya Women 3.9 8.5 7.1 9.7 12.2 Men 4.1 4.3 4.3 7.7 9.5 Tanzania Women 2.8 4.7 6.8 10.9 11.4 Men 4.4 4.6 12.1 11.7 14.9 Malawi Women 10.9 10.3 12.7 14.6 18.0 Men 18.3 16.8 23.7 21.6 14.8 Lesotho Women 19.6 27.9 25.5 27.3 28.9

8 Table derived from Mishra et al. (2007).

7 HIV, growth, poverty and inequality in sub-Saharan Africa

Figure 3: Summary of HIV prevalence by income quintile Women Men

35 25

30 20

25 Burkina Faso Burkina Faso % % Ghana Ghana e e c

c Cameroon 15 Cameroon n 20n

Uganda e Uganda e l l a a Kenya Kenya v v e e Tanzania Tanzania r 15 r P Malawi 10P Malawi V Lesotho V Lesotho HI HI 10 5 5

0 0 12345 12345 Income Quintile Income Quintile

It is important to note that the HIV prevalence is unacceptably high in all of the wealth quintiles – including the poorest (quintile 1, the wealthiest is quintile 5). Ironically, however, while there is abundant research that documents the mechanisms that lead from extreme poverty to HIV vulnerability (see, e.g., Kalichman et al. 2006), the data now indicate that the less well-studied risk factors among the better-off seem to dominate the aggregate picture.

Income Inequality and HIV

There is a significant pattern of association between income inequality and HIV prevalence across countries – countries with greater inequality have higher HIV prevalence (Figure 4).

8 HIV, growth, poverty and inequality in sub-Saharan Africa

Figure 4: HIV Prevalence and Income Inequality in Africa9

35% Swaziland

30% R2 = 0.4881 p=0.005% 25% Botswana Lesotho Zimbabwe Namibia 20% South Africa Zambia Mozambique 15% Malawi HIV Prevalence

Central African Republic 10%

Tanzania Uganda Côte d'Ivoire Kenya 5% Cameroon Rwanda Nigeria Burundi Ghana Ethiopia Mali Senegal Niger 0% 0.25 0.35 0.45 0.55 0.65 0.75 GINI Coefficient

This association suggests that we investigate whether AIDS might be more accurately described as a disease of inequality, perhaps associated with economic transition, rather than a disease of poverty in itself. The question remains as to whether the observed association at country level is robust under more sophisticated analysis, and it is clear that further research is required that can extend the enquiry to household and individual level.

One possible consequence of this apparent association between income inequality and HIV is that economic growth that is not pro-poor and leads to greater income inequality may even fuel the HIV epidemic.

Many researchers now point not to poverty itself but to economic and gender inequalities and weakened "social cohesion" (rather than poverty)(Barnett, Whiteside 2006) as factors influencing sexual behaviour and therefore the potential for HIV transmission.

9 This figure using HIV prevalence and economic data from 2006 is reproduced from Gillespie,

Kadiyala, and Greener 2007. Note also that this pattern uses data from only one year and therefore

cannot show any dynamic relationship between changes in income inequality (which are slow) and

changes in HIV prevalence

9 HIV, growth, poverty and inequality in sub-Saharan Africa

Gender Inequality

There is one fundamental difference between AIDS and many other health problems generally linked with poverty – HIV is mostly transmitted through sex. This raises the economic perspective around reward and dependency, which influences the extent to which individuals are able to make and exercise choices about sexual behaviour. Where women are economically dependent on men, their sexuality has a traditional economic potential, and sex even within marriage might be thought of as to some degree transactional. The extent to which this is influenced by dimensions of inequality is clearly key to understanding the transmission of HIV.

Social norms in many developing country contexts permit men to have multiple sexual partners, often much younger than themselves, and to dominate sexual decision-making. Sex may often involve transfer of material resources, such as money and gifts.

There are also positive associations between larger age differences between partners, the value of economic transactions and unsafe sexual behaviours. A study in South Africa found that low socioeconomic status increases the likelihood that women will exchange sex for money or goods, but also raises their chances of experiencing coerced sex and having multiple sexual partners. Low socioeconomic status has a stronger effect on women’s sexual behaviours than those of men (Hallmann 2004).

A study in Kenya (Beegle and Ozler unpublished) found that higher gender inequality between young women and adult men is significantly and strongly correlated to positive HIV status. This effect is stronger for young women, and holds for various different definitions of economic inequality between women and men.

Gender inequality is one of many injustices and inequalities that may be fuelling the epidemic. HIV is disproportionately prevalent among many groups that suffer from poor human rights protection and discrimination. This includes groups that have been marginalized

10 HIV, growth, poverty and inequality in sub-Saharan Africa socially, culturally and economically, such as injecting drug users, sex workers, migrants, and men who have sex with men.

Mobility

Since the earliest days of the HIV epidemic, there has been strong evidence of the link between human mobility and risk of HIV transmission. In sub-Saharan Africa, HIV infection has been found to be higher near roads, and amongst people who either have personal migration experience or whose partners are migrants (Crush, Frayne, Grant 2006; Bloom,

Urassa, Ng'weshemi, Boerma 2002; Zuma et al. 2003; Boerma et al. 2003, Lagarde et al.

2003; Bärnighausen et al. 2007).

The link between mobility and HIV transmission is influenced by the conditions under which migration occurs, including poverty, exploitation, separation from families and partners, and separation from the social norms of their communities. In eastern and southern Africa, mining, plantations and related agricultural industries (typically producing tea, coffee, tobacco, sugarcane, and rice) are often associated with situations of significant risk.

DEVELOPMENT STRATEGIES AND HIV

The preceding discussion demonstrates that we need to understand both the upstream and downstream interactions between AIDS and poverty in order to develop and implement effective strategies to prevent and treat HIV, and also to ensure that the impacts of AIDS do not undermine development efforts.

Growing awareness of these aspects of the epidemic has helped to catalyze greater political action on AIDS in recent years, which has in turn fuelled financial investment, increasing from $250 million in 1996 to approximately $10 billion in 2007. As a result, HIV infections are starting to fall in almost all East African countries, in the Caribbean, in Cambodia and in southern India. Almost 2.5 million people are now on anti-retroviral therapy in developing countries – up from 100,000 five years ago.

11 HIV, growth, poverty and inequality in sub-Saharan Africa

There are six key elements that we must ensure if we are to build on this progress and ensure that it is sustainable:

• First, it is vital to base strategies on a clear understanding of the transmission

dynamics of the epidemic in each country. UNAIDS’ Practical Guidelines for

Intensifying HIV Prevention (UNAIDS 2006) provide practical guidance to tailor

national HIV prevention responses so that they respond to the epidemic dynamics and

social context of the country and reach the most vulnerable populations. For example,

economic growth and the growth of trade between neighbouring countries might well

be expected to lead to increased mobility, increased economic activity and changes in

the structure of poverty and income inequality that could fuel HIV transmission.

• Second, a growing number of small-scale activities indicate the value of combining

HIV programmes with poverty reduction initiatives. For example, in Malawi, non-

governmental organizations integrate HIV prevention into village banking

programmes for women, and combine AIDS education with the provision of

microfinance to groups of women through community banking programmes (The

Global Coalition on Women and AIDS 2006). The challenge is to take the lessons

from small-scale projects to large-scale programmes.

• Third, the provision of HIV treatment can help prevent poverty, and ensure economic

participation by people living with HIV. A study in Kenya revealed a 20 percent

increase in the likelihood of HIV positive people participating in the workforce when

they took antiretroviral drugs. Such findings highlight the importance of ensuring that

the poor have access to HIV treatment and prevention services. This requires

increased investment in antiretroviral treatment – at both national and international

level; a reduction in the cost of anti-retroviral drugs; improved HIV service delivery

systems; and better services for the poor.

12 HIV, growth, poverty and inequality in sub-Saharan Africa

• Fourth, development plans and programmes must take into account their possible

interactions with HIV. For example, the World Bank-supported Chad/Cameroon

Pipeline Project supports HIV workplace interventions along the pipeline route – both

for workers and for affected communities (see lnweb18.worldbank.org

/afr/afr.nsf/General/F73F93EF36C6C8185256918004F8CD0?). At national level,

social protection programmes must also include specific measures to address the

economic and social needs of households that are directly affected by AIDS.

• Fifth, poverty reduction programmes and national AIDS strategic plans must both

reduce vulnerability to HIV – particularly of women and young people. This involves

protecting human rights and tackling issues around social marginalization and stigma.

One obvious step is to ensure that domestic legislation is consistent with international

human rights norms, and that it is effective in protecting women’s rights within

marriage, securing their right to own and inherit property, ensuring equality in the

workplace and strengthening laws against domestic violence.

• Sixth, AIDS will require increased and sustained support from governments and

international donors, driven by high-level political will. Many countries will require

international support to sustain their HIV response, and are likely to do so for some

time to come. It is critical that donors prioritise the provision of predictable and

sustained support in order to ensure the effectiveness of current and future efforts, and

avoid the unravelling of progress already made.

CONCLUSION

There is no simple explanation for the relationship between wealth or poverty and HIV transmission. AIDS cannot accurately be termed a "disease of poverty", nor is it a "disease of wealth". It is undoubtedly true that poor individuals and households are hit harder by the

13 HIV, growth, poverty and inequality in sub-Saharan Africa downstream impacts of AIDS, but their chances of being exposed to HIV in the first place are not greater than wealthier individuals or households. What is clear is that:

approaches to HIV prevention need to cut across all socioeconomic strata of

society and they need to be tailored to the specific drivers of transmission within

different groups – with particular attention to the vulnerabilities faced by youth

and women, and to the dynamic and contextual nature of the relationship between

socioeconomic status and HIV (Gillespie, Kadiyala, and Greener 2007).

AIDS is exceptional in terms of its threat to humanity, and its complexity (Piot 2005). The relationship between AIDS and poverty is just one example of that complexity. Another example is the growing evidence that the relationship between socioeconomic status and HIV varies considerably from country to country, reflecting differences in culture and traditions.

Effective actions to tackle both AIDS and economic development must directly address these factors that drive HIV transmission in different contexts. AIDS truly belongs at the centre of socio-economic development strategies.

14 HIV, growth, poverty and inequality in sub-Saharan Africa

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