House of Commons - International Development

Select Committee on International Development Minutes of Evidence

Memorandum submitted by the Department for International Development (continued)

IMPACT ON ENTERPRISES

Households and enterprises overlap where households are, essentially, units of production, for example in subsistence agriculture, local shops and other small manufacturing and commercial firms, often in the informal sector. Such small enterprises are characterised by their use of labour predominantly from one or a small number of families, and are highly vulnerable to collapse if labour is withdrawn and if it is not easily replaceable. Collapse is more likely if the enterprise relies on skilled labour. The coping mechanisms for such household enterprises have been described, above. This part of the memorandum focuses on larger scale enterprises including agriculture businesses. The box, below, contains a useful distillation of company experience, prepared by Futures Group International.8

Economic Impact of AIDS on Firms

AIDS may have a significant impact on some firms. AIDS-related illnesses and deaths to employees affect a firm by both increasing expenditures and reducing revenues. Expenditures are increased for health care costs, burial fees and training and recruitment of replacement employees. Revenues may be decreased because of absenteeism due to illness or attendance at funerals and time spent on training. Labour turnover can lead to a less experienced labour force that is less productive.


Factors Leading to Increased Expenditure	Factors Leading to Decreased Revenue

Health care costs Burial fees Training and recruitment	Absenteeism due to illness Time off to attend funerals Time spent on training Labour turnover

The actual distribution of these costs has been calculated as part of various USAID-funded AIDSCAP studies of the private sector impact of AIDS:

— One study examining several firms in Botswana and Kenya showed that the most significant factors in increased labour costs were absenteeism due to HIV or AIDS and increased burial costs as shown in the figure above.

— Another study in Zimbabwe found that the major expense was health care costs. The transport company in this study has a large staff of 11,500 workers. Since the company offers significant health benefits to its employees, the cost of AIDS is even higher than for other companies that do not provide such benefits. The study estimated that there are currently more than 3,400 workers who are infected with HIV and 64 who died from AIDS in 1996. The total cost of AIDS to the company in 1996 was estimated at Z$39 million, equal to about 20 per cent of the company's profits. More than half of this amount resulted from increased health care costs. By 2005 the cost of AIDS to the company could reach Z$108 million. There may be indirect costs as well. The report speculates that HIV/AIDS will worsen employee morale and create greater labour-management tensions and cause a labour shortage among skilled positions.

Various studies have also examined the total annual cost of AIDS to different companies, as well as the annual cost of AIDS per employee. These studies found that the annual cost of AIDS per employee varied from US$17 to US$300, as shown in the table below:

Company Name	Total Annual Cost of AIDS	Annual Cost of AIDS per Employee
Botswana Diamond Valuing Botswana Meat Commission Cote d'Ivoire food processing firm Cote d'Ivoire textile firm Cote d'Ivoire packaging firm Kenyan automobile firm Kenyan transport firm Muhoroni Sugar, Kenya Kenyan lumber firm Uganda Railway Corporation	US$ 125,941 US$ 370,200 US$ 33,207 US$ 32,667 US$ 10,398 US$ 21,312 US$ 61,132 US$ 58,303 US$ 40,630 US$ 77,000	US$ 237 US$ 268 US$ 120 US$ 29 US$ 125 US$ 17 US$ 28 US$ 49 US$ 25 US$ 300

Increased labour costs can reduce the profits necessary for expansion. This impact on profits can be considerable:

— The Indeni Petroleum Refinery in Zambia spent US$26,400 on AIDS-related costs in 1994, more than its declared profits of US$25,514 in that year.

— A study in South Africa examined the expected impact of AIDS on employee benefits, and thus on corporate profits. It found that at current levels of benefits per employee, the total cost of benefits would rise from 7 per cent of salaries in 1995 to 19 per cent by 2005. Since these additional costs will have to be paid at the same time that productivity is declining, due to AIDS, the net impact on profits could be significant.

Finally, other costs associated with AIDS that firms face include:

— The Uganda Railway Corporation has been hard hit by AIDS among its employees, experiencing a labour turnover rate of 15 per cent per year in recent years.

— Medical aid companies in Zimbabwe have estimated that meeting all the claims of just one per cent of HIV-infected members could result in a 31 per cent increase in insurance rates. Most of this increase would have to be paid by employers.

For some smaller firms the loss of one or more key employees could be catastrophic, leading to the collapse of the firm. In others, the impact may be small. Firms in some key sectors, such as transportation and mining, are likely to suffer larger impacts than firms in other sectors. In poorly managed situations the HIV-related costs to companies can be high. However, with proactive management these costs can be mitigated through effective prevention and management strategies.

Estate agriculture is likely to face increased costs in countries where significant numbers of the workforce become sick or die. In Malawi, where 10 per cent of the GDP is produced by estate agriculture, a study found that 25 per cent of firms' medical services, 75 per cent of funeral costs, all of the death in service benefits and 25 per cent of absenteeism was attributable to HIV/AIDS. The study predicted that the main impact in the longer term would be on the supply of skilled labour.9

The FAO and UNDP published in 1999 a thorough study of the impact of HIV/AIDS on the commercial agricultural sector in Kenya, which found that:

Protracted morbidity and mortality are costing the industry financially, economically and socially (including loss of skilled and experienced labour). For agro-estates to remain viable businesses it is necessary and urgent to approach the epidemic with the seriousness it deserves. This includes well-elaborated prevention programmes and concerted mitigation strategies at company level, in collaboration with other sectors of the economy including the government, NGOs, and civil society.10

The same study found increased medical and funeral expenses attributable to HIV/AIDS; HIV-related illness and death were now the major causes of employees leaving the companies; significant productivity was being lost through absenteeism due to illness and attending funerals; workforce motivation and productivity losses because of the financial and psychological impact of illness and death; falling work standards as a result of the loss of skilled labour; falling profits as a result of increasing costs and declining labour productivity, attributable to HIV/AIDS.

The study found that agricultural estates were susceptible to HIV transmission (that is, they were environments in which individuals' risk-behaviour flourished) for a number of reasons. These included overcrowded worker housing on the estates; the frequency of casual and commercial sex on and near the estates; commercial sex being encouraged by low incomes and poverty on an and near the estates; a consequent high incidence of STDs; a lack of recreation facilities, contributing to boredom and the use of alcohol, sex and drugs; continuing unwillingness to use condoms; cultural beliefs about the origins of HIV/AIDS.

Some of the firms were responding reactively rather than taking a constructive approach, and some were infringing basic rights by, for example, pre-employment HIV testing.11

The following graphs, from the same study, illustrate both the impact on the workforce and on the companies' finances (we do not have information to explain the dramatic drop in annual cases after 1995 in the second graph).

The following box contains the summary of a December 1999 ILO report on the impact of HIV/AIDS on the workforce in Africa.12

Initial data from a new analysis of the workforce in two countries—Zimbabwe and Togo—indicated that the impact of HIV/AIDS would be "very severe indeed" and "would lead to increased morbidity and mortality, reduced population and supply of labour."

  In Zimbabwe, where the estimated percentage of the adult population infected with HIV in 1997 was 21 per cent, the report projected that the labour force would be 17.5 per cent smaller in the year 2015 than it would have been, had there been no HIV/AIDS epidemic, increasing by 40 per cent instead of 68 per cent. In Togo, where the 1997 estimate of HIV incidence was lower, at 7 per cent, the ILO study projected that the labour force would be 4 per cent smaller than it would have been without HIV/AIDS during the same period, increasing by 65 per cent instead of an anticipated 70 per cent.

  Similar results were found in other countries. In South Africa's mining sector, for example, as many as one out of five workers are infected with HIV. In Rwanda, United Republic of Tanzania, Zambia and Uganda, some 80 per cent of persons infected with HIV were between 20 and 49 years old, the ages when they could be expected to be the most productive workers. In Zambia, 96.8 per cent of all deaths in 18 companies surveyed occurred among workers aged 15 to 40, with AIDS-related illness accounting for 56 per cent of the deaths among general workers, 57 per cent among middle level workers, 62 per cent among top level management and 71 per cent among lower level workers.

  The report also noted that HIV/AIDS severely threatens both productivity and demand for goods and services in a number of countries. In Mauritius, AIDS resulted in increased health care costs, medical insurance, death benefits and disability and pension payments. In Zimbabwe, life insurance premiums quadrupled in just two years because of AIDS-related deaths. In Tanzania and Zambia, large companies reported that AIDS and health costs surpassed their total annual profits. In Botswana, companies estimated that AIDS-related costs will increase from under 1 per cent of salary costs to 5 per cent in only six years due to the rapid rise in infections.

  The report urged that particular attention be given to prevention and assistance and called for a coherent labour management policy to ensure that all aspects of the HIV/AIDS epidemic are addressed in a "mutually supportive manner". To this end, the report said, employers and workers must take joint action in "multi-sectoral national policies to combat HIV/AIDS". In addition, the report called for the launching of private sector initiatives on an urgent basis.

  The report also called on ILO Member States to develop programmes that encompasses:

Citing earlier ILO research, Loewenson and Whiteside described a study of 18 firms in Zambia. Of 68 deaths during 10 months in 1993, 37 per cent were in general workers, 30 per cent lower management, 21 per cent middle management, and 12 per cent top management. Fifty-six per cent of the general worker deaths and 62 per cent of the top management deaths were associated with AIDS-related symptoms. There was a correlation between HIV/AIDS and longer periods of absenteeism. Frequent illness hindered normal operations.13 The authors go on to explain that, because professionals and more highly skilled workers are more difficult to replace, costs will be concentrated at that level.

The costs of replacing workers will vary from industry to industry and firm to firm. Companies that depend on unskilled labour will be less adversely affected than those requiring skills acquired through lengthy education and training. One study found that it took firms, on average, eight times longer to replace a deceased professional than a skilled worker.14

A study in Côte d'Ivoire found that the changed ratio between experienced and newly recruited workers led to disruption in work practices. Knowledge about how organisations work is often informal rather than formal, and the unusually rapid replacement of experienced workers reduces the proportion who know the organisational culture. This can disrupt work routines, reducing efficiency. More experienced staff serve a function of integrating new workers into companies. The absence of the former makes integration more difficult, reducing productivity (at least in the short-term). The study found that conflicts occurred more frequently and took longer to resolve, reducing the quality of work and productivity.15

Companies have been responding with increasing energy as the impacts have become more evident. The responses have been of variable quality and effectiveness, which is natural in the face of an emerging and unprecedented problem. The following paragraphs illustrate some of the more impressive examples. DFID will provide the IDC with a dossier of examples of "good practice", to accompany this memorandum.

The Lesedi Project

A group of mining companies in South Africa became increasingly aware that their workers, the majority of whom were migrants from outside South Africa, were becoming more frequently ill. This was leading to absenteeism and increased health care costs. The mining companies improved the quality of sexually transmitted diseases services for their workers and for women in the neighbouring communities who provided the workers with commercial sex services. After some initial hiccups, especially in obtaining the trust of the women, the company found that STD rates began to drop significantly among their workers, reducing the likelihood that they would acquire HIV infection. The results were highly cost effective: each of the HIV cases averted represented a significant saving in health benefits, absenteeism and worker replacement

The Kopano Project

Building on the Lesedi experience, another group of South African mining-related companies clubbed together. They worked out that a combination of health care costs, shift loss arriving from absenteeism, decreased production, labour turnover, training costs, compensation paid to an increasing number of HIV-related TB patients, and death and medical benefits, amounted to roughly R60-70,000 (£6,400-7,400) per HIV-positive individual. They projected that, if they took no action, the rate of infection in the miners would continue to increase from around 15 per cent HIV prevalence in 2000 to over 20 per cent (and still climbing) at 2010. At its most successful, they estimated that it would peak at 16-17 per cent prevalence in about 2003 and would decline to around 13 per cent, still falling, by 2010. For an intervention costing around R2.4 million a year they would realise a benefit of around R83 million a year.16

What is valuable about this illustration is that the companies recognised both the economic value of preventing future HIV cases and their obligations for care in the form of medical and death benefits.

Other examples of good practice

Astra Holdings, a holding company for 10 subsidiaries, based in Harare, has about 2,400 workers. The company set up a health promotion programme in 1994. In co-operation with a local NGO that had expertise in HIV/AIDS, the company began a peer education programme on STDs and HIV/AIDS. The programme included services for the treatment of STDs and care for the ill, including home-based care. It is estimated that the programme has led to a 40 per cent decline in monthly STD rates, at an annual cost of $4,250.17 Such a dramatic fall in STDs would significantly reduce future HIV infections.

Some companies are providing care for ill workers, including those with HIV. As with STD and HIV prevention, the picture is very mixed. In Zimbabwe about 6 per cent of registered companies run medical facilities with their own staff. This is more common among the larger employers. Services include the promotion of good nutrition, useful for maintaining immune systems and for helping workers to get over minor illnesses, thereby improving productivity. Larger companies have health and death benefit systems, and some support home-based care programmes, either their own or ones they contract in. They have found that the home-care and counselling programmes reduce absenteeism as well as improving worker well-being. Despite examples of good practice such as those described here, however, it appears that Southern African companies are still not well prepared for the rapidly increasing rate of worker ill-health.18

An example of good practice in care provision rather than prevention is a group of six companies with a combined workforce of 10,000 who got together in 1995 to provide a care centre for terminally ill employees. Companies provided the start-up costs, including a house to be used as an in-patient unit. This unit provides palliative care for terminally ill patients (not only for those with AIDS). Each company's occupational health staff refer patients to the unit. Staff from the unit also provide care in patients' homes, including grief and bereavement counselling. Costs are shared between patients and the companies (the patient's share, at $42 a day, seems expensive). "The project has provided information for, and enabled participating companies to predict and budget for the impact of HIV/AIDS on their organisations. It has also provided a collective framework for dealing with illness and terminal care needs".19

These are two examples from a growing body of good business practice in the face of rapidly increasing illness and death in the workforce. Such practice is more affordable for larger companies. There is an urgent need for initiatives that will help more companies, including smaller ones, to cope with the growing burden. This is not simply to protect the businesses: declining business performance, including closure of those that cannot carry the extra costs, will put the brakes on development in the worst-hit countries and communities. The UNAIDS-led International Partnership against AIDS in Africa is working towards greater business involvement in national responses to HIV/AIDS, and co-operative business initiatives have existed for some years in other parts of the developing world, such as Thailand.

The Global Business Council on HIV/AIDS is an active advocate for such responses. Its membership is reported to be growing fast. The DFID-financed regional HIV/AIDS programme in Southern Africa, awaiting approval by SADC Health Ministers, includes a significant component for helping mining companies to roll out the highly effective Lesedi experience among migrant mine workers. DFID's central Africa office is working with the private sector in Zambia to put together a financing proposal for strengthening companies' responses there, with the prospect for rolling out to other countries if it is successful. There is clearly much scope for the International Partnership against AIDS in Africa to act as a strategic framework within which similar efforts can be accelerated.

MACROECONOMIC IMPACT

There is good evidence that HIV prevalence is higher where per capita incomes are low and where there is significant income inequality.20 If rises in illness and death reduce per capita incomes or increase income inequality, these factors will have a mutually reinforcing effect—HIV/AIDS takes off more easily where incomes are low and uneven, and where incomes are low and uneven HIV/AIDS takes off more easily.

Accurate predictions of the macroeconomic effects are, however, notoriously difficult and are based on a large number of assumptions. In one of the earliest and most comprehensive attempts, which examined 30 sub-Saharan countries, it was found that "the net effect of the AIDS epidemic on the growth of per capita GDP is a reduction of about a third of a percentage point in the 10 countries with the most advanced epidemics."21 The 30-country average was a reduction in growth of 0.15 per cent in per capita GDP. Interestingly, the model predicted positive growth in per capita GDP in nine of the countries[1]. The author of that study stated that adding an assumption about the reduced productivity of people with AIDS to his model would exacerbate the predicted impact of the epidemic.

Later studies have shown that HIV/AIDS is likely to reduce economic growth: over 20 years the reduction could be as much as 25 per cent below what it would otherwise have been.22 The World Bank now estimates that annual reductions could be in the region of 1 per cent in countries with 10 per cent HIV prevalence in adults. Loewenson and Whiteside summarise the findings of a group of other researchers as follows:

— reduction in growth of national income by as much as 0.67 per cent and per capita income growth by 0.3 per cent per annum to 2010 (Bloom and Mahal, 1995);

— in Tanzania, reduction in average real GDP growth rates by 15-28 per cent from 1985-2010 (from 4 per cent to 3 per cent per annum) (Hanson, 1992);

— in Zambia, without AIDS, the economy would have to grow from US $4.1 billion in 1991 to US $5.5 billion in 2000 to maintain an annual per capita income of $513; with AIDS, GDP was projected to fall by 9 per cent below the baseline, reaching US $5 billion by 2000, with per capita income at US $494, 4 per cent lower than the baseline (Forjy and Mwanza, 1994).23

As Loewenson and Whiteside point out, the forecasts must be put in the context of existing low per capita incomes in sub-Saharan Africa and low growth in GDP per capita, balance of payment problems and debt. It is essential that Poverty Reduction Strategy Papers and other national planning approaches take HIV/AIDS fully into account, both from the perspective of the likely impact of increasing illness and death on the economy and the potential for well co-ordinated, multi-sectoral strategies to reduce that impact.

The World Bank and others are continuing to study economic impact, at both the micro and macro levels. National governments, backed by DFID and other bilateral and multilateral development agencies, need to keep in touch with this research and take it into account in their national planning and development strategies.

IMPACT ON EDUCATION

Investing in the Future

Education is investment in the future. This memorandum gives particular profile to the relationship between HIV/AIDS and education because of education's particular role in development. Reducing the flow of educated young people reduces the strength of future society and will slow poverty eradication. At the same time, schools, universities, and out-of-school programmes have great potential to help people to avoid or reduce the risks of acquiring HIV.

HIV/AIDS and Education

In sub-Saharan Africa HIV/AIDS is beginning to have serious impacts on both the demand for and supply of education. These threaten the achievement of the international development targets for achieving universal primary education by the year 2015 and for eliminating gender disparity in primary and secondary education by 2005.

Impacts on the supply side are most noticeable with regard to the loss of trained teachers through death and reduced productivity through illness. While disaggregating deaths from AIDS from other causes is problematic because of reporting procedures, the worst affected countries are experiencing a serious loss of staff. Present HIV prevalence rates mean that this loss will increase significantly. For example, in Zambia, 680 or 2.2 per cent of the trained teachers died in 1996 alone (Kelly, 1998). The number of teachers dying is greater than the outputs from all teacher training colleges. Already the number of trained teachers is decreasing, yet the number of teacher deaths is predicted to rise to around 2,000 a year by 2005. In Tanzania, it is estimated that AIDS will result in the deaths of almost 15,000 teachers by 2010 and 27,000 by 2020 (UNAIDS, 1999). The ability of the education system to manage the delivery of quality education and to match supply with demand is also being affected through mortality or sickness of staff including planners, teacher trainers, inspectors and finance officers.

HIV/AIDS also affects the resources that are available for education because of the funds that are tied down for salaries for an unknown number of sick and unproductive teachers. It will affect public funds due to AIDS-related decline in national income. However, additional funds will be required as costs will rise dramatically to replace lost staff.

HIV/AIDS is likely to reduce the demand for education. Enrolments in Zambia during 1990-96 stagnated and this in part can be attributed to the effects of the disease. Similarly in Tanzania, there has been a decline in school attendance which is AIDS-related. Demand is predicted to fall due to effects on the affordability of the opportunity and direct costs of education. This is due to direct loss of family income from AIDS, either through death or illness, and the use of income and savings to pay for treatment, care and funerals. Children will find new pressures to drop out of school as increasingly they are having to take on domestic and livelihood tasks in addition to caring for adults who are sick. The domestic burdens will fall disproportionately on girls. Trauma, stigma and discrimination suffered by children in AIDS-affected families is given as another reason from early drop out.

In Zambia, a study has shown that orphans are less likely to go to school than non-orphans (Foster et al 1996). In 1996, it was reported that there were half a million orphans in Zambia alone and more than 130,000 households were child-headed (ie by a child less than 15 years old). Among the problems that orphans face are: inability to provide school equipment and clothing, reduced capacity to provide for their own food and well being and psycho-social problems that affect their development. Traditional mechanisms for coping with orphans seem at the point of collapse and the number of children taking to the streets appears to be on the increase.

Assessing the impact of HIV/AIDS on education systems is hampered by the poor quality of data and problems associated with the reporting of the disease. Donor assistance is being given to assisting Ministries of Education in making reliable comprehensive impact assessments. DFID is providing support to the Government of Botswana in this regard. It is also providing support to the University of Natal to develop a manual for educational managers to help them address the challenges of HIV/AIDS. This will be trialled initially in South Africa, Swaziland, Malawi and Zambia. Following the trial process, it is anticipated that the approach will be expanded throughout southern Africa. USAID and DFID are currently discussing the planning of two workshops for Ministries of Education in West and East Africa based on the University of Natal work.

Education systems have enormous but under-utilised capacity to raise awareness about HIV/AIDS and develop skills to prevent its transmission through formal or non-formal education where NGOs have an important role to play. This includes the need to include HIV/AIDS education in the formal curriculum so as to impart the knowledge attitude and life skills that can promote safer sexual behaviour. There is a need to reach children in primary school before they become sexually active.

The role of the school will have to be re-conceptualised as a multi-purpose development institution that also has some welfare responsibilities for the counselling and care of AIDS-affected children. Schools will need to be more flexible in timetabling and more responsive to the special needs of individual children.

Effective education sector responses to HIV/AIDS have been weak so far in almost all sub-Saharan Africa. National HIV/AIDS co-ordination also tends to be weak. The challenge that development agencies are facing are how to strengthen responses that will assist in managing the impacts on the education system in terms of maintaining progress towards quantitative and qualitative targets and to harness education to prevent HIV transmission and to cope with its effects in everyday life. DFID is ensuring that all new submissions for support in the education sector address HIV/AIDS throughout and that effective assistance is given to governments to develop appropriate policies and robust strategic responses. This is now taking place in the development of education programmes in Malawi and Rwanda.

Representatives from UNICEF, USAID, UNDP, World Bank, UNDP, UNESCO and CIDA have formed an informal agency network. The main purpose of this is to share knowledge and co-ordinate responses in the education sector. UNDP and UNICEF have developed a list of on-going impact studies and resources.

IMPACT ON YOUNG PEOPLE

While the IDC call for memoranda does not specifically request information about young people and orphans, they play roles in the development process that warrants mention. The issues are wide ranging and complex and go somewhat beyond the coverage given in the section on education, above. For the purposes of this memorandum, we will flag some of the issues rather than go into them in depth.

In many countries, especially those worst affected, young people play a crucially important role in driving the HIV epidemic. The age of onset of sexual activity has been dropping in many countries. Ironically, negative trends towards impoverishment and marginalisation of young people (for example in many cities) and the creation of positive opportunities for social mixing (for example at schools and universities) can both fuel the breakdown of traditional values and increase the sexual risks that young people take.

Young women tend to be more susceptible than young men to acquiring HIV infection, both because women are more biologically likely to become infected and because teenage girls are more likely than teenage boys to have partners in older age groups. In the early stages of HIV epidemics, prevalence tends to be higher among men, as the clients of commercial sex workers. However, as epidemics mature, men increasingly pass the infection to their partners and the greater susceptibility of women means that they begin to show a higher prevalence. UNAIDS now estimates that there are roughly 12 or 13 HIV-positive women for every 10 infected men in sub-Saharan Africa. In the 15-19 year age group, there are likely to be five or six times as many HIV-infected girls as boys, because of young girls' older boyfriends. Men begin to catch up as infection increases rapidly in their 20s. The policy implication is that HIV prevention programmes must give high priority to widespread, intensified and practical efforts to encourage young people to delay the onset of sexual activity, to seek STD treatment, and to practice safe sex, especially the use of condoms. These matters are sensitive in most countries: external agencies need to advocate carefully but persuasively and, as much as possible, through national leaders and organisations. Young people, themselves, need to be involved in advocacy, programme design and implementation. Where there has been strong national leadership, as in Uganda, even though it has not been as explicit as it could have been, there has been a demonstrable reduction in HIV prevalence among young people.

As a group, youth includes children (ages 10-14), adolescents—some of whom are parents, particularly girls—(15-18) and young adults, most of whom are parents (19-25 years). These groups may have to be targeted separately, given the fact their lifestyles, sexual behaviour and learning abilities differ. Childhood/adolescence, marriage and parenthood are often very close together for girls/young women. This needs to be taken into account when designing interventions.24

There is growing awareness about the rapidly developing crisis of children who have lost their mother or both parents to HIV/AIDS. UNAIDS' estimate was that at the end of 1999, a cumulative total of more than 11 million children would be in this situation, and that most of them would still be under 15. A minority would be HIV-positive.

Traditionally, orphans or abandoned children in African countries have been looked after by relatives. In the most affected countries, the situation is changing rapidly, with children more likely to be left to their own devices. The households of the extended family may also be under stress as a result of HIV/AIDS-related illness or death. The extended family-coping mechanism is providing much support, and it would be wrong to assume that all the current orphans are unsupported. It is common to find orphans in relatives' households, although this sometimes means a single grandmother looking after a group of young children when, in normal times, she herself would probably be dependent on younger relatives. It is also not uncommon to find child-headed households in which both parents have died and there are no relatives willing or able to take on the direct caring role for the children.

UNICEF has estimated that, before the HIV/AIDS epidemic, about 2 per cent of children in developing countries were orphaned while in 1997 the rates in some sub-Saharan African countries were between 7 and 11 per cent25

While extended families might be able to cope to some extent (and that extent does not appear to have been adequately researched) orphans are more likely to be excluded from resources:

Orphans run greater risks of being malnourished and stunted than children who have parents to look after them. They also may be the first to be denied education when extended families cannot afford to educate all the children of the household. A study in Zambia, for example, showed that 32 per cent of orphans in urban areas were not involved in school, as compared with 25 per cent of non-orphaned children. Children who have been orphaned by AIDS may also not receive the healthcare they need, and sometimes this is because it is assumed they are infected with HIV and their illnesses are untreatable. Increasingly, children whose parents are dead accumulate an ever greater burden of responsibility as head of household when a grandparent or other guardian or care giver dies.

Orphans enduring the grave social isolation that often accompanies AIDS when it strikes a family are at far greater risk than most of their peers of eventually becoming infected with HIV. Often emotionally vulnerable and financially desperate, orphaned children are more likely to be sexually abused and forced into exploitative situations, such as prostitution, as a means of survival.26

In countries most affected by the epidemic, responses include a National Orphan Programme established in early 1999 by the Government of Botswana and run by a mix of government departments and organisations in the voluntary and commercial sectors. Its mandate is to review and develop policy, build and strengthen institutional capacity, provide social welfare services, support community-based initiatives, and monitor and evaluate activities.27 This programme's responsibility is massive and it is too early to say whether it is being successful. It is, though, a step in the right direction.

As with other aspects of the crises emerging from the increase in illness and death brought about by HIV/AIDS, much of the response to the growing number of orphans needs to be an intensification and re-targeting of tried and tested service-delivery and development programmes. The challenge for policy makers is to make sure that those programmes are intensified, that they are targeted on the individuals, households and communities most in need, and that they are allocated a level of resources commensurate with their level of priority.

This is a particularly difficult challenge. Not enough is yet known about the nature and scale of the problems that the orphans and their carers face. But there is a growing demand that they receive more assistance than the little currently available, and the demand is based on firm humanitarian principles. Some of the most practical suggestions, albeit longer term solutions, are about improving social services - strengthening households', communities' and countries' ability to cope. They are not specifically about HIV or AIDS.28 This strengthening will require scarce financial and organisational resources. The allocation of those resources must be decided in the context of other priorities, AIDS-related and non-AIDS-related. As with other aspects of mitigating the impact of AIDS-related illness and death, the International Partnership against AIDS in Africa should provide fora for analysing needs and helping governments and organisations to make resource-allocation decisions.

DFID is providing some support for AIDS-orphans programmes in sub-Saharan Africa. We will re-examine the priority to be given to this area in the light of more analysis of its importance in the development context of the hardest-hit countries.

IMPACT ON THE HEALTH SECTOR

This section looks briefly at the way that increasing illness is, in the worst affected countries, straining the ability of hospitals and clinics to provide the services that people now need.

There is useful illustrative data from the relatively early days of the epidemic in Kenya:

The impact of AIDS on an entire curative health care sector is demonstrated by what happened at the Kenyatta National Hospital in Nairobi, Kenya between 1988-89 and 1992, when the number of HIV-infected patients admitted daily more than doubled. The mortality rate of HIV-negative patients rose by more than two-thirds, indicating that those with less serious conditions could not even get admitted to the hospitals.29

During the same period, the mortality rate of HIV-positive in-patients remained virtually unchanged.

In many health facilities in the worst affected countries, HIV-infected patients account for 50 per cent or more of in-patients. This amount of pressure on facilities is one of the stimuli for the development of community caring programmes, including home-based care. Most of these, however, are still in the hands of NGOs and are relatively limited in scale. Home care is an expensive option compared with in-patient care, but, where it amounts to more than simply dumping patients in the community, it can have major benefits in terms of quality of life; it is an important option when, as in most of the worst affected countries, there are not enough facilities to meet the need. This is not simply an issue for the patient: family members, who often provide much of the care when a patient is in hospital, may not be able to be at a health facility far from home and their other duties.

A useful, though now somewhat out of date synthesis of estimates of costs of care is contained in the following summary.

Lancet

The cost of institutional treatment and care varies widely, ranging in Africa from US $200-US $1,000 annually (Mainor/USAID, 1996). Current public health spending in Africa is US $5 per person per year with AIDS prevention programmes running at US $20 per person per year on average (Ainsworth and Over, 1994). Out of pocket medical expenditures are also often not calculated in, but studies have found an average of 30-50 per cent of annual household income is spent on health costs, decreasing to 24 per cent for those covered by social security and increasing to 92 per cent for those not (Hanson, 1992).

In addition, costs will arise from replacement of health workers who have become ill or died due to AIDS. The rate of infection in healthcare workers is likely to be the same as that of the higher income groups in the population. As a mobile population often posted away from home, they share the susceptibility with migrant labour. In Zambia, mortality in nurses rose from 2/1,000 in 1980-85 to 26.7/1,000 in 1989-91 and staff absenteeism ran at 16 per cent (Lancet, 1995) . . . . Added to this is the poorly explored issue of psycho-social stress within the health sector of managing fatal illness under conditions of under-staffing and inadequate resource allocation and where occupational risk of blood borne and infection diseases have also increased.30

1 A result produced by the fact that marginal GDP per capita tends to be lower than average GDP per capita, so the loss of one person in a population actually increases the average income. Back



© Parliamentary copyright 2001	Prepared 29 March 2001