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Risks and macroeconomic impacts of HIV/AIDS in the Middle East and North Africa : why waiting to intervene can be costly

  • Robalino, David A.
  • Jenkins, Carol
  • El Maroufi, Karim

The authors develop a model of optimal growth to assess the risks of an HIV/AIDS epidemic and the expected economic impact in nine countries in the Middle East and North Africa region-Algeria, Djibouti, Egypt, Iran, Jordan, Lebanon, Morocco, Tunisia, and Yemen. The model incorporates an HIV/AIDS diffusion component based on two transmission factors-sexual intercourse and exchange of infected needles among intravenous drug users. Given high levels of uncertainty on the model parameters that determine the dynamics of the epidemic and its economic impact, the authors explore large regions of the parameter space. The prevalence rates in year 2015 would be below 1 percent in 16 percent of the cases, while they would be above 3 percent in 50 percent of the cases. On average, GDP losses across countries for 2000-2025 could approximate 35 percent of today's GDP. In all countries it is possible to observe scenarios where losses surpass today's GDP. The authors quantify the impact of expanding condom use and access to clean needles for intravenous drug users. They show that these interventions act as an insurance policy that increases social welfare. They also show that delaying action for five years can cost, on average, the equivalent of six percentage points of today's GDP.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2874.

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Date of creation: 31 Aug 2002
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Handle: RePEc:wbk:wbrwps:2874
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  1. Robalino, David & Lempert, Robert, 2000. "Carrots and sticks for new technology: Abating greenhouse gas emissions in a heterogeneous and uncertain world," MPRA Paper 12002, University Library of Munich, Germany.
  2. Ainsworth, Martha & Over, Mead, 1994. "AIDS and African Development," World Bank Research Observer, World Bank Group, vol. 9(2), pages 203-40, July.
  3. Bloom, David E. & Mahal, Ajay S., 1997. "Does the AIDS epidemic threaten economic growth?," Journal of Econometrics, Elsevier, vol. 77(1), pages 105-124, March.
  4. Pizer, William, 1997. "Optimal Choice of Policy Instrument and Stringency Under Uncertainty: The Case of Climate Change," Discussion Papers dp-97-17, Resources For the Future.
  5. Silvia Sgherri & Maitland MacFarlan, 2001. "The Macroeconomic Impact of HIV/AIDS in Botswana," IMF Working Papers 01/80, International Monetary Fund.
  6. Cuddington, John T, 1993. "Modeling the Macroeconomic Effects of AIDS, with an Application to Tanzania," World Bank Economic Review, World Bank Group, vol. 7(2), pages 173-89, May.
  7. Dollar, David & Kraay, Aart, 2001. "Growth is good for the poor," Policy Research Working Paper Series 2587, The World Bank.
  8. Robalino, David A. & Voetberg, Albertus & Picazo, Oscar, 2002. "The macroeconomic impacts of AIDS in Kenya estimating optimal reduction targets for the HIV/AIDS incidence rate," Journal of Policy Modeling, Elsevier, vol. 24(2), pages 195-218, May.
  9. World Bank, 2002. "Reducing Vulnerability and Increasing Opportunity : Social Protection in the Middle East and North Africa," World Bank Publications, The World Bank, number 14255.
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