For most developing countries, the main source of progress is through industry and domestic saving. In order for industry to be a viable source of progress, the country must have a large, productive workforce. Certain elements may stymie growth, leading to a slow down in development and, by proxy, a stalled economy. For developing countries across the globe in 2006 disease was the biggest problem. In some African countries, HIV/AIDS pandemic has infected up to 40 percent of the adult populations.
Worldwide, the HIV/AIDS virus affects 40 million people (Case, Fair, Oster, 2009). This has a very dramatic effect on the economies of these countries. In a country heavily plagued by the HIV/AIDS virus, industry is slowed, reducing the amount of capital available. Adding to that is the loss of capital that is diverted from other aspects of the government to the care and treatment of those infected with the HIV/AIDS virus.
According to the United Nations, the HIV/AIDS epidemic can affect the economy in a number of ways: 1. • The AIDS epidemic will slow or reverse growth in the labour supply. The economic impact can vary according to the sector of the economy, the degree to which HIV/AIDS affects hard-to-replace skilled labour and whether or not there is a substantial pool of “surplus labour”. 2. • Savings and investments of families will be reduced owing to the increase in HIV/AIDS-related health expenditures.
If children’s education, health and nutrition suffer as a result, prospects for longer-run economic growth and development will decline. 3. • The AIDS epidemic may also divert public spending from investments in physical and human capital to health expenditures, leading over time to slower growth of the gross domestic product. Foreign and domestic private investment might also decline if potential investors become convinced that the epidemic is seriously undermining the rate of return to investment.
• The HIV/AIDS epidemic may also deepen the poverty of the most affected countries by decreasing the growth rate of per capita income and by selectively impoverishing the individuals and families that are directly affected (United Nations Department of Economic and Social Affairs/Population Division, n. d. ). HIV/AIDS is a disease that is transported through the exchange of blood or other bodily fluids, such as semen or vaginal fluid. It can be transmitted from sexual contact with someone infected, as well as through coming into contact with infected blood, such as through sharing needles.
The HIV/AIDS virus work by slowing destroying the afflicted person’s ability to fight off diseases and bacteria. The immune systems of these people eventually shut down leaving them as easy prey for opportunistic infections. Along with the physical deterioration of the disease are the social ramifications that go along with being afflicted by the virus. There has long been a stigma about people who have obtained the HIV/AIDS virus. Typically, society views them as being unclean and as a group that should be avoided instead of assisted.
Myths that all people who are infected with the HIV/AIDS virus are drug users, sexually promiscuous, or homosexual, and misconceptions about how the disease can be spread has left many of these people ostracized and looked down upon. In an area such as Africa which boasts an extremely high HIV/AIDS population in the group that primarily makes up the workforce, this could make it difficult to keep a productive economy. As previously mentioned, being infected with the HIV/AIDS virus comes with certain stigmas. People are less willing to work with someone who is infected with this disease.
Case in point, during the 1990s, American basketball player Magic Johnson shocked the world when he retired from the sport and announced that he had been infected and tested positive for HIV. Shortly afterwards he decided that he would like to restart his basketball career, but was quickly forced back into retirement when others, both team mates and opponents objected to sharing the court with someone infected with a disease that could be transmitted through contact with bodily fluid. Their reasoning was that they could not play aggressively with someone with whom they feared contracting a fatal disease.
Magic Johnson was forced to remove himself from the court and take a job on the side lines. If a Hall of Fame basketball player in one of the most industrialized countries on the planet could not work from fear of others of contracting his disease, what hope would a regular person have? Aside from the negative social stigma attached to the HIV/AIDS virus, a person with this disease would also have to deal with health issues. The HIV/AIDS virus works on the immune system, eventually breaking it down and making the body susceptible to other illnesses.
From a production standpoint, a company may find it difficult to keep its workforce healthy under normal circumstances and more so if any of its work force was afflicted with a disease that systematically destroys their immune system. Whenever a worker is out, whether it is for a short or an extended amount of time, the company loses money. If people have to stay over or come in earlier to cover the slack for the sick employee then usually the company compensates them by paying them some sort of differential in pay. This extra work puts a strain on the other works, leading to a vicious cycle of missed work.
If the person is out for an extended amount of time then the company has to pay to train another person to take his place. In more modern societies, workers are paid for some of their sick days. In essence, a company has to pay two or more people to do the job of one sick person. This all leads to a slow down in production and costs the company money. Less production equals less money for companies, which in turn, means less work for employees. Less work leads to less money. Less money leads to less spending. Low spending leads to a poor economy. The continent of Africa is rich in natural resources.
On this continent one can find trees used for lumber, gold, diamonds, and a plethora of exotic plants and animals. In theory, this should make Africa one of the most rich and productive continents on the face of the planet. In actually, many of the countries in Africa have an extremely high poverty rate. The African country of Botswana has a population where in which 40% of the adult population is affected by the HIV/AIDS virus. Having nearly half of your primary workforce afflicted with a disease that eventually makes it impossible to work has drastic effects on the economy of a country.
Even with plentiful natural resources, an economy cannot progress if their workforce is scarce. “Economic theory predicts that HIV/AIDS reduces labor supply and productivity, reduces exports, and increases imports” (Dixon, 2002). Industry is an important aspect of any developing country because industry leads to capital. The more capital a country can generate, the more they are able to invest in the country. In a slow economy, such as the one that we in the United States currently find ourselves in, the best way to stimulate the economy is often a difficult debate.
Conservative legislators think the best thing to do is to save and keep the deficit as low as possible, while more liberal legislators feel the best way to stimulate the economy is to put money into it, their line of thinking being that once the economy is active again then the nation’s debt can be worked on. If I were the president of a small, poor country, I would go about resolving this issue by investing in my citizens and instituting a standard tax rate. During the US Great Depression, when the American economy was at its lowest, President Franklin D.
Roosevelt decided to invest in the American citizenry through programs such as the CCC and other like minded programs. I would adopt a similar approach to my country. I would invest the country’s money in program that would educate the population, stimulate industrialization, and make use of whatever natural resources we have available. I believe that an educated populous is a productive one. In order for people to receive any form of government assistance they have to agree to either receive on-the-job training in some form of industry or go to school for specialized training.
My focus would be on schools that specialize in trades such as engineering and mechanics, as well as medicine. This would insure that we would have a skilled and educated population of people. In order to pay for their schooling, the citizens would have to agree to work on government sponsored projects for a certain amount of time. People specializing in engineering would have to agree to work on government building projects. Those in mechanics would have to agree to keep the government vehicles working properly at these work sites. People specializing in medicine must donate a given amount of hours to working in government free clinics.
I would also issue government grants for people who have an idea on how to improve our deficit. These grants would go to individuals or groups of people who have a sound idea on how to make the most of our natural resources and reduce our reliance on foreign imports or have an idea on how to increase our exports. Another item that I would invest in would be agriculture and fishing. The more food that we can produce at home, the less that we would have to import from outside. By supporting local agriculture, we would also produce or maintain jobs. Eventually we would develop a surplus and would be able to export our goods to other places.
This would give us another area in which we could make a profit and help pay for some of our other government programs. I would also institute a standard tax rate. The standard tax would tax people equally. Everyone would be taxed at 15% of their income. This would cover some of the projects that I would institute as well as paying for necessities like police, teachers, roads, etc. People with children can earn a tax credit of 2% return per child for up to four children. Sales tax would be at a rate of 5% across the board for all purchases. To encourage people to buy domestic, I would issue an additional 3% tax on all imported goods.
By providing jobs and job training, I would stimulate the economy. It would not be instantaneously evident, but in the long run I believe that these changes would make my country a leader in innovation, industry, and medicine. A more educated workforce brings more skill, higher demand, and higher wages to the table. Higher wages mean a higher percentage of taxes for the government. By encouraging people to buy domestically, all of the money they spend on products returns to our country, creating or maintaining jobs our people. By increasing our exports and decreasing our imports, we would bring in more money then we send out.Eventually, over a period of time, we would be an economic force.
References Case, K. E. , Fair, R. C. , & Oster, S. M. (2009). Principles of Microeconomics, (9th ed. ) Upper Saddle River, NJ: Pearson Prentice Hall. Dixon, S. (2002). The Impact of hiv and aids on africa’s economic development. Retrieved from http://www. ncbi. nlm. nih. gov/pmc/articles/PMC1122139/ United Nations Department of Economic and Social Affairs/Population Division, Initials. (n. d. ). The Impact of hiv/aids epidemic on macro-economy and development. Retrieved from http://www. un. org/esa/population/publications/AIDSimpact/91.