Summary

Research Report: Assesses the economic impact of the reduction in the adult population in PNG.

Description

Papua New Guinea (PNG) could be poised on the brink of a serious
HIV/AIDS epidemic. While current estimates put the prevalence rate of the
disease at 0.6 per cent of the adult population, implying around 15 000 people
living with HIV/AIDS, there are some worrying indications that the true rate is
higher.

The study focuses on assessing the economic impact of the reduction in the
adult population. By using three African scenarios to model high, medium and low
impacts of the HIV epidemic, the report shows the adult population would be
between 8 and 38 % lower than by 2020 than it would otherwise have been. The
model found that if foreign investment can be attracted, the impact on national
production is relatively small, with the greatest declines in subsistence
fishing and farming, the service industries and to a lesser extent in
manufacturing, and minimal impact on mining. However, while production per
worker (and real wages) would rise, the increase in the number of dependents per
worker substantially lowers consumption per person. Impacts on PNG government
institutions include loss of trained staff and rising costs of production (for
example from increases in wages, training costs, pensions and health benefits).
For an already fragile economy HIV/AIDS poses a threat that only action to lower
transmission can mitigate.

Potential Economic Impacts of an HIV/AIDS Epidemic in PNG [PDF 387KB]

Available: Electronic version only

This report was commissioned by AusAID. The findings, interpretations and conclusions expressed in the report are those of the authors and do not necessarily reflect the views of AusAID or the Australian Government.

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