Briefing on Debt and AIDS
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Deadly Conditions? Examining the relationship between debt relief policies and HIV/AIDS

A report by Medact and the World Development Movement

September 1999

As Third World AIDS statistics reach unprecedented levels, WDM and Medact warn that the conditions attached to desperately needed debt relief may be nourishing the canker of the HIV/AIDS epidemic that threatens to bring many areas of the developing world to their knees.

Although there are numerous factors in the spread of HIV/AIDS, it is largely recognised as a disease of poverty, hitting hardest where people are marginalised and suffering economic hardship. IMF designed Structural Adjustment Programmes (SAPs), adopted by debtor countries as a condition of debt relief, are hurting, not working. By pushing poor people even deeper into poverty, SAPs may be increasing their vulnerability to HIV infection, and reinforcing conditions where the scourge of HIV/AIDS can flourish.

WDM and Medact believe it is doubly ironic that while debt relief is meant to ease poverty, not only are the conditions attached to relief making many people poorer, but they may also be fuelling the AIDS pandemic – one of the biggest threats to development that the Third World has ever witnessed.

AIDS as a disease of poverty

"Those at highest risk are those whose rights are least realised and whose dignity is least protected - from blacks in the USA to Arabs in France to Koreans in Japan."
Jonathan Mann, First Director of the Joint United Nations Programme on HIV/AIDS (UNAIDS)

Just as no two countries’ economic, political, social and cultural history and experience are identical, so the AIDS experience of no two countries is identical. Undoubtedly, numerous factors contribute to determine the course of HIV in any one country. But one determining factor is indisputable. While not restricted solely to poor people, AIDS is a disease of poverty, marginalisation and social and economic injustice.

It is no co-incidence that it is in heavily indebted and poverty-stricken Africa that the virus has gained the firmest foothold. As we enter the new millennium, half of all Africans are living in absolute poverty - fighting simply for day to day survival. More than half of the population still lack access to safe water, and 70 per cent live without proper sanitation.

While poverty itself does not directly cause AIDS "there are endless potential links between poverty and poor health". Families and individuals struggling for survival are more vulnerable to contracting the HIV virus, through a combined range of factors, including reduced access to health care, poor nutritional levels, increased likelihood of migration in search of work, and the reduced status of women.

HIV/AIDS - Scouring the Third World

"Never has Africa been faced with such a plague. It is a modern incarnation of Dante’s inferno."
                                                              Stephen Lewis, deputy director of UNICEF

Although improved prevention, awareness and access to better drugs in the North have meant that the scourge of HIV/AIDS has largely slipped from public consciousness, the global threat from AIDS is far from over. Around the world, more than 33 million people are now infected with the deadly virus, a staggering increase on last year’s figure of 27.6 million. Every day more than 16,000 people are infected. Ninety five per cent of these people live in the developing world, where AIDS is reversing many of the hard-earned developments won in recent decades.

Worst hit by the AIDS virus is Africa, and in particular Sub Saharan Africa, where seven out of ten of all newly infected people live, despite the fact that it houses only one-tenth of the world’s population. Among children under 15, this figure rises to a dramatic 9 out of 10. Since the start of the epidemic, an estimated 34 million people living in Sub Saharan Africa have been infected with the HIV/AIDS virus. 11.5 million of these have already died, one quarter of them children. In 1998 alone, 2 million African men, women and children died from AIDS related illness.

HIV/AIDS – A challenge to development

"AIDS is the single greatest threat to continued global development."
Peter Piot, Executive Director of the Joint United Nations Programme on HIV/AIDS (UNAIDS)

HIV is not just an individual tragedy. It also threatens to decimate the future prospects of poor countries, wiping away years of hard-won improvements in development indicators. As a result of the disease, many developing countries are witnessing a deterioration in child survival rates, reduced life expectancy, crumbling and over-burdened health care systems, the breakdown of family structures and the decimation of a generation in the prime of their working lives. In some Sub-Saharan African countries, HIV/AIDS is expected to lower life expectancy by as much as 25 years.

UNICEF Executive Director, Carol Bellamy, says "the virus is already wiping out almost at a stroke, the substantial reductions in child mortality that were achieved in the 1980s and the first part of this decade."

"Not since the bubonic plague of the European Middle Ages has there been so large a threat to hundreds of millions of people - and the future of entire economies. AIDS is no longer a problem of medication. It is a problem of development", says the World Bank.

Structural Adjustment Programmes - SAPPING the poor?

Most of the countries worst affected by the HIV virus are already buckling under the heavy burden of international debt. The requirement that Third World countries ravaged by AIDS have to divert their scarce resources away from the immediate and desperate needs of their impoverished populations to repay their debts is now finally recognised as scandalous. Debt relief is urgently needed to allow indebted countries to target their spending where it is most needed.

But, in order to qualify for debt relief under the Highly Indebted Poor Countries Initiative (HIPC), debtor countries must first implement six years of Structural Adjustment Programmes (SAPs) designed by the International Monetary Fund (IMF). In an effort to ensure that the potential benefits of debt relief are maximised, SAPs are a package of neo-liberal policies, intended to stabilise poor country economies by creating economic growth which will in time `trickle down’ to the poor.

Not only is `trickle down’ not working, but commentators from both North and South have repeatedly attested to the damage caused by the imposition of SAPs. In many cases, SAPs are costing poor people dearly. Cuts in Government expenditure have forced up the costs of education and health care beyond the reach of many ordinary people. Rushed privatisation has resulted in the laying off of tens-of-thousands of workers in many adjusting countries. The removal of price controls and the devaluation of the national currency have led to the cost of living spiralling. The combined effects of SAP policies in the Third World has left millions of people, already unable to make ends meet, struggling for survival.

While we recognise that HIV/AIDS is not exclusively a disease of poverty, there is a link between poverty and HIV/AIDS, as discussed earlier. WDM and Medact argue that by making poor people poorer, SAPs may also be making them more vulnerable to HIV infection, and the consequent spread of the disease.


Policy Intended results Common impact on the poor
REDUCING GOVERNMENT EXPENDITURE Freeing up money for debt servicing Government services to rural poor are often easiest to cut. Cuts in health, education and social welfare spending and introduction of cost-recovery and user fees puts health care and education beyond the reach of many ordinary people. Public sector redundancies and salary freezes lead to reduced numbers of teachers and doctors.
PRIVATISATION OF STATE RUN INDUSTRIES Increased efficiency Massive lay-offs and increased unemployment with no social security provision push families deeper into poverty.

Services to remote and poor areas are lost as non-profitable for private sector.

CURRENCY DEVALUATION AND EXPORT PROMOTION To increase exports by making them cheaper, boosting foreign exchange reserves needed for debt repayment Cost of imports soar, including vital resources such as imported medicines. Land used for cash crops rather than food. Moreover export prices fall because many countries are promoting the same exports under SAPs, so they still aren’t better off.
RAISING INTEREST RATES Tackling inflation Farmers and small companies can no longer afford to borrow money and are forced to reduce production or go out of business.
REMOVAL OF PRICE CONTROLS Increased efficiency in food production Basic food prices rise putting even further pressure on already stretched household budgets.


Linking SAPs and the AIDS epidemic

WDM and Medact believe that economic reforms under SAPs may have aggravated the spread of HIV/AIDS:

  • Firstly, by reducing public access to health services;
  • Secondly, by social and economic changes which increase poverty and vulnerability and so make people more susceptible to infection

Some more specific examples of the ways in which the impact of SAPs policies may have fuelled the HIV/AIDS epidemic are discussed below.

1. Health services in Crisis
A well functioning and accessible health service is crucial in the fight to control HIV; to minimise risks of infection, for diagnosis of those infected with HIV and for treatment once diagnosed.

But SAP targets for overall reductions in government spending, imposed in an attempt to reduce budget deficits and free up money for debt servicing, will inevitably land on health and education ministries given their overall share of the budget. Structural adjustment policies have been held directly responsible for massive cuts in social spending – for example, in Ecuador from 38 per cent of the national budget in 1980 to only 20 per cent in 1999.

Such expenditure cuts have hit health services hard. At a time when up to 70 per cent of adults in some hospitals are suffering from AIDS related illnesses, placing extreme pressures on health services, many African countries have had to cut their health expenditures in order to satisfy IMF conditions. Such circumstances make it almost impossible to treat those with the virus effectively, or to undertake effective campaigns to reduce high-risk behaviour and provide essential resources in the fight against HIV transmission such as condoms or sterile needles.

For example, in Tanzania - where over half a million children are orphans as a result of AIDS – the Government spends only around US$3.20 per person per year on health provision, a quarter of what the World Bank estimates is necessary to provide basic care. The Tanzanian Government spends in excess of three times more on debt servicing each year than it does on health care. During the past 5 years, total spending on health care and education has fallen by around 40% in real terms - largely as result of IMF pressures. Such health cuts can only have a devastating impact, resulting in poorly maintained health centres and hospitals; few drugs; lack of sterile equipment; no paper to keep records; no child monitoring; hospitals being unable to provide food and so on.

Cuts in health spending are likely to impact on rural services the most. As a result of reduced health expenditure under Zimbabwe’s adjustment programme, government grants for rural out-clinics were cut. Staff at the Musami Hospital had to halve the number of village centres they were able to visit, increasing the distance that many patients had to travel. The result was a 25 per cent drop in attendance.

In many African countries, the unattractiveness of working in the public-sector, coupled with freezes on the hiring of staff, have contributed to health service crises. Many health workers in adjusting countries have little or no job security, and some have not been paid for months. Many have had to take second jobs, delivering maize or driving taxis, simply to feed their families.

Staff salaries in the public sector are still far below a living wage in several countries, resulting in many vacancies and absenteeism, as well as `brain-drain’ to countries where health professionals receive better pay. Structural adjustment means that vacant posts are not filled and locums are not brought in to cover staff members who are chronically ill. In Uganda, there has been a moratorium on recruitment of civil servants- including doctors and nurses. Zie Gariyo, co-ordinator of the Uganda Debt Network says: "For a country where there is only one doctor per 27,000 people, such conditions have been hurting."

By demanding cuts in Government expenditure, SAPs are reducing the ability of poor countries to provide even the most basic levels of health care for their people, at a time when the pressures of HIV/AIDS threaten to overwhelm existing health services. Such chronic under-funding makes it increasingly difficult to treat those already suffering from the disease and can only exacerbate the potential spread of HIV/AIDS.

Mother-to-child transmission of HIV is a serious problem. In the hardest-hit areas of Sub Saharan Africa, up to 30 per cent of pregnant women are HIV positive. Up to one third of the children born to these women will be infected with the virus, during pregnancy, childbirth or breast-feeding. But the risk of such vertical transmission can be reduced by thorough antenatal care and by providing pregnant, HIV-positive women with antiretroviral drugs and breast-milk substitutes. For example, the new drug nevirapine, under trial in Uganda, could cut mother-to-child transmission by up to 50 per cent at a cost of just £2.50 a treatment. But even this is too expensive for many countries. As an article in the Financial Times suggested: "In Africa, where governments spend barely $5 a head a year on healthcare, even $4 is controversial".

Devaluation of the national currency in an attempt to make the adjusting country's exports more attractive is a central policy of IMF designed SAPs. However, devaluation has also resulted in a massive increase in the costs of such imported goods as pharmaceutical supplies, contributing to serious supply shortages.

2. User fees - reducing access to health care for poor people
In a further attempt to cut Government expenditure, SAPs have encouraged 'cost-recovery' for health care, often implemented in the form of user-fees. The introduction of user-fees has placed basic health care beyond the means of many poor and sick people. Patients must now pay for consultations with doctors and for medicines, and in many cases are also required to provide their own syringes, needles and drip sets when attending health clinics.

At Maputo Central Hospital in Mozambique, those needing medical advice now have to pay US$4 each time they need to see a doctor - the equivalent of us paying £160 to visit our GP's surgery. Mozambique's Prime Minster, Dr Pascoal Manuel Mocumbi, laments: `the attempt to recover costs of health services by charging, or applying user's fees, has resulted in sharpening of inequalities.'

Rising health care costs result in a delay in patients seeking medical attention and undermines access to care. In Zimbabwe, the number of patients receiving treatment at Marewa Musami Hospital and Harare Central Hospital from December 1991 to January 1992, after a rise in hospital fees, was 25 per cent lower than a year earlier. When the cost of an outpatient visit was raised from Z$1.50 to Z$17 in 1994, outpatient attendance and non-urgent admissions fell substantially.

The possible implications of reduced access to medical care on the spread of HIV/AIDS are severe. For example, easily treatable STDs and genital ulcers increase the chance of getting AIDS. One study in Mwanza, Tanzania demonstrated that treatment for STDs, costing as little as US$2.11 per person, can cut the number of people getting HIV by 42 per cent. However, when the World Bank advised Kenya to introduce a user fee of US$2.15 to attend STD clinics, attendance fell by 35-60 per cent. In Zimbabwe, the introduction of charges for condoms In October 1992 under the country’s adjustment programme led to a dramatic fall in demand.

In Zambia, fees for medical care were introduced in 1993. Although relatively small, charges came as rural incomes fell and malnutrition rose. Privatisation of the Zambian Consolidated Copper Mines (ZCCM), under the country’s adjustment programme had led to the lay-off of over 60,000 workers in just two years. For many families, even the smallest contribution was beyond their reach. One local organisation estimated that up to 45% of people in the Copperbelt province, one of the country’s wealthiest regions, could no longer afford to take their children to the doctor. More than 23 per cent of all adults in the Copperbelt Province are now infected with the AIDS virus.

In many cases, user-fees can literally make the difference between life and death. In January 1992, maternity fees in Zimbabwe were raised from Z$140 to Z$500 in a major hospital in Harare. Maternal mortality increased by forty per cent in the first half of 1992. The largest contributory factor to this trend was access to services. Similarly, after the introduction of user fees for maternity services in one area of Nigeria, maternal mortality increased by 56 per cent.

User fees are not even seen as an efficient method of cost recuperation. Many experiments in Sub Saharan Africa have shown that they generally only recover 5-15 per cent of health care costs, whilst accounting costs can soak up 40-60 per cent of the money raised. Nor do user fees necessarily increase the appropriate use of services. Alarming data from Swaziland suggest that when user fees are implemented consultations for preventative reasons and certain serious diseases decline more than consultation for some minor illnesses.

One editorial in the British Medical Journal concluded: `As an instrument of health policy, user fees have proved to be blunt and of limited success and to have potentially serious side effects in terms of equity…shifting the financing base in the health sector, even at the margins, can have profound effects on access to services…poor people are both sicker and more sensitive to health care prices than wealthier people.’

3. Searching for an Income
Many thousands of people have lost their jobs as a result of privatisation under SAPs. In Uganda, for example, rushed privatisation led to 350,000 lay-offs with many workers receiving just one week’s pay in compensation. In the face of rising unemployment and falling wages, thousands of African workers have been forced to join the stream of migrant labourers who move from rural to urban areas or even from country to country, in search of work.

The impact of such SAP policies as currency devaluation, privatisation and emphasis on export promotion has disrupted rural economies. The shift to large scale export agriculture, logging, mining or export manufacture in urban export processing zones has meant that many people in rural areas are forced to seek work away from home - often with profound implications for patterns of sexual behaviour. Itinerant workers living apart from their wives often have sexual relations in the city, perhaps with equally destitute, but high-risk commercial sex workers, further fuelling the spread of HIV. Women in rural areas, dependent on their migrant husbands for financial support, have little power to insist on safe sex when their husbands return, so the disease is spread from urban to rural areas.

When times are hard, destitute people may resort to alternative survival methods they may not normally consider. In times of extreme poverty, the exchange of sexual favours for money, goods or shelter is often one of the few remaining means of support for women and their families - especially by those widowed through HIV/AIDS. Poorly educated women with few marketable skills may have to use sex as a means of earning a living, putting themselves, their partners and their children at high risk of infection.

4. Education Suffers
Reduced Government expenditure under SAPs has not only hit the health service hard, but in many countries has also led to cost-recovery measures in the education system. The introduction of user-fees for education may also indirectly contribute to the spread of HIV/AIDS. Rising costs of schooling, including the requirement that in many cases parents pay for the costs of uniforms, books and building costs, combined with reduced family income as a result of unemployment or sickness through HIV infection, means that across Africa children are being pulled out of school.

In Ghana, the introduction of school fees has led to a fall in the enrolment rate – particularly in rural areas. The primary school drop out rate has now reached 40 per cent. As one discussion paper on civil society perspectives of SAPs warns: "As a result, there are real concerns that by the year 2020 Ghana’s population will be largely illiterate."

Girls are usually the first to be pulled from school. Poorly educated girls and women are more likely to be financially dependent and to have less confidence in negotiating safe sexual practices. Uneducated women have less chance of protecting themselves and their children against the risks of HIV/AIDS.

High resultant rates of illiteracy also impact on prevention attempts, diminishing the effectiveness of awareness-raising programmes dependent on written materials.

5. Decreasing nutrition levels
Poor health, caused by an unbalanced or insufficient diet, reduces resistance to diseases, including AIDS. Once infected with the virus, malnourished people die quicker.

The requirement that Governments slash their expenditure under SAPs, has forced many African countries to remove price subsidies, resulting in spiralling prices for staple foodstuffs. Families who are already struggling to survive on reduced incomes, as a result of public sector redundancies and the rising cost of health care and education, find it increasingly hard to feed themselves and their children.

In Zimbabwe, following the removal of price controls in March 1993, the price of bread went from Z$1.63 to Z$2.20 overnight. Sales in many bakeries immediately halved as a result. Price increases may be even higher in rural areas due to increased transport costs.

One third of children in Africa are significantly malnourished. UNICEF suggest that SAPs have contributed to the widespread deterioration in the nutritional status of children, pregnant women and lactating mothers in rural and urban areas undergoing structural adjustment programmes.

Where to next?

The dual scourges of the HIV/AIDS pandemic and the yoke of international debt are perhaps the two greatest threats to development to face the Third World. It is tragically ironic that conditions attached to the proposed solution to one of those challenges may be fuelling the spread of the other. WDM and Medact believe that debt relief should not be linked to policies that make poor people poorer.

At the June 1999 G8 meeting, proposals were made for wider, faster and deeper debt relief. But debt relief is still firmly tied to IMF structural adjustment policies. Recognising the need for debt relief to be linked to poverty reduction, the G8 leaders did make proposals to mitigate the worst effects of SAPs on the poor by increasing social sector spending. But they are missing the point. The negative impacts of SAPs on the poor are not limited to cuts in health and education spending. Rather, it is the whole package of market–led policies that push the poor deeper into poverty, ripening conditions for the easy spread of HIV/AIDS.

WDM and Medact maintain that IMF structural adjustment programmes should be subjected to a fundamental reform, making poverty reduction their central objective. Any macro-economic policies must be judged in terms of their ultimate impact on the poor and their health.

Contact WDM for details of the references in this report.

The World Development Movement, 25 Beehive Place, London SW9 7QR


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