JOHANNESBURG, April 2 (AFP) - The number of South Africans infected with HIV or AIDS will peak at 7.7 million in the next three years, creating the potential for an economic disaster, a report said Wednesday.
The annual report on labour relations and employee benefits in South Africa said that as a result of the pandemic, the decline of the working-age population would translate into a severe shortfall of available labour and the likelihood of declining productivity.
"The number of people infected with AIDS in South Africa is projected to peak at about 7.7 million in 2006-7 and taper off to about 7.2 million by 2010, mainly as a result of increased AIDS mortality," said the report, produced by a private labour consultancy and used by businesses and the government.
"In the face of this potential for macro-economic disaster, it is very clear that massive interventions will be necessary to halt, or even slow down the progress of the epidemic to manageable proportions."
The report estimated one million people in the 20 to 59 age group would develop AIDS in the next seven years, while the number of economic dependants, those under 20 and over 60, would increase by 1.6 million.
It said with the decline in the economically active population, expenditure on sickness and related benefits and pensions for surviving dependants would increase dramatically.
At the same time, tax revenues would decrease and the government would have fewer resources available for economic development.
The predicted drop in productivity and spending on goods was likely to push companies to relocate to countries less affected by the epidemic, leading to a potential decline in foreign investment.
More pressure would also be brought to bear on employers for financial assistance to employees and their dependants.
The report said roughly five million South Africans were living with AIDS in 2002 -- 20.1 percent of the 44 million population -- with 4.7 million in the 15 to 49 age group. Some 262,000 people died of the disease in 2002.
The report said the government was still reluctant to confront the epidemic, but the tide could have turned after the ruling African National Congress promised at its annual conference last year to give AIDS higher priority.
Clem Sunter, a strategist for Anglo American, South Africa's largest listed company, said most of the HIV-positive people contracted the disease between 1995 and 1999 and were only now starting to get sick.
"The worrying fact for business is that the infection curve does not have an economic impact. The sickness curve does," he said.
Sunter said last year Coca-Cola reported a fall in sales in KwaZulu-Natal, the eastern province where 33.5 percent of the population has HIV, the highest rate in South Africa.
Some of the largest South African companies, such as Anglo American, mining company Goldfields and brewer SAB Miller realised some years ago the cost AIDS would have and introduced policies, which included providing workers with drugs, to fight the effects of the disease.
However, Sunter said most small- and medium-sized businesses did not see AIDS as a strategic issue and would not act until the disease had an impact on their their bottom line.
"Today (AIDS treatment per employee per year) costs between 8000 rand (1,000 dollars / 930 euros) and 10,000 rand, far less than it would cost a company to replace and retrain an employee."
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