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Nexus between Human Development and HIV/AIDSof cumulative AIDS prevalence amongcountries in the South Asian regionduring 1980-98, the AIDS epidemic has hada negligible impact on economic growththus far, even in India, the country withthe highest number of HIV cases inthe region.The returns to policy action inHIV/AIDSThe tools of cost-benefit and costeffectivenessanalyses—that compare thebenefits of a policy to its opportunitycosts—are standard methods usedby economists to evaluate alternativepolicy options.Cost-benefit analysis compares thebenefits of a policy action to its costs, bothof them evaluated in monetary terms. InSri Lanka, studies have shown thatpreventing HIV transmission via thescreening of blood used for transfusion,and the use of disposable, instead ofreusable, injecting equipment in hospitalsettings can yield benefits that are muchgreater relative to costs. 72Cost-effectiveness analysis typicallycompares an outcome indicator such aslives saved and disability adjusted lifeyears averted 73 that is not measured inmonetary units, with costs that aremeasured in monetary units. There arestudies demonstrating the potentiallyhigh cost-effectiveness ratio ofprogrammes such as needle exchanges,STD prevention, informationprovision. 74 Cost-effectiveness analysesfor health interventions (includingHIV/AIDS) are not always useful forpolicymakers when comparing withpolicies in sectors other than health,since the former have outcomeindicators in units other than money.Thus, cost-benefit analyses are typicallypreferred since both benefits and costsare reduced to monetary units, provided,of course, policies in other areas aresimilarly evaluated.Impacts of HIV on poverty and equityIt is true that 95 per cent of those infectedwith HIV live in developing countries,home to 80 per cent of the world’spopulation. At the global level, there is astatistically significant associationbetween low income and HIV prevalencerates—the poorer the country, the greaterHIV prevalence rate. Moreover, absolutepoverty rates across countries—definedas the proportion of population livingbelow the poverty line of $1 per day—arepositively associated with national HIVprevalence rates. There is a positive andstatistically significant correlationbetween HIV and economic inequality aswell. 75 Nonetheless, beyond thesecorrelations, the direct impact of HIV onpoverty and inequality has not beendemonstrated empirically at the nationallevel. This is remarkable, given the globaltwo-way links between the HIV andindicators of economic well being. 76Education is not the only factor highlightedby micro-data. There is evidence thatpoverty forces people to make sub-optimalchoices and this puts them at risk of HIVinfection. As already mentioned, a seriesof small-scale studies from Sri Lanka,Brazil, sub-Saharan Africa and Haiti showhow poor women can be forced into sexwork, or be sexually exploited, and are lessable to insist on condoms use. 772.4 Implications of theAnalysisThe sections of this chapter highlighted thegamut of human development dimensionsthat are affected by, and in turn, impactHIV/AIDS. These, additionally, demonstratedthe effects of HIV on incomes, assetholdings, education, health, liberty andother elements of human development.There are studiesdemonstrating thepotentially highcost-effectivenessratio ofprogrammes suchas needleexchanges, STDprevention, andinformationprovision.Regional Human Development ReportHIV/AIDS and Development in South Asia 2003 35