HIV/AIDS, human capital, and economic prospects for Mozambique

As in other countries in the southern Africa region, a human development catastrophe is unfolding in Mozambique. Recently released data estimate HIV prevalence rates amongst the adult population in the year 2000 at around 12% with substantial regional variation..... This paper is structured as follows. Section two discusses the implications of recently released HIV prevalence rates and provides more detail on the expected demographic impacts of the pandemic using available demographic projections. Section three reviews literature focusing on macroeconomic impacts. Section four formally analyzes implications for human capital accumulation. Section five presents the economy-wide modeling approach including critical assumptions and model scenarios. Section six discusses the major results. Section seven summarizes and section eight considers both reactive and preventive policy implications.....[The paper concludes that] the economic analysis and related policy implications provide strong support for adoption of both reactive and preventive policies. While the pandemic cannot be avoided, much can be done to reduce its harshness and duration. Some relatively broad policy options were also presented; however, as usual, the devils are in the details. Moving beyond these general policy ideas (both reactive and preventive) to real policy initiatives will require careful thought particularly with respect to issues of implementation.