Russia Model to Assess Socio-economic Consequences of HIV/AIDS Spread

In recent years, the Russian Federation has experienced an exceptionally steep rise in reported HIV infections.

News | 10 February 2004

Pauline Barrett-Reid, Alexander Pochinok and Franklyn Lisk

The launch attracted much attention of the press

In recent years, the Russian Federation has experienced an exceptionally steep rise in reported HIV infections. In less than eight years, the epidemic has been reported in more than 30 cities and 86 of the country’s 88 regions. The total number of reported HIV infections in Russia climbed to over 200 000 by mid-2002 - a huge increase over the 10 993 reported less than four years ago, at the end of 1998. According to various authoritative sources, the actual HIV incidence indicator in the country is 2.5 to 4 times higher than the official records.* Even though the absolute number of people infected with HIV is relatively small, the growth rate of identifiable HIV cases is now one of the world’s fastest.

A Model of Socio-economic consequences of HIV/AIDS in the Russian Federation developed by the ILO Programme on HIV/AIDS and world of work and the ILO Moscow Office found that HIV/AIDS could reduce Russia's population by 2-5 percent in 2050. Since three quarters of the infected are persons between 15 and 29 years of age, most of the population decrease will be young people in their prime reproductive and productive age.

HIV/AIDS may lead to a decrease of the working population by 1.1 million in 2015 and by 2.1 million in 2050 if the spread of the infection continues to grow.

The results of the modeling show that, parallel to reducing the country’s work force and productivity, in 2015 the spread of HIV/AIDS may increase the number of disability pensioners by 344 thousand and survivors pensioners by 141 thousand. The additional cost of short-term disability benefits amounts to 5-7%, the study said, while pension fund revenues can decrease by 2-6%, and reduction of the affordable replacement rate can reach 2%.

The study also found a probability that GDP would fall some 2-5% as well, with an accompanying rise in the cost of health expenditure for people living with HIV/AIDS (about 0.5 % of GDP) reaching its peak in the years 2010-15. This brings to the fore the issue of government spending on HIV/AIDS treatment and prevention. According to the WHO estimates dating back to the early 1990-s, in order to successfully counter the HIV epidemic, Russia will require a single investment of approximately USD 90 million with subsequent annual investments of USD 9-10 million. International experience shows that the success or lack thereof of preventive measures largely depends on the well-being of the society and its ability and readiness to allocate adequate funds for implementation of such measures.

The ILO study is an attempt to access socio-economic cost of the epidemics. The computer model is based on detailed data on the numbers of the newly diagnosed cases of HIV infection starting from 1996 and disaggregated by sex and age groups. The data was provided by the Russian Federal AIDS Centre.

The model allows to calculate possible impact of different scenarios of the epidemic up to 2050 on the epidemiological situation (number of HIV- infected persons and people with AIDS), labour market (economically active and employed population, productivity), health expenditures on medical examination and treatment, parameters of pension system (number of pensioners by type of pension, replacement rate, contributions), expenditures on short-term disability benefits and macroeconomic situation (GDP). At the same time, the current scenarios of the HIV spread do not represent all possible directions of analysis, and adding new modules can develop the model further.

The model can be applied, with some adjustments, to individual regions of Russia as well as to other CIS states where social protection systems are similar. It can be used as a budgeting and analytical tool for decision makers, experts, trade unions, employers’ associations, NGOs, etc.

The model launch was organized today at the Russian Ministry of Labour and Social Development with the participation of the Government officials, academia, UN Agencies, international organizations, donor Embassies and the media.

“ILO is committed to strengthening the capacity of our tripartite constituents to contribute to national efforts against HIV/AIDS. This ILO model to assess the socio-economic consequences of HIV/AIDS in Russia is a valuable practical tool at the disposal of our constituents to help them formulate and implement HIV/AIDS policies for prevention, care and treatment,” said Franklyn Lisk, Director of ILO Programme on HIV/AIDS and world of work who traveled to Moscow for the launch of the model and for related technical consultations with the Russian partners.

Alexander Pochinok, Russian Minister of Labour of Social Development, welcomed the ILO’s initiative. While noting the role of prevention and treatment, the Minister stressed that in the context of the Decent Work Agenda it is important not to allow any form of discrimination on the workplace of people living with HIV/AIDS. “HIV/AIDS prevention is one of the six priorities in our cooperation with the ILO for this biennium”, said the Minister.

*See, for instance, “The Economic Consequences of the HIV in Russia” by Christof Ruhl, Vadim Pokrovsky, and Viatcheslav