HIV/AIDS and Poverty Reduction: the ACDI/VOCA Strategy
After almost three decades, the impact of HIV/AIDS on poverty throughout the world is by now well known. HIV/AIDS is the world’s fourth largest killer. Its economic and social impacts negate and even undo hard-won development gains, stymie further growth and destroy families and whole communities.
In cash economies in the early stages of development, where approximately 90 percent of wages are earned in small and medium-sized enterprises (SMEs), the debilitating effects of HIV/AIDS (as well as other preventable diseases such as malaria and tuberculosis) have had a tremendous effect on worker productivity. A healthy workforce is an essential factor in building and maintaining the competitiveness of industries in an increasingly global marketplace. In some countries in sub-Saharan Africa, for example, between 15 and 40 percent of the workforce has HIV/AIDS, resulting in low productivity, frequent absences and reduced investment in productive assets as cash income is diverted to pay for health treatment and burial expenses. The connection between the performance of industries, their ability to compete in a globalized marketplace and employee health is increasingly recognized as an issue in the emergence of a vital private sector in developing countries.
Once an urban phenomenon, HIV/AIDS also is increasingly a rural scourge. One result is food shortages. In Africa, more than seven million farmers have died of AIDS-related illnesses since 1985. Many of the new generation have thus been deprived of an education in farming techniques at the hands of their elders. Agricultural production has sharply dropped, children have been pulled from school to provide farm labor, agricultural inputs and crop and animal maintenance have been stinted, livestock sold off and loans defaulted on. Where most make their living off the land, a downward spiral in agriculture looms large indeed.
Development initiatives directed toward poverty reduction, whatever the sector targeted, must find ways to overcome the devastating effects of HIV/AIDS on competitive economic capacity. As a responsible, client-oriented organization with a long-held commitment to broad-based economic development, ACDI/VOCA is dedicated to being proactive in the fight against HIV/AIDS. ACDI/VOCA introduces appropriate technologies that substitute for increasingly scarce labor, designs innovative financial products that enable the poor to purchase those technologies, and implements creative strategies to compensate for lost labor to help the industries in which the poor are employed to compete.
ACDI/VOCA promotes the use of value chain analysis as a tool for identifying and prioritizing constraints to improved industry performance, where bottlenecks and inefficiencies impede the capacity of an industry to respond to market demands. Participatory value chain tools can be used to mobilize industry stakeholders to address health-related constraints and create solutions to make their industries more competitive.
Strategies to maximize private sector competitiveness can be a major complement to donor activities aimed at preventing and mitigating the impact of HIV/AIDS and other diseases. Private sector firms have the potential to increase income opportunities for the poor who are able to work, while accessing donor funds for public programs to provide a “safety net” of social and economic benefits for those who are not. ACDI/VOCA therefore also seeks to collaborate with public and private sector partners in the implementation of educational, treatment, nutritional supplementation, and/or health care finance programs, or programs to reduce dependency obligations for workers.
In poor countries where HIV/AIDS is rampant, sluggish economic growth, poor leadership, communal strife and natural disasters such as drought are bad enough. Unfortunately, HIV/AIDS exacerbates every other problem. Mindful of the individual suffering of victims, the long-term implications of HIV/AIDS for global welfare, and its obligations as a full-service technical assistance provider, ACDI/VOCA commits its resources and expertise to surmounting this great challenge.