Nutan Shrestha—Honors in Economics

An Analysis of the Social and Economic Impact of HIV/AIDS in Botswana. The study examines the extraordinary progress of Botswana since its independence in 1966 and the social and economic impact of the rising HIV/AIDS epidemic on the nation. The economic transformation over the last three decades, fueled by the discovery of diamonds, has been truly remarkable; however, with one of the highest HIV prevalence rates of around 36.5-percent, the nation’s social as well as economic framework have been gravely threatened. The study uses an IMPLAN model as well as a manual Input-Output model to analyze the impact of the disease as it filters through the households, industries, communities and the overall economy of Botswana.

Botswana’s economy is heavily dependent on its mining industries, particularly diamond mining. In fact, the research found that the loss of the Debswana mine alone would result in around 22-percent drop in GDP. The lucrative revenue from the diamond industry is used to fund the massive expenditure of central government. While the government has shown strong leadership over the past, we felt that the current size of government is neither sustainable nor desirable. During our research, we also found that the capital-intensive nature of Botswana’s industries somewhat insulates the economy from the full ravages of HIV for the short run. However, the disease left unchecked, in the long run, is predicted to debilitate Botswana’s economic framework. Additionally, the detrimental impact on human development indices like poverty rates, rising orphan population and death rates foretell a human crisis of tragic proportion. In the light of this national crisis, the government of Botswana should take committed steps to protect its society and economy from the impact of the vicious AIDS epidemic.