10:   On Infrastructures — A Shocking Test Case in South Africa’s HIV Survival Jungle

William Krehm

Much of the confusion that constitutes official economics has to do with the "infrastructure" concept. Economics as currently practiced on high is essentially an-oil-and-water mix of diligent, if often brainless arithmetic, and a haughty disregard of the question whether numbers so passionately added, subtracted, multiplied or divided, really do relate in a crucial way.

That is how for a good half century our finance minister concentrated on balancing the budget, without considering that when the government spent, say, $100 million on a bridge or a building, the result was an asset value that had to be depreciated over its useful life, and not treated like the floor wax that was bought and used up in the current year. But nothing was quite as simple as that. For example, government buildings are usually located in central urban districts, and as a result the value of the land beneath them is more likely to go on appreciating at the very time that the properly depreciated value of the building on it shrinks to zero.

Nor does that exhaust the complexities of these concepts. Economists in the 1960s, on the basis of the astounding recovery of Germany and Japan to become keen competitors on the world market once more, realized that public education is the most productive investment a nation can make. That, too, must be properly depreciated.

The next logical step towards a rational accountancy is this: once you recognize that education is a key investment, would you not have to include health and social services as well?

For are healthy humans not the vessels in which the government’s investment in education is held? And should it not, it should be obvious that the rate of depreciation of such investment in human capital is impressively low, since the children of educated parents tend to be better educated than those of the uneducated, and the offspring of healthy parents tend to be healthier than those of sickly ones. There are then qualitative dimensions to public investment in infrastructure that can hardly be grasped by simplistic statistics.

A most grisly confirmation of the complex, surprising forms that the important concept of economic infrastructures is provided in a Wall Street Journal story (07/04, "In South Africa, poor AIDS Patients Adopt Risky Ploy" by Michael M. Philips): "Durban, South Africa – Zolile, a 25-year-old single mother, is one of the lucky few who receive advanced anti-AIDS drugs free from the government. The pills work just the way they’re supposed to, boosting her immune system, relieving her symptoms and restoring her health so long as she takes them twice a day.

"That’s why she stopped taking them a month ago.

"Her decision represents an unexpected twist in South Africa’s AIDS crisis. The South African Government gives Zolile antiretroviral "cocktails" to make her healthier. It will also give her a $130-monthly disability grant – but only if she gets sicker than now. And if she takes the drugs, she probably won’t be sick enough to qualify for the cash.

"For Zolile, the right choice was painful but clear. "I want to get sick so the doctor will give me a grant, and my children will have healthy food. Even if I die, my children will be better taken care of" she says, speaking on condition that her family name not be used.

"There are no reliable statistics in South Africa to indicate how many AIDS patients skip medicine so they will become sick enough to qualify for financial help. But anecdotal evidence is strong, according to health professionals and advocates. Two AIDS counselors at one of Durban’s biggest hospitals estimate 30% of their clients say they don’t follow their antiretroviral regimens because they hope to become sick enough to qualify for a disability grant.

"We were quite alarmed by the number of people manipulating their medical regimes," says Maxine McCalla-Kay, former head of the South African AIDS Consortium, an umbrella group of hundreds of organizations.

"Roughly 26 million people in the nations of sub-Saharan Africa carry the AIDS virus, about 60% of the world’s total, according to the Joint United Nations Program on HIV/AIDS or UNAIDS and the world health organization.

"Currently 1.3 million South Africans receive the grants, many of them citing AIDS as the cause of their disability. The country has more AIDS cases than any other, with an estimated 5.3 million to 6.3 million South Africans carrying HIV.

"The South African government has no specific criteria for determining whether an AIDS patient is sufficiently hobbled to qualify as disabled. Instead, it leaves the decision to doctors, who generally sign off on a grant if the patient’s blood test shows a CD4 cell count – a measure of the strength of the immune system – of 200 or below. Some hospitals have reduced that threshold to 50, a dangerously low test of immunity. Normally a person without HIV will register a CD4 count between 500 and 1,500, according to the American Association for Clinical Chemistry.

"The South African government was slow in endorsing antiretroviral drugs, in large part because President Thabo Mbeki long questioned the connection between HIV and AIDS. In 2003, however, the government decided to distribute the drug for free, usually to anyone with a CD4 count of 200 or below. Nonetheless the drugs are slow in coming. As of the end of last year, just 20% of the 983,000 patients in need of the drugs were receiving them, according to UNIAIDS and the WHO.

"The conflict between getting healthy and getting the disability grant is sharpened by the fact that 40% of South African adults either can’t find a job or have given up looking. Patients desperate to be certified as disabled pressure counselors to intervene with physicians on their behalf. Some resort to bribing the doctors directly, says Mr. Jehoma, of the government’s Department of Social Development. Typically, he says, a corrupt doctor charges 200 rand – just over $30 for such an illicit service.

"A plump woman with hoop earrings and tight black hair extensions pulled into a ponytail, Zolile dropped out of school after the 11th grade, after her father’s death. About the same time she got pregnant by her boyfriend, giving birth to a daughter, now two-and-a-half years old. When the test showed that Zolile had been infected with the AIDS virus, she took a drug, nevirapine, that helps prevent transmission of the virus to the fetus. So far, her son, now 20 months old, has tested negative.

"Her boyfriend provides neither emotional nor financial support. ‘After I told him I was positive, he took off,’ she says shaking her head slowly.

"Zolile says she lives in her mother’s two-room house in a black suburb near Durban. Out of a small pension, her mother pays for school fees, rent, electricity, and food for the family. Usually it is maize meal, sugar, rice, and beans. Occasionally she splurges on vegetables, fruit or meat.

"Zolile hasn’t told her mother she has AIDS. She says she worries that this would kill the older woman and, she says bluntly, that would lose the family’s only income. ‘What job can I get without a high school diploma. All I can do is wipe off tables in a restaurant.’"

How close to dying to be allowed to live?

"The AIDS clinic that Zolile attends is located at a big state hospital where the death toll is high and it’s common to see family members enter carrying leafy tree limbs, a sign that they’re on their way to visit the body of a newly deceased relative. Following a Zulu tradition, they transport their relative’s spirit home in the branches. If they don’t, they believe the spirit – now one of the revered ancestors – will remain stuck in the hospital bed.

"Last year Zolile’s doctor put her on the latest antiretroviral drugs. A month ago, she returned to the hospital for a blood test. Her CD4 count was 99, an extremely low level, but not low enough to convince her doctor that she was eligible for the disability grant.

"So Zolile says she stopped taking her AIDS drugs with the intention of forcing her CD4 count below 50, a point at which she’s sure the doctor will approve her disability certification. Zolile has already thought how she would spend the money: apples, pears, bananas, oranges, maybe some beef. She might even set up a stall in the market place.

"Some academics and social activists argue that the solution is to retool the South African welfare system to subsidize the incomes of all of the poor, healthy or sick. Such a solution, however, would be expensive."

There is a possible series of further capital costs to the nation and the world of this weird policy to combat AIDS. A single example: "Such inconsistent antiretroviral use increases the chances of promoting drug-resistant strains of the AIDS virus, health researchers say."

It would, indeed, be a good problem for graduating classes – now that our government has made a few semi-conspiratorial steps towards introducing accrual accountancy – to analyze the AIDS problem and decide at what point the entangled issues of a minimal subsidy or a suitable job for AIDS patients must be recognized not as an unaffordable expense, but as an urgent, prudent investment.

The AIDS virus does not respect skin colour or race. And even in terms of making a token payment for the period of slavery, the international community could find enough good reason for preventing the further depopulation of Africa. Not as a spendthrift expenditure, but a moral gesture that will prevent the spread of diseases known and unknown. A program of physical infrastructures – roads, housing, schools – would put gainful employment within the reach of healthier AIDS patients so that there will be reason for them to avoid not combatting their disease because of the risk of losing their miserable grant.

William Krehm

-- from Economic Reform, May 2006