“The report is based on a theoretical model which was ‘calibrated’ to South Africa
and then used to produce several scenarios of the impact of AIDS on this country.
The key concept in the Bank’s model is human capital, ie, society’s stock of knowledge
and abilities, transmitted from one generation to another via a system of education and training. The report argues that AIDS erodes this transmission mechanism by affecting large numbers of people when they are at their most productive, often shortly after they have had children of their own. It further argues that such a reduction in human capital has a seriously detrimental effect on any country’s economic
growth.”
