The epidemic of HIV and Aids need not bring about a "doomsday scenario" for the South African economy, Treasury Minister Trevor Manuel has said.

"We are dealing with the great unknown and what's important is that we maintain a real perspective on issues," Mr Manuel told the Africa Economic Summit 2002, a gathering of business leaders.

"While we need to engage with that... we aren't talking about a doomsday scenario."

One in nine South Africans is believed to be infected with HIV, something that is weighing increasingly heavily on the country's business community.

The South African government has been repeatedly accused of irresponsibility in its attitude to the epidemic, and President Thabo Mbeki has drawn international condemnation for questioning the link between HIV and Aids.

Rand rebound

The government's attitude to HIV and Aids has started to have an effect on the currency market.

Mr Manuel reckons growth should not be hit hard

A decision by the government in April to reverse some of its policies and start administering antiretroviral drugs has been cited by many economists as a key reason for the rand's recovery this year.

Mr Manuel noted that the government had been steadily increasing its spending on health in the past few years.

He referred to a study by the independent Bureau for Economic Research, which predicted that HIV and Aids would cut a quarter-point off annual economic growth in 2002-10, and a half-point in 2002-15.

That would still allow 3% or higher economic growth in the next few years, coupled with modest inflation, Mr Manuel insisted.

'No U-turn'

Speaking at the same conference, Health Minister Manto Tshabalala-Msiman said that the government remained focused on changing South Africans' behaviour, rather than shifting policy towards mass treatment.

"There isn't a U-turn: it is a consolidation of our strategic plan. We are midway in implementing our strategic plan," she said.

Delegates at the conference bemoaned the inadequate response of the business community to the problem.

A recent survey of 110 companies showed that only 27% were assessing the impact of the disease and factoring it into their business plans.