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Papua New Guinea is facing social and economic meltdown as a result of an Aids epidemic which could reach African proportions, according to an Australian Government report.

The study, for Canberra's overseas aid agency, AusAID, estimates PNG could lose nearly 40 per cent of its adult population to Aids over the next two decades.

'PNG is poised on the brink of a serious epidemic,' the report said, predicting that the scourge would be so severe that the country would face not only a public-health crisis but also a breakdown in law and order and an end to foreign investment.

Such would be the toll among educated, middle-class people that the Government would barely be able to function.

Using models from Africa, a low-impact scenario predicts 45,000 deaths over 20 years - 13 per cent of the adult population. A medium estimate is for 100,000 Aids-related deaths, while the highest scenario predicts the deaths of 37 per cent of the adult population. That would lead to a fall in gross domestic product of seven per cent.

AusAID says the epidemic building in PNG has many characteristics in common with African countries such as Zimbabwe, Kenya and South Africa.

Like in Africa, the disease in PNG is sexually transmitted through multiple partners.

One of the authors of the report, economist Jenny Gordon, of the Centre for International Economists, said PNG's leaders were finding it hard to absorb the extent of the potential disaster.

'Already crime is a major problem in PNG and the gap between the haves and the have-nots is likely to widen. That usually leads to an increase in criminal activity, so there's a major concern there,' she said.

Officially, only 0.6 per cent of PNG citizens have HIV or Aids, but for every known case it is believed there could be up to 20 others that are hidden.

There is little testing and Aids fatalities are often attributed to tuberculosis or pneumonia.



Aids may claim 40pc of adults in 20 years