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The study released in Moscow by the United Nations Development Program (UNDP) is the first AIDS report focused on Eastern Europe and the former republics of the Soviet Union.
UNDP covered 28 countries and came up with alarming conclusions.
It estimated that between 1.2 and 1.8 million people were infected with the HIV virus or AIDS in the region last year -- almost double the number of cases in 2001 which stood at one million.
"Eastern Europe and the Commonwealth of Independent States have some of the fastest growing rates of HIV/AIDS infections in the world," said the report.
"One out of every 100 adults walking down the streets of a city in Eastern Europe or the Commonwealth of Independent States (CIS) countries carries the HIV virus that causes AIDS," the UNDP said in the 117-page report.
The United Nations said economic growth of each nation in the region could soon be reduced by one percent of Gross Domestic Production (GDP) "a tremendous impact for any country."
It warns that Russia's GDP loss by 2020 could top 10 percent and significantly affect its ability to dig for exports of natural resources -- Russia's main source of income.
"In Russia, the epidemic could affect the critical extractive industries (oil, gas, non-ferrous metals), many of which make extensive use of migrant labor. International experience suggests that workers in these industries tend to face relatively high HIV risks," it said.
The report also found that only a small fraction of those who require treatment currently have access to medicine throughout the region.
"Of the 80,000 people in the entire region who, according to WHO (World Health Organization) guidelines, currently require treatment for AIDS, only 7,000 now receive it," the UNDP said.
"This report contains a simple message: without an immediate, accelerated and significantly scaled up response by governments and other actors, HIV/AIDS risks undermining and even reversing human development gains across the countries of Eastern Europe and the Commonwealth of Independent States. Mounting such a response will be difficult, but far from impossible."
The report makes gloomy projections on the growth rate of AIDS in Russia in particular, warning that the disease could soon affect the country's national security.
It estimates that between 5.4 million and 14.5 million people could be infected with HIV in Russia by the year 2020.
"I appeal to the Russian authorities to take this threat seriously," said UNDP administrator Mark Malloch Brown in Moscow.
"I am not certain that Russia is as ready as China is to deal resolutely with this problem. There is a dawning realization that something needs to be done, but they have not crossed that bridge yet."
Russia's population currently stands at 145 million people and has been dwindling around a million a year in the post-Soviet era.
The United Nations also concludes that Russia's combat readiness will fall in the coming years because of the virus spreading.
"AIDS will reduce combat readiness through expedited retirement of experienced and well-trained personnel, additional spending on training replacements, and inevitably lowered standards of combat training."
The United Nations further warned that AIDS could affect Moscow's foreign policy over the coming decades because Russia could become increasingly dependent on foreign assistance to help overcome the spread of the virus.
"Russia's influence on international organizations could decline," the report said.
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