Business and HIVAIDS: Economic Impact and Business Rationale

1
Business and HIV/AIDS Economic Impact and
Business Rationale

• Trevor Neilson
• Executive Director,
• Global Business Coalition on HIV/AIDS
• July 8, 2004
• Bangkok, Thailand

2
The Global AIDS Crisis

• The worst health crisis in all of human history
• 30 million people have died
• 40 million are currently infected
• Infections are not slowing
• Next wave countries Russia, India, China
• Limited access to treatment

3
Adults and Children Living with HIV/AIDS at the
end of 2003
Eastern Europe Central Asia 86 000 1.9
million
Western Europe 460 000 730 000
North America 520 000 1.6 million
East Asia Pacific 450 000 1.5 million
North Africa Middle East 200 000 1.4 million
Caribbean 270 000 760 000
South South-East Asia 4.1 9.6 million
Sub-Saharan Africa 23.1 27.9 million
Latin America 1.2 2.1 million
Australia New Zealand 21 000 46 000
Total 35 42 million

• Source UNAIDS, AIDS Epidemic Update 2004

4
New Infections in 2003 5 million, over 13, 000 a
day

• More than 50 are women
• About 50 are in the age bracket between 15-24
  years
• Almost 2000 are in children under the age of 15
• More than 95 are in low and middle income
  countries

5
High and Low Estimates of Current and Future
HIV/AIDS-Infected Adults in Next-Wave Countries,
2002 and 2010
6
AIDS Decimates Economies
Growth Impact of HIV (1990-97) (80 developing
countries)
0
-0.2
-0.4
-0.6
-0.8
Reduction in growth rate GDP per capita (, per
year)
-1
-1.2
-1.4
-1.6
0
5
10
15
20
25
30
35
HIV Prevalence Rate ()
Source R. Bonnel (2000) Economic Analysis
ofHIV/AIDS, ADF2000 Background paper, World Bank.
Slide adapted from UNAIDS Socio-Economic Impact
of HIV/AIDS in Africa, presented by Anita Alban
and Lorna Guiness, ADF 2000.
7
Impact on Economic Development

• Business
• Increased Cost, decreased revenue
• Decreased productivity, depleting skills and
  distorting labor market
• Markets
• Reduced Consumer spending
• Society
• Health consumes more of government budget,
  leaving less for social investment
• Families spend down savings, reducing capital
• Tax revenues fall
• Skilled workers professionals die or may flee
  brain drain
• Foreign investment and tourism decline
• Mass orphaning

8
Security Threats of HIV/AIDS

• Civil and international conflicts contribute to
  the spread of HIV/AIDS
• AIDS does not cause wars but it magnifies the
  impact of conflict
• AIDS destabilizes governments
• AIDS is increasing the risk profile for corporate
  and international investment
• Some African armies have prevalence rates of
  40-60

9
The Impact on Businesses

• Employees in their most productive years are
  affected
• Increased cost for health care, burials, training
  and recruitment of replacement employees
• Decreased revenues as a result of absenteeism due
  to illness or attendance at funerals, as well as
  time spent on training
• Labor turnover and loss of skilled workers can
  lead to a less productive work force

10
Increasing Vulnerability

• Looking solely at direct costs underestimates the
  full impact of HIV/AIDS
• In addition to measurable savings of 20K-200K
  for each new infection prevented, DaimlerChrysler
  concluded that prevention of a new infection
  averted a far greater loss of human capital
• Small and medium enterprises
• Potentially more vulnerable than MNCs
• Capture majority of the population
• Limited resources and lack of awareness and
  access to health services
• Will require massive mobilization and support

Source South African Business Coalition on
HIV/AIDS and Bureau for Economic research, 2003.
11
What Can Business Do?

• The workplace is one of the best mechanisms to
  educate the adult population and their
  communities about HIV
• Businesses can give resources or in-kind
  contributions and use their products in
  innovative ways
• Workplace health systems can be important for
  expanding access to treatment and prevention
  services
• Business people can play leadership roles in
  their communities and urge governments to take
  action
• Businesses can provide management expertise to
  HIV/AIDS organizations

12
Global Business Coalition on HIV/AIDS

• Over 150 Member Companies
• Richard Holbrooke, President and CEO
• Mark Moody-Stuart, Chairman
• Business AIDS Methodology
• Benefits of Membership
• Issue-based campaigns

13
What do GBC companies do?

• Use their products, people and reputation to
  fight AIDS
• Adopt AIDS policies and prevent and treat within
  their workforce
• Every companies approach is different
• Examples Anglo American, Viacom, MAC, Getty
  Images

14
Care Prolongs Productive LifeThe widening gap
between North and South
Source Adapted from WHO/UNAIDS Statistics,
HIV/AIDS Surveillance in Europe, End- year report
2001, No. 66, CESES
15
Business, AIDS and Public Policy

• Accelerating Access to Testing
• 6 million people need ARVs only 400,000 have
  access to medicines
• To fulfill WHO 3 by 5 goal
• 5,000 people need to be brought onto treatment
  every day, which means
• 500,000 people need to be tested every day
• (assuming that 50,000 test positive and 10 of
  those will need immediate access to treatment)
• Policy Shift on HIV/AIDS Testing

16
Overcoming AIDS What Must Happen

• Business is only one small piece of the pie
• In hard hit regions, national governments
  creating effective programs for their countrys
  HIV response is critically important
• In donor nations, mobilization of resources
  globally toward HIV prevention testing and
  treatment must be sustained
• The general public must be educated about the
  need for new resources

17

• The impact of AIDS on business and Economic
  prosperity cannot be ignored. Our customers in
  many parts of the world and our own staff are
  threatened by the epidemic the day to day
  operations of business could be compromised, we
  have to solve this problem.
• -- Mervyn Davies, Group Chief Executive, Standard
  Chartered Bank