The Business Response to HIV/AIDS: Impact and lesson learned

The business impact
of HIV/AIDS
I
he economic and human consequences of the spread of HIV/AIDS around the world are
much more evident in countries where HIV has been present the longest and where the
epidemic is at its highest levels. For many businesses the impact of HIV/AIDS is already
severely constraining their ability to be competitive, while for others the potential risks are
significant in both high and low HIV/AIDS prevalence regions.
Building awareness of the severity of the impact of HIV/AIDS on business is
one of the most important elements in assisting businesses to respond effectively.
HIV/AIDS is not purely a health issue; it is also an issue that goes to the GLOSSARY
very core of business practices. The effects are evident on two levels, the
macroeconomic and the individual company levels, both of which require
urgent responses if businesses are to remain competitive. Absenteeism:
unplanned/unauthorised absences
1. MACROECONOMIC IMPACT from work by employees
It is important to identify the macroeconomic impact of HIV/AIDS as it Capital: physical (e.g. factories) and
has a considerable effect on business operations through its influence on human (e.g. training) contributions
markets, savings, investment, services and education. While it is difficult to productive activity
to accurately predict the macroeconomic impact of HIV/AIDS there has Foreign Direct Investment (FDI):
been a considerable amount of analysis undertaken around this issue, investments in physical assets by
particularly in sub-Saharan African countries. The long history of the non-domestic individuals or
severe effects of HIV/AIDS in this region has led to a concentration of organisations
studies. However, the macroeconomic impacts have not solely been Macroeconomic:
experienced in Africa; company profiles within this report are evidence of combined/aggregate economic
the globally diverse responses to a very real global HIV/AIDS problem. activity
Morbidity: incidence of a disease in
Principally, HIV/AIDS affects people within their most productive years a specific locality
of life (most infections before the age of 25), and through reduced Mortality: the number of deaths in
earnings as a result of illness, care demands, higher expenditure on health a given period
care and premature death; the result is a reduction in savings rates and Production Costs: the price (finance
disposable income. In the long-term this has the combined effect of and time) of creating or
reducing the market size for business, particularly in markets outside of manufacturing goods and services
the basic necessities of food, housing and energy, and reducing total Production Cycle: the process
resources available for production and investment, and thus declining (inputs and outputs) of production
economic growth. Early results of on-going estimates by the World Bank of goods and services
suggest that the macroeconomic impact of HIV/AIDS may be significant Productivity: the amount of output
enough to reduce the growth of national income by up to a third in per unit of input (labour, equipment
countries with adult prevalence rates of 10 percent.i and capital)
Supply Chain: provision of raw
Through higher morbidity and mortality, no sector of the economy is materials and manufactured goods
immune to the impacts of HIV/AIDS, particularly as a result of reducing to point of sale, including
the available productive and skilled labour and investment. The combined production, assembly and delivery

effect of this is to increase the broader service and production costs to
business, particularly through the effect on sectors such as transport and

THE BUSINESS RESPONSE TO HIV/AIDS: Impact and lessons learned