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Ninety-five percent of the people infected by HIV/AIDS live in developing countries.
AIDS affects workers, managers and markets:
- Financial impact
- Direct costs - Medical and other benefits costs, recruitment, and training needs
- Indirect costs - Lost productivity due to absenteeism, loss of skills and institutional memory
- Reputational risk
- Impact on consumer bases, savings, investments, education, and generally the costs of doing business
- In the most severely affected countries where AIDS might become a barrier to investment
- In countries where incidence is rising rapidly, AIDS could become a concern to investors, along with other issues such as corporate governance and security
 The Business Case for Action Against AIDS (PPT) demonstrates each one of these points and gives concrete examples and cases that show why AIDS prevention and care is imperative for companies in regions with HIV.
Select Research Materials
HIV/AIDS and the private sector: Does the Private Sector Care About AIDS? Evidence from Investment Climate Surveys in East Africa.
Small and Medium-sized Enterprises (SMEs) and HIV: HIV/AIDS is threatening the viability of SMEs in highly affected countries. SMEs are at risk due to their limited financial, clinical, and human resources capacity to proactively engage in HIV/AIDS education, prevention, care, and treatment initiatives. Learn more....(PPT)
Economic Costs of AIDS: Clive Bell: The Long-run Economic Costs of AIDS: Theory and an Application to South Africa. Most existing estimates of the macroeconomic costs of AIDS, as measured by the reduction in the growth rate of GDP, are modest. For Africa -the continent where the epidemic has hit the hardest- they range between 0.3% and 1.5% annually. The reason is that these estimates are based on an underlying assumption that the main effect of increased mortality is to relieve pressure on existing land and physical capital. The work by Clive Bell, Shantayanan Devarajan and Hans Gersbach argues that this emphasis is misplaced and that, with a more plausible view of how the economy functions over the long run, the economic costs of AIDS are almost certain to be much higher.
Investing in the Epidemic: Making the "Business Case" Against AIDS (PowerPoint presentation) Researchers from the Center for International Health at Boston University developed a costing model that calculated the financial impact of the epidemic on six corporations in South Africa and Botswana and found that the "AIDS tax" (increased medical costs, decreased productivity, and other costs associated with HIV/AIDS in the workforce) was as much as 5.9% of the corporations' labor costs. View summary of related article in the Harvard Business Review |
