HIV/AIDS Could Cause Major Economic Crisis in ‘Emerging Markets’; Some Companies Providing Prevention, Treatment to Workforce
Not only is the HIV/AIDS pandemic a "humanitarian disaster," but the disease could also cause an "economic crisis" in "emerging markets" such as South Africa, China and the former Soviet Union, where the virus is "spreading fast," the Toronto Globe and Mail reports. Labor-intensive industries, such as mining, have been particularly hard hit by HIV/AIDS, and service industries such as banking and food products may have to project slower growth in coming years due to a declining consumer base, according to the Globe and Mail. A number of banks, including Deutsche Bank and Dresdner Bank, have said that HIV/AIDS statistics will have to be included in financial forecasting, stock selection, asset allocation and risk underwriting. One of investors' foremost concerns is the "lack of relevant information" that companies disclose about the HIV/AIDS status of workers. According to the Globe and Mail, "calls are intensifying" for companies to provide more HIV/AIDS information in financial reports. All companies trading on the Johannesburg Stock Exchange will be required to disclose such information this year, and approximately 30% of South African companies already report HIV/AIDS statistics, according to the Globe and Mail.
Gold Fields, a mining operator, estimated that worker deaths from AIDS-related causes cost the firm $18,500 per employee and the "full impact" of the disease will increase production costs by $10 per ounce of gold. "The problem is that in Africa, where companies are not permitted to test, fire or screen out workers for HIV/AIDS, it is difficult to keep a sick worker away from work if he is desperate for money and gets paid for punching in his card," Michael Rea, a Toronto-based corporate responsibility consultant who has worked with mining companies in Africa, said. Some companies are turning to HIV/AIDS prevention and treatment programs. According to a study published in the February issue of Harvard Business Review, prevention programs cost firms $10 to $15 per employee in 2001 and resulted in an estimated 50% fewer HIV infections for one mining company employing 4,000 workers. Labor-intensive firms thus get a "positive return" by investing in prevention programs, the Globe and Mail reports. In addition, treatment with antiretroviral drugs can cost up to $500 to $1,000 per worker per year, but the therapy can extend employees' working lives by five to eight years. Although the stigma associated with HIV/AIDS keeps some workers from taking advantage of free antiretrovirals given away by companies, the number of workers participating in such programs is "expected to balloon" in the near future. "It's definitely a cost, but with earnings of about $1.7 billion, [providing antiretrovirals is] not going to kill us -- it will protect us," Brian Brink, head of mining conglomerate Anglo American's medical program, said (Heaps/Whittaker, Toronto Globe and Mail, 3/22).