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AIDS Threatens Global Business

February 1, 2000
Related Topics: Global Business Issues, Featured Article
Recently, loan negotiations between the government of an African country andthe World Bank were suspended when a high-ranking official of that country diedof AIDS. No one else in the government was trained to assume his role.

The official’s death resulted in unanticipated delays and the suspension ofloan negotiations while other officials were briefed and readied to continuediscussions with the World Bank. Critical national business and public sectorissues were put on hold.

AIDS, so often regarded as a public health or humanitarian issue, casts alooming shadow over global business and already has begun causing bottom-linelosses. Yet planners seem to be ignoring the epidemic. Leaders of U.S.-basedbusinesses, thinking in terms of their own country’s epidemic, need to reframetheir awareness and their plans in light of the long-range business effects ofglobal AIDS.

How substantial is the threat? Consider the following:

  • During 1999 alone, 2.6 million people died from AIDS/HIV. Also last year, 5.6 million people worldwide contracted HIV, the virus that causes AIDS. According to UNAIDS, a United Nations Programme on HIV/AIDS, the total number of HIV-infected people as of December 1999 is 33.6 million.

  • Half of all new infections are in the 15-to-24 age group, according to the UNAIDS’ December 1998 Epidemic Update. This group includes some current employees, some family members on employee benefits plans, and the future hiring pool.

  • Life expectancy in the regions with high rates of HIV is shrinking. Some countries face an unplanned zero population growth rate because of AIDS-related deaths and associated declines in birth rates. Barely 10 percent of the world’s population live in sub-Saharan Africa, but 70 percent of the newly infected live there, says UNAIDS. And South Africa, emerging into a developed nation while part of its economy is still in the developing world, is among the hardest hit.

  • While the epidemic is established in sub-Saharan Africa, it is young in South and Southeast Asia, North Africa, the Middle East, East Asia, and the Pacific, and very young in Central Asia and Eastern Europe. (See "Regional HIV/AIDS Statistics and Features," on this page.)

UNAIDS describes a situation that’s unfamiliar to business leaders who areaccustomed to the U.S. epidemic. We have an HIV infection rate of about one inevery 265 people. Countries where the rate can be as high as one in foururban-based adults now experience staffing shortages and productivityinterruptions.

The report warns, "AIDS ... is decimating a limited pool of skilledworkers and managers and eating away at the economy. ... Businesses are alreadybeginning to suffer."

Eighteen years into the epidemic, some companies and coalitions areundertaking global efforts to analyze and deflect the business impact of AIDS.Yet while 73 percent of respondents cited in the recent report, "CorporateResponse to AIDS," have programs to help inform their own employees aboutHIV, only 13 percent are involved in AIDS-specific partnerships in the widercommunity, according to Victor Barnes, associate director for international HIVprevention at the Centers for Disease Control and Prevention in Atlanta.

What happens to unprepared employers?

Barnes describes the consequences of AIDS-related death and illness withinthe ranks of the highly trained, as well as a parallel problem within thebroader labor pool: inefficiencies from lost labor due to caring for families,attending funerals, and providing child care.

In sub-Saharan Africa, he explains, what used to be a five-day leave fordeaths has been reduced to one-half day, so that employers can maintainproductivity. In his 15 years with USAID before joining the CDC, Barnesencouraged employers to build in parallel training requirements because of thepotential for illness. He stresses that employers need to search constantly forreplacements for people with technical skills in high-prevalence countries.

Without intervention, the eventual effects of AIDS mortality among workerswho are parents include declining family nutrition, deteriorating economicstatus, and pulling children out of school -- especially girls -- leading to thede-education of the future labor pool.

But only in Africa, you may think. Not true. The epidemic is still relativelyyoung in Asia and India, where the same outcomes will result unless preventionmeasures are more effective.

Needed: a better lens to look through.

If productivity is at risk, how has the global AIDS epidemic created suchprofound business effects without becoming an important business issue? Part ofthe problem is positioning.

"The two defining paradigms for AIDS worldwide are as a humanitarian orpublic health issue," according to the Levi Strauss Foundation report,"Developing a Global Business Response to AIDS: Strategies for U.S.-BasedMultinational Corporations," by Stephen T. Moskey. Neither paradigmprepares business leaders to be alert to trends that will have bottom-lineimpact.

Dr. Anthony Pramualratana, executive director of the Thailand BusinessCoalition on AIDS, offers a view of business impacts from within a Type 3country that would startle any business planner from the United States. Hepoints to effects in the following:

The Economy: There will be a reduction in savings and investment, achange in employment opportunities as well as in the labor force, and a decreasein tax revenue.

Social Structure: There will be higher proportions of the very young and thevery old, an increase in workplace discrimination, closure of primary schoolsbecause persons of reproductive age have died, and population shifts as thosewith HIV leave the cities and return to the provinces.

Health System: Problems will arise due to complications in resourceallocation and financing health care.

Any U.S.-based company is limited in its planning capacity if it fails totake into account these effects of AIDS in Type 3 and Type 4 countries. Even ifthe company has no local affiliate in any Type 3 or Type 4 country, itsmarketing department may be projecting sales in that country that will evaporateif families must choose, for example, between CDs and medicine.

What can U.S.-based businesses do now?

Farsighted employers can intervene. For example, Chevron Corp. in SanFrancisco is working with its affiliates in Chevron Overseas Petroleum to"meld their expertise in in-country business with our expertise inaddressing AIDS," explains David Scull, program officer for AIDS andgay/lesbian funding. "In countries where we have operations, we want toundertake community involvement."

Scull reports that no particular crisis or event has provoked Chevron’scommitment to confronting AIDS. But in communities where AIDS is a big issue,"we try to focus our dollars there." For example, in Angola, Chevrondonated $250,000 in medical supplies to two hospitals for state-of-the-art bloodtesting and storage equipment.

When Levi Strauss in San Francisco is praised as a model in domestic andglobal AIDS response, many other businesses roll their figurative eyes, assumingthat no one else could touch Levi Strauss’s level of involvement, largely ameasure of its CEO’s high commitment. Yet the model isn’t exclusive toFortune 500-size employers.

Jan Bein, Levi Strauss’s EAP regional manager for the United States,explains that the company has sought to provide HIV education to all itsaffiliates in more than 60 countries with a tool they now make available toother businesses. In 1998 they produced "The Changing Face of AIDS: TheGlobal Epidemic," a video now translated into 14 languages and shownworldwide in the company.

Levi Strauss focuses on providing culturally appropriate HIV education to itsemployees’ communities, using posters and theater groups in areas of lowliteracy. Employees learn about HIV as a workplace issue during orientation.

Yet Bein reports that most affiliates are still reluctant to talk about AIDS.Levi Strauss is responding with an EAP Web site on its intranet, linked to itsEuropean affiliates and providing both U.S. and European HIV resourceinformation.

As Exxon builds a huge pipeline across southwest Africa, it plans to providehealth-care services to its large workforce, much of which will be displacedmale workers.

Exxon has sought technical assistance from the CDC to provide HIV preventioneducation models for this vulnerable population and the surrounding communitiesthat will interact with the workforce. CDC’s "Business Responds toAIDS" approach to providing workplace education and outreach willsupplement Exxon’s broader health promotions.

Pramualratana urges a "rational response strategy." He explainsthat "business operating in any country should consider HIV/AIDS workplaceguidelines and policies. AIDS programs cost very little. They certainly willdevelop staff morale. Strategically planned, they can even develop a goodcorporate image to [present] to the wider customers and public. Americans canmake a difference through links in their corporate sectors and the network ofRotary Clubs abroad."

What if your overseas workforce couldn’t produce?

In Type 3 and Type 4 countries, maintaining productivity will become acritical issue unless the company takes action. Moskey’s report acknowledgesthat not all employers will respond in the same way.

In the best link between corporate headquarters and in-country operations,Moskey suggests there will be "an interdependent, synergistic relationshipwith each other around AIDS issues. The field needs to push for involvement ofthe home office by providing it with information and analysis of the local,in-country situation. At the same time, the home office needs to pull fieldofficers into a global corporate strategy to address issues of theepidemic."

The bottom line: All parties need to now set aside old paradigms and reframeglobal HIV and AIDS as a business issue. Human resources, with its unique blendof strategic expertise and information about the human impact of policies, isthe best partner to bring the new model into the conversation.

Workforce, February2000, Vol. 79, No. 2, pp. 52-55 -- Subscribenow!

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