The Cost of AIDS

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Despite seeing significant economic growth and foreign investment, southern Africa is also often thought of as the epicentre of the world's worst humanitarian crisis. With just 2% of the world's population living there, the region also contains 30% of all HIV carriers.



After a decade of peace and democracy in southern Africa, with Zimbabwe as the notable exception, the region is seeing unprecedented growth. Mozambique has achieved an 8% increase in its GDP, and the country's young stock exchange has gone from strength to strength. Across the border in South Africa there has been 4.4% growth this year, and it is widely expected to reach the magic 6% growth target in the near future. South Africa's stock exchange has hit record highs this year on the back of some significant foreign investments, which are viewed by many as confirmation that South Africa's hard-fought political and economic stability is finally paying dividends.



Crime, joblessness, racial tension and income disparity are serious problems, but, with a vibrant economy and growth in public spending, there remains light at the end of the tunnel. The outlook therefore would be positive were it not for the HIV virus, which, few would disagree, is the greatest challenge faced by the region today.



The full effect of HIV on these economies is hard to quantify and will not be fully felt for years to come. Dealing with HIV is now simply a part of doing business in southern Africa. South Africa has roughly 5m people infected with HIV out of a population of 46.2m, with infection rates amongst women rising to a record 29.5% in 2004. The worst affected country in the region is Swaziland, which has an infection rate of 40%.



HIV has the largest impact on labour productivity and worker absenteeism in South Africa. According to a survey from the Bureau on Economic Research, which was released on the eve of World AIDS Day, more than half the mining sector has suffered a drop in profitability because of the virus. The study showed 46% of the transport industry and 38% of the companies surveyed in the manufacturing sector reported a substantial drop in earnings.



Some industries are worse affected than others, with a 38% infection rate among South Africa's 35,000 long-distance truck drivers. Absenteeism is rife and the drivers are passing away quicker than they can be replaced. It is estimated that 30% of the workforce in the gold mining industry is infected, with 10-12% in the platinum industry also having contracted the virus.



Many larger companies have tried to tackle the HIV virus head on. Volkswagen SA has spent about R4m ($634,000) on its HIV/AIDS workplace programme. The company tested 60% of its 6000 employees on a voluntary basis and found that they had an infection rate of 6%. Both Volkswagen and DaimlerChrysler have received awards in recognition of their efforts at combating the virus.



Andreas Tostman, the managing director of Volkswagen SA, told the Business Report last June that too many companies were deflecting the responsibility to the government, and that a disease that had killed 30m people worldwide was everybody's problem.



While the automotive industry has one of the lowest infection rates in South Africa, many smaller companies in South Africa are simply ignoring the problem.



The South African government's policies towards HIV/AIDS have long been a subject of controversy, with President Thabo Mbeki denying that HIV caused AIDS. The government has recently come under renewed criticism over its handling of the crisis from the UN. Stephen Lewis, a top UN AIDS envoy, said last month that he had been unable to carry out his professional responsibilities in South Africa because of differences with Health Minister Manto Tshabalala-Msimang. He accused the government of moving too slowly in providing antiretroviral treatment to AIDS sufferers, saying much poorer African countries like Lesotho and Malawi had acted far quicker.



The slowness in treatment has less to do with questions of capacity than the sense of energy of the government to promote the treatment regimens, Lewis said in an interview with the Reuters news agency last month.



South Africa has little time to lose in the fight against AIDS, with hopes that it can become an engine of regional growth being undermined by the pandemic. The region also desperately needs foreign direct investment (FDI), and most analysts agree that multinationals will increasingly be deterred from investing in South Africa if they have to factor in how many of their workforce will be lost every year to HIV/AIDS.

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