US embassy cable - 05GABORONE953

UNCLAS  GABORONE 000953 
 
SIPDIS 
 
 
AF/S FOR MALONEY 
 
E.O. 12958: N/A 
TAGS: KHIV, ECON, ELAB, BC, HIV and AIDS, ECON 
SUBJECT: HIV/AIDS IN BOTSWANA: FRANCISTOWN BUSINESSMEN 
DESCRIBE ECONOMIC IMPACT 
 
REFERENCE: GABORONE 879 
 
1.  SUMMARY:  HIV/AIDS is decreasing productivity and 
reducing economic growth in Botswana.  According to 
members of the business community in Francistown, 
Botswana's second largest city where some of the highest 
HIV/AIDS infection rates in the country are found, the 
costs of AIDS-related leave taking, higher dependency 
ratios, and the loss of skilled workers continues to 
outweigh the benefits of the GOB's free anti-retroviral 
treatment program.  Mission will continue to engage the 
Botswana Confederation of Commerce, Industry and Manpower 
(BOCCIM) and the Botswana Business Council on AIDS (BBCA) 
to encourage a coordinated and proactive private sector 
response to the challenge of maintaining economic growth 
in an HIV/AIDS era.  END SUMMARY 
 
PROFITABILITY VERSUS SOCIAL RESPONSIBILITY 
 
2.  Mr. Sharif, a senior manager at the hundred-year old 
hardware dealer Haskins, told PolOff on June 28 that in 
the past two years he and his management colleagues at 
other firms had begun to see the dramatic effects of 
HIV/AIDS on the private sector.  He reported that eight 
out of 250 Haskins employees had died in 2004.  He had 
seen multiple instances in which an employee whose health 
was fast deteriorating suddenly improved thanks to anti- 
retroviral treatment.  Nonetheless, workers still called 
in sick at a much higher rate than before.  Some 
employees came to work too ill to perform their duties. 
Those who showed no symptoms often bore the burden of 
anxiety for sick loved ones, which resulted in slower, 
lower quality work, he said. 
 
3.  Not only did workers worry about their relatives, 
many had to help meet the cost of their medical care. 
Mr. Sharif estimated that one-third of his staff had 
taken financial responsibility for a least one additional 
person in the last two years.  This increase in 
dependents occurred while the value of wages fell due to 
inflation and devaluation.  As a result, the number of 
applications for salary advances had dramatically 
increased, placing employees in financially vulnerable 
situations. 
 
4.  Mr. Sharif described certain traditional practices as 
exacerbating the economic impacts of the disease. 
Management at Haskins, for example, had wrestled with 
whether or not to grant salary advances on the basis of a 
medical emergency when the employee intended to use the 
funds to pay a traditional healer.  Mr. Sharif reported 
that many of his staff, including middle managers, turned 
to these "witch doctors" even though they charged as much 
as three times the cost of a private medical doctor. 
 
5.  Haskins employees were spending so much on funerals 
that the company decided to institute a funeral benefit. 
Haskins paid the enrolment fee and both the company and 
the employee made monthly contributions to an account 
with a funeral parlour to provide some form of insurance 
to cover death expenses.  Not only are funerals quite 
expensive, he said, the social obligation to attend a 
funeral extends even to distant relatives and 
acquaintances.  As a result, workers frequently requested 
leave to attend funerals. 
 
6.  Naturally, these dynamics affected Haskins' customers 
and their staff as well, which meant decreased revenue. 
Mr. Sharif told PolOff that the previous day one of his 
best customers, a general contractor, had lost to 
HIV/AIDS his most reliable and highest skilled employee. 
As a result, the contractor will need more time to 
complete his jobs, reducing the amount of supplies he 
orders from Haskins.  Other customers, he said, had 
purchased goods on credit but then encountered difficulty 
paying their balances because unexpected medical and 
funeral costs had cropped up.  The company had shown 
patience in such circumstances, but he was not sure how 
much more lenience it could afford. 
 
DOWNSIZING TO REDUCE LABOR COSTS 
 
7.  Mr. Pule, owner of a security company in Francistown, 
told PolOff that he planned to reduce his work force from 
over one hundred to only fifteen in 2006 due largely to 
escalating labor costs.  Although only two percent of his 
employees had died in 2004, Mr. Pule had found that 
drastically increased leave taking had fundamentally 
altered the profitability of his business.  He said it 
 
 
was not unusual for an HIV positive guard to be away from 
work for two to three weeks at a time when he or she gets 
sick.  Added to these prolonged absences from work are 
the frequent funerals.  Consequently, he planned to scale 
back his staff by 85 percent and shift away from labor- 
intensive security services to focus on selling security 
technology such as surveillance systems. 
 
NEEDED: SKILLED AND SEMI-SKILLED WORKERS 
 
8.  Like Mr. Pule, George Wirth, manager of a small 
furniture-manufacturing firm in Francistown, had 
witnessed HIV/AIDS undermine productivity and 
profitability in his business.  He indicated that 
HIV/AIDS was diminishing the already small pool of 
skilled and semi-skilled laborers.  Two out of twenty of 
his employees had died in 2004.  One had just finished a 
training course paid for entirely by the company - a lost 
investment.  Unlike Mr. Pule, however, Mr. Wirth could 
not replace workers with more advanced technology and had 
to sink additional costs into finding qualified 
replacements. 
 
9.  Recognizing the impact this had on his bottom line, 
Wirth had engaged his workers over the issue of HIV/AIDS. 
He pleaded with those who had not tested to do so and, if 
they were positive, to get treatment.  Employees who had 
started ARV therapy he encouraged to take their 
medications regularly and to avoid lifestyle choices that 
would undermine the benefit of their treatment - like 
smoking and excessive drinking.  Like Mr. Sharif and Mr. 
Pule, he complained that traditional healers were 
undermining efforts to treat those infected with HIV, 
thereby not only shortening their lives but shrinking the 
labor force as well. 
 
COMMENT 
 
10.  Although these interlocutors agreed with PolOff on 
the value of establishing firm-level policies on HIV/AIDS 
and on keeping statistics on deaths, leave taking, etc., 
they said that BOCCIM had done little to promote such 
strategies.  Mission will continue to encourage BOCCIM to 
play a greater leadership role in developing a proactive 
and coordinated private sector response to the challenge 
of maintaining a healthy economy in the face of the 
HIV/AIDS epidemic.  The Embassy will continue to work 
with the BBCA in promoting an HIV/AIDS in the workplace 
policy and work with the Ministries of Labor and Home 
Affairs, Trade and Industry and Health on this important 
issue. 
 
HUGGINS 
 
 
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