LATIN AMERICA: CRIME AND VIOLENCE AND ITS CONSEQUENCES ON THE ECONOMY

Index of perception of corruption, 2010

LATIN AMERICAS VIOLENCE AND STAGGERING CRIME RATES COME AT A HIGH PRICE

Executive Summary:

• LATIN AMERICA (LATAM) is the most violent region in the world - what consequence does this have on LATIN AMERICA’s economy and society?
• High levels of crime undermine confidence in the state institutions
• LATIN AMERICA has the world highest crime rates
• High rate of pupils abandoning school
• Business with fear
• Crime and corruption are two of the world's largest multinational industries

Studies show that violence and crime have economic consequences - URUGUAY, the country with the lowest crime rate on the continent, loses more than three percent of its GDP a year due to crime and violence.

LATIN AMERICA (LATAM) IS THE MOST VIOLENT REGION IN THE WORLD - WHAT CONSEQUENCE DOES THIS HAVE ON LATIN AMERICAS ECONOMY AND SOCIETY?

This has been investigated by the Inter-American Development Bank (BID) and the results are frightening: From birth weight of babies up to the value of a property, crime and violence take influence, BID concluded.

HIGH LEVELS OF CRIME UNDERMINE CONFIDENCE IN THE STATE INSTITUTIONS

"The crime caused direct costs for prevention and security infrastructure," economist Ana Corbacho said at the presentation of the study in Washington. "But the indirect costs are much higher, as high levels of crime undermine confidence in the state institutions."

Comment by Geopolitical Analysis and Monitoring: One should not forget that security infrastructure and the security market in LATIN AMERICA is one of the biggest “industries”, and as in many countries, controlled and run mostly by Organized Crime Syndicates, thus fostering corruption. See: CRIME AND CORRUPTION ARE TWO OF THE WORLD'S LARGEST MULTINATIONAL INDUSTRIES (Part1 and 2) at:

http://geopoliticsrst.blogspot.com.ar/2012/09/crime-corruption-and-political-system.html

WORLDS HOMICIDE RATE

http://en.wikipedia.org/wiki/List_of_countries_by_intentional_homicide_rate

LATIN AMERICA HAS THE WORLD HIGHEST CRIME RATES

Despite robust growth over the past decade and a sharp decline in poverty, LATIN AMERICA has the world highest crime rates. Inequality and marginalization, the dissolution of the traditional family structures and inefficient judicial and police apparatuses, are according to the UN the main causes for such devastating crime rates. Between 2000 and 2010, homicide rates increased by 11%; with HONDURAS being the leading country with 85 homicides per 100,000 inhabitants. In the EU, the rate is 1.6%.

According to the BID study, mothers and children suffer most from the violence. Children of abused mothers have a birth weight of 2.5 kg, which is below the average, and often suffer from diarrhea and are vaccinated less frequently. This indicates that violence is a further impediment for social advancement.
If in a region in Mexico, the murder rate increases by one percent, the real estate market drops by 1.8 percent. Particularly violent regions showcase higher unemployment rates and less industries settling there. Such regions consume 6.8 percent less power in comparison to safer regions.

HIGH RATE OF PUPILS ABANDONING SCHOOL

 

Young criminals in COLOMBIA on average attend one year less in school than their peers and 15 percent abandon training more likely. In URUGUAY, one of the most “peaceful” country on the continent, the costs caused by violence and crime annually amount to 1.2 billion U.S. dollars, or 3.1percent of the GPD.

BUSINESS WITH FEAR

"We have thus for the first time a tool to measure the economic costs, crime and violence cause. Based on these findings we are now able to make political decisions," said BID coordinator, Gustavo Beliz. According to surveys, public safety is the most pressing topic and concern for the majority of the LATIN AMERICAN population, ahead of employment and health care.

Buenos Aires: Protests against soaring crime

But the study has also brought to light how big the business with fear is: In BRAZIL for example exists so called “Safety Bonuses” on Real Estates in prime locations which, households are willing to pay and which sum up to 13 billion U.S. dollars. In other words, if BRAZIL was a safer country, rents and real estate prices would be lower. "People are willing to pay for the sense of security," said the studies director, David Vetter.

In ARGENTINA, the development of closed neighborhoods or gated communities are booming, giving the residence the feeling of security, not minding that they live in an environment that resembles a military camp with private security companies guarding the premises, who are mostly run by retired or suspended police chiefs and organized crime syndicates, thus even these so called “save heavens” are more frequently victims of crime and violence, keeping the business with fear and corruption booming.

By Sandra Weiss via DerStandard. Translated by Geopolitical Analysis and Monitoring