Crime costs Caribbean countries billions

A study undertaken by the Inter-American Development Bank (IDB) estimates the direct annual cost of crime and violence in Latin America and the Caribbean at US$261 billion or 3.55 percent of gross domestic product (GDP).

The IDB said the figure is roughly what the region invests on infrastructure and double the average cost for developed countries.

It is also the equivalent income for 30 per cent of the poorest population, underscoring the grave development impact violence has on the region.

The IDB said the “Costs of Crime and Violence: New Evidence, New Revelations in Latin America and the Caribbean” study is a landmark effort to provide comparable crime costs numbers for 17 countries in the region, benchmarking them against 6 developed countries.

“Crime and violence are at near crisis levels in Latin America and the Caribbean. The region accounts for nine percent of the world’s population but contributes nearly one-third of its homicide victims, making it the most violent region outside of war zones. Six out of ten robberies in the area involve violence, and 90 percent of murders go unresolved. Its prisons are the most overcrowded in the world,” the IDB said.

“Crime has reached alarming levels in many countries,” said Ana María Rodríguez, the manager of the IDB’s Institutions for Development Department.

“By providing estimates of the costs of violence at the regional, sub-regional, and national levels, the study will help governments and international cooperation agencies better allocate resources, as well as design better policies to control and prevent crime.”

Crime-related costs are on average 3.55 percent of GDP in Latin America, compared with 2.75 percent in the US, 2.55 per cent in the UK and 1.34 per cent in Germany. If the region brings its crime costs down to the level of developed nations, it could increase its infrastructure investment by 50 per cent.

The study breaks down the costs of crime into three parts.

The social costs include lethal and non-lethal victimisation and individual income of prison populations: 0.64 percent of GDP. Private spending on security by business and households: 1.37 percent of GDP and public spending, including the costs of the justice system, spending on police services and spending on prisons: 1.51 per cent of GDP

The estimates are conservative as they include mainly direct costs of crime: public and private spending on security and the social costs. They do not include indirect costs such as changes in behaviour due to fear of crime, or the impacts of crime on the health of persons, the IDB noted.

It said as a percentage of GDP, public spending on crime-related areas in Latin America and the Caribbean is similar to the level in developed economies such as the U.S. and the United Kingdom. However, spending is a much bigger portion of public budgets, and private spending on crime prevention is vastly superior to that in more developed nations, the study shows.

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