The economic price of crime and violence

Is there a way to stop this? Probably. The short-term solution is to improve the judicial system for it to actually work, not to make more laws, because they already exist, but to actually apply them. The long-term solution is one where the government must be really present, offering job opportunities for those who want to be productive and a better education for those children growing up.

Latin America and the Caribbean is home to some of the most violent countries in the world, even when they are not at war. And according to a recent report issued by the Interamerican Development Bank, this is costing about 3.5% of the GDP of these countries, at least. In some countries, such as Honduras and El Salvador, this cost reaches 6% of the GDP. This price is the double of the price paid in developed countries, it is equivalent to the investment in infrastructure and it doubles the investment that these countries make in childhood. This cost is measured in all those things that countries have to invest as a result of crime, such as private and public security, prisons and justice, as well as the loss of productivity due to death or incarceration of the productive force of the country. 

Cost of Crime in Latin America and the Caribbean, as percentage of GDP

It is curious that the region improved in indicators such as poverty, education and health, but at the same time the violence has increased exponentially, becoming the most violent region in the world. 33% of the homicides committed in the world belong to this regions, and it is home to less than 9% of the world population. What happened? One of the key elements we must talk about in the region is the quality of the judicial system, which in average is highly inefficient and with a high level of corruption.  Only 10% of the crimes are solved, leaving the rest into impunity. Nevertheless, the incarceration rate exploded and as a result the prisons are among the most populated in the world. The problem does not end here. Due to the high number of people inside the prisons (some over two and three times over the limit), the facilities face inhumane conditions for the prisoners. Additionally, at least in the case of the North Triangle (Guatemala, Honduras and El Salvador), prisons are home to thousands of gang members, and the prisons become some kind of school for the new ones as they represent the opportunity of interacting with the highest members of the so-called pandillas (gangs) and learn from them.

                Social Cost of Crime by Subregion, as percentage of GDP

In the graph above, we can see that homicides make for most of the total cost of crime, 60% in the case of Central America, where we can also see the highest costs in crime, followed by the Carribean and the Andean region. The South Cone of South America is the lowest, with countries such as Argentina, Chile and Uruguay. Prisons constitute another big part of the total social cost of violence. The victims of all this violence are mostly young men between 15 and 30 years old, particularly in the North Triangle region, where gangs play a very important role in the number of crimes and homicides committed in the region. The fact that most of the victims are between 15 and 30 years old, means that a huge part of the productive force is being reduced, and this makes violence particularly costly for these countries as we are seeing a direct effect in human capital and economic growth.

Homicides per 100,000 habitants in the North Triangle, 2009-2015

In the case of the countries in the North Triangle (Guatemala, Honduras and El Salvador), we can add another cost to violence: high rates of migration. In 2013 only, the amount of migrants from these 3 countries in the United States increased by 80% compared to the number registered in 2000. Furthermore, during 2013 and 2015, almost 100,000 unaccompanied children from these 3 countries arrived in the United States. People do not feel safe anymore in this region. They are not finding the work opportunities they need. There is a very high amount of young graduates who simply cannot find a job doing what they studied for and they end up working in a different field for a very low salary. Adding to this, we face a very unsafe environment for the families. Many people are finding a better option migrating to the United States, even though they will end up washing dishes. Still safer and better paid than back home. The result: divided families, children growing up alone as their parents leave in order to send them remittances so that they can have a better life and education. But many times these children feel like their family is the gang that has always been there for them, and not their parents who migrated to give them a better life. And with the gangs, they learn to rob and kill. And the violence and crime increases, as the country is less and less able to stop this. And the cycle is endless.

Is there a way to stop this? Probably. The short-term solution is to improve the judicial system for it to actually work, not to make more laws, because they already exist, but to actually apply them. Can something be done with the gangs right now? The population of the North Triangle are facing a very difficult decision, as the death penalty has come as a solution. The people, mostly religious, does not believe that the death penalty is the solution, while the younger population agrees even more and more with this measure. The long-term solution is one where the government must be really present, offering job opportunities for those who want to be productive and a better education for those children growing up. When there is a healthy country, people want to be productive and stay home with their family and friends.

Dott.ssa Ana Figueroa