Crime and municipal violence reduce economic activity to 0.4%

Mexico City. Crime and violence impedes the growth of countries, since a 10 percent increase in homicides at the municipal level reduces economic activity to 0.4 percent, said Raphael Espinoza, deputy head of the Central America division of the International Monetary Fund ( IMF).

These data correspond to statistics collected in municipalities located next to the border and the coasts, as well as on routes where the largest violent events in Latin America and the Caribbean (LAC) are recorded, where a third of the world’s homicides are recorded, although They only have 8 percent of the world’s population.

The average cost of crime and violence in the region is 3.44 percent of the gross domestic product (GDP), which is equivalent to 78 percent of LAC’s public education budget and represents double spending on social assistance programs and 12 times the investment in research and development, according to Nathalie Alvarado, coordinator of the citizen security and justice area of ​​the Inter-American Development Bank (IDB).

Raphael Espinoza explained that crime and violence raise the cost of countries’ debt, discourage foreign investment and reduce the productivity and growth of companies, even leading to businesses closing and employment opportunities being limited.

When participating in the conference Crime in Latin America and the impact on public policies organized by the IMF and the World Bank, he explained that crime and violence disrupt specific economic sectors such as tourism; They affect people’s health and increase the risk of mental anguish and risky and violent behavior.

Espinoza said that it is essential that policy makers address violent crime and insecurity in the region, since the losses and expenses of companies due to these problems are close to 7.0 percent of annual sales.

He commented that in Mexico, costs are four times higher for companies that report the presence of organized crime and drug trafficking in their vicinity.