Violence and crime absorb almost 3.5% of the GDP of Latin America and the Caribbean

Violence and crime absorb almost 3.5% of the Gross Domestic Product (GDP) of Latin America and the Caribbean (LAC), exhausting funds that could go towards education and assistance to vulnerable peoplehighlighted a report.

They also indicated that The cost of crime amounts to almost 80% of the region’s public budgets for education, double what is spent on social assistance and 12 times the budget for research and development.showed the study from the Inter-American Development Bank (IDB), which uses data from 2022 and was published on Monday.

crime “it limits growth, drives inequality and diverts private and public investment. We must join together and redouble our efforts to change that reality”said the president of the IDBIlan Goldfajn, in a statement.

The study calculates the direct cost of crime in three areas: the loss of human capital in the form of productive time, spending on crime mitigation by companies, and public spending on crime prevention and criminal justice.

In 2022, Security expenses of private companies represented 47% of the total cost of crimewhile public spending on crime prevention represented 31% and the loss of human capital 22%. For comparison, a data set of Poland, Ireland, the Czech Republic, Portugal, the Netherlands and Sweden showed that their costs are 42% lower than those in the region.

If the levels of its European counterparts were reached, the region would have about 1% of GDP to invest in social welfare and other programs, according to the IDB.

IMF: Latin America responsible for a third of the world’s homicides

A parallel study of International Monetary Fund cites Latin America as responsible for a third of homicides worldwide despite having less than 10% of the planet’s populationorganized crime being especially costly.

“The presence of gangs and drug trafficking amplify the costs of doing business”says the IMF report. “A novel analysis of Mexican companies suggests that the costs of damage from crime are four times higher for companies that report the presence of gangs in their vicinity.”

The fiscal cost for governments is also considerable, according to the IMF, which states that Spending on public order and security in the region averages around 1.9% of GDP.

“Although spending more on security and deploying more police appears to help reduce crime, other factors are likely to be more important in the region, with spending efficiency playing a key role,” they said and expanded: “For example, despite the high proportion of spending on the judiciary, the capacity of the courts to punish crimes remains weak.”

Among the political proposals, IMF says region should establish ‘regional knowledge platform’ to collect, share and analyze dataalong with the dissemination of best practices on effective economic and security policy responses.