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Counting the cost of violent crime

Thursday, May 31, 2018

The Government budgeted to spend $6.4 billion on national security in the current fiscal year. While not the largest allocation—$7.39 billion goes to education—it is still a huge slice of the budgetary pie to be disbursed among the various entities responsible for keeping the country safe, as well as to fund the fight against escalating crime.

It would be a mistake to take that figure as an indicator of what crime costs this country. Indeed arriving at that figure requires more complex calculations than I—an abysmal failure at mathematics through my entire school career—would ever dare tackle. However, even by my admittedly below-average guess-timates, $6.4 billion is not even a fraction of the financial toll crime takes on T&T annually.

Consider how hard crime has been hitting the average T&T citizen in the pocket. Think about the amount of dollars and cents that have to be shelled out on burglar proofing, home security systems and close circuit cameras, plus motor vehicle alarms, GPS systems, ever-increasing insurance premiums.

The costs just keep adding up—not a guarantee of safety but likely to give the criminals at least some resistance when they come to steal and assault.

Those costs multiply for businesses and not just the huge manufacturing and retail enterprises. Even operating a small corner parlour requires a significant capital outway for security infrastructure.

These costs have been increasing over the many years that the crime situation has been getting worse, which more violence and deaths contributing to an economic burden that needs to be quantified.

Crime is a significant factor for the higher cost of doing business in T&T. In addition to having to employ different forms of security—infrastructure and personnel—it diverts investments away from expansion and productivity improvements and inflicts losses, due to theft, extortion, assault and murder.

For a deeper insight into the extent of the problem, just recall recent comments by the president of the Manufacturers Association (TTMA) Christopher Alcazar that the business sector has been spending more and more to secure their premises, employees and customers as robberies and murders continue to rise.

Alcazar, who was at the time addressing a TTMA breakfast meeting at the Trinidad Hilton and Conference Centre, said among the increasing costs for businesses is the cost of hiring private security, which is a very expensive service. He also said businesses in T&T spend more on hiring security personnel than any other country in the region.

That latter point is consistent with a 2017 Inter-American Development Bank (IDB) report which said 85 per cent of private businesses in T&T pay for private security—the highest rate among the 13 countries surveyed by the multinational agency.

This is also consistent a survey done last year by the T&T Chamber of Industry and Commerce which revealed that approximately 90 per cent of businesses that participated had implemented CCTV cameras, additional security and additional insurance due to crime-related incidents.

In addition, 90 per cent of Chamber members claimed their operating costs have been affected by crime.

Dare I say, it may be the biggest reason why various productive sectors of the economy are not attracting higher levels of foreign investment.

And all this is just the tip of the iceberg.

The crime bill increases even more when factors like medical attention and rehabilitation for victims that survive, loss to families, productive members removed from the workforce through violent death. All these issues cause repercussions across the various sectors of the economy and list can go on and on.

For the State, there is the high expenditure on security, detection, incarceration, judicial proceedings, compensation and rehabilitation with money that has to be diverted away from important public services such as education, health, infrastructure development and maintenance .

Get the picture?

A big chunk of money is being extracted every single day that crime continues to spiral out of control. As the murder toll gets higher and higher, so does the cost across the public and private sectors and in communities, affecting every single law-abiding national of this country.

How large are the costs of crime and violence in T&T and how can they be measured? The answer to these questions will show the magnitude of this problem and the true extent to which it affects this country’s economic health.

While this is not likely to be the kind of thing given prominence in any discussion related to T&T’s economic health, it should be. An entire heading in any budget or mid-year presentation by the Finance Minister should be dedicated to the effect of crime on the economic health of the country, whether there are improvements, or set backs and specific measures to address this problem.

This should be high on the national agenda to advance the search for solutions to this crisis. Our discussions of this problem should not be limited to direct stakeholders in terms of ways of improving crime prevention and strengthening crime control policies. Stakeholders in business, academia and civil society need to be fully involving in these conversations, influencing decisions about ensuring financial allocations are properly targeted.

The Government should not take much convincing about the urgent need for a multi-sectoral approach to crime prevention and reduction. Prime Minister Dr Keith Rowley acknowledged that the problem is taking a financial toll.

Late last year, at a function where he was presented with a report of the T&T Police Service Manpower Audit Committee, he revealed his own concern about that specific matter when he said: “Every murder case that is going through the courthouse costs taxpayers between $1 million to $10 million. So if we eliminate it that is money saved.”

When one considers recent studies which show that the cost of crime in Latin America and the Caribbean is twice the average cost of developed countries, it is worrying that this isn’t an area of more sustained.

It is a fact that region and T&T in particular, is saddled with higher social costs and double the private spending on security as a share of GDP, all because of the higher crime rate.

In the region, T&T ranks 6th for annual costs of crime as a proportion of GDP. This country loses between 2.26 per cent and 3.52 per cent of GDP to crime annually.

An IDB report, Restoring Paradise in the Caribbean: Combating Violence with Numbers, looked at crime in five Caribbean countries—T&T, Jamaica, The Bahamas, Barbados and Suriname—and found that government expenditure on crime in T&T is between 1.04 per cent and 1.68 per cent of GDP, which is above the average for the 17 Latin American and Caribbean countries.

He said among the increasing costs for businesses is the cost of hiring private security.

It is time to advance this dialogue and be more consistent in implementing strategies that will work. Criminals are not just holding the country to ransom—they are endangering T&T’s long-term economic viability.

It is time to country the cost of crime and commit to eradicating this burden from the nation.


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