Friday, July 25, 2008

The high cost of crime

For years now, we have known as a country that crime is the most significant factor contributing to the lack of economic growth in Jamaica. And this is not only crime as it relates to murders, robberies, and rape, but includes white-collar crimes such as corrupt activities by public officials. The fact is that crime contributes significantly to the cost of doing business in Jamaica and hence decreases productivity, which is at the heart of our economic challenges.

This effect is even more pronounced now, as the world is caught in a serious downturn in economic activity. Because of this, the region as a whole is expected to experience negative impacts to tourism and remittances, the mainstay of Caribbean economies. The IMF has reported that world economic growth is expected to decrease from five per cent in 2007 to 4.1 per cent in 2008 and 3.9per cent in 2009. The Latin America and Caribbean (LAC) region has not been spared, and growth is expected to slow from 5.6 per cent in 2007 to 4.4 per cent in 2008 and 3.6 per cent in 2007.

Poor regional performance
So, the numbers show that the LAC region is expected to decline at a faster rate than total global growth. My view is that this is explained by the fact that Caribbean economies' main foreign exchange earners (tourism and remittances) are discretionary income types, and so the expected slowdown in consumer demand, and reduction in discretionary disposable incomes, will have a greater effect on the Caribbean. The exception, of course, being Trinidad that produces oil.

A March 2007 report by the UN/World Bank entitled "Crime, Violence, and Development: Trends, Costs, and Policy Options in the Caribbean", reveals that crime robs the region of a significant amount of growth. Murders per 100,000 population annually at 30, is the highest in the world when compared to other regions. It also states specifically that if Dominica, Guyana, Haiti, and Jamaica were to reduce their annual homicide rates to Costa Rica's level they could add 1.8 per cent, 1.7, 5.4, and 5.4 per cent respectively to their annual growth rates. In the case of Jamaica, this comes against the background of a 2003 study which found that crime costs the country 3.7 per cent of annual economic growth.

So, because we have failed to act for so long, the cost of crime has continued to increase. This is evident in the last business confidence survey, which shows that less business persons are inclined to put new investments in Jamaica. No doubt, all the evidence points to crime as the number one problem in Jamaica today.

The question then is, how can we deal with this problem? All we have been doing over the years is just talking and putting in place the same old policies over and over again. Whenever we have an upsurge in crime, we tend to put in place 'tough' measures to fight the monster. This always elicits the same response from human rights groups and the police go out and crack a few skulls while their actions contribute even more to the increasing levels of crime, because what they do creates enemies instead of deterring crime. In fact, the same UN/World Bank report states: "An important finding. is that in Jamaica a lower percentage of crimes are reported to the police in areas with higher crime rates. The reporting rate can plausibly be interpreted as a measure of confidence in the police, as people will be more likely to report when they trust the police and believe they will respond. Lack of trust and confidence in the police is then lower in areas with higher local crime rates."

Chasing the wrong issues
This, in my view, is at the heart of the crime problem we face. And so, when the media continues to focus on the measures announced by the prime minister, this is another example of how way off track we always are in what we need to focus on. The prime minister has announced extended detention measures (when properly approved) and mandatory prison sentences for certain crimes, amongst other measures. As far as I am concerned, extended detention has always been practised unlawfully by the police and some have always imposed their own sentences on citizens without a trial. The announcements by the prime minister will not, in my view ,further erode the rights of Jamaicans as they have always been subject to the whims and fancies of the police. In fact, if the appropriate controls can be put in place, the measures announced by the prime minister may even improve the conditions.

The important thing to focus on is not the measures announced by the Prime Minister. If these measures can be properly controlled, then the best way to avoid being subject to them is to not commit the crime. This reminds me of when, under the previous government, motor vehicle fines were significantly increased and there were demonstrations against the fines by some taxi drivers. As far as I am concerned, the way to avoid the fines is to stick within the rules.

If we are to seriously deal with the crime problem then it is not enough to give greater powers to the security forces, which are needed in the short term to address the crime crisis. Giving the police additional tools is like giving the carpenter a saw and hammer to make a table. If the carpenter is not competent, then despite all the high tech tools he may be provided with, the table will still not be made properly. And so we need to go beyond the measures announced by the prime minister and address penalties for police corruption; how we intend to build trust in the police force; and what immediate improvements are to be made to the justice system.
The fact is that no new powers for the security forces can work without people trusting the police, and feeling comfortable giving them information. If people feel that the police are their enemies then they will never come forward with information. We also must remember that justice delayed is justice denied, and prolonged court cases while the legal fraternity argues about who are hustlers and who are not is just not cutting it. And very importantly, we must double the penalty for public officials involved in corrupt practices. It is only after we address these issues that any measures we implement will work.

The fact is that, as a country we cannot afford to continue the high levels of crime that have haunted us for far too long. The effect has been compounded by world economic events, as rising energy and food prices mean that businesses are less competitive and real disposable income levels have decreased. But as we seek to solve the crime monster, let us not lose focus of what the real issues are.


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