Impact Of Crime On Jamaica’s Economy

An economic problem that Jamaica faces as a country is Crime. Crime may be defined as an intentional act or omission in violation of criminal law.

For many decades Jamaica has been plagued with crime and violence. This has been a major concern of the nation and the Government since the mid -1970s. In January of 2012, Jamaica’s murder rate was over 20% higher than in the same period of 2011. The Government has made numerous attempts to decrease the rate of crime but these measures have been short – term. The Government’s ultimate plan was to increase Police mobility and firepower but this has proven futile as Police are understaffed, corrupt, and ineffective and the cost is unsustainable.

Jamaica’s population is estimated at approximately 2.7 million people. The number of murders and other violence causes Jamaica to have one of the highest crime rates in the world. Police statistics in Jamaica has shown that since the year 1999 Jamaica’s crime rate has steadily risen. In 2005, according to International statistics, Jamaica was the “Murder capital of the World”. There has been tremendous increase in the rate of homicides and shootings, illegal drugs, arms and ammunition, rape and carnal abuse which continues to negatively impact the country’s social and economic growth.

Crime can be attributed to several factors namely: weak family structure, poverty, income inequality, unemployment and lack of opportunity.

According to Lewis (2010), Jamaica is experiencing a G-culture challenge which is characterized by a hazardous combination of guns, gangs, grand money and girls to which Jamaican men gravitate. Bunting stated, “The estimated cost of crime has been 67 to 90 per cent of Jamaica’s gross domestic product over the last 40 years” (jamaicaobserver.com, Business – Reduced crime leads to better economy, Bunting June 17, 2012).

The purpose of this research is to investigate the causes and effects of crime and recommend economic concepts that could be employed to correct this problem in Jamaica.

A Review of Literature

Types of Crime

Violent Crime

Violent crimes may be defined as offenses that involve the use of force or injury to the body of another person. “The seriousness of a violent crime is usually determined by the degree of physical harm caused to the victim” (LaMance, 2011).

Jamaica has an above average violent crime rate in the world. From the period 1989 to 2009 Jamaica saw a rise in organized crime and a subculture of violence. Since the arrest and extradition of Christopher ‘Dudus’ Coke in June 2010 there has been a significant decrease in the murder rate and other crimes across the country. Recent crime statistics have shown that Jamaica’s crime rate has decreased by 80 percent. However, crime is still an issue as the country continues to be affected by it. Jamaica is plagued with robbery, gang violence, domestic violence, rape and carnal abuse.

Rape and carnal abuse is rapidly increasing. Mostly females are the victims. There has been a recent incident in Montego Bay, St. James where five women including three girls below 18 were brutally raped. Police statistics have shown a 100 percent increase in the number of rapes reported in Clarendon, 58 percent increase in St. Catherine, 43 percent in Manchester, 40 percent in Trelawny and 33 percent in other communities across Jamaica. According to statistics for the period January to September 2012, a total of 626 rape cases were reported while for that same period 2011, 595 cases were reports, this depicts a 5 percent increase.

REPORTED CHILD ABUSE CASES JAN – JUN 2012

Sexual abuse – 1402

Physical abuse – 1201

Trafficking – 2

Of the sexual abuse cases mentioned above 92.9 per cent of the victims were girls.

The above data is from the Office of the Children’s Registry (OCR).

Types of Crime

Nonviolent Crime

Non-violent crimes may be defined as crimes that do not involve the use of any force or injury to another person. The seriousness of a non-violent crime is usually measured in terms of economic damage or loss to the victim (LaMance, 2011).

Common non-violent crimes affecting Jamaica’s economy are: theft, bribery, drug related crimes, corruption and fraud more so the infamous ‘Lottery Scam’.

The lottery scam is smearing the country’s reputation internationally. It deters foreign investors Lottery scam inflows may be Jamaica’s third largest foreign exchange earner. Income from defrauding persons overseas only follows remittances and tourism earnings, if estimates of US$300 million a year are true.

The fraudulent activity was listed among the highest threats to Jamaica in the national security policy published by the Cabinet for public comment last Friday.

Read more: http://www.jamaicaobserver.com/business/The-high-cost-of-crime_12370259#ixzz2DS3ouLjm

Nonviolent crimes have a greater impact on the country’s international reputation.

Crime Factors

Weak Family Structures

In Jamaica there is a vast amount of children with absent fathers. Growing up without a father or male figure as a role model is very difficult for children, especially boys. There are too many neglected, unloved and uncared for children especially in the inner cities, many of which can be seen wandering on the streets and left to the mercy of perpetrators. Mothers are left to raise their children by themselves, the fathers are never around. Often times these mothers are teenage girls or under twenty five (25) years of age who lack experience and need guidance themselves. Boyne stated, “A recent study of Caribbean youth found that only 9 per cent grew up with a father, and when step-fathers were factored in, the percentage grew to only 13 per cent. So a large percentage of Jamaican youth are growing up without their fathers. This has grave economic and social consequences for society”, Boyne, I. (2005, November 20). Closing Jamaica’s crime factories. Jamaica Gleaner. Retrieved November 01, 2012, from http:www.jamaica-gleaner.com.

In Jamaica society, fatherless children are at a disadvantage as they face more struggles to achieve success in their lives both personally and academically. They lack the sense of the most basic social norms and behaviours. These children become the raw materials of crime in Jamaica as they usually form gangs and engage in criminal acts due to lack of proper guidance and stability. Children from broken homes are far more likely to commit crimes than those from stable families.

Many research studies support the theory that weak family structure correlates with delinquency. The family is the foundation of human society.

Crime Factors

Poverty

There is a direct link between poverty and crime as they usually go hand in hand. Crime exists everywhere in Jamaica and among all people. However, where there are high poverty levels the rate of crime is significantly high.

Poverty causes hunger, when impoverished people are hungry they engage in acts of stealing or robbery to acquire what they need as they lack legitimate means to attain them. The lack of independence which comes with economic hardship makes the poor more likely to commit crime (Harriot, 2001). Young people especially in the inner cities are more likely to get involved in drug dealing and gangs as they feel there is no other way out of their impoverished state.

Jamaica’s poverty level is unacceptably high. According to CIA World Fact book, 16.5% of the country’s population is living below the poverty line (2010 est.); this would be equivalent to approximately 462,000 people who are unable to meet their basic needs. In addition, the IMF report states that 1.1 million Jamaicans are living in poverty and earning less than US$2.50 per day.

A combination of Poverty and crime equals: people benefiting from criminally generated income. People in poverty are more likely to get arrested.

Crime Factors

Income Inequality

Income inequality makes it difficult for the poor to survive and on a wider scale it lowers the economic growth of Jamaica. When income inequalities are high, crime is equally high as it is a major determinant of crime. When the poor feel inferior to the rich it causes serious social tensions to increase hence decreasing the opportunity cost of crime. Consequently, as the income distribution gets more unequal, the gap between the benefits and costs of crime widens and thus the incentive for crime becomes higher (Becker, 1968).

Three major ecological theories that fit to the conception that inequality increases crime rates are: Becker’s economic theory of crime, Merton’s strain theory and Shaw & MacKay’s social disorganization theory. According to Becker’s framework, areas of high inequality, i.e. those areas where very poor and very rich coexist; the rational criminal’s motivation is stimulated by the inequality. Merton’s theory argues that when faced with the relative success of others around them, unsuccessful individuals feel frustration at their situation. The greater the inequality is, the greater the inducement for low status individuals to commit crime. The motivation to commit crime is not solely drawn from the expected economic benefits, but from social disgruntlement and dissatisfaction (Kelly, 2000).

Crime Factors

Unemployment & Lack of Opportunity

Jamaica faces great challenges with high rate of unemployment and underemployment. Unemployment creates an environment where parents cannot provide a good education, a comfortable home and healthy meals for their children. These children become economically and socially lacking. On a broader scale this also increases the country’s illiteracy rate due to high percentage of uneducated children. More than likely they will become criminals as they see no other option for future fulfilment. Youth going to work or school tends to reduce the probability of being involved in criminal activities (Tauchen and Witte, 1994).

When people are unemployed they tend to be more hostile, angry and jealous this creates social dismantling and crime. It can be concluded that unemployment and crime are closely related.

According to CIA World Factbook, Jamaica’s unemployment rate was 12.7% in 2011 and 12.4% in 2010. This reflects an increase by .3%. In comparison to other countries Jamaica is presently ranked at sixty nine (69) with an unemployment rate of 12.7%. The unemployment rate in Jamaica is approximately 14.3% with youth unemployment significantly high (World Bank, 2012).

Lack of Opportunity

Job opportunities in Jamaica are limited. Too many persons have spent enormous amount of money to send themselves to Colleges and Universities and are unemployed or underemployed due to the lack of job opportunities. There are too many children graduating from High School without a skill or qualification. They end up at a dead zone because the society lacks the appropriate training facilities.

Cost of crime on the Jamaican economy

Crime has a negative impact on Jamaica’s economic growth. The cost of crime is very high and the effects are both monetary and non monetary. At present, Jamaica’s debt is estimated at 139.7% of GDP (World Bank, 2012) which is equivalent to a current debt stock of J$1.7 trillion (Global Competitiveness Report, 2011-2012).

Crime affects: economy, tourism, cost of doing business and foreign investment. The non monetary effects of crime are: trauma, emotional and social break down, suffering and death. A study of the effects of crime carried out in Jamaican neighborhoods found out that resident of inner-city neighborhoods suffer from what is called “area stigma.” Based on where they live, these persons are stereotyped to be associated with criminals this makes it difficult for them to find employment. The study also made emphasis on the intangible effects of violence on a person socially, indicating that “violence destroys social relationships increasing levels of tension.” Due to the high rate of crime and violence in inner-city areas of Jamaica, residents are afraid to leave their homes and socialize less often with friends and family who live elsewhere (Moser and Holland 1997).

Economy

Crime slows the growth of the economy and decreases the Gross Domestic Product (GDP) of the country. According to CIA World Factbook, since the year 2008 Jamaica has not seen any marginal growth; 2008 showed a decrease by -0.6%, -3.1% in 2009, -1.4% in 2010 and 1.5% increase in 2011. Jamaica, in comparison to other countries is ranked at one hundred and seventy (170) out of ???? countries with a GDP rate of 1.5%. A report by the World Bank (2008) indicated that a reduction in Jamaica’s crime rate would increase the GDP growth by 5.4% yearly.

Based on a study by the United Nations Development Programme (UNDP) (2012) confirmed that Jamaica has the highest number of youths convicted of crime in the Caribbean. Every year Jamaica spends more than US$529 million to fight youth crime, which includes public and private cost. The report also states that crime in Jamaica by youth is costing the country approximately 3.21 % of GDP.

According to the World Bank, crime costs the medical sector approximately US$29.5 million per year.

Tourism

Most of Jamaica’s revenue comes from tourism which accounts for 10% of the country’s GDP. High crime rates negatively impacts the arrival of tourists in Jamaica. As a result, tourists are reluctant to visit Jamaica and therefore choose other destinations as they are concerned about their safety. This dampens the sector’s economic growth which inevitably affects Jamaica on a macroeconomic level.

In 2004, the tourism minister of Jamaica said that, “the country’s unprecedented crime rate was threatening to hamper the tourism industry by scaring away visitors and hurting investment” (Associated Press, 2004). A study by Dunn argued that, of popular perceptions of those working in the tourism industry found that crime and violence were perceived as the main problem afflicting the tourism industry (Dunn and Dunn, 2002).

In another theory, tourists that visit Jamaica are unwilling to leave the confinements of their Hotels as they fear being harassed, robbed, or even kidnapped. This impacts the tourist experience, Jamaica’s ‘paradise’ image and hurt local businesses (especially craft vendors).

Harriot (2000) argued that: “Crime control has become a central development issue and an important public policy concern in most Caribbean territories. These tourism dependent economies have become more vulnerable to violent crime, yet more crimogenic. In the case of Jamaica (which is perhaps the most problematic), the high rates of violent crime and insecurity among all segments of the population are matched by declining public confidence in the criminal justice system and growing cynicism among its functionaries.”

Cost of doing business in Jamaica

According to the Global Competitiveness Report 2012-2013, Jamaica’s competitive rating was ranked at 141 out of 144 countries which measures 12 criteria, and Jamaica performed the worst in the category of macroeconomic performance and business cost of crime and violence. High crime rate results in:

An increase in security costs because of the need to acquire more security personnel and systems.

Loss of business due to theft and extortion, etc.

Discouraging investors from investing or developing a business.

Reduction in productivity and thus revenue due to early business closure or shortened hours of operation in crime prone areas.

Reduction in output from the labour force due to injury or worst death of a worker.

Permanent closure or relocation of a business to an area that is less prone to crime.

Loss of Foreign Investment

Investment is a major contributing factor to GDP because it aids in increasing production in an economy. Crime discourages investors both local and foreign. A decline in the level of investment decreases the GDP of the country and thus its economic growth. Jamaica’s crime level has dampened investors’ confidence in investing in the country.

According to the National Security Policy for Jamaica published by the Government of Jamaica, Foreign Direct Investment (FDI) is affected as a result of the increased cost of security, insurance, capital, and recurrent costs in addition to other costs that may be specific to each business.

Recommendation

In an effort to fight and possibly correct Jamaica’s crime problem, the following recommendations are proposed:

It commended the Jamaican Government for the programmes implemented to provide inner-city community infrastructure and services for the poor, including measures to promote short-term conflict mitigation and resolution, as well as medium-term social prevention and capacity enhancement interventions.

The Government should build legitimate institutions that can provide a sustained level of citizen security, justice and jobs.