The rising cost of crime

According to a recent IDB study, Trinidad and Tobago has spent more money on crime than any other country in the Caribbean, thus increasing the cost of doing business locally.

At the primary level there are costs expended in anticipation of crime, measures to circumvent it: locks, alarm systems, CCTV, security officers, et cetera. There are also costs incurred because of crime, such as loss of property, medical expenses, and victim support. There is also the cost of responding to crime, involving the police, fire and ambulance services, prosecution, court proceedings, and legal fees.

The secondary financial impact of crime considers the national economy, where it can discourage domestic and foreign direct investment, tourism, and economic growth. It can also reduce the quality of life and property values. The fear of crime often deters businesses from expanding into or operating in certain geographic areas. Even businesses operating in relatively crime-free zones may experience a decline in patronage as citizens are reluctant to venture out after dark.

The costs incurred by businesses when they put in place measures to mitigate against crime can send the cost of goods and services to the customer spiralling upwards. If these costs are borne by the operator, they reduce profitability and can lead to smaller companies going out of business.

Crime in TT takes a heavy toll on the private sector in terms of costs. Often overlooked is the collateral damage incurred by the victim, whether individual or business. In the case of a business the internal business loss might be $20,000 stolen from a safe, but the external or true loss would include the cost of repairing or replacing the safe, replacing the broken door or window through which entry was gained, replacing any destroyed electronic surveillance systems, and the cost of further hardening the target. On top of all that comes the likelihood of an increase in insurance premiums.

In TT, the local corporate community invests heavily to protect businesses, especially during the crime-prone hours of darkness. However, more and more business-related crimes are taking place in daylight during normal business hours. Other local crime trends are carjacking and credit and debit card skimming. Both have been around for a while but appear to be on the rise.

Apart from the effects of crime on the private sector, what causes crime? And what can be done to deter potential criminals?

The most readily accepted theories cite parental neglect, alcohol and drug abuse, lack of education, poverty, the influence of gangs, unemployment, and a dwindling middle class. All these factors are evident in our society and are likely to be contributing factors to crime.

Community outreach is one way of working with at-risk youths. The TT Police Service, in collaboration with corporate leaders, has established 113 youth clubs across the country which provide training, education and recreation for young people. Additionally, effective rehabilitation can change the mindset of prison inmates by improving self-esteem and the ability to fit into society after serving their sentences.

Over the past decade, the TT Chamber, with the aid of the private sector, has established over 500 neighbourhood crime watch groups across the country; this project is still ongoing.

The general consensus of the business community and the broader populace is that there needs to be a more concerted effort by government to address crime which, if allowed to continue unchecked, will damage TT’s long-term economic sustainability, FDI levels and access to a skilled workforce.

The Trinidad and Tobago Chamber of Industry and Commerce thanks Pauline Hamilton for permission to re-publish. A longer version of first appeared in Contact Magazine Vol 19 No 4, produced by MEP Publishers. For the full article see the online issue at www.chamber.org.tt/media/contact