IDB Study Reveals High Crime Costs in Latin America

A recent study by the Inter-American Development Bank (IDB) reveals that crime and violence account for nearly 3.5% of the GDP in Latin America and the Caribbean, a figure that has remained largely unchanged since 2017. This financial burden equates to almost 80% of public budgets for education, more than double what is spent on social assistance, and twelve times the budget for research and development. IDB President Ilan Goldfajn emphasizes that crime hampers economic growth and exacerbates inequality, urging for intensified efforts to tackle these issues. The study identifies the direct costs of crime as losses in human capital, expenditures by businesses on crime prevention, and public investment in justice systems. Comparatively, countries in Europe experience crime costs that are 42% lower than those in the region, suggesting significant potential for improvement in Latin America. Additionally, an IMF report highlights that Latin America is responsible for a third of global homicides despite comprising less than 10% of the world's population, further illustrating the urgent need for effective crime reduction strategies.