The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas leads the Caribbean when it comes to the victimisation of businesses by gun violence and Internet fraud, with crime-related costs higher here than anywhere else in this region

A new Inter-American Development Bank (IDB) study yesterday further exposed crime’s true cost for the Bahamian economy and society, with more than 20 per cent of crime-hit local businesses victimised by gun-toting armed robbers.

The report, ‘Restoring Paradise in the Caribbean’, also found that Bahamian businesses had been hardest hit by cyber crime and Internet-based fraud, with four out of every 10 impacted.

“Overall, 17 per cent of firms surveyed in the 13 Caribbean countries reported Internet fraud,” the IDB report’s authors found.

“Cyber-crime appears to be a bigger problem in the Bahamas and Trinidad and Tobago, with 41 per cent and 33 per cent of all businesses, respectively, reporting Internet fraud in the last year. No businesses reported this crime in Jamaica and Barbados and only 4 per cent (five firms) experienced Internet fraud in Suriname.”

No explanation was provided for the high level of Internet-based crime in the Bahamas, but the report found that companies in this nation were also impacted most by gun crime and armed robberies.

“The use of guns was highest in the Bahamas, Jamaica, and Trinidad and Tobago,” the IDB report said, with just over 20 per cent of crime-hit Bahamian businesses suffering from this.

This was the highest in the region, exceeding the average 16 per cent, which highlights just how much more work is needed to remove firearms from the Bahamas’ homes and streets.

Knives were used against 15 per cent of victimised Bahamian companies, with a similar percentage reporting that ‘other’ weapons were used. Added up, this means that 50 per cent of crime-hit firms in this nation were attacked by criminals wielding weapons.

The IDB report found that around 23 per cent of Bahamian companies were impacted by crimes such as internal theft, vandalism, robbery or arson in the past year, placing this nation in line with the Caribbean average.

The data showed there was no discrimination between small, medium and large businesses, with an equal proportion hit across the three categories.

“Crimes occur fairly equally during working hours (49 per cent) and outside of working hours (51 per cent), with very little variation between countries,” the IDB report found.

“Theft and robbery occur more frequently during working hours, while vandalism occurs more frequently outside of working hours.”

It added: “Where respondents answered questions regarding the perpetrator, most perpetrators were thought to be gang-affiliated (36 per cent.

“Within the region, the Bahamas, Trinidad and Tobago and Jamaica stand out with higher reports of gang-related perpetrators (52 per cent, 45 per cent, and 28 per cent, respectively).”

When it came to frequency, 60 per cent of impacted Bahamian companies reported suffering between two to five loss episodes due to crime,

And the Bahamas trailed only Trinidad & Tobago when it came to the proportion of businesses that spend money on security, standing at near 80 per cent. As a percentage of sales, security costs were third highest in the Bahamas at 3.8 per cent.

And average annual losses due to theft and vandalism were also in line with the Caribbean average, costing Bahamian firms a sum around 2.5 per cent of annual sales.

“The country that emerges as having the highest amount of crime-related costs is the Bahamas, where our lower-bound estimate for 2013 indicates that those costs represent about 3.09 per cent of the country’s GDP,” the IDB report revealed. “The upper-bound estimate is 4.8 per cent.”

The study thus placed crime’s total cost for the Bahamian economy and society at between $268.31 million to $408.62 per annum, inclusive of government, private sector and social costs.

The IDB report said the costs were shared equally between the Government and private sector, standing at between $98.9 million and $167.15 million for the former, and $84.39 million and $161.39 million for the business community.

These figures represent funds that could have been invested by companies in job-creating investments and expansions, or used by the Government to improve health and education.

“By using an accounting method, we have estimated that the welfare costs of crime and violence are around 3 per cent of GDP of the region, with Barbados being the country least affected and the Bahamas the most,” the IDB report’s authors said.

“This is a conservative estimate, as it does not include other direct and indirect costs such as violence prevention programmes, health expenses due to violence, or the impact of crime on other outcomes like property prices.”

The study reiterated that only Honduras and El Salvador suffered from a higher cost of crime than the Bahamas when the same methodology was applied.

Turning back to the Caribbean, it added: “The lowest figures are reported for Barbados, where our lower-bound estimate for 2014 shows that crime-related costs amount to 1.84 per- cent of GDP, while our upper estimate amounts to 2.7 per cent, almost 2 percentage points lower than the Bahamas’ upper estimate. Jamaica and Trinidad and Tobago fall in between.

It can be seen that between the three categories of crime-related costs, costs incurred by the Government are the highest in every country, ranging between 1.5 and 2 per cent of GDP.

“Only the upper estimate of the costs incurred by the private sector in the Bahamas exceeds the costs incurred by the Government. In fact, private costs are the highest in that country, and lowest in Barbados.”