Because of factors such as business closures and lack of opportunities, it is estimated that criminal activity costs Honduras and El Salvador 16% of GDP, and in the case of Guatemala, its losses could amount to 7% of its production.
In Central America, the human costs of crime remain one of the highest in the world. El Salvador, Guatemala, and Honduras—referred to as the Northern Triangle— account for about four-and-a-half percent of homicides worldwide despite only having about one-half-percent of the world's population.
After three soldiers were killed in Izabal, Guatemalan business sector asks the government to regain control of the territories where criminal groups dominate.
On several occasions, business chambers have denounced that organized crime groups operate in the area from the Polochic Valley to Izabal, thus affecting productive activity in the area.
The situation became clear after it was reported on September 3 that a patrol of the Guatemalan Army Marine Infantry was ambushed in the municipality of El Estor, department of Izabal. As a result, three soldiers were killed.
Businessmen from Central America and the Dominican Republic ask that ILO Convention 190 not be ratified, arguing that countries already have regulations to deal with violence and harassment in the workplace.
The Federation of Private Entities of Central America, Panama and the Dominican Republic (Fedepricap), through a statement dated August 9, reported that they agreed to request from the governments "...
After more than 40 days of protests and looting, Honduran businessmen report that about 50 companies have been affected, and several stores have already been closed.
Preliminary reports from the Chamber of Commerce and Industry of Tegucigalpa (CCIT), establish that among the most affected businesses are supermarket chains, appliance stores, fast food restaurants and microenterprises dedicated to the marketing of clothing and footwear.
The business sector is concerned about the way in which the demonstrations have developed in recent days, generating "an unsustainable cost to the Honduran economy.”
After the Honduran government approved decrees PCM-026-2018 and PCM-027-2019, the country's doctors and teachers began demonstrations with the aim of repealing them, because they argue that they will be able to fire government employees and privatize public services.
The bill being discussed in Costa Rica basically seeks to extinguish the assets of organized crime, but there are those who claim that as proposed, it puts at risk the presumption of innocence of individuals.
The extinction of domain is a concept that in practice refers to seizing or confiscating assets linked to criminal activities, and then transferring them in favor of the State.
A report by InSight Crime highlights the homicide rate registered in Costa Rica in 2017, which was 12.1 per 100,000 inhabitants, the highest number in its history.
The report indicates that Costa Rica is a country that has traditionally been considered "peaceful," and in respect to the escalation of the homicide rate, an increase that local authorities attribute to organized crime, the report indicates that "... lack of retrospective and a vague methodology is weakening the authorities' attempts to attribute blame to organized crime."
The housing market, casinos, concert halls, and the livestock sector are all used to launder money in Central American countries.
Excerpted from the report "International Narcotics Control Strategy Report, Volume II, Money Laundering and Financial Crimes" by the US State Department:
Costa Rica Transnational criminal organizations continue to favor Costa Rica as a base to commit financial crimes due to its location and limited enforcement capability. Costa Rica’s government has attempted to strengthen the legal framework for supervision and enforcement; however, challenges remain in mitigating money laundering risks. Costa Rica is a transit point that is also increasingly used as an operations base for narcotics trafficking; and significant laundering of proceeds from illicit activities continues. Costa Rica should continue to close financial crimes legislative gaps and allocate resources for investigation and prosecution.
The United States has renewed its travel alert warning that crimes such as extortion, assault and robbery are common in the country.
From a press release issued by the US State Department:
The Department of State warns U.S. citizens to carefully consider the risks of travel to El Salvador due to the high rates of crime and violence. El Salvador has one of the highest homicide levels in the world and crimes such as extortion, assault and robbery are common. This replaces the Travel Warning for El Salvador dated January 15, 2016.
The United States has renewed its travel alert, warning that the levels of violence and crime in the the department of Gracias a Dios are very high.
From a press release issued by the US Department of State:
The Department of State warns U.S. citizens to carefully consider the risks of travel to the Department of Gracias a Dios in Honduras. In addition, the greater urban areas of San Pedro Sula, Tegucigalpa, and La Ceiba have notably high crime and violence rates. This replaces the Honduras Travel Warning dated August 5, 2016.
Insecurity and excessive red tape remain the main obstacles to the growth of exports, which have lost momentum in the last four years.
From the Survey on Business Competitiveness by Fusades:
FUSADES has carried out the "Business Competitiveness Survey" every year since 2011, interviewing more than 430 micro small, medium and large enterprises.The surveys help to statistically demonstrate the challenges and opportunities in improving growth and employment generation, the only institution in the region that makes such an effort.
Projects are becoming more expensive due to the fact that they increasingly include more security measures and in areas such as La Libertad, Soyapango, Ilopango and Apopa, some lots and homes are even losing value.
The wave of violence and insecurity affecting El Salvador is also being felt in the real estate market, especially in areas with high crime rates, such as La Libertad, Soyapango, Ilopango and Apopa, where"... houses may remain unsold for months. Contrary to this, in areas such as Santa Tecla and Santa Elena, buildings are in higher demand and are increasing in value because of their location. "
The most vulnerable to extortion are small and medium enterprises, which employ half of the economically active population.
From the executive summary of a study by Fusades:
In El Salvador, the crime of extortion has become one of the main problems affecting the work and economic activity of enterprises in recent years. Results from the Business Dynamics Survey conducted by FUSADES since 1991, consistently show that micro and small enterprises (MSEs) are more vulnerable to this crime than medium and large ones.
The agricultural sector has denounced that some agricultural companies have closed their operations because of the crime wave affecting the country's rural areas.
From a statement issued by the Chamber of Agriculture:
With the increase of violent acts perpetrated against collaborators of agricultural enterprisesand their private facilities, enterprises which operate and generate employment within the country, we wish to state that:
A World Bank analysis indicates how the vicious circle of crime, violence and low growth is limiting competitiveness, discouraging entrepreneurship and investment.
From the document "Unlocking economic potential for greater opportunities" by the World Bank:
Honduras’ history of low and volatile economic growth and high inequality have created the conditions for the emergence of two mutually reinforcing cycles: (i) a high crime-low growth cycle; and (ii) an emigration/remittance flows-low growth cycle. Over the last 15 years these cycles have shaped the challenges faced by Honduras and have continued to impact the country’s growth prospects.