Another Tax to Pay: Extortion

In El Salvador, where the cost of insecurity is equivalent to 12% of GDP, extortion is the main obstacle to economic development.

Tuesday, September 13, 2011

Crime affecting the country stops economic development and investment, according to the technical secretary of the Presidency, Alex Segovia.

La Prensa Grafica reported statements by the secretary "In terms of growth, the main obstacle is, in terms of costs to businesses, especially micro, small and medium enterprises, the issue of extortion. In fact extortion is another tax. "

Micro-producers are the most affected due to not having enough resources to hire private security.



More on this topic

El Salvador: Increasing Insecurity and Decaying Business Climate

February 2016

Warnings have been given over increased insecurity, stagnation in the fight against corruption, and little capacity for Government dialogue in the second half of 2015.

The adoption of higher taxes without a dialogue, the consequences for the country of the increase in homicides from 10 to 18 a day in 2015, and stagnation in the fight against corruption, were highlighted in the evaluation made by the Salvadoran Foundation for Economic and Social Development ( Fusades) regarding the legal and institutional framework of the country during the second half of 2015.

High Rate of Extortion Forces Businesses to Close

September 2012

A study conducted in July by the Chamber of Commerce of Honduras shows that extortion has caused the closure 1,600 companies.

Crime that has been affecting the country's economic development, discourages investment and generates job losses, said Mario Bustillo, president of the Chamber of Commerce of Tegucigalpa.

Costa Rica: Growth in Private Security Spending

June 2011

Firms spent $174 million in security for their businesses in 2009, however in 2010 the expenditure amounted to $190 million.

A study by the Costa Rican Chamber of Commerce reveals that 42% of those surveyed said they had been a victim of violence.

"... We are convinced that the government has not fulfilled its part, ...

High Crime Rates Halt Investment

April 2009

Even though Panama is not the country in Central America most affected by crime and violence, there is already a warning about the cost of rising insecurity.

Panamanian companies are seeing an increase in their security costs and they are starting to worry about the consequences on the investment climate in the country, especially the possible decline in tourism.

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