El Salvador: High Cost of Criminal Extortion

The most vulnerable to extortion are small and medium enterprises, which employ half of the economically active population.

Thursday, June 23, 2016

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 sector is of great social importance, because about 55% of the economically active population is employed in companies with fewer than ten employees (DIGESTYC, 2014); this represents almost 1.5 million people who contribute to the national economy.  For this reason, it is very important to understand more about this problem which is an obstacle to the development of these companies. In 2015 the National Civil Police (PNC) reported a total of 2,121 complaints of extortion, representing a reduction of 13% in complaints compared to 2014.   

See complete study " Extortion of micro and small enterprises in El Salvador ".

More on this topic

More Extortion, Fewer Companies

May 2018

In El Salvador every week at least two companies report that they intend to close down due to the impact of extortion, a problem that, far from being resolved, seems to be getting worse every year.

Representatives from the Chamber of Commerce and Industry of El Salvador (Camarasal), said that the country's employers do not see any significant improvement in the security climate, following the six month extension last April of the extraordinary measures of the Sánchez Cerén administration to try to control crime and insecurity.

El Salvador: Growing Industrial Unrest Due to Insecurity

March 2016

Businessmen have stated their categorical opposition to statements made by a government official that confuse extortion with the funding of organized crime.

The statements by the Technical Secretary of the Presidency of El Salvador, Roberto Lorenzana, against companies in the country that suffer from extortion caused a strong reaction from the private sector, four days after Industrias La Constancia publicly announced that it was suspending operation of its plants because of increasing insecurity and violence.

El Salvador: Insecurity Deters SMEs

May 2014

90% of small business owners are extorted and many have had to leave the country, reported industry representatives.

Although the percentage of extortion of SMEs has increased 20% in 8 months, 76% of employers affected do not report it for fear of reprisals. The overall business perception is an increase in criminal behavior, constant threats by organized groups and greater mistrust of the National Civil Police (PNC), according to reports by the National Council of Small Business of El Salvador (CONAPES).

70% of MiyPEs in El Salvador Suffer From Extortion

September 2013

A study by the union of micro and small businesses reveals that 70% of them are victims of extortion, of which 65% do not file any complaints for fear of retaliation.

The study which included the participation of over 425 representatives of MSE's was conducted jointly by the National Council of Small Business in El Salvador (CONAPES) the MiyPEs Union and the Society of Businessmen and Industrialists of El Salvador (SCIS).

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