Growing Cost of Insecurity in Guatemala

Companies have to allocate up to 15% of expenses to security services, as a result of the growing violence in the country.

Friday, March 18, 2016

A company wishing to operate in Guatemala has to allocate between 8 to 15% of its expenses to security in order to keep operating. The figure was provided by Victor Guillen, manager of purchases, imports and exports at Dagas, and published by Elperiodico.com.gt, who revealed that his company earmarked Q250 thousand ($32,000) per month for the security of its plants, trucks and workers.

See also: "Criminal Extortion in Guatemala"

"... Due to the inefficiency of state in security this investment is necessary because otherwise the losses from incidents would be much higher than the cost invested in that area , " said Guillen.According to the Global Peace Index 2015, Guatemala invested $11.5 billion in measures related to containing violence. This represents 10% of gross domestic product (GDP) ".

See also: "Guatemala: Extorsion Crimes Increase"

The other big blow to the competitiveness of companies in the country is smuggling. "... The President of the Foreign Security Council (OSAC), Servio Camey, revealed that Guatemala has a monetary impact of Q5 billion ($646 million) a year in unpaid taxes from sales and jobs.The average figure includes tax revenue not received, and the security cost paid by companies ".



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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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