By Wayne Henry, Contributor

THE JAMAICAN economy faces a crisis due to the high level of crime in the society. While the high rate of criminal offences includes those against persons (murders, shootings, sexual offences, felonious woundings) and those against property (burglary, praedial larceny), the most disturbing aspect must be the high murder rate. It is now estimated to be well over 900 persons who have been killed since the start of the year, an extremely disturbing fact indeed.

Attention has justifiably been given to this crime epidemic, and to various aspects of the cost it imposes on the society. There are different types of costs associated with crime. The most direct are the social costs (the impact on people's lives, particularly of murder, rape and other violent crimes). These are the most pronounced, due to the incomparably high value human life has relative to material things (property, goods, money).

UPSURGES

When scarce policing resources are tied up in dealing with upsurges in crime in specific areas, it represents a cost to the Jamaican economy. When scarce medical resources are tied up treating both victims and perpetrators of crime, it represents a cost to the economy. Hospital bed space, availability of supplies, the time and energy of medical personnel are all resource factors in the cost of crime. Think also of the overburdening of resources in the legal and criminal justice system, including overcrowding in our penal system, as measures of the economic cost imposed by crime.

These costs also include lost economic opportunities due to crime. Recently the Minister of Tourism spoke of the potential loss of investment to the economy due to the high crime rate. The level of crime in an area is a factor that both foreign and domestic investors weigh in assessing the attractiveness of that area as a place to put their money. The reduction in businesses, services, facilities and job opportunities in high-crime areas are attendant economic costs of crime. One cannot assess how many millions of dollars may have been lost as investors made silent decisions not to place their funds in specific areas of the Jamaican economy because of crime. Think too of the millions of dollars in human resources, either lost as victims of crime, or lost opportunities as persons decide not to return to live and work in Jamaica because of the crime rate here.

MORE DIFFICULT

While the economic costs of crime are evidently many, some are more difficult to ascertain and measure than others. Though difficult, it may be possible to measure the loss in productivity suffered by victims of crime, as well as their families and friends. However, it is almost impossible to assess the loss in creativity and innovation, and the overall breakdown in intellectual capacity that may result from the psychological and emotional trauma suffered by these persons.

Additionally, people who are neither victims of crime nor connected with such victims, may themselves suffer limitations in their ability to contribute to their full potential due to a fear of crime (potential victimization). This may indeed describe a large number of persons in our society, regardless of age, income level, or area of residence. As a person lives in fear, his quality of life diminishes, and this will impact on his efficiency, and invariably have associated economic costs. In a study conducted by University of the West Indies lecturers Harrison, Francis, Kirton and Gibbison (2002), the economic cost of violent crime to the Jamaican economy in 2001 was estimated to be $12.4 billion (approximately 3.7 per cent of GDP). This estimate was derived by aggregating, among other things, the medical expenses incurred on crime-related injuries by both government and individuals, the loss of output arising from death and injury, the cost of security provision by public and private entities, and direct business losses of firms arising from crime such as extortion, theft, and fraud. They noted that this figure represented a lower-bound estimate of the cost to the society, as it did not include the more dynamic and long-term effects, such as the impact on investment and productivity.

INCREASED RATE

It follows that this figure would be much higher now, given the increased rate of crime. There is no real cost-benefit analysis to crime. Howbeit one may argue that certain benefits accrue to criminals who, having not yet been apprehended, enjoy the spoils from criminal behaviour. So too, certain industries (e.g. the security services industry, certain aspects of the insurance industry or the funeral services industry) may see increases in revenues and profits because of increases in the crime rate. Nevertheless these "benefits" pale in comparison to the overwhelming costs of crime which, by virtue of their very nature, render the notion of 'benefit' irrelevant.

The economic and social costs of crime to a society are significant. If the scourge of high crime in Jamaica is not eradicated the devastating impacts are limitless. As a truth, crime will cost, and it does not pay.

Dr. Wayne Henry is a lecturer in the Department of Economics, UWI, Mona Campus. E-mails may be sent to wayne.henry@uwimona.edu.jm

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