A dramatic deterioration in public security in countries across Latin America and the Caribbean is weighing heavily on growth and undermining investment flows to the entire region, top officials from the region warned Thursday.
“Insecurity is a new frontier and it is affecting the capacity to attract investment,” IDB president Ilan Goldfajn told an audience at the bank’s annual meeting in the Dominican Republic, noting that the region’s worsening security predicament had spiraled into a “stability issue.”
His warning was echoed by Barbados’ prime minister Mia Mottley, who also noted that questions over security must not be separated from the larger development challenges facing emerging countries.
“If you do not give people the option to make a proper living, they will go down a different path,” she said at a seminar.
Mottley said that tackling the scourge of violent crime across the region required a coordinated approach between countries. “We cannot solve this problem with individual countries turning inward,” she said.
The officials’ comments in the resort town of Punta Cana came as neighboring Haiti was engulfed in a wave of unprecedented violence this week. Armed gangs burned police stations and released inmates from prisons warning of “civil war” without the resignation of prime minister Ariel Henry.
Mottley noted that “more people died in Haiti than Ukraine in January, but there are not cameras in Haiti” reporting it.
MARTIAL LAW
Ecuador meanwhile is reeling from a spate of violence that forced the new administration of president Daniel Noboa to declare martial law in January.
The IMF has noted that the region’s average homicide rate is 10 times higher than in other emerging markets – a fact that costs the region roughly half a percentage point of GDP in lost output.
Gino Costa, a former lawmaker and interior minister in Peru, noted that insecurity hits small businesses and microenterprises hardest – the very sectors that are vital to the region’s productivity growth.
According to a report from the Association of Chambers of Commerce in Peru, small companies increased spending on security by 25% between 2019 and 2022.
El Salvador is one country that has drawn attention for the hardline approach of its president, Nayib Bukele, who last month secured overwhelming support for a second term, winning more than 80% of the vote.
The number of homicides in the country fell nearly 70% last year, taking El Salvador from one of the world’s highest per capita murder rates to among the lowest in the region.
However, Costa warned that the country’s approach should not be seen as a panacea. “We do not need to implement a Bukele solution but adapt what we already know,” he said. “A professional, thorough approach that uses intelligence gathering is what we need.”