World Bank Report Warns Central American Violence Harms Economies

World Bank: Central America's Rising Crime and Violence Puts Region's Development at Risk

CPI Financial: Crime and Violence: A Staggering Toll on Central American Development

World Bank Report: Crime and Violence in Central America

The World Bank released a report commenting on the damage Central American violence has on the countries’ economies. It estimates that violence costs Central American economies 8 percent of GDP due to law enforcement, citizen security and health care costs alone. This is significant when considering that, in 2010, Central America’s GDP growth rate in was only 2 percent compared to the rest of Latin America’s GDP, which grew about 6 percent.

Crime and violence are commonplace in Central America. The countries of Central America estimated that an average of 40 homicides occur per day. An estimated 71 percent of Central Americans identify crime as the main threat to their wellbeing. Violence rates have been much higher in El Salvador, Guatemala, and Honduras than in the more southern countries of Costa Rica, Nicaragua, and Panama. However, the latter countries have recently experienced an increase in violence.

The report says that Central America’s high rate of crime and violence also hinders economic growth. Business owners in Central American countries, other than Costa Rica, place crime in the top five obstacles to business growth and productivity. This hindrance stems not only from the loss of victims’ wages and labor time, but also from discouraging investment and diverting government resources to law enforcement instead of promoting the economy.

Central American crime and violence stem from easy access to firearms (due to years of civil wars), weak judicial systems, and drug trafficking. Drug trafficking is the main cause of the increase in violence. In fact, 90 percent of drugs bound for the United States flow through Central America. Drug cartels and gangs are a significant cause of the region’s high murder rates. The members of the cartels and gangs are rarely prosecuted, which contributes to the weakness of the judicial system. Because of this, many victims do not report crimes for fear of retribution and also due to a lack of faith in law enforcement and in the judiciary. For example, in 2006 in Honduras, over 63,000 criminal complaints were made, but only 1,015 ended in a conviction.

Although the report suggests that Central American governments have a long way to go to improve their situations, it offers possible steps and goals for the governments to take in the future. It recommends strategies that combine violence prevention with criminal justice reform to fight the increase in crime. It also suggests childhood development programs to steer children away from drug cartel and gang violence. On the bright side, the report estimates that even a 10 percent reduction in murder rates could increase the region’s economic growth by one percent of GDP. Because Central American countries are small and it is easy for individual (and therefore violence) to move among them, these countries must work together to decease crime and violence and their negative effect on their economies.

Central American Independent Fishers at Risk

Prensa Libre: Pescadores Se Quejan Por Alza del Combustible

IPS: Big Fish Eat the Small Fish

Central American fishers are facing many different hurdles and are struggling to survive. The Confederación de Pescadores Artesanales de Centroamérica (“CPAC”) represents the interests of over 95,000 small fishers from Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama. The CPAC advocates for productive development of the artisanal fisher sector. It warns that the small fishers are “gradually disappearing” due to many different factors.

The most damaging factor has been competition from large fishing corporations. The independent fishers cannot compete with the volume of fish harvested by larger companies. The CPAC points out that the fishers have small boats that can only spend a few days out at sea. However, the corporations have large vessels that can spend up to one month fishing. The longer excursions produce much more fish and overshadow the amount produced by the small fishers. For example, in Panama, the region’s largest producer of fish, industrial fishing comprises 77.3 percent of the industry’s production, whereas independent fishers account for only 16.1 percent.

International trade could be an important opportunity for the independent fishers, but it is difficult for them to reap the benefits of international trade because of free trade agreements (FTAs). Most Central American countries have FTAs with the United States, Taiwan, and soon the European Union. However, the FTAs are benefitting the larger companies and not the smaller fishers. The FTAs remove export tariffs, and corporations are free to ship their products to whichever country has the highest prices without worrying about tariffs. Smaller fishers do not have the resources to export fish in the same quantities as the larger corporations, and many must settle for the local prices. Because of this discrepancy, many of the smaller fishers cannot take advantage of the FTAs. The CPAC estimates that 75 percent of its members sell locally instead of exporting.

Even those who are able to sell internationally are struggling. Because of the fishers’ difficulty in selling their product overseas, they must depend on intermediaries. These intermediaries sell the fish at high prices but only pay local prices to the independent fishermen. The low local price and this year’s high fuel prices have caused many fishers to operate at a loss in the past few months.

While competition from big business and the use of middlemen are greatly affecting these small fishers, other factors are important as well. Many fishers complain that tourism and pollution are causing devastating environmental damage. Resorts use fertilizers and pesticides that leak into the rivers and oceans and poison marine life. Unlike the larger vessels, small fishers’ boats cannot enter the more distant, cleaner waters. Because of this, they can only fish closer to shore where the water is more likely to be polluted and the fish are diseased or dead.

The CPAC and other organizations are fighting for fisheries law reform in Central American countries. For example, the CPAC is calling for government intervention and removal of the trading intermediaries. So far there has been little progress. However, independent fishers will not disappear without a fight. Groups like the CPAC show that the independent fishers are willing to come together and fight for more favorable government policies so they can continue to support themselves and compete with the commercial fishing operations.