Introduction
The World Bank has issued a stark warning that organized crime is significantly hindering economic growth in Latin America and the Caribbean. The international organization highlights that homicide rates in these regions far exceed those observed anywhere else globally.
The Urgent Problem
According to the World Bank, organized crime is one of the most pressing issues in Latin America and the Caribbean. The region’s economy is projected to grow by only 2.1% in 2025 and 2.4% in 2026, positioning it as the area with the lowest growth rate worldwide.
Historical Context
For a long time, Latin America and the Caribbean have struggled with mediocre annual economic growth, low productivity, poverty, and high levels of inequality. The World Bank’s report states that the region will remain stuck in this poor equilibrium until it curbs organized crime and associated violence.
Homicide Rates
Despite representing approximately 9% of the global population, Latin America and the Caribbean account for one-third of all homicides worldwide. The gap has widened, with the average homicide rate being 5.4 times higher than the global average (22.0 compared to 4.1) in the first decade of this century, and now being 8 times higher (23.9 compared to 3.0).
Country-Specific Data
The average homicide rates from 2018 to 2022 range from 38 per 100,000 inhabitants in Honduras to 4 in Bolivia and 5 in Argentina.
Recent Trends
While some countries like El Salvador and Venezuela have seen improvements, others such as Ecuador and Haiti have experienced worsening situations.
Recommendations for Change
The World Bank recommends enhancing educational systems and labor markets in the long term. However, for immediate action, it advocates prioritizing the strengthening of prison capabilities, police forces, and justice systems. Additionally, targeted prevention efforts for “at-risk youth” who might join criminal groups are crucial.
Factors Contributing to Crime
Although it’s challenging to pinpoint the exact reasons behind the rise in organized crime, the World Bank identifies several contributing factors. These include global demand for cocaine, illegal gold trade, human trafficking in the 2010s, government crackdown-induced group reorganization, increased weapon availability, business diversification, and high technology use.
Impact of COVID-19
The pandemic has also played a role. In Colombia and Mexico, for instance, organized crime groups gained legitimacy and power by providing social support and governance, sometimes replacing the state in impoverished and unequal areas.
Case Study: Tren de Aragua (Venezuela)
In response to border closures during the pandemic, Venezuela’s Tren de Aragua transitioned from charging passage fees for migrants to running its own operation, including owning transportation and accommodation businesses.
Economic Impact
According to the Inter-American Development Bank’s (IDB) latest figures, the direct costs of organized crime reached 3.4% of Latin America and the Caribbean’s GDP in 2022.
Key Questions and Answers
- What is the World Bank’s main concern regarding Latin America and the Caribbean? The World Bank is concerned that organized crime significantly stifles economic growth in the region.
- What are the projected economic growth rates for Latin America and the Caribbean? The region’s economy is expected to grow by 2.1% in 2025 and 2.4% in 2026.
- Why are homicide rates in Latin America and the Caribbean so high? Despite representing a small portion of the global population, this region accounts for one-third of all homicides worldwide.
- What factors contribute to the rise of organized crime in Latin America? Factors include global demand for cocaine, illegal gold trade, human trafficking, government crackdowns, increased weapon availability, business diversification, and high technology use.
- How has the COVID-19 pandemic affected organized crime in Latin America? The pandemic allowed criminal organizations to gain legitimacy and power by providing social support in impoverished areas.
- What are the World Bank’s recommendations to address organized crime in Latin America? The World Bank recommends strengthening prison systems, police forces, and justice systems while improving educational systems and labor markets in the long term.
