Rising crime and its impact on business

Published on Feb 26, 2013, 8:43 pm AST

"Headless Horror", "Murder spree claims seven over weekend", "Granny found dead, car
missing" Just a few of the newspaper headlines over the past week, describing a disturbing
increase in crime in Trinidad and Tobago. While the authorities may be hailing the recently
concluded Trinidad and Tobago Carnival 2013 as a "success" in terms of keeping the levels of
crime and violence at a minimum, it is evident that criminal activity is once again on the rise.
TTMA concedes that given the nature of Carnival the country's main tourism event it is, of
course, of critical importance that a safe and secure environment is established for our visitors
and citizens over the days leading up to, and during the two days of revelry. Negative reports by
tourists upon their return to their home countries have the capacity to do significant damage to a
country's international reputation. The Honourable Kamla Persad-Bissessar, Prime Minister of
Trinidad and Tobago revealed just how great an impact crime can have on just one area of the
economy tourism. She told a Caricom Inter-Sessional meeting on strengthening the regional
crime and security agenda and architecture that crime has cost $200 million per year in lost
tourism revenue. It must be noted, however, that creating an atmosphere of safety and security
throughout the year is equally important for all concerned, and in particular, for the private
sector. The upsurge in criminal activity over the past five years, and even more so, the spate of
murders in the past week, are cause for alarm.
As noted by former President of Colombia, lvaro Uribe during a recent visit to Trinidad and
Tobago, crime will affect investor confidence in Trinidad and Tobago if it is not brought under
control. He is not alone in his assessment. A recent report prepared by the United Nations
Development Programme revealed that an increasing crime rate is threatening economies and
livelihoods in Caribbean countries, and called for the right mix of policies and programmes to
tackle the problem. The "Caribbean Human Development Report 2012" stated that crime is
costing Caricom countries between 2.8 per cent and four per cent of The Gross Domestic Product
(GDP) annually. It noted that with the exception of Barbados and Suriname, homicide
rates including gang-related killings have increased substantially in the last 12 years across
the Caribbean, while they have been falling or stabilising in other parts of the world. It also
noted that Latin America and the Caribbean are home to 8.5 per cent of the world population, yet
the region accounts for some 27 per cent of the world's homicides.
The TTMA notes that crime and corruption are among the top five problematic factors for doing
business for Trinidad and Tobago, according to the World Economic Forum's Global
Competitiveness Report 2012-2013. Crime has significant social and economic costs it can act

as a deterrent to both domestic and foreign investment, which in turn affects economic growth.
Crime has wide ranging effects, including the diversion of resources for national development,
additional stress on health care facilities, and the erosion of a country's human capital. It adds to
the cost of doing business, as companies are forced to employ stricter security measures, which
diverts investment away from business expansion and productivity improvement. Businesses
suffer from reduced output because of shorter hours of operation, reduced profit as a result of
theft of goods, and in some cases, reduced labour productivity due to employees falling victim to
crime. Crime erodes the development of human capital as well as social capital and thus
constrains the potential for growth.
For a number of years, the TTMA, along with other private sector organisations, has put forward
a number of recommendations to the Government to address the crime problem. These include
the need for the drafting of legislation and implantation of existing laws dealing with criminal
activity both blue collar and white collar. The country's protective services should be given
adequate resources both human and technological - to assist with the detection and prosecution
of crime. Our nation's borders should be monitored to curb the illicit drug trade and the entry of
weapons which land into the hands of criminals. The anticipated introduction of scanners at the
nation's major sea ports will be critical in this regard.
While these suggestions look at the existing problem, the authorities should place a stronger
focus on preventive measures. Long term solutions to deal with the root causes of crime such as
poverty, education and youth unemployment, are also needed. TTMA acknowledges that there is
no easy solution; however, the bottom line is that crime affects all of us, and requires a collective
effort to tackle this problem.

The Impact of Crime on Tourism in Trinidad

and Tobago
According to the World Tourism Organisation, in 2010 tourist arrivals increased by 5%,
following a contraction of 4.2% in 2009. The World Travel & Tourism Council estimated that the
travel and tourism industry, from direct and indirect activities combined, now accounts for 9.2%
of global GDP, 4.8% of world exports and 9.2% of world investment. Recognising the potential
of this sector to provide economic growth and development, the Trinidad and Tobago
Government has signalled its intention to make tourism an important platform to create
sustainable jobs and increase its contribution to the country's GDP. The Government plans to
expand the tourism product and use the country's festivals and cultural diversity to anchor a
significant year-round tourism development programme. This article presents some stylised facts
and attempts to explore some trends in the local tourism industry.
Trinidad and Tobago ranked 79th (out of 139 countries) in the Travel and Tourism
Competitiveness Index (TTCI) 2011 published biannually by the World Economic Forum
(WEF). This was an improvement of five (5) places from 84th in 2009. Other Caribbean
countries in the top 100 include Barbados (ranked 28th) and Jamaica (ranked 65th). The TTCI
which was developed within the context of the WEF's Industry Partnership Programme for the
Aviation, Travel & Tourism sector is based on several pillars of competitiveness. These pillars
include: policy rules and regulations, environmental sustainability, safety and security, health and
hygiene, prioritisation of travel and tourism, ground and air transport infrastructure, tourism and
ICT infrastructure, price competitiveness, human, natural and cultural resources.
The World Travel and Tourism Council estimated in 2010 the Trinidad and Tobago tourism and
travel industry accounted for 3.8% of GDP a decrease from 4.4% in 2009, and provided
33,000 jobs a decrease from 35,000 in 2009. This decline was largely due to the contraction
of the local economy by 3.5% in 2009. There was marginal expansion of 0.6% in 2010. This was
mainly largely attributable to upturn in the energy sector which was partially offset by further
deterioration in the non energy sector.
Chart 1 shows that the country's number of monthly tourist arrivals exhibited a seasonal pattern
during the period 2002 to 2009. The peak periods coincide with Carnival and the vacation
periods July-August and December. Using publicly available data from the websites of the
Tourism Development Company (TDC), the Central Statistical Office (CSO), the Central Bank
of Trinidad and Tobago and the Trinidad and Tobago Police Service (TTPS) websites, the impact

of crime on the travel and tourism industry in Trinidad and Tobago will be briefly examined in
the remainder of this article.
The WEF takes crime into account, under the pillar of safety and security, when assessing a
country's tourism competitiveness for the TTCI. Crime has the potential to significantly damage
a country's travel and tourism industry. In Trinidad and Tobago, crime data from the Central
Statistical Office shows that total serious crimes (includes murder, manslaughter, robbery,
narcotics and forgery amongst others) has increased by approximately 30% over the last decade
from 15,796 in 1998 to 20,566 in 2008. The murder rate has increased by approximately 293%
from 120 in 2000 to 472 in 2010. Monthly data from January 2008 to November 2009 was used
for the analysis. (Monthly crime data prior to January 2008 was not available on the TTPS
website; monthly stop over tourist arrival data post November 2009 was not available on TDC or
CSO websites.)
Simple linear regression analysis shows that there was a statistically significant relationship (at
the 90% confidence level) between total stopover arrivals and total crime (from the previous
month) for the period January 2008 to November 2009. Chart 2 illustrates that, in some
instances, total tourist arrivals decrease as total crimes reported increases. Total tourist arrivals
includes all international visitors to the country for purposes of business, leisure, study, visiting
friends and relatives, wedding, honeymoon and others. The impact of reported crime on business,
leisure and other tourism is examined in Charts 3 to 5.
The application of regression analysis reveals that there is no statistically significant relationship
(at the 90%) between total business tourist arrivals and total crime during the period.
Notwithstanding this fact, Chart 3 illustrates that, during some periods, business total tourist
arrivals increase when total crimes reported from the previous month decreases. The chart
suggests that crime may have impacted the investor climate in Trinidad and Tobago during the
period.
Chart 4 shows the monthly number of other tourist arrivals (mainly tourists visiting friends and
relatives in Trinidad and Tobago) versus the number of total reported crime for the previous
month. Similar to business tourist arrivals, regression analysis demonstrates that there may not
be a statistically significant relationship (at the 90%) between the two data sets plotted in Chart
4. A careful observation of the data plotted in the aforementioned chart, however, indicates that
there are some instances in which other tourist arrivals increase when total crimes reported from
the previous month decreases.
Chart 5 shows the leisure tourist arrivals exhibit a seasonal pattern with the peak periods being
Carnival and the vacation periods of July-August and December. The number of leisure tourist
arrivals is not significantly impacted by the number of total crimes reported from the previous
month during the peak period. This is consistent with the results obtained using regression
analysis and a confidence level of 90%.
The information presented in this article indicates there may not be significantly strong statistical
results from the data to suggest that total reported crime considerably impacts the number of stop
over tourist arrivals to Trinidad and Tobago. However, the charts presented do illustrate that the

crime rate does affect some components of tourist arrivals to the country. The WEF has
acknowledged the negative implications a country's crime rate can have on its travel and tourism
industry, by the strong weighting it places on the safety and security pillar in its Travel and
Tourism Competitiveness Index. Significant reductions in the country's crime may provide the
added impetus to catalyse the optimisation and development of the travel and tourism industry in
Trinidad and Tobago.

All information contained in this article has been obtained from sources that First Citizens
Investment Services believes to be accurate and reliable. All opinions and estimates constitute
the Author's judgment as of the date of the article; however neither its accuracy and
completeness nor the opinions based thereon are guaranteed. As such, no warranty, express or
implied, as to the accuracy, timeliness or completeness of this article is given or made by First
Citizens Investment Services in any form whatsoever.
First Citizens Investment Services and/or it employees or directors may, where applicable, make
markets and effect transactions, or have positions in securities or companies mentioned herein.
Neither the information nor any opinion expressed shall be construed to be, or constitute an offer
or a solicitation to buy or sell.

The terrible cost of crime

Published on Feb 19, 2013, 11:04 pm AST

On the day after a weekend murder spree left eight dead, Prime Minister Kamla PersadBissessar, speaking in another country, put a dollar cost of crime to Trinidad and Tobago. It was
an admission that her administration has not been able to get a handle on criminal activity.
However, her solution proposed to the Caricom 24th Intersessional Summit would have little
impact on crime locally.
Mrs Persad-Bissessar focused on tourism revenues, revealing that T&T loses more than $200
million a year because of crime. Overall, however, crime has a much larger economic impact on
the country. A 2005 report from UWI, supervised by the late economist Dennis Pantin, estimated
the recurrent cost of crime to the economy to be over $4 billion annually. This was the total of
extra costs to the State, the private sector, and households for security precautions.
Yet even this economic impact pales in comparison to the social and psychological effects on
citizens. With the murder rate averaging just over one per day, nobody can feel secure. Add to
this regular incidents of robbery, assault, rape, and even noise, and, surveys of how happy Trinis
are notwithstanding, the stress levels in the society must be continually high. Such an
environment contains the seeds of its own destruction, bearing as it must the poisoned fruit of
general mistrust between citizens and State, citizens toward each other, and an increasing
tendency for persons, who might otherwise fear the law, to trample on other people's rights.

Only last week, several members of a family in Piparo were assaulted, allegedly because they
had complained about an illegal chicken farm operating near their home. The police are
reportedly sitting on their thumbs because they view the matter as a land dispute instead of an
assault. The Environmental Management Authority (EMA), now best known for a 24-hour
Carnival complaint hotline which was totally useless, has apparently been unable to enforce its
own regulations.
This is how law and order breaks down: when citizens feel they have neither recourse nor
protection from the State. Nor is public confidence helped when the Prime Minister appoints as
National Security Minister an individual of dubious reputation who has since displayed a
penchant for prevarication and simplistic solutions.

Since she was speaking to a Caribbean audience, Prime Minister Persad-Bissessar naturally
focused on a regional strategy. "I fear that we have found ourselves in a very serious situation
and we are running out of time as the scourge of transnational crime is slowly taking over the
region," she said. "The time has come, colleagues, for urgent and drastic action."
That may be so. But perhaps the Prime Minister should begin, like charity, with urgent drastic
action at home.

Crime destroying investor confidence

By COREY CONNELLY Sunday, March 3 2013

Local businessmen say high crime plus a dormant economy have ruined TTs international reputation. And
these business leaders also have serious concerns about the ability of the Peoples Partnership Government
to catch the big fish persons widely believed to be the kingpins of the drug trade, thought to fuel violent
crime for more than a decade.

It is no secret that the lawlessness that has continued to grow with each passing year has more
or less ruined our reputation on the international market and affected our chances of ever
recovering our full potential from this stigma, said Gregory Aboud, outspoken president of the
Downtown Owners and Merchants Association (DOMA) in an interview on Tuesday.
This past Christmas, no one could find a Midnight Mass; churches have cancelled such events
because of the danger posed to their parishioners. This past Carnival, touted as one of the safest
ever, has been riddled with stories of stabbings, robberies and assaults, he said.
Despite claims by various Government officials that TT was investor-friendly, Aboud said
continued lawlessness was destroying investor confidence and job creation, whilst increasing
unemployment levels. It is regrettable that the business community is constantly asked about the
effect of crime in the economy when there is hardly a single person who is not aware of the fact
that the rapid growth in all types of lawlessness is destroying investor confidence, he told
Sunday Newsday.
No one seems to appreciate that the business community is as concerned as everyone else with
the way our country is being ruined and the way the authorities keep trying to paint a picture that
we know is hopelessly untrue.
Noting that various embassies have been issuing advisories to visitors to avoid going out at night
since Carnival, Aboud called for frank discussions between the Government and all sectors of the
country in curbing the scourge of crime.
We need to have the courage to discuss openly and honestly the true issues that are sinking the
ship of State and taking us into waters that future generations will blame us for, he said.
The problem isnt as complicated as it has been portrayed. Easy and ready solutions are within
our grasp if we would only have the courage to have a respectful and fruitful discussion with
each other.
While agreeing with Aboud on the need for open discussion about crime, President of the San
Fernando Business Association Daphne Bartlett, nevertheless pointed to the futility of such
discussions given failure to catch the big fishes involved in the drug trade.

We have to deal with the issue of the importation of illegal drugs into the country. The young
boys (who are committing much of the crimes) are not the ones bringing in the drugs, she said
in an interview on Wednesday.
Whether it was the PNM (Peoples National Movement), the UNC (United National Congress),
or the NAR (National Alliance for Reconstruction), none of them have been able to determine
what is causing that evasion; we are continuing to lose our brothers and sisters.
Bartlett referred to a recent study conducted at the St Augustine Campus of the University of the
West Indies which showed that 50 percent of the nations violent crimes were either drug or
gang-related.
Where are the drugs coming from? she asked, noting futile public appeals for warring gangs to
put down their weapons.
I really dont think you can appeal to them to stop it. Its a war among the people who really
trade in drugs and kill for turf. The problem has to be nipped in the bud.
Noting that the crime problem existed throughout the Caribbean albeit on a smaller scale in
some islands Bartlett said flinging our hands in the air in despair will not solve the problem.

She urged the Government to consider asking the United Nations for assistance in combating the
fight against crime.
She said escalating crime had prompted many businesses to invest more in security.
But if your business is not making more money, it will be an expense that you will not be able
to recover from, said Bartlett.
Lamenting the countrys low criminal detection rate, Bartlett claimed many police officers
preferred to watch cable TV in the comfort of their police stations rather than venture into the
streets to catch criminals and maintain law and order.
She alluded to a recent incident along a bustling street in San Fernando in which a civilian was
forced to restrain a bandit at gunpoint because there was no police officer around at the time.
They had to wait for 15 minutes before anybody came, and the police station is three minutes
away from where the incident occurred, she noted.
Agreeing that crime affects business confidence, President of the Trinidad and Tobago
Manufacturers Association (TTMA) Dominic Hadeed said entrepreneurs were already feeling
the impact.

Not only does it raise the cost of operations but it also means greater investment in security. In
some cases, people have to be escorted to taxi stands, he said.
The effect is felt among corporate citizens and it is passed on to the consumer in the cost of
items.
So grim is the situation, members of the various Chambers of Commerce met on Thursday to
discuss possible solutions, Hadeed said.
We are very concerned, he said.
President of the San Juan Business Association, Ibrahim Ali said the impact of crime, particularly
in Port-of-Spain and Laventille, has caused entrepreneurs to take stock of their businesses.
Business has been curtailed tremendously. Many of the night businesses, snackettes and clubs,
even the pharmacies, supermarkets and gas stations, are closing earlier because they are feeling
the pinch. In some places, it is a virtual ghost town after 7 pm, he said.
Saying that some Government ministers have been giving mixed interpretations of the impact
of crime on the economy, Ali stated, But the murders, the gruesome attacks, are not going down
well with visitors, he said, suggesting that a heightened police presence, including foot and
mobile patrols, would stem the wave of criminal activity.
Ali also said the Association did not agree with Governments proposed plan to give soldiers the
power to arrest citizens.
We are not in favour of that in a democratic state. You cannot bring the army into the fold of
police officers, Ali said. They have the potential to overthrow a Government and become a law
unto themselves.
The draft bill to precept soldiers with police powers was laid in the House of Representatives on
Friday.