Crime ‘impacting the economy’

Central Bank of Barbados Governor Dr The Most Honourable Kevin Greenidge has made a case for strong and modern policing to reduce the negative impact crime has on the economy, including its threat to investment, loan growth, business activity, tourist arrivals and visitor spending.

While not quantifying the effect of crime on the macroeconomy, the economist said that based on statistics provided by the Barbados Police Service, “it is obvious from the data that it is having a marked impact”.

Greenidge delivered a keynote address on Security, Stability, And Growth: The Economic Case For Strong Policing during the recent two-day annual Police Conference at the Lloyd Erskine Sandiford Centre.

“When persons talk about policing supports the economy, they often talk about that in a very general sense. For me, that is not enough. Any serious economic case must start with mechanisms and how it’s happening,” he asserted.

Greenidge said the five main channels through which he saw the crime fallout passing through to the economy were in relation to reputation and confidence, the cost of doing business, finance and investment, productivity and public resources, and fairness and long-run outcomes.

The Governor emphasised the importance of understanding the direction and composition of crime, not just the overall level.

“The economic impact is not only about the level [of crime], it is about the direction shift, and it is about the risk environment that people experience and the type of offences that matter, that shape the crime,” Greenidge suggested.

“What the data shows is that the high . . . violence and firearm-embedded . . . crimes are the clearest risk to tourism outcomes, both for arrivals and spending. It also shows that property [crime] and violent crimes, the way we measure, are consistently linked to weaker investment and credit growth.”

He recommended the following actions to improve the fight against crime and hence increase the likelihood of its reduced negative effect on the economy: Develop and commence a programme to improve data quality and measurement for policing, including community-level geocoding of incidents and calls, and more frequent data collection. Define and produce a set of police performance metrics and dashboards, with response times, clearance rates, seizures, and time to charge, for routine reporting and evaluation.

Design and implement an operational plan to reduce firearm supply and firearm-enabled violence through intelligence-led targeting, supply disruption and faster case resolution, with clear performance targets.

Develop a tourism-safety exposure management plan that scales staffing and deployment in visitor corridors during peak seasons and tracks incidents per visitor, for example, incidents per 100 000 visitors or per visitor-night, alongside response-time metrics.

Implement hot-spot policing and repeatvictimisation prevention strategies, and establish problem-oriented prevention partnerships with local communities and the private sector, including environmental design interventions.

Formalise and continue research partnerships to provide regular crime and analysis data. Expand the existing dataset and agree on a schedule for ongoing quarterly or monthly data transfers to enable empirical evaluation.

Elaborating on crime’s five channels of economic fallout, he said its prevalence affects tourism and investment by damaging confidence, which is a measurable economic variable; raises security and insurance costs, disrupts operations, and affects productivity, especially for small and micro businesses; changes perceived risk, affecting firms’ and lenders’ decisions to invest and expand; diverts resources from productive activities to dealing with crime, affecting public services and infrastructure; and fair enforcement practices affect productivity and employment prospects, impacting economic outcomes.

He zeroed in on properly-related crimes and those likely to impact tourist behaviour.

“The evidence, in my view, supports a targeted agenda focusing on crimes that give the greatest economic bang for your buck,” the Governor said.

Greenidge, who lauded police for the job they were doing, said his main takeways for them were that policing is economic infrastructure, the composition of crime matters, and modern policing should target harms that have the greatest economic impact.

“For us here in Barbados, confidence, tourism spending and financial conditions, lending, [and] investment are sensitive to the risk environment. The composition of crime matters more so than the level, the level has been down, actually,” the Governor reiterated.

“Modern policing . . . is a bridge between safety and [economic] growth. The economic case is strongest when policing is targeted at the harms that matter most, and scale them to exposure in tourism corridors, measure with clear operation metrics and deliver with legitimacy and proportionality, so it strengthens the long run opportunity rather than creating scarcity.”

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