Effects of Organized Crime to Central America’s Economy

in Transnational Crime

A study conducted by the World Bank found that the economic costs to the Central America region due to organized crime violence is $6.5 Billion per year. The costs associated with the violence decreases the region’s GDP by 7.7 percent.

The impact of organized crime and drug trafficking violence on the countries GDP is as follows:

El Salvador: 10.8 percent of GDP worth $2 Billion.

Nicaragua: 10 percent of GDP worth $529 Million.

Honduras: 9.6 percent of GDP worth $885 Million.

Guatemala: 7.7 percent of GDP worth $2.2 Billion.

Costa Rica: 3.6 percent of GDP worth $791 Million.

There are 41 homicides for every 100,000 residents in Central America. 24 percent of the world’s marijuana smokers and 45 percent of the world’s cocaine users resides in Central America.

(What is racketeering?Find examples here.)

Source:  Sergio Ramos, “Central America: Organized crime costs Central America billions,” Infosurhoy, August 5, 2013.

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