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Taylor's Crime Estimate Conservative
Published: Tuesday | April 2, 2013
My routine sumptuous consumption of Sunday reading of The Gleaner was again enhanced by my brethren Orville Taylor's usual perspicacious penmanship, exhibiting his usual balance of intellectual depth with common-sense pragmatism.
I fear, however, that although Dr Taylor's piece was spot on in linking the lotto scam to the 'slow' reactions of successive governments in this land we love, I respectfully submit that his estimation of the impact of crime on Jamaica's gross domestic product (GDP) is a tad conservative.
Apparently, Dr Taylor was guided by his university colleague, Professor Francis, and another source unknown to me, the Violence Prevention Alliance. However, I humbly submit the following information in an effort to convince my friend that the crime impact on our island is far more than the "whopping" four per cent that he alluded to.
My research has revealed that when sources quote the cost in percentage of crime to the GDP of countries, they rarely include both the cost of violent crime and white-collar crimes. Even so, those of us whose professions plunge us into these extrapolations know that four per cent seems low for either white or violent crimes individually, and even more so when taken collectively.
LOSSES TO FRAUD
The world's most comprehensive report on the global economic impact of occupational fraud, prepared by the Association of Certified Fraud Examiners (ACFE), saw both its 2010 and 2012 versions of the Report to the Nations on Occupational Fraud and Abuse, estimating that the typical organisation loses five per cent of its annual revenue to fraud. The ACFE points out that these patterns are consistent around the globe.
If we add these white-collar-related percentage costs of our GDP to those of our more violent crimes, the total could be frightening. The World Bank, for example, estimated the annual cost of violent crime in Jamaica at around five per cent of GDP, not including costs of investment in fighting crime and production losses because of crime. The World Bank estimates government spending on crime control alone to be at 3.1 per cent of our GDP, and not including production and health-care expenses from violent crimes.
IMPACT OF VIOLENT CRIME
The bank additionally identifies private expenditure on security at 1.3 per cent and points out that violent crime limits business expansion and investments to improve productivity, adversely affects productive activities by limiting night shifts and longer opening times, and provides an incentive for firms to relocate outside Jamaica.
Admittedly, it would be simplistic to just add these violent crime-cost percentages of our GDP to the ACFE's five per cent cost of white-collar crime. I'm fairly sure, however, that empirical assessments would exceed my friend's four per cent estimate.
What is certain is that this issue is not only impatient of debate, but eminently deserving of research and worthy of Dr Taylor's next book. Whatever the percentages, however, I concur with him that "the lotto scam and the guns imported from 'farrin' have a greater impact on Jamaica than they do on the USA".
http://jamaica-gleaner.com/gleaner/2...cleisure3.html
Collin Greenland is a forensic accountant. Email feedback to columns@gleanerjm.com and cgreeny.collin@gmail.com.
Published: Tuesday | April 2, 2013
My routine sumptuous consumption of Sunday reading of The Gleaner was again enhanced by my brethren Orville Taylor's usual perspicacious penmanship, exhibiting his usual balance of intellectual depth with common-sense pragmatism.
I fear, however, that although Dr Taylor's piece was spot on in linking the lotto scam to the 'slow' reactions of successive governments in this land we love, I respectfully submit that his estimation of the impact of crime on Jamaica's gross domestic product (GDP) is a tad conservative.
Apparently, Dr Taylor was guided by his university colleague, Professor Francis, and another source unknown to me, the Violence Prevention Alliance. However, I humbly submit the following information in an effort to convince my friend that the crime impact on our island is far more than the "whopping" four per cent that he alluded to.
My research has revealed that when sources quote the cost in percentage of crime to the GDP of countries, they rarely include both the cost of violent crime and white-collar crimes. Even so, those of us whose professions plunge us into these extrapolations know that four per cent seems low for either white or violent crimes individually, and even more so when taken collectively.
LOSSES TO FRAUD
The world's most comprehensive report on the global economic impact of occupational fraud, prepared by the Association of Certified Fraud Examiners (ACFE), saw both its 2010 and 2012 versions of the Report to the Nations on Occupational Fraud and Abuse, estimating that the typical organisation loses five per cent of its annual revenue to fraud. The ACFE points out that these patterns are consistent around the globe.
If we add these white-collar-related percentage costs of our GDP to those of our more violent crimes, the total could be frightening. The World Bank, for example, estimated the annual cost of violent crime in Jamaica at around five per cent of GDP, not including costs of investment in fighting crime and production losses because of crime. The World Bank estimates government spending on crime control alone to be at 3.1 per cent of our GDP, and not including production and health-care expenses from violent crimes.
IMPACT OF VIOLENT CRIME
The bank additionally identifies private expenditure on security at 1.3 per cent and points out that violent crime limits business expansion and investments to improve productivity, adversely affects productive activities by limiting night shifts and longer opening times, and provides an incentive for firms to relocate outside Jamaica.
Admittedly, it would be simplistic to just add these violent crime-cost percentages of our GDP to the ACFE's five per cent cost of white-collar crime. I'm fairly sure, however, that empirical assessments would exceed my friend's four per cent estimate.
What is certain is that this issue is not only impatient of debate, but eminently deserving of research and worthy of Dr Taylor's next book. Whatever the percentages, however, I concur with him that "the lotto scam and the guns imported from 'farrin' have a greater impact on Jamaica than they do on the USA".
http://jamaica-gleaner.com/gleaner/2...cleisure3.html
Collin Greenland is a forensic accountant. Email feedback to columns@gleanerjm.com and cgreeny.collin@gmail.com.
