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Can businesses curb gang violence?

By Michael Coleman | Special to The Tico Times 

WASHINGTON, D.C. – El Salvador managed to slash its homicide rate in half this year, but more needs to be done to ensure the drop is permanent, says the country’s minister of justice and public security.

Douglas Moreno made his remarks at a recent World Bank symposium entitled “Security in the Northern Triangle: The Private Sector’s Role in Violence Reduction.” The Northern Triangle refers to El Salvador, Guatemala and Honduras, but the event – co-sponsored by the Americas Society/Council of the Americas – focused primarily on El Salvador, where gang violence is most severe.

It also coincided with AS-COA’s release of a study on violence reduction in El Salvador. The report found improvements in corporate productivity and local security when companies offered jobs and training to former gang members.

For example, Grupo Calvo employs 90 rehabilitated ex-gangsters – about 5 percent of its staff – at a Salvadoran tuna cannery, and facilitates employment opportunities with suppliers for an additional 100 former gang members. At League Collegiate Wear, an apparel manufacturer, 15 percent of the workforce signed up through a similar program.

“The private sector can clearly play an important role in improving security in the region, and this is best achieved through public-private collaboration,” said the organization’s president and CEO, Susan Segal. “This policy brief brings concrete and positive ways forward to one of the most pressing issues in the region.”

The public-private partnership concept is relatively new in Central America, and while the policy brief analyzes its effectiveness in El Salvador, it also serves as a reference point for Honduras and Guatemala. 

The World Bank estimates that crime and violence costs El Salvador $2.5 billion annually, representing 10.8 percent of the country’s gross domestic product. It says that a 10 percent drop in the homicide rate translates into annual GDP growth.

“We will end the year with 2,000 homicides fewer than in 2011,” Moreno said, noting that following the March 2012 truce signed between El Salvador’s two largest gangs, homicides fell from an average of 14 per day to five. In 2011, the country reported more than 4,300 killings, translating into a homicide rate of 66 per 100,000 inhabitants. That’s second only to Honduras, which reported 82 homicides per 100,000, the highest rate in the world.

In El Salvador, the administration of President Mauricio Funes has enacted an integrated public security plan that relies equally on crime control and prevention. The plan calls on municipal councils to improve coordination between the state and society in the fight against violence and insecurity. The Funes administration also has beefed up its reliance on military units to bolster police efforts.

Moreno said his government is committed to educational and employment opportunities for young people, adding that the violence will be a focal point in El Salvador’s presidential election in two years. “No matter who wins in 2014, it will have to lie on his shoulders throughout this process,” he said.

Hasan Tuluy, the World Bank’s vice-president for Latin America and the Caribbean, said violence in Central America inflicts economic losses equivalent to almost 8 percent of the Northern Triangle’s total GDP.

“When people ask why institutions like the World Bank are engaging in activities like this, it’s because it is very much a development challenge for these countries,” Tuluy explained. “That’s why we are increasingly incorporating crime and violence prevention in an entire range of products, such as financial solutions or knowledge sharing and convening, so we can learn from it.”

He also said there are no one-size-fits-all remedies, pointing out that what works for El Salvador might not be effective for Honduras.

“There are no off-the-shelf solutions,” Tuluy said. “We have to learn by crowding in as much experience as we can to provide the right solution for the right country. That’s why these partnerships are important. Everybody needs to join in on this because it will be a long and multi-faceted effort.”

“The private sector can create jobs for at-risk youth, … one of the key underlying factors for crime and violence. The quality of public services is also important. The public sector can play an important transformational role,” said Tuluy, who also announced that the World Bank would begin granting appropriations for projects in public safety, with a first loan to Honduras.

Jason Maczak, senior editor of Americas Quarterly and moderator of the Washington event, said companies in Central America are beginning to realize that investing in at-risk youth and other programs to help disaffected and disenfranchised people can boost their bottom lines. These range from software giant Microsoft to energy conglomerate AES.

“This is about the effect the homicide rates have on business climate and investment in countries across the region,” Maczak said. “What is unique about each of these examples is that the programs have a corporate social responsibility component, but they also serve business interests. Serving business interests is possible if it is part of their core corporate model.”

AES spokeswoman Adriana Roccaro Giamporcaro, whose company provides electricity in 27 countries on five continents, said something as simple as a commitment to lighting public spaces can help reduce violence.

“Lives and security have improved with public lighting and access to electricity,” Giamporcaro said. “It’s important to see how we can have a direct impact. The electrification process is carried out with funds allocated by the government, whose willingness to provide electricity is so great that it set up a fund for this purpose.”

Josue Alvarado Flores, president of Rio Grande Food Products Inc. in Laurel, Maryland, migrated to the United States in 1985. He said many gang members in his native El Salvador would jump at the chance to go straight, and that the private sector is equipped to help.

“Many of those who are criminals are planning acts of violence and extortion. They want to stop doing that,” he said. “Some people say, ‘We want to leave the gang but how can we survive?’”

Flores explained how his company tries to help. 

“We provide them a basket of food for two weeks to help them, and we told them they had to go to church over a six-month period and also have medical checkups and psychological assistance until these young people are ready for some businesses that open their doors to them,” he said.

Flores said the corporate mission is business-oriented and conveys social responsibility. But for him, the effort is also personal.

“My dad was a drug trafficker and a gang member,” he said. “I have a 1-year-old child and I don’t want this future for him.”


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