BUSINESS NEWS - Government is targeting infrastructure investment to promote growth through its stimulus package, yet is silent on the high crime levels that are a major cause of divestment in a society with characteristics of both the Wild West and a Mafia state. Without getting crime down to tolerable levels, economic growth will remain at best stunted.
South Africa’s shocking crime statistics have been paraded on social media and talkshows as being mainly caused by poverty. Economic growth can be considered essential if poverty is to be reduced, and crime levels would then also decline.
Looking at data, however, an inverse picture emerges.
The statistics on crimes against business indicate that a range of criminals is at work: those who shoplift a piece of frozen chicken, those who need a sheep for the month, and those who cash in on others in transit. It’s almost like the range from informal traders to struggling SMEs and the few big corporates.
The belief that poverty causes crime, which subtly shifts the blame for criminality from the perpetrator to society, was at work again: almost no-one mentioned really poor countries with far lower crime rates. Tanzanians are significantly poorer with a per-capita GDP of less than 20% of South Africa’s, but on the Word Economic Forum (WEF) Global Competitiveness Index, Tanzania ranks significantly better (36 positions) than SA concerning the cost of crime. Sri Lanka, which, like South Africa, suffers from a violent past, is another example. Recently, Stellenbosch University economics professor Johan Fourie was the lone voice asking why criminality is higher in the richer provinces of Gauteng and the Western Cape than the poorer Limpopo.
The argument even changed from poverty to the rich being the culprit: if they were not so rich and no wealth gap existed, there would be no incentive to pilfer …
Anine Kriegler of the University of Cape Town, responding to the shockingly high crime statistics, argues that police minister Bheki Cele’s call for more police isn’t the answer since “a number of studies on the relationship between policing levels and crime rates suggested that the impact of more police is generally small”.
Kriegler argues that leaders must address inequality: “South Africa is a highly unequal society (and) has one of the highest Gini-coefficients in the world. Research shows that inequality and crime go hand in hand.” She quotes a paper in the April 2002 edition of the Journal of Law and Economics Vol XLV by Pablo Fajnzylber and Daniel Lederman titled Inequality and Violent Crime.
Unfortunately, she did not mention that the authors themselves thought their paper had serious shortcomings – “we have not provided a way to test or distinguish between various theories on the incidence of crime” and “a more nuanced econometric exercise than what we offer is required to shed light on the relative validity of various theories on the inequality-crime link.”
Another shortcoming is that “we have not identified mechanisms through which more pronounced inequality leads to more crime. Uncertainty about these mechanisms raises a variety of questions with important policy implications. For instance, should police and justice protection be redirected to the poorest segments of society?”
The source Kriegler quoted to argue against increased policing actually proposed the consideration of more policing in poorer areas.
