World Video | Defence | Foreign Affairs | Natural Events | Trade | NZ in World News | NZ National News Video | NZ Regional News | Search

 


Papua New Guinea Businesses Impacted by Crime and Violence

Papua New Guinea Businesses Suffer High Costs from Crime and Violence

15 August 2014

New World Bank Report Assesses Impact of Crime and Violence on PNG businesses

PORT MORESBY: A World Bank Group report released today says that eight in ten businesses in Papua New Guinea suffer substantial losses and security costs as a result of high rates of crime and violence, slowing business expansion and hampering the country’s economic development.

More than 80 percent of 135 companies surveyed said their business decisions are negatively influenced by the country’s law and order situation, with crime significantly increasing the cost of doing business.

The expense of avoiding criminal damage limits firms’ ability to grow, deters start-ups, and imposes significant long-term social costs on the country.

“Crime in Papua New Guinea constrains businesses and threatens to put the brakes on the economy,” said Carolyn Blacklock, Resident Representative in Papua New Guinea for IFC, the member of the World Bank Group that focuses on private sector development in emerging markets. “Local firms not only struggle to be competitive as they seek to manage crime, but they also pass on these costs to consumers via higher prices, less choice, and the absence of new products and services. This is bad not just for business, but the economy as a whole.”

The World Bank Group report, entitled “The Cost of Crime and Violence to Businesses,” draws on a survey and interviews conducted with the local business community, and is the first study in the country to comprehensively assess the impact of crime and violence on local enterprise.

The report finds that security in particular represents a significant and growing expense for businesses.

84 percent of the country’s firms pay for security hardware, such as installing specialized gates and security alarms, which is 30 percent higher than the average in the East Asia and Pacific region. Hiring private security consumes on average five percent of firms’ annual operating costs.

Companies are also suffering direct losses averaging K89,000 ($33,000) per year from stolen property and about K71,000 ($26,000) annually to petty theft by employees. 38.5 percent of companies reported closing their businesses early each day to avoid becoming victims of crime, resulting in losses of income estimated at an average of K93,000 ($34,000) per year.

“Everybody in PNG is losing money and time to crime,” said Alys Willman, World Bank Social Development Specialist and co-author of the report. “While the report assesses direct losses from crime and violence, we can never calculate the investment foregone, the expansions to new products and areas that never happened, the number of businesses that never opened their doors, or the jobs that were never created because the costs of security were too high. These costs are all passed on to consumers – and everybody suffers.”

Businesses are also worried about broader social costs, the report found. High levels of crime and violence create fear, which constrains the movements of staff and customers and stigmatizes the young, who are often seen to be perpetrators of violence and crime. Domestic violence, in particular, intrudes into the workplace, contributing to absenteeism and affecting morale and productivity of staff. Official police data, and data from Government-led victimization surveys, suggests that crime has stabilized in the country over the last decade, though there are significant disparities across regions.

There is evidence however that violent crime may be increasing as a proportion of overall crime, especially in recognized ‘hotspots’ such as the Western Highlands, Madang, Lae and the National Capital District. In Lae, incidence of violent crime more than doubled in 2010 compared with 2008.

The World Bank report is part of its wider Research and Dialogue Series on the socioeconomic costs and drivers of crime and violence in Papua New Guinea. Carried out at the request of the PNG government, the report draws on an extensive review of existing data, a survey of 135 businesses conducted by the PNG Institute of National Affairs, in-depth interviews with business owners, and consultations with businesses and employees carried out from 2012 to 2014.

•67 percent of businesses that took part in the survey said crime was a major constraint on their business, a higher rate than in El Salvador (51 percent), Venezuela (60 percent) and Democratic Republic of Congo (63 percent).

•81 percent of businesses reported that their decisions to further invest in or expand their operations were affected by the country’s poor law and order situation; only 3 percent said that their decisions were not affected at all.

•84 percent of companies said they pay for security in the form of security personnel or hardware. This is significantly higher than the average of 52 percent for the East Asia and Pacific region.

•More than twothirds of businesses use private security services, which costs an average of 5 percent of their annual operating costs. About 30 percent of firms said that hiring private security accounts for at least 10 percent of their annual costs.

•Businesses reported losing an average of K89,000 ($33,000) per year to stolen property and K71,000 ($26,000) to petty theft by employees. 38.5 percent reported closing early to avoid victimization, which cost an average of K93,000 ($34,000) per year in lost earnings.


ENDS

© Scoop Media

 
 
 
 
 
World Headlines

 

Ebola Cases Reaching Record Low

Highly contaminated waste is removed from an Ebola Treatment Unit and carried with caution to a disposal area, where it will be fed into an incinerator that burns it into ashes. Photo: WHO/R. Sørensen More>>

South Sudan: Pervasive Violence Against Healthcare

Juba, South Sudan, July 1, 2014 - Violence in hospitals and the destruction of medical facilities are denying medical services to many of South Sudan 's most vulnerable people, Médecins Sans Frontières (MSF) said today in a report, South Sudan Conflict: ... More>>

ALSO:

  • UN News - UNESCO chief denounces killing of journalists in South Sudan
  • Increasing Demand For Refined Products Will Increase Prices

    In last week's article I posted a chart from the International Energy Agency'srecent Oil Market Report that shows global demand for refined products catching up to supply by the 3rd quarter of this year. My opinion is that all of the analysts who are now ... More>>

    ALSO:

    Terrorist Attack On Hotel In Libyan Capital

    27 January 2015 – The United Nations Security Council today condemned in the strongest terms the deadly terrorist attack against the Corinthia Hotel in Tripoli, Libya, and underlined the need to bring the perpetrators, financiers and sponsors of such ... More>>

    ALSO:

    Malawi In Urgent Need After Intense Flooding

    Torrential rains in Malawi have caused dozens of deaths, with hundreds of people still missing. Photo: UNDP/Arjan van de Merwe More>>

    Lack Of Funding Hampering Aid To Syria

    Deputy Emergency Relief Coordinator Kyung-wha Kang briefs the Security Council on the situation in Syria. UN Photo/Eskinder Debebe More>>

    Spy Agency CSE Is Monitoring Our Private Online Activities

    Breaking - Spy agency CSE is monitoring our private online activities on a massive scale and sharing sensitive data with other governments More>>

    UN ‘blue Helmet’ Killed Near Lebanon-Israel Cross-Fire

    28 January 2015 – A United Nations peacekeeper with the UN Interim Force in Lebanon ( UNIFIL ) was killed today near the border with Israel but the precise cause of death is as yet undetermined and remains the subject of investigation, according ... More>>

    ALSO:


    Get More From Scoop

     
     
     
     
     
    World
    Search Scoop  
     
     
    Powered by Vodafone
    NZ independent news