The Cost of Crime

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At the end of June, South Africa's crime problems once again made international news. Although dramatic, the instance of crime has dropped. The authorities have increased their efforts to tackle this challenge facing South Africa in order to improve the country's image as a secure place for investment.

Recent reports in the international press focused primarily on a bloody gun battle between the police and an armed gang.

The Jeppestown massacre, as it has now become known, took place after police followed an armed gang to their safe house in the Johannesburg suburb after they robbed a "Pick'n Pay" supermarket. In the ensuing shootout, four police officers and eight of the suspects were killed, with 11 more members of the gang arrested.

South African Safety and Security Minister Charles Nqakula was quoted in the press the day before the shootout as saying that anyone who complained about crime could leave the country. Since then, he has gathered the leaders of South Africa's nine provinces to discuss the crime epidemic and stated that anyone who points a gun at a policeman can expect to be shot.

Crime is increasingly becoming a challenge for South Africa as the country attempts to market itself as a safe destination for foreign investment. In addition, analysts cite crime as one of explanations for fewer visitors arriving in the country.

The 2004 World Bank ranking of best places to do business placed South Africa 28 out of 155 countries. The ranking was based on issues concerning government regulations designed to facilitate the conducting of business. The survey did not, however, measure the effect of crime on a country's business environment, or the effect it has on investor confidence.

Johannesburg has become synonymous with crime's effect on society and the economy. Like most urban areas in South Africa, Johannesburg is afflicted by an unprecedented influx of people from the countryside as well as migrants from neighbouring countries who come in search of a better life. The new arrivals congregate in enormous squatter camps on the edges of major cities and towns. In Johannesburg, new cities have sprung up made out of corrugated iron and tarpaulin in Orange Farm and Diepsloot. In Cape Town, the city council seemingly has no answer to the ever-growing population of the cape flats, which are plagued by gang warfare and drug abuse.

Organised crime syndicates, many from neighbouring countries, operate sophisticated crime rackets and they have a seemingly an unlimited supply of youths from the squatter camps to do their dirty work. The South African Police Service (SAPS) is investigating alleged links between the Jeppestown gang and Zimbabwe's security forces.

Some crime experts believe that the increasing sophistication of criminal gangs is a response to SAPS invigorated efforts to tackle crime. The force is growing in numbers of officers, resources and expertise, with the government ploughing an additional R5.4bn ($755.29m) into the police service in 2006. The resources are available, as is the commitment from the government to tackle the issue.

The dramatic nature of many recent crimes undermine statistics that show a significant decrease in violent and non-violent crime. The SAPS's annual crime report, released in September 2005, stated that the number of murders fell by 5% in the past 12 months compared to the total for 2004, and that murders are down by 40% since 1995. Johannesburg General Hospital is also reporting an encouraging drop in gunshot victims admitted.

A recent survey by the Institute for Security Studies (ISS) in Pretoria found that although crime had significantly decreased since 1998, public perceptions of their personal safety in 2004 were 100% lower than in 1998.

Antoinette Lowe, senior research fellow at ISS, believes that the explanation for South Africa's crime is a combination of different factors including demographics, with 50% of the population under the age of 20, a high urbanisation rate and a growing gap between the rich and the poor, together with a high rate of dysfunctional families and under-equipped schools.

There has been no attempt to undertake a comprehensive national costing of crime in South Africa. The damage crime inflicts upon the economy in terms of investor perceptions of South Africa is very difficult to quantify.

The damage to property and lost business, however, is somewhat easier to measure, with gangs having hit more than 50 shopping malls in Gauteng in 2005, costing the retail industry in excess of R70m ($9.79m) in stolen merchandise. The last census of the farming industry, carried out by Statistics SA in 2002, calculated that crime costs South Africa's commercial farming industry roughly R1.2bn ($167.8m) a year - more than a quarter of its total annual losses.

Overall the authority's effort to tackle the issue is paying off and the country's violent crime is on the decline. With an ever-increasing priority given to law enforcement, South Africans can expect further improvements.

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