May 2, 2025
A new report by the World Bank says organised crime and violence have become a central obstacle to development in Latin America and the Caribbean (LAC).
The chief economist for Latin America and the Caribbean at the World Bank, William Maloney, will on Wednesday participate in a panel discussion along with Beatriz Magaloni, Professor of International Relations at Stanford University and General Óscar Naranjo, former Vice President of Colombia and a security expert on the issue.
“Together, they will explore how the lack of opportunities fuels organised crime and violence, what reforms can strengthen states to face these challenges, and the need for greater international cooperation and collaboration to protect citizens,” the World Bank said.
The Washington-based financial institution said its Latin America and the Caribbean Economic Review (LACER), has underscored how these issues “exacerbate the region’s already fragile economic landscape”.
The report, titled “Organized Crime and Violence in Latin America and the Caribbean”, projects the region to grow by 2.1 per cent in 2025 and 2.4 per cent in 2026, positioning it as the slowest-growing region globally.
The report notes that “the region grapples with alarmingly high levels of lethal violence linked to organised crime” and that victimisation rates are three times higher than the global average, with homicide rates standing at eight times the global average.
The report outlines several factors contributing to the rise in organised crime, including escalating global demand for illegal goods, government crackdowns that have reconfigured criminal networks, and the COVID-19 pandemic, which allowed these groups to solidify their power in areas where state presence is weak.
“Organised crime is rapidly proliferating across the region, transcending domestic borders and becoming a pervasive threat,” said Carlos Felipe Jaramillo, vice president for Latin America and the Caribbean at the World Bank.
“This is no longer an isolated issue; it demands a regional and global dialogue to elevate solutions and mobilise our collective expertise and resources,” he added.
The report states this proliferation has clear development consequences, outlining how it threatens public safety, stifles economic growth and erodes the integrity of public institutions.
“The uncertainty surrounding property rights, rampant extortion, and pervasive insecurity inflate transaction costs for businesses, undermining competitiveness. Moreover, the diversion of public security resources from essential services like health and education burden countries already facing high debt and fiscal challenges,” the report noted.
Maloney said that fighting organised crime is “not merely a law enforcement issue; it’s a development priority.
“It undermines governance, distorts investment, and exacerbates inequality. We must address this issue head-on to prevent it from becoming a permanent drag on growth.”
To address these challenges, the report calls for a “robust agenda” to enhance state capacity against organized crime, including police reform, improved prison systems and strengthened judicial processes.
“Well-equipped institutions are key to achieving growth and development in the region,” the report stated, adding that economic policies also “play a crucial role in combating organised crime, promoting growth and job-creating reforms while providing youth with options through improved education and training.
“These initiatives raise the opportunity cost of crime, reducing its labour supply,” the report said, stressing the need for long-term research to inform government actions, “as the absence of regular, comparable surveys hampers the development of effective policies.”