Crime is a business and SA is an attractive proposition <br> <br> <br>

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Crime is a business and SA is an attractive proposition

Postby GOSA » Mon, 2007-03-26 07:44

Found on the Sunday Times Web site, undated.

Crime is a business and SA is an attractive proposition for criminals

Risk of being caught needs to outweigh the loot, writes Sifiso Falala

As much as we prefer to see crime as a social perversion, with
socioeconomic causes and implications, crime is also big business.

And part of the key to solving it is for everyone to see its many

Although overall, criminal offences decreased by 14% between 2002 and
2006, as gleaned from official crime statistics, this belies the
unacceptably high level of criminality that persists in South Africa.
What is not reflected in the statistics is the callous and often
mind-boggling nature of certain types of crimes.

Crimes that have decreased are those where the victims have over the
past four years taken measures to protect themselves more. For example,
the two crimes with the highest percent reduction over the four years
were bank robberies and truck hijacking. While murders went down by 13%,
culpable homicide was up by the same percentage.

Information dating back to 2000 indicates that the conviction rate for
murders in South Africa is approximately 18%, compared with 61% for
England and 56% for the US. Information on arrests, trials and
convictions for serious crimes, which is currently scarce, should be
reported frequently.

By comparison, the conviction rate for rape in 2000 was 8%, meaning
that there is an approximate 92% chance of a rapist getting away with
it. For murderers there is approximately an 82% chance of getting away
with murder, literally.

For as long as the chances of being arrested, convicted and justly
punished are far less than the chances of going free, crime cannot be
reduced. Like other business people, criminals assess the risk that is
involved in their trade and act accordingly.

Crime is a business. Before they enter into business most people assess
factors such as size of the industry, barriers to entry, major
competitors, chances of success, payback period and required up-front
investment. So it is with crime. Although it would be cynical to suggest
that it be isolated as a gross domestic product (GDP) variable and that
criminals should pay taxes, crime is a big industry. There are virtually
no barriers to entry, as long as one is enterprising, relatively fit and
healthy, and the market is so big and diverse that one does not have to
worry unduly about competition. This makes the industry attractive as
long as one is prepared to take certain risks. For now, the risk factor
is very low because the chances of being arrested and convicted are much
lower than the chances of success.

Bearing in mind the historical marginalisation of most of the
population in South Africa, a lot of criminals virtually have nothing to
protect, and are therefore not risk averse. While all these are
compelling explanations for the proliferation of crime, the trump card
seems to be immediate pay, often in cash and often without much
investment up front. Contrast this with the prospect of looking for a
conventional job, attending interviews and possibly not succeeding. Or
starting a *normal* business, for which a bank will ask for a
business plan and collateral, among other things before declining to
give you a loan, which would have been under patronising terms anyway.
Suddenly the crime industry seems like a good bet as you are in control
there and gratification is instant.

Is there corruption in this crime industry? Of course. The operators
can buy policemen and security guards and give them kickbacks, as it is
unprofitable to give the kickback to victims. Police protection is
bought, allowing crime to continue and increase.

Many people, including law-enforcement agents, do not consider this.
They hope that crime will die down over time due to broader national
reforms. This is unlikely because criminals are business people. They
will not disinvest from money-making enterprises. If business is good,
as it is currently, they will invest more and spread their wings. Hence
the cash-in- transit heists have become more daring and scams ever more

Businesses are investing in technology today and modernising their
operations. Crime, too, is getting more complex. What is frightening is
that when businesses detect attractive markets wherever they are in the
world they go and invest there. Hence the current wave of emerging
markets in India, China, South America and Africa. And so it is with
crime. Because South Africa is a lucrative destination for the crime
industry, we should not be surprised that international crime syndicates
are investing more on our shores.

The only sure way of stopping the crime industry is to make sure that
the cost of doing crime is higher than the returns. As one cannot deal
with this industry through taxes and levies, the only way is to
apprehend criminals and bring them to justice.

A business-oriented approach is needed. The complexity of tools and
approaches needed to apprehend criminals must be reviewed and as much of
a private- sector approach adopted as possible. For example, salary
increases and bonuses for police officers could be linked to their
success in investigating and arresting criminals. Prison authorities
could be assessed and rewarded on their adoption of successful
rehabilitation programmes, and so on. It would not be inappropriate for
the government to engage a top management consulting firm to help design
performance-review mechanisms that can galvanise the justice system into

Without such an approach it will take many years to come to grips with
the thriving crime industry. The entrepreneurial ability, mental
astuteness and evasiveness of the crime tradesman can only be
underestimated at all of South Africa's cost.

Falala is the CEO of Plus 94, a research company
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