Crime deters investments

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How crime deters investments

Crime is common everywhere around the world. Crime deters investments in any economy that it exists. This is due to people fearing that the justice system in that region actually doesn’t function as well as it should be. Places that have experienced a growth in crime have been plagued by capital flight. People don’t seem to want to invest their money in a failing society. Societies that have almost zero crime statistics seem to be able to attract investments. Corruption is a type of criminal activity. This is why poor countries are rigged with corruption and low investments. An investor has a higher chance of losing their investments when investing in a corrupt country. Therefore the first thing about business-friendly places is that they need to be free of crime.

Why crime deters investments

There are many reasons why regions with high crime statistics are failing to gain investment. Many people have stated that this is due to the hardship faced by businesses when operating. It is very difficult to operate from an environment that has a lot of crime. For example financial companies that operate in places with a lot of fraud find it hard to grow their business and protect their user’s funds. The sector that is most affected by crime is actually the financial sector. If in a certain region there are many people who are criminals then it is highly likely that they are after people’s personal property or assets. In e-commerce, crime affects delivery and payment methods. It is hard to operate an e-commerce business from a crime rigged region. This is mainly because these regions tend to have people that rob e-commerce warehouses and delivery companies.
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