Peru economy: Small businesses suffer as crime takes over country

Key Concepts:

• Extortion
• Economic Impact of Crime
• Small Business Vulnerability
• GDP Loss
• Security Measures
• Civilian Defense

Gym Facade Destroyed Due to Extortion

The video details an incident where a gym's facade was completely destroyed, marking the second attack in 10 days. This demonstrates the perpetrators' determination to extort the gym owner, Orlando. Orlando is concealing his identity to avoid paying $12,000 in extortion fees, asserting that he has earned his money and will not surrender it to criminals. He expresses deep disappointment, stating, "I'm terribly disappointed because I'm an entrepreneur. I'm not a criminal. I'm a good person who contributes to the progress and advancement of my country. This cannot be happening to me."

Economic Devastation for Small Businesses

The usually vibrant business district in San Martin Pores has fallen silent due to the crime. Orlando's gym, which previously served an average of 500 clients per month, has seen its clientele disappear, and 27 employees have been sent home. Orlando is withholding the exact amount of his losses to prevent criminals from assessing his business's worth.

National Economic Impact of Violence

Economists estimate that victims like Orlando are facing enormous losses nationwide. The finance ministry and central bank report that violence is costing Peru nearly $6 billion, which represents 2% of the country's GDP. A significant portion, 80%, of these losses are borne by small businesses and families in conflicted and often impoverished neighborhoods, with the money ultimately funding illicit activities.

Interconnectedness of the Economy and Crime

The speaker argues that if businesses cease to grow and hire, it will inevitably impact the broader economy. "The entire economy is interconnected, we're going to see crime become one of the main obstacles to the country's growth." This highlights how crime acts as a significant impediment to national economic progress.

Dilemma Between Investment and Protection

Individuals are now faced with a difficult choice: invest in their businesses, provide better resources for their families (food, education), or allocate funds towards security measures for their businesses and personal safety.

Surge in Demand for Security Products

One of Peru's largest security firms reports a substantial increase in sales. Non-lethal weapon sales have grown by 400%, and flag jacket sales have increased by 150%. The majority of these buyers are civilians, indicating a widespread civilian response to rising crime.

Crime's Suffocating Effect on Society

The narrative emphasizes that crime is "suffocating the economy. It is suffocating people and logically the most vulnerable households are the ones that are running out of oxygen the fastest." This metaphor illustrates the severe and disproportionate impact of crime on the most vulnerable segments of society.

Orlando's Resilience and Continued Threats

Despite the ongoing threats to his life, Orlando plans to wear a bulletproof vest and is determined to rebuild his gym. He remains resolute in his refusal to yield to the criminals' demands.

Conclusion

The video underscores the severe economic and social consequences of escalating crime in Peru, particularly its impact on small businesses and vulnerable populations. The narrative highlights the financial drain, the stifling of economic growth, and the difficult choices individuals face between investing in their livelihoods and ensuring their safety. Despite facing significant threats and losses, individuals like Orlando demonstrate resilience and a commitment to not succumbing to criminal demands.