Crime Costs Chile $8 Billion a Year as Violence Chokes Economic Growth

• Chile loses $8.2 billion annually to rising crime.
• Local businesses like La Piojera are closing earlier due to violence.
• Murder rates in Chile have risen significantly since 2016.
• Business strategies are changing to adapt to the crime situation.
• Young people are altering their social habits in response to safety concerns.

Economic Impact Due to Rising Crime in Chile

Rising Crime is Hurting Local Businesses in ChileCrime has become a significant concern in Chile, especially with businesses like the century-old bar La Piojera in Santiago feeling the heat. Once bustling with patrons, La Piojera has adjusted its hours significantly due to the unsettling crime rates that plague the area. According to a new study from CLAPES UC, a research center associated with Universidad Catolica, Chile is losing around 2.6% of its GDP each year due to crime, translating to a staggering $8.2 billion. It’s not just La Piojera; many businesses are having to shut their doors earlier or even close altogether in neighborhoods beset by crime, leading to increased security costs and lost investment opportunities.

Adaptation Strategies of Businesses to Crime

Shift in Social Habits Amid Growing ViolenceThe chilling effects of crime have reached beyond local businesses and altered social habits, as people are apprehensive to go out. Mauricio Gajardo, the manager of La Piojera, shared that his sales are down by a significant 60% compared to previous years, making weekend nights less profitable. The bar, which used to remain open until late into the evening, now generally closes by 8:30 p.m. to safeguard against potential incidents. As for other establishments, Cristian Gonzalez, who manages Bar & Vuelvo, noted that they have had to adapt to this dangerous reality by offering discounts to entice patrons to linger a little longer during the later hours. It seems that everyone is adjusting their schedules and routines due to the surging crime rates, with many preferring to go out earlier, showing that the city’s vibrant nightlife is now under strain.

Changing Perceptions of Safety and Nightlife

Rising Crime Statistics Paint a Grim PictureSince 2016, the murder rate in Chile has shown an alarming increase, peaking at 6.0 per 100,000 in 2024. In contrast, that number was only 2.32 in 2015, suggesting a troubling trend. While Chile still boasts one of the lower murder rates in comparison to other countries like Colombia or Mexico, the economic ramifications of this rise are felt more acutely. Leonardo Hernandez, a professor involved in the study, explained that in nations with higher murder rates, such as Colombia, there is a normalization of the violence, which lessens the impact when crime rates increase. For young people like Jose Tomas Rodriguez, the rising fear has shifted their collective behaviors, forcing them to adapt and plan their outings with caution, and quite often earlier in the day.

Crime is bleeding Chile’s economy to the tune of $8.2 billion annually, impacting everything from sales at local bars to overall social habits. With crime increasing since 2016, businesses are forced to adapt and find new ways to thrive in a climate of fear. The long-term economic and social consequences of continued crime growth could reshape the very fabric of life in Chilean cities.